Kathryn Edin and Luke Shaefer - $2.00 a Day: Living on Almost Nothing in America

>> Hello everybody. Good afternoon. And welcome. I'm Susan Collins, the Joan and Sanford Weill Dean here at the Gerald R. Ford School of Public Policy. And I couldn't be more delighted to see all of you here with us this afternoon. Today's event would not have been possible without generous support from the National Poverty Center and its interim chair, Sandy Danziger. I also want to thank the School Social Work for cosponsoring today's event. I know that many students from social work are here with us, very welcome. We're delighted that you're here with us, too. We're pleased to be joined by some senior members of the university administration, Tim Lynch, who is the university's general counsel. And Lisa Rudgers who's Vice President for Global Communications. We're delighted that both of you are here with us as well. Well, thank you for coming here to join us, to learn from the School of Social Work and the Ford School's own Professor Luke Shaefer and coauthor Kathy Edin. They presented their work which you were about to hear about in Washington DC, to multiple audiences of policymakers. And I know that they are going to explore some of the really important policy issues and implications of the research that they have been doing with us here today. Luke and Kathy's book, "$2.00 a Day: Living on Almost Nothing" in America, has been featured in the Atlantic, the New York Times, Huffington Post, Chicago Tribune, and I could go and on. It has received considerable very well deserved attention.

[ Applause ]

So all of the press and policymaker attention is really noteworthy but most importantly it really amplifies a crucial finding in Luke and Kathy's book. And that is that there are 1.5 million American households living in poverty and extreme poverty, and that that number is increasing. That's really a striking number and something that should really garner a lot of our attention. During years of on-the-ground research throughout the country, Luke and Kathy have documented families who are struggling under these extreme conditions, connecting a very real face to that shocking data. Luke and Kathy will delve further into the research methods and findings during their talk. But first, I wanted to tell you a little bit more about them. Luke's research focuses on the effectiveness of the US social safety net in serving low-wage workers and economically disadvantaged families. Luke has pursued policy advocacy at both the state and the national levels. And prior to coming to Ann Arbor, he participated in Chicago's anti-poverty policy initiative successfully helping to raise the Illinois minimum wage and expand access to health care, access to health care to low income families. With Kathy, he recently presented their poverty research to the President's Council of Economic Advisers. He is an associate professor at the School of Social Work and he very recently joined the Ford School faculty this year, we're delighted to have him on board. Kathy Edin is Bloomberg Distinguished Professor at Johns Hopkins University, where she specializes in study of people living on welfare. Over the years, Kathy's books have tackled very tough and important social challenges, including making ends meet, how single mothers survived on welfare, and low-wage work with current dean of the School of Social Work, Laura Lein. And doing the best I can fathering in the intercity with Timothy Nelson. The Department of Housing and Urban Development, the National Institutes of Health, and the National Science Foundation, among others have founded-- have funded her poverty research. She's a trusty of the Russell Sage Foundation, and she serves on the Department of Health and Human Services advisory committee for poverty to search, for poverty research centers at several universities, including here at Michigan. Last year when she became a member of the National Academy of Sciences and the American Academy of Political and Social Sciences as well. So Kathy, thank you much for traveling and joining us here today to share your work with Luke with our community. Just a quick note about today's format, Luke and Kathy will make their presentation and then welcome questions from the audience. Beginning at about 4:40 p.m., members of the Ford School staff will walk up and down the aisles to collect your questions. You should have received a card when you came in. Please white your questions on that card. If you are watching us online, please twit your questions into us using #policythoughts. So, after the program, "$2.00 A Day", will be available for purchase and signing in the Great Hall. And I hope you will stay with us to continue the conversation and also to have your books signed by Luke and Kathy. And so, with no further ado, I'm delighted to welcome Luke and Kathy to the floor.

[ Applause ]

>> Thanks Dean Collins for such a warm and personal introduction. I'm going to start with a story because a story is how we got here. Sometimes graduate students want to know how you come up with ideas for research. My failproof recipe is to spend a lot of time with folks out in the field and this was very much a story of how just immersing yourselves in your daily life with lots of poor people, allows you to see something new. So, as Dean Collins mentioned, at the beginning of my career, I spent six years running around the country interviewing low-income single mothers about their budgets with the dean in School of Social Work, Laura Lein. And because of that experience, I kind of have a mental calculator in my head. If we go at a dinner tonight, I might look at you and suddenly say, "So how do you make ends meet?" That kind of became a habit over those early years. I had gone on after welfare reform that was published in 1997. I just studied the family and study the working poor. But in 2010, I came to Baltimore to study the lives of a group of people, my colleagues and I had been following since the mid-1990s. These were young people who had been zero to seven in the mid-'90s all born in public housing and we've been following their lives over the years to see how they would turn out. And so, in 2010, as they were reaching adulthood, I came to Baltimore. And I-- you know, I started hanging out in the neighborhood and of course several and many of these young people were in fairly disadvantaged circumstances. But one day I went and visited the home of Ashley. Ashley lived in the Latrobe Homes with her mother, her brother, elderly uncle and sometimes a cousin. And she had just a baby. The baby was two weeks old. When we arrived at the house, Ashley was visibly [inaudible]. She looked depressed. She was, you know, holding her baby over her shoulder but she was having a hard time adequately supporting her baby's head. Of course, there's only-- there's hardly any furniture in the house and so Ashley sat out on the only chair in the kitchen and I sat on the floor and she just gave me the perfect purview into the kitchen. This is an old trick I learned from Dean Lein, you know, she was always looking in the kitchen cabinets to see what was in there. And I quickly notice there was no food in the house, nor was there any baby formula. When I began asking Ashley, of course, how she made ends meet, what I quickly learned is that there was not cash coming to the household. Nobody had a job. Nobody was getting anything from [inaudible]. In fact, nobody in the family was even getting food stamps. What they did have was housing subsidy. So I started wondering, you know, is this is thing? Are there a group of people who might claim something from the in kind safety net but have no cash? So I kind of tucked that thought in the back-- in my back pocket. And in the next day, we kind of invented a [inaudible] to revisit Ashley because we were concerned about her and the child. We said, you know, Ashley, we need to ask you few more questions. Can we come back tomorrow? And she said yes. So, we gave her the $50 upon leaving, that we gave respond at the end of an interview. And the next day when we returned, we met her at the door. She was on her way out. She's forgotten we were coming. She had gotten home perm. She looked terrific. She no longer looked depressed. She had kind of spring in her step. She had gone down to the local Goodwell, which is just down Broadway Avenue from the Latrobe Homes and bought a new pantsuit. And in fact, she was on her way to search for work. It was her-- her confidence had been restored, you know, $50, isn't that much money. But for Ashley, it seems to be the difference between really being despondent and sort of unable to function and to get that kind of confidence encouraged about and search for work. So, this prompted a second thought which-- and this by the way, ended up being the arc of the book. What was it about cash that was so special? She had a house in subsidy. But something about cash, just a little bit of cash seems to be transformative. And if it was true, there were a whole group of people living with virtually no cash in America, you know, since the advent of welfare reform. And we did-- you know, we did learn that this story was linked to welfare reform that we're living on virtually cash in America's most advanced industrial country or in the world's most advanced industrial country. What does that look like? And what were the implications for the well-being of families and children? So, it just so happen-- and this was pure serendipity that I visited the School of Social Work and given a talk a year before. And Luke and I had cooked up a plan for him to come to Harvard as a visiting professor. So that fall-- I think it was an 8 o'clock, one morning in Cambridge, I was teaching at Harvard at the time. Luke came to my office. I told him the story of Ashley. I said I want to know if this is thing. I knew enough about Luke to know that he was one of the nation's experts on [inaudible] data set called the Survey of Income and Program Participation, which was in fact the best data set to really answer the question of whether, there been a rise in a form of destitution in America that was so deep, we didn't even think it existed and had actually never even looked to see if it was there. And Luke can take the story from here.

