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Shumita Basu, Narrating: This is "In Conversation" from Apple News. I'm Shumita Basu. Today, why there's so much poverty in America, and what you can do about it.
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Basu, Narrating: Matthew Desmond is a sociologist and writer who likes to talk about big, seemingly intractable problems. His Pulitzer Prize-winning book "Evicted" told the story of housing insecurity, by following eight families. But his latest book zooms out and takes a different perspective on why poverty exists in America.
Matthew Desmond: I read this line by Tommy Orange, the novelist, where he writes, "Kids are jumping out the windows of burning buildings, falling to their deaths. And we think the problem is that they’re jumping." And I tried to write a book about the fire, you know, who lit it, who's warming their hands by it. So, this is a book about why there's so much poverty in America and how can we get rid of it. But in that telling, it's really a book about the fire.
Basu, Narrating: It's called "Poverty, by America." And that part about "who's warming their hands," that's the part that'll stick with you. Because he's talking to you. If you are not poor, that is, if you're wealthy or even just comfortable, you're benefiting from a system that keeps people poor. And Matt says, when you're in poverty, it dictates everything. It's not just the state of not having enough money.
Desmond: It's pain and exhaustion, piled on top of the nauseating fear of eviction, piled on top of debt collector harassment, and tooth rot, and the suffocation of your dreams and literally the suffocation of your life.
Basu, Narrating: Matt says, for everyone else, it's not enough to simply be against poverty. You need to be actively anti-poverty. Similar to the anti-racism movement, there's no such thing as a neutral stance here. He rejects the idea that this is some kind of unsolvable problem. He's got big policy suggestions, but also some concrete, personal ideas on what everyone should be doing to be anti-poverty. I asked Matt to start by defining the problem of poverty in America, and how exactly the rest of us, the comfortable, benefit from it.
Desmond: Many of us enjoy the cheap goods and services that working poor people produce. Many of us enjoy high returns on investments in the stock market, even if those returns are based on kind of a human sacrifice in the form of worker exploitation. Look at financial exploitation. Every day, around $60 million is pulled out of the pockets of the poor in overdraft fees, and check cashing fees, and payday loan fees. Who benefits from that? You know, big banks and payday loan outfits do, but many of us, just normal bankers, do because our free checking accounts aren't free, they're subsidized by the 9% of account holders that are paying all those overdraft fees. Or just look at the tax code. You know, many of us like these tax breaks we get, we protect them. When our politicians try to revise them or reform them, we raise a fuss. But in doing so, we support a country that does much more to protect our fortunes than it does to alleviate hardship. And then so many of us, and this is true for Republicans and for Democrats, continue to be segregationists. We continue to say, "No, no," to any kind of affordable housing in our communities. We draw walls around ourselves, and we hoard opportunities behind those walls. And we can decorate those walls with rainbow flags or "don't tread on me" flags, but the wall remains the wall. You know, indifferent to those decorations. I read a study recently that showed that conservative renters are more likely to vote yes on an affordable housing proposal than liberal homeowners. You know, so maybe we're not so polarized after all. You know, maybe above a certain income level, we're all segregationists.
Basu: That's really interesting. Let's take a step back for a moment and just talk about how we define poverty in America. I mean, there is the poverty line. But as you explain in your book, that doesn't really tell the full picture. So, can you explain that?
Desmond: Sure. So officially, poverty is drawn at a line. So, if you make under a certain amount of income like $28,000 for a family of four, roughly, you would be considered officially poor in America. But there's plenty of poverty above the poverty line, right? One in three of us lives in a home where the family's bringing in $55,000 or less. Now, a lot of those folks aren't considered poor, but what else … [LAUGHS] What else do you call it other than …
Basu: Struggling. Really struggling to make ends meet.
