Poverty is back in the headlines thanks to a pair of public figures. The comments illustrate divergent views, and only one is correct.
“Americans have choices. And they’ve got to make a choice,” Rep. Jason Chaffetz, R-Utah, told CNN. “So maybe, rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on, maybe they should invest that in health care. They’ve got to make those decisions themselves.”
Chaffetz perpetuated the idea that poverty is a matter of personal choice while promoting the new Republican plan to overhaul U.S. health care. His argument puts forward the notion that self-control and better decision-making help people escape poverty. At the same time, it criticizes people who have little money but decide to buy cell phones, televisions and alcohol.
Pope Francis took another stance.
“There are many arguments which justify why we should not give these alms: ‘I give money and he just spends it on a glass of wine!’ A glass of wine is his only happiness in life!” Pope Francis said, according to Christianity Today.
He spoke with an Italian newspaper run by homeless people about a variety of issues including the need for Catholics to give to beggars on the street. The Pope jokingly rebutted why people should not withhold giving over concerns about how the money will be spent. In doing so, he argues that every person does things to bring pleasure and cope with hardship.
Chaffetz’s comments bring to mind a story Ronald Reagan used in his 1976 presidential run of a Chicago woman who bilked the government for more than $100,000. The ‘Welfare Queen,’ as the Chicago Tribune labeled it, epitomized the idea that poor people put more effort into getting help from the government than into earning an honest income. The argument became the backbone to Reagan’s welfare reform proposals. He told Americans that handouts created dependency that kept people in poverty.
“We’re in danger of creating a permanent culture of poverty as inescapable as any chain or bond; a second and separate America, an America of lost dreams and stunted lives,” Reagan said during a national radio address in 1986. “The irony is that misguided welfare programs instituted in the name of compassion have actually helped turn a shrinking problem into a national tragedy.”
There are always exceptions to the rule. The story Reagan used is an example of welfare abuse, but it is a single instance. Anecdotes should not drive policy decisions. The cost of an iPhone 7 Plus would pay for about two months of health insurance coverage for the average person. Foregoing the phone is not going to solve health care for a family living in poverty.
These persistent myths continue to drive bad policies. Welfare reform led by a Republican Congress and the Clinton administration in the early 1990s was predicated on the myth of ‘making good choices.’ New rules made it harder for families to access the Temporary Assistance to Needy Families program (aka welfare) and encouraged people to find jobs.
The recent book $2 a Day: Living on Almost Nothing in America shows that the reform failed. Initial drops in welfare enrollment after the reform were boosted by a rapidly growing economy and low unemployment. As things slowed down, people in need of a social safety net no longer had the cushion that was once available. The authors of the book estimate that some 1.5 million American households are living on less than $2 per person per day.
That is extreme poverty.
Depicting poverty as the result of a series of choices overlooks the myriad factors and causes behind the problem. Such a point of view makes it possible to say that lack of access to health care is due to personal spending priorities. It ignores issues of cost, availability of health-care services and other needs.
For example, a cell phone signals stability. One of the women featured in $2 a Day struggled to keep her job and find work because she had to list the phone number for her shelter. Chances were someone else would be using it or another person would answer the phone – signaling to potential employers that she was homeless and saddling her with a stigma that could impact employment decisions.
MIT economists Abhijit Banerjee and Esther Duflo looked at data on how people living in extreme poverty from 13 countries spend their money and earn income. One might assume that most of their money is spent on food, education and health care, but that is not necessarily the case.
Food spending for people living on less than a dollar a day ranged from 56 percent to 74 percent. Yes, some of that money went to alcohol and cigarettes. The average household spent about 4 percent of their income those things.
Surprisingly, they found that people often save money to spend on weddings, funerals or religious festivals. Nearly every household in Udaipur, India, said they spent money on one of those three in the past year. The average household spent 10 percent of their money on “festivals” – more than twice as much as on alcohol and tobacco. It is a similar story for Pakistan, Indonesia and Cote d’Ivoire.
People who share Chaffetz’s view may look at spending habits and see waste, concluding that giving assistance would fuel spending on alcohol. They would be wrong. A review of 30 studies from Latin America, Africa and Asia found that people spend less on alcohol and tobacco after receiving a cash transfer.
“There is a sideshow on this belief that people are poor because they are spending their money on alcohol and cigarettes,” David Evans, a senior economist at the World Bank and co-author of the study, told Humanosphere in November. “This study tries to close the door on the sideshow. ”
Worried about people not working when receiving handouts? That too is a myth. A separate analysis of cash transfer programs found they helped improve health, education, income and savings. Work rates were either unchanged or increased as a result of giving people cash – they did not decline. Welfare provides a safety net for people who do not have one.
And who are we to deny the things that bring joy and meaning to the lives of poor people? For a family in Udaipur, it might be a festival. For a young girl in Seattle, it might be watching a video on her parent’s smartphone. And for the Pople in Rome, it might be a glass of wine.
Poverty does not strip people of their basic humanity. The myth that portrays poverty as a choice and blames people for their station in life does.