>> Well, I think of that first date, an 8 a.m. meeting, it's unclear if Kathy actually remembered I was coming.

[ Laughter ]

But we had a terrific time. And she said, gee, I just wish, you know, I was visiting all of these homes and I wish there were some data set where we could see, was there some sort of trend over the past 15 or 20 years of more families surviving on virtually no cash income. Now, the SIPP is a large scale nationally representative data set conducted by the US [inaudible]. They go out and they interviewed tens of thousands of households and they asked lots of very specific questions about different income sources. So it does the best of any source that we have at capturing the income of the poor. And all of these surveys have the challenge of sort of missing some income, underreporting of income, people might not want to tell you about sources. But we know that to SIPP is the absolute best choice, and so we thought it was the right place to start. And so Kathy likes to say that within a day, I was back, I think it was about a week, where-- and we started to sort of search around for some benchmark of virtually no cash income, how do we operationalize that. And as all my students know as I would say, if you have to find an arbitrary line, use somebody else's. So, we use the world bank's metric of $2 per person per day and we wanted to see, could you see a trend among household with children and we're going to include all the cash coming in through odd jobs, though work, we're going to include gifts from families and friends, all that that's reported. And we're going to see if there's a trend over the last 15 years or so and more families experiencing this. And then we're going to include SNAP. Food stamps now called the SNAP. And we're going to say, what if you treated food stamps as a dollar-- SNAP as a dollar of cash. And we're going to tell you why we actually think you can't do that for this specific population as we go on but we'd at least get a sense for what kind of impact of the safety net if we have it today, was happening. So in about a week, we had this trend line to deal with, and I think it was maybe a little more dramatic. Then we are initially expecting. So, there's branch in line is households with children who are reporting cash incomes of no more than $2 per person per day in any given month. And you can see it goes from about 636,000 as of mid through 1996, that's just before the1996 welfare reform was implemented, to about 1.5 million households with three million children as of 2011. So that's more than a doubling. Perhaps, even a larger increase than we were necessarily expecting. If you add in food stamps and you count a dollar food stamps as a dollar of cash, that's the blue line. And you can see right there the incredible impact that this program is having at a very the bottom, at the very bottom. It's virtually the only safety net that we have left and-- but even so, you can see-- even if you count food stamps, that blue line only looks good relative to the top line. We're still talking about an 80% increase even when you count SNAP as cash over this period of time. So, we actually release the Sheldon Danziger here at the Ford School. Told us to go ahead and release something, so it was a five-page policy, probably the shortest thing you ever written. And it ended up getting some attention but it really raises a lot of more questions and we had answers, right? What does it look like to live on $2 per person per day? Is this really just maybe noise in the data, you know? Our people-- is it just underreporting of income or something screwy going on with [inaudible]. So, we started to do two things. The first was we wanted to look for other sources, large scale data that might say, you know, is this a trend that we can see in the population as a whole? Can we externally validate what we see in the set with these other sources of data? And the second thing was to start to try find families, thinking that the proof is really you know, right there. Could we find families that look like that? And if we could, what do their lives look like? You know, how did they get into these circumstances, and what did they do to survive? So, starting just with the large scale data, one thing is that the SIPP is a longitudinal survey so we could look overtime and we wanted to know where these spells families living on $2 per person per day. Were they short spells of family, sort of experiencing a month or two months at a time, or was it really a story about longer spells? And what we could see when we look longitudinally is actually the biggest increase was among these longer spells that we call chronic spells, families who are living for at least 7 in as much as 12 months under this low threshold over the course of the year. And it's more than a tripling, right? So, it outpaces the growth in the monthly estimate. We knew SNAP was a big part of the picture, right? It's this buffer that we have. And we looked in the SNAP administrative records. So if you to go down to the technical appendix of the annual reports that they release, you can actually tally the number of households with children who are reporting that they have no other cash income except SNAP, right? So no actual cash coming into the house. So we plotted that. That's the dash line against the boxes from our most recent estimates and you can see we lined up really well in 1996 and 2005 and across this whole spectrum. And actually, when I saw these first two lines, I took the rest of the day off. Because you virtually never see two sources of, you know, entirely different data line up that closely. And then the SNAP, they'd actually starts to outpace us, so you see that it's going up to an even a greater extent than our comparable $2 a day estimate. As we started to get into the qualitative work, we saw that housing instability with a major piece of this. And so, we knew that the nation's public schools in about the mid-2000s, started recording of the number of homeless children, these are children without a permanent place to live. Across the schools, we would assume that this is an undercount. So, here I sort of plotted the same-- this trend line for you and some of you can probably figure out in 2005, 2006 what accounts for that spike, it's a Hurricane Katrina, and everything that went on there. But you can see a very similar sort of trajectory, right, of increasing numbers of the children at sort of a similar pace and extreme poverty, I'm sorry, without permanent place to live. And then, if you go to Feeding America, they have reports that they list every few years that captures a number of unduplicated Americans who have benefited from private emergency food programs. Now, again, this is not a directly comparable number but we thought if what we are seeing in extreme $2 a day poverty was actually something that was happening on the ground, we would probably see an increase here too in a number of families seeking emergency food assistance. And you can see at 2009, it goes up dramatically, right? And that's the effect of the great recession. But again, that sort of dwarfs actually a fairly sizable increase as of 2005. Between 1997 and 2005, this goes up by about four million American, more Americans seeking emergency food assistance. So, across a series of indicators, right, using both nationally representative survey data and the administrative records and reports from our charitable organizations, we can see a consistent story of deteriorating circumstances among poorest of the poor families in the United States.

