Poverty, Wealth, and Economic Inequality

Poverty and Its Costs

Jessica Sullivan

Why is poverty so hard to get out of, and why does it appear to follow a generational cycle? How do our views of those around us differ depending on our background, and what is the government doing to assist those around the poverty line?

Pins represent top 10 most populated US cities (New York, Los Angeles, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, and Austin)

The Poverty trap

Poverty Trap: An economic system in which it is difficult to escape poverty; created due to a combination of factors (ie. access to education and healthcare.

Welfare Stigma: The Mental Toll of Poverty

American society has historically painted people (especially women) on welfare as being ‘lazy,’ uneducated, abusing the system, and having poor spending habits. They say that they lack the motivation to “get ahead” or don’t work hard enough to succeed. In fact, 52% of the American public believes that a lack of motivation is a major cause of poverty; 35% thought it was a minor cause (NPR, 2001). Fundamental cause theory (FCT) asserts social conditions including stigma fundamentally cause health inequities that persist over time, despite changes in risk factors and health interventions. Economic inequality may be responsible for the erosion of social cohesion that has the potential to foster a climate less supportive of policies related to social welfare.

By the numbers...

- In one survey of 2,000 Americans, ⅕ of those surveyed believed that poor people have lower moral values than other Americans
- About 50% of the more affluent people polled believed that the poor were not doing enough to help themselves, but so did about 39% of the poor
  - The poor were more likely to blame “circumstances” than themselves for their financial hardship
- 52% of the American public believed that lack of motivation was a major cause of poverty; another 35% believed it was a minor cause of poverty

WHY?

The intersection of welfare stigma, state contexts and health among mothers receiving public assistance benefits

The Intersection of Welfare Stigma, State Contexts and Health Among Mothers Receiving Public Assistance Benefits (Lapham and Martinson, 2022)

Sampled mothers from 15 states who received TANF, Medicaid, SSI, or SNAP in the previous 12 months (N=2064)
Black and Hispanic mothers who reported experiencing higher levels of welfare stigma were more likely to report poor health
Mothers who cohabitated (18.8%) or were single (16.8) had higher rates of poor health compared to married mothers (16.8%)
36% of mothers who met depression criteria reported poor health, and roughly 21% of the sample who reported experiencing (21%) and perceiving (21.3%) high levels of welfare stigma also reported poor health

Paper Aims & Findings:

Are experiences and/or perceptions of welfare stigma associated with poor self-rated health for mothers receiving public assistance benefits?
- Findings show experiences and perceptions of welfare stigma are robustly associated with poor health regardless of state context
Do state policy, economic and social contexts including state TANF generosity, income inequality and public welfare attitudes moderate these relationships?
- Across both dimensions of welfare stigma, we find significant differences in health by race, ethnicity and education. In addition, state economic contexts modified the relationship between experienced welfare stigma and poor health for mothers with less than a high school education, as did state social contexts for Black and Hispanic mothers
Do patterns of health vary for groups who historically have been stigmatized for engaging with the U.S. welfare system?
- State TANF generosity had no meaningful effect on the observed associations between experiences and perceptions of stigma and health suggesting generous state TANF policies may have limited ability to protect public assistance recipients against the stigmatizing effects of the U.S. welfare system

Federal Assistance: The "Big Three"

SNAP

Amount varies
Can only be used on certain foods and items
Some recipients may need to meet a job requirement
Coverage for 12 or 36 months; you must reapply to continue

Housing Assistance

Various forms of housing to choose from
Public housing, Section 8, etc.
Tax credits incentivise developers and investors to build or renovate properties for low-income tenants

Medicaid

Benefits vary by state of residence
Covers doctors, prescriptions, hospital stays, preventative care, and more
Affordable Care Act (ACA)
- Some states expanded, others did not

Questions for Consideration

What are the economic and societal costs of poverty in the United States? How do these costs extend beyond the individuals experiencing poverty themselves?
In a wealthy nation such as the United States, is there a moral obligation to address poverty? If so, what are the most effective ways to do so?
How does political ideology and party platforms influence approaches to poverty reduction? What role does political polarization play in shaping anti-poverty policies?

Further Reading & Exploration

The Mothers Who Fought To Radically Reimagine WelfareBlack women have long been used as symbols in debates over welfare, but a movement of poor black women who fought to radically redefine aid to the poor as a guaranteed right has been mostly forgotten.

How Much Would Poverty Decrease in Each State If Every Eligible Person Received Safety Net Benefits?The total amount of benefits people receive would double and poverty would decrease by almost one-third overall if safety net programs were fully funded and all eligible people participated.

How welfare reform changed American poverty, in 9 chartsTwenty years after Clinton signed the controversial welfare reform bill, it's legacy endures.

“If I Wasn’t Poor, I Wouldn’t Be Unfit”The 147-page report, “‘If I Wasn’t Poor, I Wouldn’t Be Unfit’: The Family Separation Crisis in the US Child Welfare System,” documents how conditions of poverty, such as a family’s struggle to pay rent or maintain housing, are misconstrued as neglect, and interpreted as evidence of an inability and lack of fitness to parent. Human Rights Watch and the ACLU found significant racial and socioeconomic disparities in child welfare involvement. Black children are almost twice as likely to experience investigations as white children and more likely to be separated from their families.

From Mothers' Pensions to Welfare Queens, Debunking Myths about Welfare | PBSLearn more about the origins of and the mythology around the idea of the "Welfare Queen," and watch Storming Caesars Palace on PBS.

References:

American attitudes about poverty and the poor. PRB. (n.d.). https://www.prb.org/resources/american-attitudes-about-poverty-and-the-poor/
Centers for Disease Control and Prevention. (2022, September 27). Social Determinants of Health Maps-socioenvironmental: Poverty. Centers for Disease Control and Prevention. https://www.cdc.gov/dhdsp/maps/sd_poverty.htm
Costello, E. J., Compton, S. N., Keeler, G., & Angold, A. (2003). Relationships between poverty and psychopathology: A natural experiment. Journal of the American Medical Association, 290 (15), 2023-2029.
Emily A. Shrider And John Creamer. (2023, September 12). Poverty in the United States: 2022. Census.gov. https://www.census.gov/library/publications/2023/demo/p60-280.html
Federal Poverty Level (FPL) - glossary. Federal Poverty Level (FPL) - Glossary | HealthCare.gov. (n.d.). https://www.healthcare.gov/glossary/federal-poverty-level-fpl/
Lapham, J., & Martinson, M. L. (2022). The intersection of welfare stigma, state contexts and health among mothers receiving public assistance benefits. SSM - population health, 18, 101117. https://doi.org/10.1016/j.ssmph.2022.101117
Mani, A., Mullainathan, S., Shafir, E., & Zhao, J. (2013). Poverty impedes cognitive function, Science, 341, 976-9880.
O'Brien, Neman, T., Seltzer, N., Evans, L., & Venkataramani, A. (2020). Structural racism, economic opportunity and racial health disparities: Evidence from U.S. counties. SSM - Population Health, 11, 100564–100564. https://doi.org/10.1016/j.ssmph.2020.100564
Robin L. Jarrett, “Welfare Stigma Among Low-Income African American Single Mothers,” Family Relations 45 (1996): 368-74.
The 2020 Annual Homeless Assessment Report (AHAR) to Congress - HUD USER. (n.d.). https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf

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