Desmond: Yeah. Struggling. You're living in Miami, Portland, New York City, and you're raising two kids, and gosh, that's tight. And so, a lot of the folks that are on the front lines of the anti-poverty struggle are saying, "Look, the poverty line doesn't even cut it." And there's also depths and depths beyond depths of poverty. The Nobel laureate Angus Deaton, the economist, estimated that 5.3 million of us in America live in abject poverty on $4 a day or less. And he says, you know, this is a kind of poverty that mirrors extreme poverty that we used to think only was present in faraway places where people have swollen bellies and bare feet. I think we have to accept just a hard reality that there's a bottom layer here in America. And I've seen this, you know. I've lived in very poor neighborhoods, and I've met, you know, grandmas living without heat in the winter in Wisconsin. I've seen houses full of kids get evicted, just kids, their things thrown out on the curb. And so, I think for those listeners who kind of doubt an extreme poverty in our country, I would just ask them to get in community with folks that are really struggling today.
Basu: Now, I realize that this book is different from your last, "Evicted," and that it's not as narrative driven. Can you talk a little bit more about sort of the lived reality of poverty in America today?
Desmond: Yeah, a quick story. So, I wrote a little bit about a man I met named Julio Payes. And he was from Guatemala, and he was working two jobs when we met a few years ago. And he would work the graveyard shift at McDonald's from 10 p.m. to 6 a.m. and then he'd have two hours and then need to clock in at a company called Aerotek. It was a temp service. And he just did anything they told him to for another eight hours. And then he slept as much as he could and showered, and then it was back to McDonald's. And he said, you know, my life, I don't have any life. I feel like a zombie. He was either working or sleeping. And one day, his eight-year-old brother came up to him and was like, you know, how much for an hour of your time? I just wanna buy an hour of your time to play with me. And, you know, when Julio heard that, he just cried, he wept. And not long after that, he collapsed from exhaustion in a grocery store. He was 24 years old. And so, I think that what we're talking about when we're talking about ending poverty, is we're talking about a whole other existence for people like Julio that deserve better.
Basu: Yeah. I mean, you're talking about health implications here. Right? The real effects of stress on a human's body and mind.
Desmond: Absolutely. Between 2001 and 2014, the richest women in the country gained three years of life, but the poorest women gained about 14 days. And so, what we're talking about when we're talking about inequality is literally talking about more life, giving a better life, but extending people's lives too. And in this rich country, we certainly can afford to do that.
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Basu: One thing that you do really well in this book is some myth busting of common talking points. I thought it might be helpful to talk about some of them. So, first myth: Poverty persists because of immigration. Immigration depresses wages. It overburdens the safety net. What makes this inaccurate, a misconception?
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Desmond: So, if you look at immigration rates since 1970, they've gone up a lot, but poverty hasn't gone up a lot. Poverty's basically stayed the same. About half of folks that are born in another country that live in America, live in three states: California, Texas, and Florida. And so, you can look at giant increases in immigration in those three states, but none of those three states have had giant increases in poverty. In California, it's basically stayed the same between now and 1970. And in Texas and Florida, poverty's actually decreased a little bit. So, what's going on with that? Why? Immigrant families have some of the highest rates of social mobility in the country, and a lot of us just know this from our daily lives. We've met doctors and engineers and business leaders who are the sons and the daughters of berry pickers and laundresses and other people that came to this country so their kids could have a better life, and they've succeeded. Now, some of us might ask, well, does that come at the cost of native-born workers? And the best evidence we have suggests it does not. You know, that immigrants mainly compete with other immigrants for jobs, and they don't compete that much with native-born workers. And then the last myth about immigration is that they really burden the safety net. They pull down government spending. But a lot of immigrant families, especially those that are undocumented, they don't qualify for a lot of federal programs. And the best evidence we have here shows that the average immigrant family contributes more to the Federal Treasury in terms of taxes paid than they do receive money from the government. So, the persistence of poverty in America just can't be attributed to our immigrant workforce.
Basu: Yeah. Second myth: If we increase wages for poor people, that would lead to more unemployment.