>> So what do this mean? We decided, in order to continue our collaboration, we needed to actually go back to households like Ashley's. And in order to understand four pivotal questions, who falls into extreme poverty, what's it like, you know, what's the texture of daily life like, how do you survive, and what are really the implications for families and children of a level of poverty this deep? So, we were inspired I think both as young people by the work of Michael Harrington. And as you know, he kind of went on the road and exposed poverty in various places across the United States. Our site selection was actually driven by the SIPP. So, we show-- we chose sort of what we feel as the quintessential American Central city. I apologize to Detroit and Ann Arbor, but we felt that was Chicago. And so we began our exploration there, kind of a typical American city if there is such a thing as a typical American city. We also wanted to find a town that had been really a boom town in Harrington's time. But he had since hit the skids and we landed in Cleveland, Ohio where I lived for three summers and kind of fell in love with the city. I actually have a T-shirt that says, "Cleveland is my Paris" that I wear proudly, and bumper sticker. But we also saw in the SIPP that there was this clustering, the slight clustering of the $2 a day poor in the region [inaudible] called the south east. This is of course Appalachia and the Deep South. So, we choose a site in Appalachia, the Johnson City, Tennessee area of Eastern Tennessee. What was interesting about this site is it even deeply poor in Harrington's time. But had since seen a bit of a rebound but still had deep pockets of poverty. And finally, we went to what one rider has called the poorest place on earth, the Mississippi Delta. Is Bethany Patton here? Can you stand up? Bethany Patton brought us the Mississippi Delta, so thank you Bethany.

[ Applause ]

Through her experience as a TFA, she was able to make amazing connections for us so that we can do in-depth work in the poorest place on earth. As you can imagine, this was quite an adventure. But, I want to take a step back for a second and talk about the fact that we make the claim, that what we see in the growth of $2 a day poverty, is intimately connected to welfare reform. Now, at its peak in 1994, AFDC, the Aid to Families with Dependent Children program, the precursor of TANF, right, served about 14 million people about 10 million adults, 5 million children, OK? But currently, that number is dramatically lower. So today we only have about four million people on the rules, under three million children, just about one million adults by latest count, OK? So, the Center for Budget and Policy Priorities constructs a measure of the TANF to poverty ratio to give a sense of how many eligibles are actually able to access TANF. And of course TANF is the Temporary Assistance for Needy Families Program. It's the program that replaced welfare when welfare is reformed. So that number was at about 68% percent in 1996. And I just heard an update from Donna Pavetti [assumed spelling] that the current number is 23% percent today, OK? Now, when I say there are million adults left on the rules, what's really crucial to understand over and above that is that half of those are adults are in only two states. These are the states with the most vibrant welfare systems, although those systems have also atrophied dramatically. And these are the states of New York and California. So once we take out those adults, we only have a half million adults on the welfare rules across the rest of the country. So, if you didn't need that as evidence, that TANF is essentially in receivership in the United States or to use the title of our chapter, "Welfare is dead", you need to come with us to Chicago where we met Madonna Harris. And Madonna was living with her daughter Brianna, kind of moving across a group of homeless shelters and truly desperate straights. One weekend, while I was hanging out with Madonna and Brianna, there's absolutely no food in the house. The shelter wasn't just serving any kind of meals. All they had was a half a gallon of spoiled milk in the refrigerator, the inspiration for the cover of the book. And I said to Madonna, "Why don't you just go to TANF?" She said, "Oh, haven't you heard? They aren't giving that out anymore." And we heard this again and again and again. The notion, that welfare was dead, OK? So, we then went to Johnson City, Tennessee where we met a young couple, Jessica and Travis Compton. And if you read the [inaudible] in the Atlantic, Jessica is the plasma donator of that we feature. And this young couple was truly desperate. They had gone months without work. In fact, as we talk, each time we visited, Travis was sitting at the window looking for the sheriff to come and evict the family from the home because they were so far behind on the ramp. When I said-- maybe I think, Luke, it was you who said. I said, "Travis, what about welfare? What about TANF?" And Travis looks stunned and said, "What's that?" Now, some of our respondents had heard of TANF or welfare. One such person was Ray McCormick [assumed spelling], who steadfastly had resisted going to the welfare office because she felt that she was a worker and she didn't think that this was something workers did unless they were truly desperate. But that point came. And Ray did finally go down to the TANF office. And when she came back, her report is that she had been rejected and told, honey, there are so many poor people, we just don't have enough to go around, you need to come back next year. And there are more and more examples of states and locales, even local welfare offices that are engaged in these so-called soft diversions, to keep people from the world. And in Q and A, we can talk about why TANF offices might be motivated to do that. Wow. Luke will fix it. But if you want even more evidence that welfare is truly dead in the minds of the $2 a day poor, all you have to do is go back to the SIPP. So we followed children over the course of the year, and we looked at whether those children had any adult who was claiming even a penny from TANF or any adult who is engaged in the formal labor market. And what we saw here was truly stunning. Like only 1 in 10 of these households was claiming even a penny from TANF over the course of a calendar year while 70% had an adult in the labor market. OK. So, this is really important. This told us something. This told us this was not a story of a group of people who were sort of fundamentally separated, you know, from the mainstream who were, you know, sort of set apart. But these were families for the most part who are really trying to hang on to the ragged end of a low-wage labor market that had become badly degraded. And as we begin of course delving into the evidence on this, we learn that the bad jobs of yesterday, even the bad jobs in the days of welfare reform were far better than the truly bad jobs of today.

