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Think Tank Report Says Poor Americans Have It Too Good

Conservative think tanks have spawned a cottage industry churning out dubious studies purporting to show that poor families are living high on the hog on public benefits, a claim that anybody who has actually experienced poverty in America would find laughable.

These papers are then amplified by the right-wing media, forming the basis for calls to further eviscerate a social safety net that’s already been tattered and torn by 30 years of ascendant neoliberalism.

The latest addition to the genre is a study published this week by Michael Tanner and Charles Hughes at the CATO Institute. They calculated the maximum benefits of every federal anti-poverty program in which a single parent with two kids could participate, including things like tax credits for the working poor and supplemental nutrition and health benefits for pregnant women and young children, called it all “welfare” – a word that has long been unpopular to a public that otherwise supports measures to help the neediest – and used it to form the claim that “welfare” provides a perfectly decent quality of life.

Running the numbers in all 50 states and the District of Columbia, Tanner and Hughes claim that “the current welfare system provides such a high level of benefits that it acts as a disincen­tive for work” and urge lawmakers to “consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tighten­ing eligibility requirements.”

Taken at face value, the study is actually a stinging indictment of America’s low-wage economy. Only two of the 33 countries in the Organization for Economic Cooperation and Development (OECD) devote a smaller share of their economic output to programs that help poor families make ends meet than the United States – Mexico and South Korea. If those relatively stingy benefits provide more than one can earn working a minimum wage job – the authors say that’s true of 35 states – then the minimum wage is obviously not enough to get by on. Tanner and Hughes make much of the fact that in 13 states, the maximum benefits exceed $15 per hour, but according to MIT’s Living Wage Calculator, their hypothetical single parent needs to make at least $20.14 per hour just to cover his or her family’s basic necessities. That’s in the cheapest state – South Dakota. The nationwide average is $24.09 per hour. The federal minimum wage, had it kept up with American workers’ productivity, would fall somewhere between $16.50 and $22.00 per hour instead of $7.25. But the paper shouldn’t be taken at face value because the authors’ abundant caveats show that their study measures neither the reality of poverty in America, nor that of the public programs designed to fight it.

Tanner and Hughes acknowledge that “surveys of welfare recipients consistently show their desire for a job.” They acknowledge that a significant share of those receiving public benefits are working – Walmart employees, for example, famously rely on public assistance to get by, meaning that taxpayers effectively subsidize the Walton family’s vast fortunes. And they note that programs like TANF are time-limited – to a maximum of 60 months except in most cases.

They also acknowledge the central flaw in their conclusion: in real life the “typical” family in their study doesn’t come close to receiving the maximum benefit from every single program for which they’re eligible. But here the authors’ caveat doesn’t go far enough. Due largely to the fact that eligibility requirements have already become harder to overcome, these programs are helping fewer poor families get by. In 2009, around three out of four poor families with kids weren’t getting any TANF benefits. At the height of the economic crash, about 25 percent of those eligible for food stamps weren’t receiving them; during better times, that number hovers around 40 percent. And as the CATO study concedes, six out of seven poor families aren’t getting housing assistance.

by Anonymousreply 1909/21/2013


So a study that claims to tell us about the “typical” poor family is really describing a rarity — the equivalent of a four-leaf clover. But the purpose of these studies isn’t to inform good policymaking. They feed a narrative that the poor are lazy and undeserving, and provide wonky cover for further weakening our social safety net. When studies like this one are picked up by the conservative media, all of the authors’ caveats tend to be stripped away, and they become straightforward claims that poor families sit back enjoying a good life, forcing overburdened tax-payers to pick up the tab.

With one in seven Americans either unemployed or underemployed, and the sequester already resulting in deep cuts to programs designed to help the neediest, it’s a profoundly immoral pursuit.

by Anonymousreply 108/26/2013

The Cato Institute is filled with a bunch of libertarian fringe loonies. I am frequently surprised that anyone takes them seriously anymore.

by Anonymousreply 208/26/2013

The problem is that many poor people have iPhones, cars, computers, internet access, flat screen tvs, etc.

Well, not that that's a problem, but that it is a glaring contrast between the poor in this country and the poor overseas.

by Anonymousreply 308/26/2013

Exactly R3, the poor from other countries aspire to live the kind of lives that the american poor have.

by Anonymousreply 408/26/2013

R3 , how many poor people have you actually ever met? You are implying that formerly middle class people who have plunged into poverty have far too many luxuries because they have kept remnants of their previous "comforts", not realizing that, at some point in the past, these people bought into the "American Dream" fallacy and thought that they were no one without those things. Saying that they are representative of the average poor person, is absurd at best.