Desmond: Right. So, economists used to believe this as orthodoxy. It came from a paper by a man named George Stigler, which was published in 1946. And he was like, you can't raise the minimum wage because if you do, employers will hire fewer people. But he didn't make that argument with any sort of data, actually. It was just kind of a math proof. He called it "hypothetical data" in his paper. And so, when economists actually started testing this proposition with real actual data, they just didn't find much evidence of it. You can certainly find studies that show that when you increase the minimum wage, there are job reductions, but you can also find studies on the other side that if you increase the minimum wage, there's job gains, growth. But the best evidence suggests that the effect zero. Someone like Julio didn't have to get paid poverty wages for his job to exist. If he manned the grill in Denmark, for example, at McDonald's, he would've got twice as much as he did manning it in California. So, this is a myth that we have to reject.
Basu: Now, the third myth: Government assistance disincentivizes people from working and leads to a dependence on the government. Now, I found this part of your research actually really, really interesting. So, what's wrong about this?
Desmond: It's just not empirically true. And so, we hear so much about welfare dependence. We heard so much during COVID about how folks aren't getting back to work because we're paying them to stay at home
Basu: This persisted for many months after the increased unemployment aid ended as well.
Desmond: Right. Just really sticky story in some parts of America. But you can test it. You can say, okay, half the states kept extended unemployment insurance and other benefits, and the other half didn't. So, if this was true, then the states that got rid of those benefits, they should have seen their job numbers jump up, right? They didn't. Their job numbers are basically the same as states that kept the extra protections. And if you dig into the data, right, the biggest problem is not welfare dependence. It's welfare avoidance. It's the fact that so many families in America are not taking advantage of programs designed for them. Let me just put some hard numbers around this. You know, if you add up the number of families who could receive the Earned Income Tax Credit, this bump in wages that working poor families receive, well, one or five folks pass on that. One in five elderly Americans that could receive food stamps, pass on those. And you add that up with the number of folks that pass on government health insurance and unemployment insurance, you reach a total that's over $140 billion a year. That's a massive amount of aid left on the table. So, this is not a picture of welfare dependency. You know, this is a picture of us doing a really bad job getting families aid that they need and deserve.
Basu: Yeah. So, why is that disconnect happening? You're saying that, you know, it's being left on the table. But is it because people are opting out? Is it because of the stigma around accepting aid in this way?
Desmond: We used to think it was stigma, and there is something to that. Right? Being broke in America is still a very stigmatized thing to do. And I don't know if you've ever been to a welfare office or applied for a government program, but it is often a very degrading process. But the bigger reason folks aren't taking advantage of these programs is we've designed them in really, frankly, stupid, confusing ways. So, if you look at the number of folks who are signing up for food stamps that could sign up, in Oregon, basically everyone does that could. They have a really strong coverage rate. But in California, only about two-thirds of folks that could sign up do. So, are food stamps more stigmatized in California than Oregon? No, they're not. Oregon just does a much better job than California in getting the word out. And this is really a low hanging fruit for us, right? Like, we can do things like make these programs much simpler, make it automatic for people to re-up. Just pay folks to spend 15 minutes with people helping them sign up on the phone. You know, these things really matter for getting folks connected to aid that alleviates their hunger and stops their homelessness.
Basu: You know what I've thought about probably once a week or more since I read it? There was an Annie Lowrey piece in "The Atlantic" where she wrote about how there is just so much time required to sign up for things like this. And that itself is a cost that so many people can't bear. I mean, who has the time to take a morning off from work to go stand in line at a welfare office and spend some decent amount of time trying to sign up for something? Not many people.