>> So these-- the families who we talked to really envision themselves as workers as Kathy says and want to work. It's a core, you know, with many like Ray McCormick. He was a very serious sort of opposition to applying for TANF. But it was really a combination of the unstable jobs that were there available to them. We saw many examples of unsafe work conditions, not getting enough hours as a core dilemma of the $2 a day poor as well as we work fluctuations, the number of hours going from say, 10 in 1 week to 20 in another week or 30 down to 20. And lots of examples of clear labor law violation sometimes called wage set in the case where somebody might have actually got an overtime, not being paid for overtime, or people being asked to clean a hotel room as a hotel maid before they clock in or clean up the store after they have clocked out. So you have a lot of instability in the jobs and you can think of, you know, most of our folks says it's those at the very bottom only having access to the jobs that maybe nobody else wanted. But they might be able to survive that if they had a stable personal life that can sort of make up for some of us. But in the case of our families, we would often see sort of the interaction of unstable work opportunity combined with unstable family life. So you'd see volatile living arrangements, right? A large degree of overlap with the number of children who our doubled up, not having a permanent place, not knowing are they' going to be able to stay, and often actually subject to a fair amount of risks in these circumstances. And in the case of these families-- and I want to be clear, we don't think this is a story about the poor in general, but among those at the very bottom, they're often sort of seemed to be situated in a social network of family and friends that are at best unsupported and at worst downright harmful. So, to give you two examples, Jennifer Hernandez, when we met Jennifer, she was a living-- had been living for 10 months in a succession of homeless shelters in Chicago with her kiddos, Caitlin and Cole, nine and seven years old. And she was actually just about to be asked to leave the homeless shelter that she was in because most of these places, if you don't find a job, you are actually asked to move on. And Jennifer was incredibly good at finding the resources that are relatively affluent, city like Chicago has to offer struggling families, but she had no idea where the next place they're going to stay was. And she couldn't stay with family for some of these reasons I just mentioned, they've been an extremely abusive situation in the recent pass, but she was able to find a job at Chicago City Custodial Services, a small family cleaning company on the South Side. And when she started the job, she really liked it. She loves the actually the ability to go in and clean a room and had made a visible differences in that day. I think a lot of-- many of us like about our jobs. And it was going well and she appreciated the structures. She would say, "My mental health challenges were [inaudible] when I'm working and I have the structure." But when she started the work, it was really a lot of corporate apartments, right between leases, maybe consultants coming in and out or office bases in the loop, but as the Chicago winter set in, she found herself going more and more to foreclose homes on the South Side of the city and the West Side of the city especially. And there's a large industry around getting all of these foreclose abandon homes back and ready for resale. And she was at the very bottom, I think, of this industry. So you can imagine going into these homes. There's been no lights, there's no heat and particularly, there's no water. So they would come in and they never know what to expect as she said, "You know, sometimes, we wonder, is there going to be a drug den when we get inside, is there going to be family that's squatting there. Is everything going to be-- have been ripped out of the, you know, anything of value have been ripped out of the unit by scrappers have come in. And, you know, even ripped open the walls and take some of the piping, the toilets, the tile off the walls." And then she would find that they were cleaning in coats obviously. She'd go down to the Salvation Army and sort of grab another coat to wear. But maybe, the thing that did it for her was the water. So, everyone knows water is an important piece of the puzzle. And so, there's no water at these places. They've had to bring their own buckets in and so they would come in, but you might imagine these places she says where really dirty, a lot of cleaning had to be done. So after a half of an hour or 45 minutes, maybe the water we get is black, of no use at all and they'd have to dump out the water and go to the nearest neighbor who might have an faucet or go to the nearest gas station and go, you know, [inaudible] contact and go into the bathroom to refill the heavy jugs and then carry them back to the cleaning inside and maybe repeat these a couple times. So, Jennifer was an asthmatic and she has little kids and so she started to get sick, she had a few asthma attacks but she find she was susceptible to viruses, you know, cleaning in the cold. And everyone, I have small kids, 6 and 2. Everyone knows when you get sick, your children get sick so she starts to call in more and more and her boss starts to see her as not a reliable employee so then her hours start to tick downward. And she makes this decision where she says, "You know what, I'm barely getting 10 or 15 hours a week now and I have to call off some of those sometimes. I need to quit this job," because she got housing subsidy that cut them stable. She's going to have that for a couple more months through the family homeless shelter. "I need to quit this job and get healthy and start looking for the next one because how long it's going take me to find a next job." So, despite conditions like that though, there remain the sort of real attachment to work and the desire to work so think of Ray McCormick in Cleveland who I think Kathy maybe mentioned. Ray was about 23, 24 when we met her, she'd been abandoned when-- by her mother when her father died at 11. And one thing that you would probably not notice about Ray right away is that she actually has lost all of her teeth because she have some sort of dental disease and had never gotten dental care and so, all of her teeth were gone, but she was incredibly skilled at sort of covering that up. So whenever she laughs, the hand went right over the mouth. She worked to Walmart. Her last employment was at Walmart as a cashier. And she wanted to be the fastest cashier in the store so she have this technique where she would actually-- she knew to be the fastest cashier, you had to be able to key in the produced items really fast. So, she would take the most popular produced items and she would read the barcode in her recording device on her phone. And then, she would actually set that recording of herself to play over night and she'd say in the morning, my subconscious had done the work. And she was named "Cashier of the Month" two times in the six months that she worked there. But that in that six month, she had been living with an aunt and uncle who are not related and she actually got in to the truck that they shared and she had given $50 in to get gas. And she gets in the truck to go to Walmart and the gas light is on, there's no gas, the car won't start up. She goes in and says what's the deal, you know, this is supposed to be for me to be able to get to work and they say, "Well, you know, we're running errands and we use the gas, sorry". Ray has no way to get to work and she calls her manager. She works in the suburbs partially because she likes the ability to go the suburbs and I think can get away from the city. She work in the suburbs, there was no way to get there by public transportation. And she called her manager and said, "I can't get to work, you know, can you float me a loan. I don't have anymore money until the next paycheck," and her manager said, "If you can't get in, don't bother coming in again." So, we see the interaction of both volatile work conditions with a non-supportive family.

