The Other 1%: What Does It Mean for 2036?

Image result for graph of american families in extreme poverty

We have heard a lot about the top 1% of families in the last ten years, but what about the other end of the income scale? What’s it like to be disconnected from paid work and any type of social safety net? Last night, I heard Kathryn Edin, co-author of the book $2.00 a Day: Living on Almost Nothing in America, give an eye-opening presentation about it. She and her co-author Luke Shaefer studied the 1.5 million families—a little over 1% of all U.S. families—who have almost no cash coming into their households.

Using a combination of personal interviews and statistics, she painted a grim picture of an isolated life in which mothers and children experience frequent evictions, illness, hunger and abuse.

According to Dr. Edin, the roots of this problem are in the welfare reforms of the 1990s that converted the federal Aid to Dependent Families with Children (ADFC) to a law called Temporary Assistance for Needy Families (TANF). The focus of the reform efforts was to move mothers from welfare to work with the promise of job training, financial help with child care, and wage subsidies through an expanded Earned Income Tax Credit. It also gave more flexibility to the states to design their own programs.

During the booming economy of the 1990s TANF seemed very successful as many mothers moved off welfare and into paid employment. However, as states chipped away at the programs to support employment and businesses eliminated many entry level jobs, getting onto the first rung of the income ladder became tougher for many. According to the Census Bureau, the number of families with virtually no income has grown consistently since 2000, year after year.

I will be buying a copy of the book and looking into what critics say about it—can’t say yet if there are any holes in the authors’ conclusions—but let’s assume for a minute that they are 100% correct. Will the next generation of voters wish that we had provided better support to stabilize these families?

According to Dr. Edin, small amounts of money to repair a car, to buy some presentable clothes for a job interview, or to get a sitter for a sick child, can make the difference between being employed or not. Most of the children of this 1% are probably destined to fall behind in school because of frequent moves and stress at home. The rest of our children and grandchildren will have to live with the results. What would they want us to do about it?

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