Desmond: Yeah. I've spent so much time in welfare offices with my friends, and often, you're waiting a half a day for a 10-minute appointment. You know, and if you don't have that birth certificate or that second form of ID … And many of us that are listening, we've been there. But for those of us that aren't, like, think of going to the DMV, which often we have to do maybe once every five years or something. It's not pleasant. But going to the welfare office is way worse. It takes way longer. There are also these ways of applying for aid that getting rejected is like just part of the process. Right? So, my roommate in Milwaukee, his name was Wu, and he stepped on a nail in this apartment we shared, and his leg got infected, and he experienced an amputation. His leg was amputated. And I met Wu in the hospital, we cried together, and then we applied for disability for him. He was a security guard, and he couldn't work that anymore. And so, his application was turned down. And everyone knows this is just how it goes. You know, when you apply for disability, you just are expected to get rejected. Like it's a normal part of the process. So, Wu hired a lawyer, and with the lawyer's help, he was able to secure the benefit, but the lawyer got paid. And if you're looking at the data, you learn that every year in social security funds, over a billion dollars - billion with a B - doesn't go to people like Wu, it goes to lawyers to help people like Wu get aid that they need. So, there's all these inefficiencies that we can address as a country.
Basu: Speaking of inefficiencies, and to stay with the pandemic example for a bit, I'm thinking about how much COVID-related aid has been earmarked in states across the country that is still sitting unused. It hasn't been dispersed. I'm trying to understand. I mean, I think a lot of people are trying to understand. It might be different reasons in different places, but I think a lot of it comes down to a disbursement issue as well. Just an administration of aid.
Desmond: Yeah. And I would call a disbursement issue, a moral failing. It's a failing of public virtue. And this is something that happened in COVID, but this is also something that happens all the time. So, if you look at cash welfare, which is called Temporary Assistance to Needy Families, or TANF, if you're a policy wonk. That's distributed to states through block grants, which means that states have a lot of leeway about how to spend that money. And for every dollar that's budgeted for those families, the poorest families in those states, only 22 cents reaches them. Because states use a ton of discretion about how to spend TANF dollars. They fund Christian summer camps, and marriage initiatives, and antiabortion clinics and on and on the list goes. And then states just sit on the money. So, Tennessee was sitting on over $700 million, the last time I checked, in unused TANF funds. This is one of the poorest states in the nation. But this isn't just a red state issue. You know, Hawaii was sitting on so many TANF funds that it could pay every poor kid in the state $10,000. So, we have to hold our electeds accountable for this. You know, we have to demand that money that is earmarked for our most vulnerable families actually reaches them. Because I mean, let's talk about what we're talking about here. Right? We're talking about kids not getting enough to eat. We're talking about kids facing eviction. We're talking about kids living in homeless shelters and cars. We have over a million homeless public-school children in America today. So, when we're talking about this aid not going out the door, we're talking about a real cost to our families.
Basu: Yeah. Another thing that you write about well in the book is this idea of welfare not reaching people who need it the most. And instead, very much reaching the affluent in this country.
Desmond: Yes. And so, a lot of us don't look at a tax break as something akin to a welfare check, but we should, you know. Tax breaks cost of government money. Tax breaks give us money. If you receive the mortgage interest deduction, for example, 'cause you're a homeowner, that can be distributed to you by a tax break or the government could just mail you the check every month, you know. It's the same difference. So, if you look at the amount the government is spending on tax breaks, social insurance programs, means tested programs, which are the programs for our poorest families in the country, you learn that every year, the average family in the top 20% of the income distribution receives about $36,000 a year. But the average family in the bottom 20% receives only $25,000 a year. That's almost a 40% difference. So, we're giving the most to the families that need it the least. And then we have the audacity, really, and the shamelessness to ask how we can afford to do more. We look at the gains we made in cutting child poverty during COVID; we reduced child poverty almost by half in six months. And then we started asking, "Can we afford it? Can we afford it?" And I just, I think that's a sinful question. It's a dishonest question. You know, a study recently showed that if the top 1% of Americans just paid the taxes they owed, not paid more taxes, just stopped evading what they already owe, that we as a country could raise $175 billion a year, which is more than enough to fund the extended child tax credit. In fact, $175 billion is almost enough to bring everyone out of poverty. So, it's not that we lack resources, we lack something else.
