Why Do Rich Countries Have Poor People?

1. Why Do Rich Countries Have Poor People? Amy Glasmeier Penn State Professor of Regional Planning and Geography University of Washington West Coast Poverty Center April 7, 2008

2. What Can We Learn From Comparisons of Poverty in the US and the UK? • How different starting conditions can lead to similar results -- structure • How measurement shapes understanding • How identity is reshaped by policy discourse • The undeniable role that geography plays in issues of equity and distribution • How scholarly research can help fill the void in current discussions of policy

3. Begin With A Recent Historical Glance… A wage earner at the 90th percentile makes five times the income of the wage earner at the 10th percentile.

4. Beginning with Definitions

5. Relative Versus Absolute Definitions • Relative measures commonly used outside the US • Standard based on threshold set compared to national income • Debates then about configuration (what is in and what is out) • Absolute measures nominal money income for persons/persons in a household

6. How We MEASURE Poverty: From thrifty food budget to poverty line Molly Orshansky, 1970s The poverty thresholds (also called “poverty lines”) are income levels that the Census Bureau compares to actual family income to determine poverty status.  The current, official thresholds are referred to as the “Orshansky thresholds,” after government economist Mollie Orshansky, who combined measures of need and expenditure.  This metric was chosen to avoid a debate about income redistribution; absolute poverty could be eradicated, relative poverty would always persist.

7. 2007 HHS Poverty Guidelines SOURCE:Federal Register, Vol. 72, No. 15, January 24, 2007, pp. 3147–3148

8. USING CURRENT DEFINITION, NUMBER AND PERCENT OF POPULATION IN POVERTY 2006

9. In the 1960s the Elderly were Poor; In 2006, the poor are Children.

10. The UK • Definition not as easy or as consistent over time • Low Income Family Series (72-85) • Income below which aid required • Households Below Income Average Series • One metric < 60% median income • The UK has adopted the EU definition

11. In 2005/06 the UK used threshold of 60% of the average (median) household (disposable) income in that year. • Single adult with no dependent children £108 (+-$216/week) per week. • £186 per week for a couple with no dependent children; • £182 per week for a single adult with two children under the age of 14; • £260 (+_$520/week) per week for a couple with two children under the age of 14.  • (Income measured after income tax, council tax and housing costs, where housing costs include rents, mortgage interest (but not the repayment of principal), buildings insurance and water charges.

12. http://www.poverty.org.uk/reports/mpse%202007.pdf

13. http://www.poverty.org.uk/reports/mpse%202007.pdf

14. Who is Poor in the UK

15. Statistics at a Glance… • In 2005/06, around 13 million people in the UK were living in households below this low income threshold.  This is around a fifth (22%) of the population. • The number increased ¾ million compared with the previous year, 2004/05.  It follows six uninterrupted years of decreases from 1998/1999 to 2004/05 and is the first increase since 1996/97. • The number of people on low incomes is still lower than it was during the early 1990s but much greater than in the early 1980s. • The proportion of children and pensioners who live in low income households has been falling.  In contrast, the proportion for working-age adults without dependent children has remained broadly unchanged.  • A third of all people in low income households are now working-age adults without dependent children, and the majority of these are single adults rather than couples.

16. UK and US 60% of Median Income, US Absolute Measure

17. Mapping poverty in the UK is a relatively recent preoccupation of scholars. This is due to data limitations, mapping tools, and public interest. For more than a decade Danny Dorling, a professor at Sheffield, has constructed maps, formulated measures and been in the news about the geography of poverty. Unfortunately, the lack of detailed historical data reduces our ability to render poverty over time.

18. Playing Poverty Forward The United States

19. FROM THE BEGINNING, WHY POVERTY WAS SO DIFFICULT TO TACKLE: NO SINGLE CAUSE. FROM THE NEW YORK TIMES IN 1964: • Which of the following is correct • Most poor families in the US are those whose principal wage earner is unemployed. • Most families whose principal wage earner is unemployed are poor. • Paradox: the majority of those unemployed are not poor. And the majority of the poor are not unemployed.

22. CONSTRUCTING THE IMAGE OF POVERTY IN AMERICA White, poor, isolated, illiterate, unemployed, lost in time APPALACHIA

23. APPALACHIA 1964 Black number total state population; white fractional number in Appalachia

24. THERE WAS MORE THAN JUST APPALACHIA

25. Native American Poverty

28. Back in 1964, not making it on the farm and in rural areas forced people to migrate to the cities

30. THE PROBLEMS OF THE CITIES • While we recognized the problems of the cities: • Population groups unable to find work • Those that found work couldn’t make it pay • Housing was unavailable • Health care was unavailable • Schools were ill prepared to cope with the concentrated influx of people • Congressional policy responses collided with a Washington perspective insufficiently sensitive to the issues and delusional about the magnitudes and the historical basis of poverty problems.

31. Johnson makes a pact to carry out Kennedy’s wish and shapes the Great Society based on his own perspective of the problem

32. Policy Trajectory • Strong policy in the US late 1960s-early 1970s—poverty down from the 1960s • UK was overall policy redistributive • Both shift upward in response to the early 1980s recession, then back down • Divergence in the 1990s: the US goes mean; the UK goes paternalistic

33. What we see now • Patterns of poverty are little changed • Problems now include rising working poor, non-living wage jobs • Growing economic insecurity for children • No longer a welfare mom problem

35. Poverty in The Greater London Region, 60% of Median Income, CACI Data 2006

37. Percent of the Population in Poverty by County, Census 2003

38. Percent of Income Earners at 60% of Median Income or Less, County, Census 2000

39. Percent Children in Poverty, County Census 2000

43. Rising Vulnerability of the Poor • An increase in economic insecurity • Growing spatial isolation in urban and rural areas • Jobs, but what quality—make people work, even if work doesn’t pay a living wage • Countries differ on starting conditions • Housing, health care, education

44. The Last Decade of Policy • The UK • A Great Society-type program, emphasizing children and parents • People and places • Yet, paternalistic and without job creation and quality improvement • The US • Tie receipt of welfare requires work • Working hard, but not getting by and failling further behind • Locked in and Left out

45. Moving Forward • Rising inequality: will we see a new Poor People’s movement? UK yes, US, probably not. • Poor people working too hard to organize • Mechanisms of social control and receipt of minimal help dissuade people from acting on their own behalf • The American Paradox: Everyone deserves a chance and you are expected to make it on your own—how long will this last?

46. Poverty Policy in America • To succeed, does policy have to be about middle class concerns? • Will current period of uncertainty make a difference? • Is a brush with poverty enough to lead to new policy?