[Comment] America still offers hope for escaping grip of poverty

From Indy Star

Peter Z. Grossman

In August the government released its latest report on poverty in America. It said that the ranks of the poor had grown since 2004 by more than 1 million people to a total of 37 million, 12.7 percent of the U.S. population.

The fact of poverty in America was emphasized by the scenes from New Orleans in the wake of Hurricane Katrina. The wealthy and middle class, for the most part, got in their cars and drove to safety, leaving only the poor behind. The pictures and numbers are nothing to dismiss. There are poor people who have not benefited from a growing economy.

Yet, there are some misconceptions about what these numbers are telling us. Many people believe that the poor are a trapped class; that those sinking into the ranks of the poor can't get out; that 37 million people in this country are poor and most of them are going to stay poor.

But the reality is different. In fact, most people who are classified as poor at some point in their lives leave poverty, many for good. While we can hope that no one will be poor, we should also recognize that these numbers do not mean that capitalism has failed.

It is important to understand just what poverty means in the U.S. It refers to money income (before taxes) amounting to $19,307 or less for a family of four. While it may well be difficult in 21st-century America for a family to get by on that amount, money income alone often does not tell the whole story.

Income is not, for example, corrected for regional differences; in a small town, $19,000 may be adequate while even more money may be too little in a major city. Nor does it include non-cash benefits like food stamps and housing vouchers. By some estimates, including such benefits reduces the poverty rate by 3 or 4 percentage points, or by about 12 million people.

Then there is the question of just how long a poor person officially stays poor. Studies have shown that after two years, more than half of people classified as poor are no longer in those ranks.

This shouldn't be surprising. Among those who fall into poverty are those who are unemployed, especially when they stay unemployed for a few months. But the average time on unemployment is about three months. After workers find jobs, many of them cease to be poor by official or any other measure.

Young people 16 to 21 are also represented among the poor. Many of these are new entrants into the work force who often start out at low pay. But with experience, they see their wages rise and leave the ranks of the poor. Of course, each year there are new young workers just starting out who are poor, at least for the short term. The number of poor doesn't change, but the people who make up that number do.
Immigrants are another large segment of the poor. About 6 million poor people are immigrants, who because of education or language have few options but to work at low-paying jobs. Another 2 to 3 million are the children of immigrants born here and classified as "U.S. natives" but dependent on their parents' incomes. While some immigrants remain poor all their lives, their children typically do not. A recent study of second-generation Mexican Americans shows that they are realizing the same kind of upward mobility that second-generation immigrants from Europe enjoyed in the past.

Of course some people, and not just immigrants, are trapped in poverty, with little hope of getting out; perhaps as many as 10 million people fall into this category. Programs from the Great Society era as well as 1990s welfare reform have not provided a means for them to escape chronic poverty.

There are some barriers such as racial discrimination and family structure that keep people poor that are hard for government action to overcome fully. However, if there is one area where government programs might make a difference, it would be education. Probably the single most important way to escape poverty is through educational attainment. We need imaginative and innovative programs to make this more likely for the chronically poor.

America faces a challenge in helping the poor, but the problem is not as big or as bad as numbers suggest. Poor people, as they have for two centuries, still hope of making it in America, and many of them do.