>> So if you think about our argument, there's a three legged stool. The first piece is really the welfare is dead claim. The second piece really is that work has become-- welfare is dead but work has become degraded to the degree that is incredibly hard to raise the family. And in fact, it is the degradation of those jobs and job loss which usually predates entering into $2 dollar a day poverty. But the third leg of this tool is housing instability. A housing instability was ubiquitous among the poor. Housing has-- rental housing has increased in cost by about 6% since 2000, but renter's incomes have declined by 13% so we see this increasing disconnection between rent and wages. Of course, these folks have incomes so unstable that they're often unable to stay in a place of their own and end up in a series of parallel stable ups or homeless shelters. And this is often when we see kids exposed to the greatest risk. But housing instability also interferes with work and often, both deepens and elongates a spell of extreme poverty as to the family relationships of many of our folks. And in these parallel stable ups we often see the true harm, the trauma especially the children experience while their parents are living in less than $2 a day in poverty. Jennifer Hernadez had 1 point, flees to an uncle's house to escape, about of $2 a day poverty. He's a respectable ground's keeper at a country club. She comes home one day, of course, and finds him molesting her daughter Caitlyn. The family flees to a good will who generously clears on office for the family to live in for a while since there are no family beds in the shelter. And when recounting the story, she said, "I never expected that". Ray McCormick similarly has lived among the $2 dollar a day poor on and off since she was 12 and asked about the trauma she experienced as a child. She says matter of factly to us, "I've been beat, I've been raped." And her daughter at aged 6 has also been molested.

>> So, when we start to look at the question that Kathy post at the beginning of, is cash important? So, we have some resources of non-cash, SNAP. Some of these charitable organizations play a vital, vital role but does cash matter? Really, I think the most compelling evidence of that is the work, the extent to which people spend their time trying to generate just enough cash to go on to the next day. So, Travis and Jessica content, when Travis's work hours got cut down after the holiday surge at a fast food restaurant. The only cash coming in to the household was Jessica's donation. I've been told to call that the selling of her blood plasma. So, every-- two times a week and in fact we're the only country that allows plasma donation more than once a week. But two times a week is much [inaudible] allow the whole family Travis and Jessica and Rachel and Blight [assumed spelling], their two little girls, four and two, I think, would actually walk down to the plasma clinic. And Jessica is only about five foot two, and in fact she would always have this panic as they're going to the center that she's not going to meet the health requirements for the day. Her iron count is not going to be high enough and-- or her blood pressure is not going to be sort of in the range it has to be, and she's not going to be allowed to sell her plasma because of the $30 that that provides actually is perhaps the sort of the best hourly rates that they could get for anything. So she has all of these very sort of, sort of planned out techniques that she always eats an iron-rich supplement bar right as she's going in the door so that that's going to boost her iron count. And she does these breathing exercises as she's waiting to get her blood pressure taken, so she can make sure she's the a range to brings in Nicholas Parks' novel that she checks out from the library to try to calm her. And across the range of folks, you see all of the sort very serious strategies, and I think almost an American spirit in a way, right? We originally titled this chapter, "The Entrepreneurial Spirit", because it was all about sort of figuring out what resources you have, whether it's your blood, whether it's your body, to sort of make-- get that little bit of cash that'll keep you going to the very next day.

>> So you have to go back to the last slide real quickly. So plasma cells were so obliquitous, right, that many people had little [inaudible] in their arms from selling plasma. It was almost like a marker of $2 a day poverty, but a very debilitating thing if you do it very often and many people actually weren't healthy enough or strong enough to be able to give plasma that often. Trading SNAP is probably not common among they just plain poor. We have a lot of evidence. The evidence is actually quite rare. But among the $2 a day poor, it is actually obliquitous. And the generally, for your trade, you get 60 or even 50 cents on a dollar. So it-- since food stamps actually don't generally cover, we know this from surveys, our family's food needs for an entire month is guaranteed that you and your children won't go hungry. But when it comes to buying socks and [inaudible] for school, paying for the utilities or, you know, staying-- keeping the rent going for just one more month, our families do make that tradeoff. Finally we see a just a lot of creativity. We occasionally see selling sex. We do see scrapping. But all of these are very, very low level survival strategies that generate only a few dollars of cash typically and really leave families both consumed with the work of survival but of also very badly off. Of course, the ultimate expression of this was in the Mississippi Delta. The two towns that we were in Percy and Jefferson we [inaudible] the skies by the way to protect the identity of our respondents, are in some sense, in exception because they are so poor, you know, the poorest places on Earth. But if you look at the Census Bureau's data, you can see that there are little hidden rural places like this all across the country that share many of the characteristics of these towns. And it is here in the Delta they really saw the intensification, a system of mutual exploitation that kind of sprung up because there were so much poverty. You can almost throw a stone in any given direction and you would be likely to hit a household of a family who was $2 a day poor. TANF face so little in Mississippi that you actually in most cases will qualify as $2 a day poor, even if you happen to get it. So here, what we saw is that they're not quite poor, who didn't really have enough cash to survive. This is specially disabled people, would often be the purchasers of the food stamps of the extremely poor, right, often transporting the extremely poor to the grocery store and then of course basically at taking their price by loading up at that the extreme poor family's car with their own groceries. We also what passed for the middle class in these towns. Sometimes exploiting the poor because of their desperate circumstances, Tabitha Hicks in the little town of Percy was inboxed by teacher when she's 15 years old. Her mother, Olva [assumed spelling] had roughly a dozen children. This was probably the poorest family that we encountered. They typically sold their food stamps when they came in because they need to pay the utilities and the temperature just in the last six months had ranged from 9 degrees to 109 degrees. So the family was always hungry as a result. And in fact, even when we met her, Tabitha was almost at unbelievably thin after those years of hunger. So a teacher who did Facebooked her when she was 15 years old and wrote to her as follows. "I've been watching you waiting for you mature." Then he suggested she come over to his house after school and promised food. And this led to, of course, a four-month liaison between the teacher and Tabitha were she exchanged sex in return for food. Now, as we were talking with Tabitha about the story, I asked her, you know, what did it feel like to be that hungry? And she answered as follows. "Well, actually it fells like you want to be dead because it's peaceful being dead."

