Two posts ago I wrote:
Relative poverty is based on a statistical distribution. Theoretically, we could place the amount of wealth each person or family has on a continuum. Then we decide that people who are below some percentage cutoff line on the continuum (5%? 10%? 20%?) are in poverty. The only way poverty is eliminated here is when everybody makes exactly the same amount of wealth; otherwise there will always be someone who is relatively poorer than others.
Until the time of the industrial revolution nearly every (non-nomadic) society throughout recorded history has tended to have great masses of people living at subsistence level with and a small minority of people with wealth and economic power. With industrialization, that began to change. By the time the developed nations moved into the post-industrialized economy era something more similar to a bell curve emerged. I used the chart below to illustrate this point a couple of days ago.
Even the poorest people living in developed nations today are materially better off than most people have been throughout history and they are better off than large segments of societies in developing nations today. Yet they experience themselves as poor and marginalized. Why?
Imagine being in a community of 100 people. We will call it Ancientland. One person is unimaginably wealthy. Then there are another nine people who have considerably more than everyone else but not nearly to the degree of the first person. Then imagine there are ninety other people including you who all have similar amounts of wealth. You are number eighty in the last group of ninety people in this community. But because there is so little difference between you and number twenty, your experiences of life are very similar. Even though there are eighty-nine people ahead of you, you experience yourself as normal member of the community.
But let us move to the community of Richland. It too has 100 people. Here again there is an exorbitantly wealthy person. Then there are four people who are not quite as wealthy but still have beyond what most could imagine. Then there are fifteen more people with still lesser wealth but have so much they do not have to worry about life and have enough for many luxuries, should the wish to buy them. They are followed by twenty more people who are pretty secure financially but can’t afford much extravagance. They are followed by twenty more people who have stable lives. They sometimes find themselves in a pinch and probably can’t afford some of things the forty to sixty people ahead of them can. This group is followed by another twenty people who live modest lives and they likely experience financial hardships on occasion. They do without a great many things that the sixty to eight people ahead of them do without. They find they are unable to afford the recreation and lifestyles those above them take for granted. Because of this, they at times feel excluded from the broader life of the community. Then there is the bottom twenty people who are almost perpetually in financial difficulty. They need assistance from others. Coping with life in an advanced economy consumes all their energy. Sometimes they get by and sometimes they don’t. You are number ninety in this group of people from 81-100. Do you feel you are a “normal” member of community? Not likely! This is in spite of the fact, that on a material basis, you might have more than 95 people in Ancientland have. Living in the left-tail of the economic bell-curve can be devastating.
The truth is that in a place like Ancientland, very little education or input is needed for an individual to become a productive member of society. Often a strong back and a healthy mind may be all that is needed to eke out an existence. Direct financial or material assistance can often make a positive difference in the life of Ancientland citizens because most people have the basic skills needed to function at their economy’s present level of sophistication. New resources and incremental introductions of evermore sophisticated technologies can spiral the community to higher standards of living.
However, advanced economies like Richland’s economy require much more. One has to have more sophisticated cognitive and social skills in order to function in the economy. Without them, you can not effectively function as a steward of resources in the economy. In Richland, poor citizens often just consume whatever resources are given to them and then they end up right back where they started. Transformation into genuine stewards requires far, far more than pure financial assistance.
So how many people are poor in a Richland like the United States? Economic data suggest the poverty rate was about 12.6% in 2005. That would be about 37 million people. However, two observations need to be made here. First, the poverty rate is a measure of income and over the past decade assistance to the poor has been increasingly coming in the form of non-cash assistance. Thus, this percentage probably overstates the level to some degree. Second, in developed nations there is rapid movement by people in and out of poverty. According to Poverty in the United States: 2002 by the Census Bureau, here are a few pertinent facts:
- Spells of poverty lasted for four months or less for 51.1% of people in poverty.
- Nearly 80% of spells in poverty are less than a year.
- Over a four year study period, 34.2% of the population was in poverty for at least 2 consecutive months but only 2% were in poverty for all 48 months.
Doing the math, this probably means that only about 20% of the of 37 million people are in what some might call the underclass (generational poverty), although there are likely several million that are in precarious situations above them. Many of the people who end up briefly in the poverty numbers are recently divorced people, temporarily unemployed, students and a host of other people who have the resources to alter their situation. Thus, many in poverty are not like our fictional character in Richland. They have hope of better future.
The key group I want to focus on here are those who experience poverty as a chronic generational problem. What is our response to them?