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Basu, Narrating: What are we lacking? Is it political will? Personal responsibility? Matt says it's all of these things, but it's really about accountability. Again, this is similar to anti-racism. He argues that it's gonna take a radical rethinking of how you and me and all of us contribute to this problem, even unintentionally, in order for us to try and solve it
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Desmond: You know, the anti-racist movement has taught us that really having a reckoning with racism and striving for more justice in this country, it's gonna take big transformative policies, but it also requires us to search ourselves, to take inventory of our own misconceptions, and what we're teaching our kids, and how we might be contributing to racism in ways that we didn't even anticipate or fully recognize. And I think that becoming a poverty abolitionist means pushing for a government that makes deeper investments in ending poverty, pushing for a government that empowers poor folks, giving them more choice about where to live, giving them more power in their jobs. But it also requires us to say, "What am I buying? What am I investing in? How am I living?" You know, how am I even talking about poverty? So, take tax breaks, for example. You know, tax season comes along, many of us - left, right, center - we complain about it, right? We complain about that bill. That's how it's designed for us. "Taxes should hurt," Reagan famously said. But what if instead of the next time your neighbor's like, "Oh my gosh, you know, tax season," what if we said, "Yeah, you know what's crazy? I get all these deductions, and I just don't need them. And like, if there wasn't so many evictions and homelessness in the country, if there wasn't so much poverty and hunger, I'd be okay with it. But I just don't see how this is just and right at all. And this year, what I'm gonna do is I'm gonna donate a portion of my mortgage interest deduction to my local anti-eviction fund, and I'm gonna write my congressperson and I'm gonna say, 'Look, I don't need this. Invest this in anti-poverty spending.'" Now, if one person did that, that's a one-off. But what if thousands and thousands of us did that? You know, I think we need to start building political will at the bottom, and that means really taking responsibility for poverty in a way that many of us just haven't done yet in our daily lives.
Basu: You know, I think what feels so intractable for a lot of people is, it feels like you can't take a step down the street in America without participating in some kind of exploitative process. I mean, really. So, this idea of, you're talking about examining all the things you do in your life. Frankly, I think a lot of people hear that and think, "Well, that sounds exhausting. How am I supposed to go about doing that, even if I wanted to? How do I do that?" I mean, you gave one example. How do people do that, in practice, really?
Desmond: Step by step. Step by step. And if we get overwhelmed or full of guilt, that's not gonna be very useful. If we just despair, our despair is useless. And so, here's some tangible things we can do. Next time we shop, we can consult organizations like B Corp or Union Plus. These are nonprofit organizations that take a hard look at businesses and say, look, if you want some candy, these candy bars are made by unionized workers, and these ones aren't. Why don't you get the unionized ones? You know, B Corp looks at companies and says, look, these guys have really high social and environmental standards. Why don't you vote with your wallet there? Some of us can't; we're cutting coupons, our budgets are stretched. But for those of us that can make choices about where to spend our money, we should reward companies that are doing right by their workers. And look, I try to do this, but I don't do it a hundred percent. You know, I try, I fail. I do it again. But I feel it's the price of our restored humanity. The other thing we can do is we can join anti-poverty movements, and I created a website for this purpose. It's called EndPovertyUSA.org. And you can go on that website, and you can see folks that are just putting in the work on this fight in every state or at the national level. And you can pitch in. And look, I don't really think of myself as a protesting kind of type. You know, I'm a writer, but movements need writers too. And they need lawyers and marketing executives and students and retired grandmas. And, you know, this is all our fight.
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Basu, Narrating: It can be easy to fall back on old patterns of thinking, like this is too big to solve, and given our political climate, we'll never agree on how to fix it. But Matt says, we've done transformational things before, at times of big political clashes.
In the 1960s, President Lyndon B. Johnson enacted nearly 200 pieces of legislation known as the Great Society, which included the so-called War on Poverty. It created several programs that exist today like food aid, Medicare and Medicaid, and expanded Social Security benefits. From the early-'60s to the early-'70s, the percentage of Americans living below the poverty line dropped by about half.
Matt says, look, the 1960s was also a time of political polarization and division. That should tell us, sweeping changes to address poverty are totally possible today, especially since he believes we're more aligned on this issue than we might realize.