Truly poor people are concerned with things as basic (or rather, tragic) as wondering where their next meal is going to come from, or whether they will have a roof over their heads by the end of the week. These are people who never enjoyed the benefits of economic growth during the 90s and mid-noughties, and have plunged ever deeper into the pits of misery - to the point where their situation is comparable to the inhabitants of the poorest regions in the planet.

This demonizing the poor and saying that they have it easy because they are not dragging themselves across the floor while dying of starvation in some African shithole, is offensive beyond belief. Both things are tragic and they are part of the same system's injustices. Don't blame the poor for having it too easy compared to the biggest victims of capitalism.

by Anonymousreply 508/26/2013

R5, R3 said "many poor people", not ALL poor people. Clearly those who stand at the street corner near WalMart begging for change aren't included.

The fact is that many people who hit the criteria for qualifying as poor DO have it better than the poor overseas. This isn't giving them a pass, dismissing other poor or anything else other than stating simple fact.

I do know poor people. Sorry to disappoint you, but to paint ALL of them as worrying about their next meal is to do them a far greater disservice than you accuse me of doing. So eat shit and die.

by Anonymousreply 608/26/2013

Somebody who works for minimum wage qualifies as poor in this country but wealthy in another country. That person could be wondering where their next meal is coming from but still have a cell phone. The majority of America's poor are NOT sitting on the curb with all their belongings hoping pennies will be thrown their way. It does them a great disservice to paint them that way, although people like that do exist.

by Anonymousreply 708/26/2013

There was a homeless guy I saw the other day bitching that his government phone didn't work well enough.

by Anonymousreply 808/26/2013

I'm renting, on the internet, employed and cooking healthy meals, yet I make 1,000 dollars more than the poverty line for my state. I don't have insurance but that's about it. I receive no assistance.

by Anonymousreply 908/26/2013

R6, why is it objectively assessing the situation in which many people find themselves doing a great disservice to the poor? Because it doesn't fit with your idea of how society should function? And no, people who earn the minimum wage in the US wouldn't be rich in other countries, because in most 3rd World countries inflation is off the roof, and only high earners can live decently.

And no, I wasn't talking about lower middle and formerly middle class people, who might have it slightly better than the poorest among the poor. I was talking about people who are well below the poverty line. You know, the millions of Americans who are in deep and extreme poverty, who do worry about the things I was mentioning, and are many more than the official statistics bother to represent.

Oh, as for your last comment, thank you for keeping things classy. It truly shows your level of seriousness when you tell people to "eat shit and die" just because they disagree with you and refute your arguments.

by Anonymousreply 1008/26/2013

When rich Americans can afford $100m mega mansions while using every loophole to avoid tax, these assholes are complaining about wide screen TVs???

Well, cut them off - and the poor might begin to look around themselves and maybe get a bit ANGRY...

by Anonymousreply 1108/26/2013

Using secondary characteristics to determine poverty is shoddy thinking. I gave my old iPhone to my mother's caregiver. He makes under 20,000.00 a year. I gave my old laptop to his girlfriend who is in school and had been using a laptop with a broken screen. Just because they have Apple products does not mean that they are abusing the system.

by Anonymousreply 1208/26/2013

So they would be happier if the poor here were living in favela-like conditions? I don't get their point.

by Anonymousreply 1308/26/2013

[quote]their hypothetical single parent needs to make at least $20.14 per hour just to cover his or her family’s basic necessities. That’s in the cheapest state – South Dakota. The nationwide average is $24.09 per hour. The federal minimum wage, had it kept up with American workers’ productivity, would fall somewhere between $16.50 and $22.00 per hour instead of $7.25.

I found that to be the most interesting part. If the American minimum wage was raised to $22 / hour, how many of you could afford the subsequent $4 can of Coke at 7-Eleven, a $10 coffee at Starbucks $15 Big Mac, or a $30 ticket to a movie, or the $88 for 4 hours of babysitting? ?

by Anonymousreply 1408/26/2013

This is sick. Some people really have no shame.

by Anonymousreply 1508/26/2013

R44, that would not happen because companies would price themselves out of existence. What will happen is that smaller companies that will work with smaller profit margins will come in and "correct" the market. The profit margins that companies expect today are ridiculous.

by Anonymousreply 1608/26/2013

Only in conservative circles can 500,000 dollars a year can be considered middle class and 10,000 dollars a year be considered living large.

by Anonymousreply 1708/26/2013

This whole 'blame everything on the poor' nonsense is so ridiculous...

If they really hate poor people so much, they should raise the minimum wage, pass universal health-care, and strengthen unions and the social safety net.

You'll have far, far fewer poor.

by Anonymousreply 1809/21/2013

R18 speaks the truth they refuse to hear, because keeping the poor, poor keeps the 1% of the 1% very, very rich....with that the elected get their dollars, and those rich get their laws to oppress. It's a win-win for the politicians and the rich. It's a losing proposition for the USA though.

by Anonymousreply 1909/21/2013
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