>> So what do you do with that, you know, as we sort set out to write the last chapter trying to think what are the policy implications as folks situated in schools of public and social work. And I don't think we have-- clearly don't have all the answers that we think that we need to do something. But I think there's a couple of hopeful notes here. We have heard-- we do understand that our book is depressing, so sorry about that. But really, the folks who-- you know Jennifer and even Tabitha, they haven't given up and they saw a hope and I think-- so I think we can't either, necessarily. So we don't provide all the answers or moving forward and sort of trying to tackle the type of extreme poverty. But we did sort of, I think, get a couple of insights that at least wasn't on my radar when we went in. The first was the importance of dignity and the extent to which families would actually trade in hunger in a sense. Trade in some resources like SNAP for the chance to-- especially with their children sort of get them some clothes at the Thrift store that would give them a little bit of dignity when they go to school, or get them, get them underwear. And I think there's very strong connection to work, really has a lot to do with a desire to be a part of a community, right? Be a part of America. So, we have this premise, and maybe it's a simple premise that whatever we do, whatever policy sort of solutions we might try, maybe there's a litmus test and maybe it's simple but maybe it's something more than that, that whatever we do either through government policy or as universities or as nonprofit, we should see of these, these intervention or these programs work to incorporate poor family and especially those at the very bottom into society rather than isolating them from it. And the history of welfare in this country is one of isolating families. So we talked about how what we see is partially significantly I would say, related to the welfare reform of 1996. But in no way that Kathy and I want to go back to the system we have before, which absolutely failed this test of a litmus test of incorporating the poor.

>> So, we endorsed three principles. And I think we do have a little-- we have quite a lot of detail about how we think we might move forward in the book. But the first principle is really about work, because work equals citizenship in the society. The poor know it and they want it. There is no doubt that we have too few jobs to go around especially too few good jobs at the bottom of the labor market. It's a serious problem. And if we're going to have a work-based safety net and that's essentially what happen in 1996, we moved toward a work-based safety net, then we must insure the opportunity. Second, parents should be able to raise children in a house of their own, this follows from the trauma that we often see-- saw children exposed to. But third, we do have to have a safety net that catches people when they fall because sometimes work won't work. I'll end there and turn it over to Professor Danziger, et.al.

[ Laughter ]

[ Applause ]

>> OK. So, ton of questions have come in, a ton, we really appreciate it. And Rashid [assumed spelling] and Melanie [assumed spelling] are going to give you questions back and forth. They're sort of split between a little-- other ideas about causes and further explanations and ideas about policy, questions about policies. So, well maybe go kind of back and forth.

>> First off, thank you so much for the wonderful presentation. My name is Melanie, I'm a first year Master student at the Public Policy School here. Our first question, how might extreme poverty be growing because of mass incarceration, especially the removal of many men from their communities?

>> Anyone?

>> Do you have ideas?

>> Well, you know, it's interesting, we were really looking at households with children and certainly households are made more vulnerable when the father is taken out of the household and separated from his children. We saw that in, I believe, at Jennifer Hernandez's childrens-- one of her children's father was incarcerated. At this no doubt plays a role and I've written about it extensively in my other book, especially the relationship between male incarceration and family instability. So, it is important, it's not something that we focus on here because these families are often-- what's interesting about $2 poverty is that sort of that equal opportunity condition. Right. We see white families as well as black and Latino families and they're also in fact I think half of the families in the--

>> In the household.

>> -- the households are white. We see married and unmarried households, we see households across the country. So, maybe this is a special kind of poverty certainly incarceration interacts with it but there are a number of groups are represented in this category that you don't sort of think about when you think about a poverty this deep. And those are not necessarily the group most attracted by mass incarceration.

>> Hello and I am Rashid Malik [assumed spelling], I'm a second year Masters of Public Policy student here at Fort School, interested in social welfare policy and a student of Luke Shaefer's. I, well, have a two parts question. What administrative burdens are imposed on those living on less than $2 a day when they seek government assistance? And how can we-- and as policy makers design programs that alleviate that burden and improve access and use of these programs.

>> So, this is a-- this gets us into the question of why TANF is sort of failing. Even I think in its stated mission, temporary assistance for needy families. And I at least thought when we started this investigation and it was really about work requirements which were part of the-- sort of the welfare reform and there was about time limit, lifetime limits that would make a lot of sense. And those play roles but are really I think the bigger factor is the structure-- the very structure of the black grant itself. So the way that TANF is set up, is to say, states here is-- here is a fixed pot of money, right, that we're going to distribute across the States, and by the way we're not going to sort of in, you know, adjust it for inflation at all. So it's declining in real value every year since 1996. Here's a fixed pot of money, and you can use it for cash assistance, right? You can use it for the Stigmatized Program that not many people like and if you do that, we're going to impose a lot of, sort of restrictions on you. That you have to have a certain fraction of the case load working and you have to take care of this and that. Or, if you don't give it out, through cash assistance, which you don't have to do, you can pretty much use it for any other related thing. Right. So, you see a very, very clear incentive, and here at the Fort School, we now how important incentives are. For States to keep their cash assistance case loads artificially low. And we saw that and clear as force I think during the great recession where the case loads very much didn't sort of in any ways sort of leap up like some of these other, like snap, for example. And a case of a lot of States they've actually kept their case loads incredibly low so might just have 23 out of every 100 poor families on the program. But I think we have some States that are bound to eight or nine poor families out of every 100 on the program. And in those cases, a lot of those States are actually, redistributing that money to other things that they would've spent on any ways. So there's actually not net positive benefit of the money going into TANF rather than to provide a little bit of caution for states. So I guess, to answer the question I would say, building effective policy. This is a great case example of what not to do, right. And paying attention to the incentives that are sort of coming from the way that the program is designed, I think we have a lot of nice examples like, snap which is going to electronic EBT card. And we'll, you know, TANF istoo. But that actually reduces especially when we have rates of residential instability reduces people loosing their benefits. And you have a lot of States that are doing the online and sort of longer re-certification periods. And those will all make a difference.

>> So to add to that, the qualitative story here really is that our welfare has disappeared from the imaginations of the poor it has become so rare. Out of the social networks which might have spread the word, have really atrophied. But I do want to emphasize this point about pride almost to a person, actually to a person of the people on our study. We followed 18 of these families very in depth over several years really saw themselves as workers. And perhaps that's partly a credit to welfare reform, you know, back when Laura and I we're studying, Dean Lein and I was studying Welfare Acceptance in the early 1990s, mother's would say, "I don't know if I can be a good mother and a worker." Now, they say, "I don't know how I can be a good mother if I'm not a worker because I have to model the value of education to my children." So for better or for worst, a strong working identity motivates a lot of job seeking and that's what you see over and over again in this book, these heartbreaking endless-- seemingly endless searches for work. But it doesn't make people very eager to come to TANF store because that is really the antithesis of what workers do to survive.