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Desmond: Most Americans, left and right, think that poverty is the result of unfair circumstances, not a moral failing. Most Americans, left and right, want deeper investments in healthcare, want higher wages, want more affordable housing. So, why aren't we getting it? And it is true that Congress often is disconnected from the needs of everyday Americans. Congressional representatives are often very rich and, just in their personal lives, are kind of insulated from the struggles of so many of us. The only way we can win is to work together. The only way we can win is to form a mass movement. And so, their vested interest, they've got money, they've got lobbies. So, what do we have? We've got numbers. And so, the tent has to grow, and that means that many of us have to enter it who don't see eye to eye on everything. You know, you and I might both wanna abolish poverty, but maybe we see things differently on gun rights, or on abortion, or on other of these issues. And I think that many folks in the antipoverty movement are saying, "I hear you. I hear you." But for this tent to grow, we've gotta bind together.
Basu: Why have we been made to feel like there's so much polarization on this topic?
Desmond: So, on the one hand, we are polarized. There is a political party that have plans to expand affordable housing, to deepen investments in low-income families. And we have another political party that frankly has nothing to say to the poorest families in America. In fact, with our new Congress, the first thing the Republicans did is say they're gonna roll back funding the IRS, which is giving the richest families a break again, on just paying their fair share of taxes. So, the polarization narrative isn't false, but it's also absolving. It does let us off the hook. It does give us this chance to say, "Well, geez, if Congress was aligned differently or if my neighbors looked at the things like I did, we'd be better," but we just can't wait. They didn't wait in the '60s for Congress to get perfect. They pushed and pushed, and I think we can push now. And binding ourselves together on these basic issues of economic justice. Let's reign in exploitation. Let's give low-income families more choice about where to live. Let's demand a fairer government that does much more to expand opportunity than to guard fortunes. And let's finally tear down these walls. You know, let's be inclusive and share prosperity. I think a lot of us agree on those fundamental values, so now we just have to push and make Congress reflect the will of people.
Basu: Matt, I appreciate how so many times over the course of this conversation, but also the book, you have steered the conversation toward hope. So, let's end on a hopeful note as well. You've talked a lot about how your goal is ending poverty, truly ending poverty. What is that vision? What does our country look like if that end goal is met?
Desmond: For those of us that are struggling, for those of us that are poor, those of us that have been exploited, or evicted, or incarcerated, it means a whole other existence. It means being able to breathe. It means your kids can dream. It means safety and life. It means a full incorporation into the union, to the benefit of the union. And for those of us who have found security and prosperity but are haunted by all this poverty in our midst, it means a safer country, a happier country, a freer country, a country without that ickiness that we feel when we know we're complicit in all this misery around us. It's like, wouldn't it be great to go to a restaurant and know, look, everyone in this restaurant, they're getting a living wage. You know, to spend the night at a hotel and knowing that the folks that are changing your sheets, they're taken care of, they're working under dignified conditions. And those of us that have been to other countries, we can feel this. Right? Like, you go to Europe and you're like, "Well, how much should I tip?" And they're like, "Nothing. We don't need it." You know, and here it's like, "Gosh, how can I, in this little transaction, balance out this inequality that I'm participating in?" This is where a poverty-less America benefits all of us. Right? This is how poverty diminishes and pulls down all of us. Right? We don't want this, you know? And so, I think it is disingenuous to talk about ending poverty without really talking about sacrifices that some of us will have to make. But I think it's also disingenuous if we don't recognize how those sacrifices come with this better country, a more freer, healthier, safer country.
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Basu: Matt, thank you so much for your time.
Desmond: Oh, gosh. It was an honor. Thanks for having me.
Basu, Narrating: You can find Matthew Desmond's book, "Poverty, by America," on Apple Books. We'll include a link for you on our show notes page, as well as a book excerpt. And, if you like what you're hearing on this show, "In Conversation," please don't forget to subscribe, rate and review us on Apple Podcasts
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