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 Industrial Revolution, nearly every (non-nomadic) society throughout recorded history tended to have great masses living at subsistence levels and a small minority of people with wealth and economic power. That began to change with industrialization. When the developed nations moved into the post-industrialized economy era, something more like a bell curve emerged. I used the chart below to illustrate this point a few days ago.
Even the poorest people living in developed nations today are materially better off than most people throughout history and 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 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 this community's last group of ninety people. But because there is so little difference between you and number twenty, your life experiences are very similar. Even though seventy-nine people are ahead of you, you experience yourself as a normal community member.
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 less wealth but have so much they do not have to worry about life and have enough for many luxuries, should they 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 the things the forty to sixty people ahead of them can. This group is followed by another twenty people who live modest lives and occasionally experience financial hardships. They do without many things that the sixty to eighty people ahead of them do without. They find they cannot 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 are the bottom twenty people who are almost perpetually struggling financially. 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 the community? Not likely! This is even though, on a material basis, you might have more than 95 people in Ancientland. Living in the left tail of the economic bell curve can be devastating.
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 living standards.
However, advanced economies like Richland's economy require much more. One must have more sophisticated cognitive and social skills to function in the economy. Without them, you cannot effectively function as a steward of resources in the economy. In Richland, poor citizens often 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 poor people has been increasingly coming as 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 two consecutive months, but only 2% were in poverty for all 48 months.
Doing the math, this probably means that only about 20% of the 37 million people are in what some might call the underclass (generational poverty). However, several million likely are in precarious situations above them. Many people who end up briefly in 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 characters in Richland. They have hope for a better future.
The key group I want to focus on here is those who experience poverty as a chronic generational problem. What is our response to them?
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