By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Living on $2 a day: the new face of extreme poverty in America
A new study argues that one of the unintended consequences of welfare reform is the dramatic increase in families with children living on cash incomes of $2 a day or less. - photo by Jesse Hyde
Last month, the United Nations set an ambitious goal: end extreme poverty by 2030.

Whats extreme poverty? Living on $1.25 a day, or as Laurence Chandy recently put it, the most egregious forms of destitution: where people live so precariously that they fret about the source of their next meal and are burdened by the simple stresses of survival.

It's hard to fathom that 2.2 billion people on earth live on roughly $2 a day, but a new book argues that this isn't a problem confined to the developing world. In fact, Kathy Edin, a sociologist at Johns Hopkins University, and Luke Shaefer at the University of Michigan, have found that nearly one in 25 households with children in America survive on a cash income of $2 a day per person. To put that in perspective, as Marketplace recently did, $2 a day is barely a gallon of gas, or a gallon of milk.

In their new book, $2.00 a Day: Living on Almost Nothing in America, Edin and Shaefer traced the rise of extreme poverty in the U.S. to welfare reform in 1996, which placed an emphasis on putting America's poor to work. The problem, Zeeshan Aleem writes, is that while this reformed social safety net was "designed to prop up the working poor," it left "few safeguards for those who cannot find jobs."

The results at first glance are troubling. As Edin and Shaefer note: "In 1994, 9.6 million children and 4.6 million adults received cash assistance. Today's program covers only a fraction of that -- less than 3 million kids and only about a million parents. Back in 1994, Aid for Families with Dependent Children -- welfare's name pre-reform -- touched the lives of about two-thirds of poor families with kids. Now, only a quarter are aided by Temporary Assistance for Needy Famlies (TANF)."

And yet, that's only part the story. "The government actually spends significantly more on aid to the poor than it did 25 years ago," Aleem writes for Policy.Mic. "What's changed is the focus on working families."

In fact, Ron Haskins, a senior fellow on economic studies for the Brookings Institution and one or the architects of welfare reform in 1996, argues that Edin and Shaefer's study is only telling part of the story. For starters, research has shown that income from government programs is underreported (by as much as 40 percent in the case of TANF) and that "measuring consumption data and comparing it with income data shows that most low-income households consume goods and services worth much more than their income."

In other words, it's not fair to just look at cash assistance. For a more complete picture of government aid, Haskins says you have to consider "nutrition programs, housing, health insurance and many other benefits that provide tens of billions of dollars to single mothers and children."

One of the main objectives of welfare reform, Haskins points out, was to get more people working in exchange for benefits, and in that way reform has achieved its objective.

The problem, Edin and Shaefer write, is when people can't find work. On top of that the erosion of cash assistance, the scarcity of affordable housing and the rising cost of daycare have created an especially precarious situation for the poorest Americans, in particular single mothers. Together these trends have given rise to "a new form of poverty that defies every assumption about economic, political and social progress made over the last three decades," Edin and Shaefer write.

For their research, Edin and Shaefer spent time with people living on $2 a day across the country, including a wife and mother of two who had an "obvious indentation at the crease of her arm, the result of many needle pricks" from selling blood plasma as often as the local laws allowed to get cash to feed her family.

"What we learned from spending so much time with the $2-a-day poor was how important dignity and respect were to them. They wanted above all to be workers," Edin recently told Marketplace. "...They'd say, you know, 'I'd like a $12-a-day job, full time, with regular hours, maybe. Then I could have some stability, and I could give my kids the kind of life I've always dreamed of."
Sign up for our E-Newsletters