So Rich, So Poor by Peter Edelman

Rating: 4

So Rich, So Poor encapsulates in 162 pages the forces that keep people in poverty in America. It’s written by Peter Edelman, a lawyer and former policy advisor to Robert F. Kennedy and Bill Clinton. He draws on fifty years of experience in government to give a perspective on poverty in its historical, political, and sociological dimensions.

The book is structured like a research paper with the facts and reasoning of his arguments bookended by an introduction and conclusion (“tell ‘em what you’re gonna tell ‘em, tell ‘em, tell ‘em what you told ‘em”). This makes it a little bit repetitive, especially about three-quarters in, but it’s set up so that the casual reader can get the general idea by reading only the introduction or conclusion.

Honestly, I still don’t have a great grip on how poverty or welfare really works after reading this book, so this “review” will mostly be notes and highlights, but hopefully it’ll still be informative and thought-provoking.

What happened to welfare?

“Why the rise [of deep poverty] since the mid-1990s? The biggest reason is the near-demise of welfare. The 1996 law [that the Republicans backed and Clinton signed] ended the legal right to cash assistance and imposed a five-year lifetime limit on federally financed help to any given family. States responded to their newfound discretion with gusto, reducing welfare rolls nationally by two-thirds in just a few years. Such discretion was not only accompanied by a strong message from Washington to get people off the rolls, but also by a substantial fiscal incentive. Each state receives a mixed amount of federal funds regardless of the size of its rolls, so reducing the rolls frees up funds that can be used for other purposes.”

Basically, we have two main forms of government assistance to directly alleviate poverty: food stamps (SNAP – Supplemental Nutritional Assistance Program) and welfare (TANF – Temporary Assistance for Needy Families). The 1996 law established TANF, which significantly narrowed the population eligible for welfare. Republicans congratulated themselves for lowering the number of people on the welfare rolls, but the lower number meant that less people were eligible, not that people who had been on welfare found other sources of income. SNAP is popular and successful because it gives poor people food rather than a cash handout. Conservatives believe that this is less likely to be abused than directly giving families cash. Liberals believe restrictions make the assistance less helpful and less likely to meet the diverse needs of recipients.

What conditions keep people in poverty?

Edelman argues that there are four main factors contributing to poverty in America:

1. The decline of well-paying, low-skill jobs and the ubiquity of low-wage jobs.
2. The increase in single-parent families.
3. The effect of race and gender on earnings.
4. The concentration of wealth in the hands of the uber-rich.

There are a couple of reasons for number 1, the decline of unions, the advancement of technology, the switch from a manufacturing to a service-based economy, and the centralization of high-paying jobs in large corporations being some of them.

Edelman cited some really frightening statistics about falling incomes and rising cost of living:

“The result is that half the jobs in the country pay less than $34,000 a year and a quarter pay less than the poverty line for a family of four. Families with two earners can do all right, but the large number of families with only one earner—typically a single mother—are in big trouble.”

“The general rule of thumb is that housing should constitute no more than 30 percent of a family’s budget. By this standard, more than half of all renters lived in unaffordable housing in 2009, and 7.1 million households either paid more than 50 percent of their income in rent or lived in severely substandard rental housing, a 20 percent increase just from 2007 (probably due more to falling incomes than rising rents). According to federal guidelines, there is not one state in which a family with one minimum-wage job can afford to rent a two-bedroom home or apartment at the federally defined “fair market rent” for that state.”

On the effect of race and gender, Edelman had this to say:

“The Pew Center reported that between 2005 and 2009 the median wealth of Hispanics fell by 66 percent and that of African Americans fell by 53 percent, while whites lost ‘only’ a mere 16 percent. By 2009, the median wealth of white households was twenty times that of African Americans and eighteen times that of Latinos. The damage caused by the housing bubble to people’s savings and assets, including the disproportionate effect on minorities due to their having been targeted by predatory lenders, was stunning.”

“When it comes to understanding the roles of race and gender in understanding the nature of poverty, there are two story lines, both important.

One, the largest number of the poor has always been white. The crux of the poverty problem is often perceived as there being too many African American single mothers. It is not: white is the predominant color of poverty. And the fact that the largest number of the poor is white means that many of the remedies for poverty are race- and gender-neutral and would benefit whites more than any other group.

But two, poverty is still disproportionately present among people of color and single mothers (and their children). That story line is equally significant: African Americans, Latinos, and Native Americans are poor at close to three times the rate of whites. This disparity raises obvious questions of discrimination, both overt and more subtle, embedded in the functioning of such systems as schools and criminal justice.”

What can we do about it?

“The only way we will improve the lot of the poor, stabilize the middle class, and protect our democracy is by requiring the rich to pay more of the cost (at minimum what they were paying before the Bush tax cuts) of governing the country that enables their huge accretion of wealth… I do not believe in class warfare, but asking the rich to pay more is simply not class warfare: it is in their interest to do so. They benefit enormously from the stability of our system; they can’t have appropriately educated workers without good schools; they won’t have enough consumers for their products without paying their workers a decent wage.”

His conclusion:

“In a way we have not seen since the Great Depression, the rich and the powerful are adding every day to the bricks that make up the wall of their separation from everyone else. The banks earn record profits but do not lend, and the government does not press them to do it. The big companies stockpile enormous cash reserves but do not hire, and the government does not stimulate demand for their products. And the answer to the possibility of raising taxes at the top just to the level they were a dozen years ago remains a resounding no.

This is crazy.

The first thing we need to do is roll back the Bush tax cuts for the wealthy. If we can’t do that, we’re not going to have the resources to do the next ten things. Attacking inequality means action at the bottom as well as the top. The fundamental and continuing priorities are jobs that yield a decent income, a reliable safety net, and an educational system that delivers for every child. The immediate priority, along with action on the revenue side, is to defend and protect the basic programs without which poverty would be even worse. And the most pressing need, in pure humanitarian terms, is to repair the rip in our American safety net that leaves us with so many millions who are in deep poverty, especially the 6 million people who have no other income than food stamps.”

For more background and details, buy the book! You can get it online at Amazon or at your local bookstore (I got this on a trip to City Lights Bookstore in San Francisco!).