>> Can you expand a bit on the role of mental health and extreme poor?

>> So we saw a significant agree. I think of mental health challenges and we can trace a lot of those in the stories of the families to-- let's call them a literature, adverse childhood experiences, right? So this is the sort of experience of physical, sexual abuse, emotional neglect and we know very clearly that these sort of experiences and especially accumulatively experiencing many of them follows a person through their lifetime. And we can see very clear associations with physical health that and mental health. And so that was very clear. And when you look at the ACE Literature, it's actually quite astounding the significant degree of just all Americans who experience this-- experience ACEs. But we think it's very much concentrated among this group at the bottom. So, you can sort of see a clear link there. Now, for us, we are actually very interested in the effect of work as mental health intervention. And the idea that Jennifer Hernandez really like the stability of work, the structure of work, I think a lot of us in this room can probably relate to that, right, of, you know, if you lost your job, what would you do and how would you feel? And so we're very taken with the possible healing effects of work structured well, right, decent work with dignity. And the last thing I'll say on this is that we did have, you know, there's pretty good coverage especially for kids of medical insurance through our public health insurance programs. One of the good things we did during the 1990s was expand access to public health insurance for kids and you can see a dramatic decline on the number of uninsured kids. And the earned income tax [inaudible] which provided a wage subsidy in this, the story in Kathy's other-- one of her other recent books. It's a little intimidating to write a book with somebody who's an-- writes one before and after yours, but that's for me to deal with. And so, it's not like I'm [inaudible] about the ITC. It's also actually like the happy story in the 1990s, right, of providing, you know, a significant wage subsidy for folks who go to work. So, expanded health insurance was a part of this and we can see mental health treatment. Now, we didn't write about this in the book but I will say we very much question the quality of the both physical and mental health treatment that many of our respondents got and wondered, are they actually-- you know, this is an expensive program. We spend a lot on health insurance for the poor and there's a-- and it's still a question-- open question on my mind. Sort of what, especially for this group at the bottom, is the net benefit that they receive out of the treatment they get.

>> And on to the next question from the policy pile. How might the policy idea of a universal child allowance help alleviate extreme poverty?

>> So people have, you know, learned summers and others have sort of noted that we may be running out of work that automation might be affecting many jobs in the US. I know people have varied opinions on this. I think in one PC suggest that we need some sort of guaranteed minimum income to get us out of this mess of too little work. To us, a guaranteed child allowance is a little different than a guaranteed minimum income because parents feel worthy because they're claiming them in behalf of their children. And in fact, in the EIC book, people often coded it as the kid's money because they knew they were getting it in part because they had children. So what I'm about to say probably applies more to this notion that we will suggest, you know, basically subsidize a large group of Americans who aren't working. Again, work equals citizenship in the United States. If you've seen the "Joe, run" ad that was running last night during the presidential debates, where he speaks very eloquently about the dignity of work and work is-- you know, a good job is the ability to say to your child with confidence, it's going to be, OK, honey. You know, kind of-- thinking about the story of his own father who had to leave town to find a job and then bring the family along later. But in any case, we think in America that it's really important to find a solution for work. Because we're not just interested in the financial wellbeing of the $2 a day poor, we're interested in America where everybody gets to take part, where everybody is sort of a part of the same community. What AFDC did was to divide the poor. It was almost as if you had to trade your citizenship card in to cross the road that separates the worthy from the destitute. That's a rough rephrase of TH Marshall's world in order to get that help. And we think that this is the 21st century and we should have a 21st century approach to caring for the poor that allows them to claim dignity and be part of society. And the work have several political scientists to at least suggest that there might be spillover benefits beyond financial wellbeing that extend to citizenship participation. Maybe we'll no longer be so prone to bowl alone and maybe even voting, and other activities that benefit our democracy.

>> You described how family and friends could often have detrimental impact on these families from abuse to maltreatment to theft? Did you find any trends that challenge this such as family networks and smaller towns in the south or communities with more active churches and social clubs?

>> So, I think we had examples where family was a support. So that's what you're asking. And we take Susan Brown that we write about in the first chapter is living with her husband Devin and their daughter Lauren, baby daughter Lauren, with a number of other family members who are both sort of among the $2 a day poor, but they're able to live in a house that's sort of owned by the family. And it's clear actually you can see Susan as we've followed up with her sort of after the book, she is doing the best, I think, of virtually all of our respondents, right? And so, that family buffer is an important one. So I think what we were trying to note in the book was that, you know, family is not always positive. In fact, it can be a serious detriment. And again, we're not trying to say this is a story about the poor or, you know, in general, but I think among this specific group, there's almost like a selection effect of, you know, if you're in these circumstances, you're-- but you have family that can support you, you either get out very quickly or you don't-- never sort of fall into our-- the sample we selected.

>> Next question. How optimistic are you for a genuine policy response to the new data you've discussed?

>> Well, I think we're both pretty optimistic people. So maybe that's what I'm going to reflect here. But, you know, I do think that we are in a moment during the reception of this book, both at the state and federal level has been absolutely astonishing. Our people seem very hungry for the information they see moved. But this is one voice among many sort of pointing out the degradation of work and the deepening need of families, not just at the very bottom of the labor market, but maybe even, well, at the bottom 40% of the labor market that's experiencing many of the things that are [inaudible] they are-- poor experiencing but to a less severe degree. If you watched the debate last night, you might have seen the anti-Walmart ad, another total heartbreaker. It's as if-- it was as if those families could be our families. So, people are catching on. There are, you know, there's pressure for increasing the minimum wage. Some folks are even thinking about expanding the reach of the EITC. So, if not now, when?

