The Rise of $2-a-Day Poverty and What to Do About It

In 1996, following his campaign promises, President Bill Clinton ended welfare as we knew it. He passed the Personal Responsibility and Work Opportunity Reconciliation Act, a self-congratulatorily titled law which shut down Aid to Families with Dependent Children (AFDC) and effectively ended the last lifeline of cash assistance for the most destitute Americans. At the time, first lady Hillary Clinton supported her husband’s decision, even as close friends and mentors from her days at the Children’s Defense Fund declared the reform “morally and practically indefensible” and abandoned the Clinton administration in protest. In interviews and writings throughout subsequent years, Hillary Clinton has continued to defend welfare reform, insisting that welfare “simply did not work” and that the elimination of AFDC transitioned “deadbeats” from “dependency to dignity.”

In “$2.00 a Day: Living on Almost Nothing in America,” authors Kathryn L. Edin and H. Luke Shaefer examine the legacy of welfare reform and its effects on the poorest members of society. What they find is equally predictable and horrifying: despite the glowing reflections of boosters like Clinton, welfare reform has led to a dramatic increase in extreme poverty, which has in turn subjected the most vulnerable members of society to rising levels of hunger, homelessness, and physical abuse.

According to the authors, in 1996, around 1 in 59 American households with children had cash incomes lower than $2 per person per day, the commonly used threshold of extreme poverty. After welfare reform, that number grew steadily, increasing 150% in 15 years. By 2011, 1 in 23 households with children was living in extreme poverty.

Through detailed ethnographic interviews, the authors introduce us to some of these families and, as you’d expect, they endure a gruesome existence. Mothers with children in tow are hopscotching homeless shelters while filling out dozens of job applications that never get answered. When shelters aren’t available, these families are forced to double up with relatives, friends, and other people they hardly know. These unstable arrangements often lead to violence and sexual abuse, including of the children.

Lacking sources of cash, these households occasionally revert to selling plasma, scrapping found or stolen metal, and exchanging sexual favors for food or rent (children included). Members of these extremely poor households sometimes go days without eating and explain to the interviewers that they often want to die. While some of these people are too disabled to work (but not disabled enough for benefits), others very much want to work but can’t find any. The promise of welfare reform was to move such people from welfare to work and from dependency to dignity, but for many it’s denied them all of the above.

Cultural hysteria, mainly racist in origin, drove Bill Clinton's near total annihilation of cash assistance for the very poor. Even at its high-point in 1993, AFDC was a relatively modest program that provided cash benefits equal to 0.3% of GDP to the poorest 5.5% of Americans, two-thirds of whom were children. AFDC was never a budgetary or economic problem, but it became a convenient vehicle for mobilizing anti-black and anti-poor animus and a perfect thing to blame for all of society’s problems.

Despite the obvious long-term failure of welfare reform, Edin and Shaefer insist that “reverting to the old welfare system is not the answer.” For them, AFDC was out of sync with “America’s values” and “government programs that are out of sync with these values serve to separate the poor from the rest of society, not integrate them into society.” Thus, instead of proposing welfare benefits to cut the alarming rise in extreme poverty, they briefly offer up vague policy ideas around increasing private and public job creation, improving the pay and scheduling of jobs, and making housing more affordable.

Whether or not she’s willing to admit welfare reform was a failure, these are the kinds of policy “fixes” a centrist liberal like Hillary Clinton could get behind in her bid for the presidency. But, with respect to Edin and Shaefer, these are the wrong ideas and, in fact, the very kind of ideas that got us into this extreme poverty predicament to begin with. The answer to extreme poverty is the welfare state and, if that’s not politically feasible, then we just have to admit that we are going to have a society with extreme poverty in it.

If candidate Clinton wants to right the wrong her husband has done to the worst off in society, she can’t repeat more alternatives to welfare from the Brookings Institution. Instead, she needs to come out vigorously in favor of expanding welfare benefits to families with children. This needn’t be done through stigma-inducing welfare regimes like AFDC that separate the poor from the rest of society. Instead, it can be done through universal child benefit programs that pay out monthly checks to all families regardless of their means. These sorts of cash benefits, which exist in most developed countries in the world (including Canada and the United Kingdom), would eradicate extreme poverty overnight while also avoiding all of the pitfalls of AFDC-type welfare regimes.

Until then, the Clinton welfare reform legacy will continue to ensure that the brutal $2-a-day poverty captured by Edin and Shaefer remains shockingly common in the US.