[This book argues that the United States must move beyond its
current minimalist approach to fighting poverty and adopt a set of
policies aimed at the "structural vulnerabilities" in our society that
keep people poor. ]
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PORTSIDE CULTURE

THE POVERTY PARADOX: UNDERSTANDING ECONOMIC HARDSHIP AMID AMERICAN
PROSPERITY  
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Craig R. Roach
April 24, 2023
New York Journal of Books
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_ This book argues that the United States must move beyond its
current minimalist approach to fighting poverty and adopt a set of
policies aimed at the "structural vulnerabilities" in our society that
keep people poor. _

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_The Poverty Paradox
Understanding Economic Hardship Amid American Prosperity_
Mark Robert Rank
Oxford University Press
ISBN: 9780190212636

Mark Robert Rank’s ambitious book, _The Poverty Paradox,_ is said to
be “a game changing examination of poverty and inequality. It
provides the essential blueprint for finally combatting this economic
injustice in the years ahead.”

Rank advocates for a fundamental change to our perspective on poverty.
“The traditional perspective” on poverty, he writes, is that
“the vast majority of the poor are responsible for their economic
circumstances” and as a consequence “government assistance should
be kept to a minimum, with strong work incentives emphasized.” He
argues that the perspective of blaming poverty on the failures of the
poor is a “major reason for historically high rates of poverty” in
the U.S., and it is the reason America’s poverty programs “have
been ineffective or minimal.” The right perspective, argues Rank,
“is that poverty ultimately results from [policy] failures at the
economic and political levels,” not personal failures of the poor
themselves. He coins the term “structural vulnerability explanation
of poverty” to explain why individuals cannot lift themselves out of
poverty.

The author begins with a helpful primer on alternative ways to define
and measure poverty. Rank sums up the recent results by writing that
“For 2021, 11.6% of the population fell below the official poverty
line, representing 37.9 million individuals; 19.4% experienced poverty
or near poverty; and 5.5% were living in extreme poverty.”

His primer also offers insights on factors that drive differences in
poverty rates. Rank points to the demographic traits such as race,
gender and household structure associated with significant differences
in poverty rates. For example, the poverty rate for whites (not of
Hispanic origin) was 8.1% as compared to 19.5% for Blacks. For
households led by married couples, the poverty rate was 5.2%; for
households led by single females the poverty rate was 25.3%.

Referring to differences in “Human Capital,” Rank points to
education and work experience. The poverty rate for those with less
than 12 years of education was 27.2%, while that for those with 12
years of education was much lower at 13.2%; for those with 16 or more
years of education the poverty rate was just 4.1%. In terms of work
experience, the poverty rate for those who worked part-time was 12.2%
while for those who worked full-time the rate was just 1.8%.

The reader can see how these results could support the traditional
perspective about individual responsibility for falling into poverty.
For example, Rank cites a quote from another top poverty expert,
Isabel Sawhill at Brookings, on what it takes to stay out of poverty.
Sawhill writes “The challenge is to find ways of providing generous
support to the poor without disregarding the unpleasant facts about
their behavior. Ideally, we need to nudge them toward a different set
of behaviors by linking generous government assistance to staying in
school, delaying childbearing, getting married, and working
full-time.”

In contrast, however, Rank argues that these poverty rates reflect
America’s “minimalist” approach to its poverty programs:
“Contrary to the popular rhetoric of vast amounts of tax dollars
being spent on public assistance, the American welfare state, and
particularly its social safety net, can be more accurately described
in minimalist terms. Compared to other Western industrialized
countries, the United States devotes far fewer resources to programs
aimed at assisting the economically vulnerable.”

As to evidence to this point, Rank reports the results of his
companion of Pretax/Transfer and Posttax/Transfer poverty rates in 21
Organization for Economic Cooperation and Development (OECD) countries
including the United States. Rank’s argument is that the other OECD
countries do a great deal more to reduce the poverty rate.

Specifically, on average the OECD countries excluding the United
States reduced their Pretax/Transfer poverty rates from 29.3% to
9.7%—that is, they reduced the poverty rate by 66.9%. In contrast,
the United States had a Pretax/Transfer poverty rate in the ballpark
of the OECD average (it was 26.8%), but the United States reduced that
poverty rate by only 33.6%. Readers will want to draw out the
implications of Rank using a different definition of the poverty line
here.

In terms of an economic blueprint for combatting poverty, the book
gives a broad view and much of it will not be new to the reader. Rank
calls for greater access to “public resources” including
education, healthcare, and housing. In terms of specific proposals,
Rank calls for a significant increase in the federal minimum wage and
the earned income tax credit. He also calls for grass-roots advocacy
and labor unions to reduce inequality. Given his expertise, the reader
might expect more specific, innovative policy proposals.

Perhaps Rank is right; we may need a new view of American poverty
programs. The new view must reflect the fact that we need all hands on
deck to fight looming, global economic battles, and those battling for
America must all be highly skilled. In that context, to borrow an
iconic phrase, a mind is a terrible thing to waste, and innovative
education and training must be an essential part of our effort to
reduce poverty.

 

Craig R. Roach is an author of narrative nonfiction. His book _Simply
Electrifying: The Technology that Transformed the World, from Benjamin
Franklin to Elon Musk_ (BenBella Books, 2017) won a 2018 Axiom
Business Book Award Gold Medal.

* U.S. Poverty
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* Anti-Poverty Policy
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* Racism
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* Structural Inequality
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