>> Actually I applied for a job at Walmart as part of the [inaudible] and Kathy was my reference and I didn't get a call. But yeah, I think you know, I'm sort of-- we're both sort of pessimists again, incredibly optimistic at the same time. And I'm thinking in Washington, it's very hard to sort of do anything. Maybe we'll see sort of more stuff at the state level. And I do think you can expect sort of any one book to sort of really move the dial. It has to come with the other things but maybe we'll be a part of it. You also just never know, I'm sorry, when the policy windows are going to open up. So what doesn't seem possible, you know, for David Ellwood writing "Poor Support" in the late 1980s becomes very possible, like in the first month that he goes into the [inaudible] administration where they expended their income tax credit which is by the way billions and billions more than we ever spend on AFDC. It's just only you can only get it if you work. So, it's not really a safety net. Right. So, so maybe it will happen-- something good will happen this year or maybe it will happen five years from now. I will say that as we've been in Washington, I think, the notion of doing something to create more jobs and government intervention, whether it's for the private ship-- public/private partnership, is more on the table than it was, I think, five years ago.

>> Thank you. Next question. Reading your book, I was surprised that more of the extreme part didn't turn to drug trade though you mentioned other felonies. Do you think this is about character and their commitment to parenthood or is there an economic calculation behind this as well? Not available or worth it?

>> OK. Great question. So, you know, one of the things that gives me great comfort is I've been in this business a long time. I've talked to thousands of poor families across 11, as well-- let me see now, roughly, you know, 15 different locales across the United States. So, we restricted our sample to parents with custodial children. Right? Parents with a custodial children very rarely sell drugs. And why, it's because they're almost certain to lose custody of their kids to the state and their kids are their most precious asset, so they don't wan to do that. Now, are there drugs in the Mississippi Delta, are there drugs in Chicago, Cleveland, and Johnson City? Absolutely. But it's generally not parents who are engaging in those kinds of behavior. So, it is interesting how, you know, we can-- We tend to think of drug dealing as sort of this ubiquitous activity. And you do hear a lot about this in all locales that we talked to, but these are parents desperately trying to keep their families together. You know, if they weren't tough, they are-- we would have already lost their children's child protection. They're very-- living circumstances often put them at risk of CPS involvement. Paul Hackwilder [assumed spelling] had the 22 people in his house. He was very nervous to engage with social services because of course that would have violated the rules many times over of how many children could be in the same room and what their ages and genders could be. So, I'll end there but it's a question that comes up every time and it's actually quite interesting to see how little we see of this, especially since all of our families except one actually did have to commit at least one felony in order to survive during the period that we observed them.

>> Our next audience question asks, "Besides the welfare reform, have you seen major changes on the low wage-- in the low wage labor market side that leads to more instability?

>> We think that there is a fairly significant change or start of a trend in the low wage labor market starting in the early 2000s. And we've actually-- I think a lot of us has thought it was there and we're starting to get more data that I think confirms that. And a lot of that has to do with the prevalence of these sort of unstable sort of work conditions outside of wages. So, low wages is a part of this story, right? But these, you know, keeping large part time workforces, keeping the, you know, this sort of very closely linking consumer demand to the number of people you have in the store, right, unlike an hour to hour basis. Some of these things employers just couldn't do, you know, 20 years ago. So we think all of these things are clear. The-- actually we see a lot of examples of on call work also where somebody doesn't get paid but is actually required for a sort of a set of hours to be by their phone and able to come in. Or in some cases, they actually have to call in every couple of hours just to see if they're one and they don't get paid for that. And so I think there's a lot of talk about, you know, what kind of policy reforms do you undertake to sort of fix those kind of problems. And I tend to think often that employers are smarter than policymakers. So if you did something to say, well, you can't keep people on call. Employers might figure out a way to get around that or they might come up with something else that tries to help them. So that's why we have such a focus, I think. I think we absolutely need to look at policies that can kind of curb some of these. One thing we can do is try to curb the extent of labor law violations that exists, right? So, as it is right now, it's better for an employer to sort of not pay over time, if people actually get over time or to sort of engage in some of these practices and risk being caught. Because chances are they won't be caught. And if they get caught, the penalty isn't that bad, right? So, actually benefiting from those is better, so maybe we just start by enforcing what we have on the books. But in addition, I think, this notion of creating more jobs, right. And these public/private partnerships that potentially subsidize jobs or jobs coming to the nonprofit sector will put pressure on the labor market and should positively impact some of these practices.

>> Having said that, the problem is really big and I think many of the programs we can point to right now are pretty small. So we also say in the book that we might actually have to reconceptualize how we think of work and how we think of the government as an employer. Maybe this is too big of a thought for a policy school, I hope not, but there are still much work to be done in our community. So, there are parks that aren't clean, they are not open because we can't afford the personnel to keep them open. We have recreation centers that have limited hours, public libraries that are barely open. On the little town of Percy, there is a public library that has virtually no books, and it is only open limited hours because they can't afford a librarian. Our cities are filthy. Our preschools are too few. Our classrooms are too large. There's so much work to be done in our society. And if you say to me, well, the government is never proved to be a very good employer, I would just like to point at our teachers and our firefighters and many fine public service-- servants who our employees of the government and whose work is a vital value to our daily lives.

>> And this will be the last question we have time for today. We spoke a bit about potential policy responses, but what do you hope will come from the public reading your book?

>> Well, so when Kathy and I started to write this book, we knew we wanted to try to do a popular press book, right, and try to actually connect with the-- a broader audience. And we were happy to get a contract with Houghton Mifflin that has brought us such literary icons as Ralph Waldo Emerson and Curious George. But, you know, I think that we have sort of a targeting policymaker strategy and also being a discussion point, right? And I hope maybe the book goes a little bit on these lines of social incorporation that it allows. We tried to tell people stories. My mother is a professional storyteller. So, I sort of known the importance of stories for a long time, tried to tell the stories in a respectful but honest way, right, and try to sort of bring people to meet peoples that they wouldn't have ever met in their life because, you know, we're so stratified in society. So, I think we would be really happy if people picked up this book who didn't necessarily agree or had thought a lot about poverty in the United States and used it as a sort of a resource to hone what they, you know, sharpen their ideas about what poverty is like and what we should do about it.

>> Well, thanks again.

[ Applause ]

>> Thank you, thank you very much. I'd also like to thank Sandy, Rashid and Melanie for facilitating the questions and all of you for a fabulous group of questions. I know we didn't get to all of them, I hope you'll stay so that we can continue the conversation in the great hall and you all can get your book signed. Please join me in a final round of thanks to Kathy Edin and Luke Shaefer.

[ Applause ]