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This is who we are: the richest country on earth, with more poverty than any other advanced democracy. If America’s poor founded a country, that country would have a bigger population than Australia or Venezuela. Almost one in nine Americans—including one in eight children—live in poverty. There are more than 38 million people living in the United States who cannot afford basic necessities, and more than 108 million getting by on $55,000 a year or less, many stuck in that space between poverty and security.[1]
In the history of the nation, there has only been one other state-sponsored initiative more antifamily than mass incarceration, and that was slavery.
Poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that.
The U.S. economy lost millions of jobs during the COVID-19 pandemic, but there were roughly 16 million fewer Americans in poverty in 2021 than in 2018. Poverty fell for all racial and ethnic groups. It fell for people who lived in cities and those who lived in rural areas. It fell for the young and old. It fell the most for children.[3] Swift government action didn’t just prevent economic disaster; it helped to cut child poverty by more than half.
That was our leading theory of the case. It made sense. Frankly, it sounded obvious: America wasn’t getting back to work because we were paying people to stay home. But it was wrong, and the fact that so many of us thought otherwise reveals how conditioned we are to assume the worst about one another when it comes to receiving help from the government.
Today, the biggest beneficiaries of federal aid are affluent families. To benefit from employer-sponsored health insurance, you need a good job, usually one that requires a college degree. To benefit from the mortgage interest deduction, you need to be able to afford a home, and those who can afford the biggest mortgages reap the biggest deductions. To benefit from a 529 plan, you need to be able to squirrel away cash for your children’s college costs, and the more you save, the bigger your tax break, which is why this subsidy is almost exclusively used by the well-off.[27] As far as I know,
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With respect to the federal income tax, some believe that middle-class taxpayers are carrying the poor on their backs. But let’s look at the data. In 2018, the average middle-class family had an income of $63,900, paid $9,900 in federal taxes after all deductions, and received $13,600 in social insurance benefits (like disability and unemployment) along with $3,400 from means-tested programs (like Medicaid and food stamps). In other words, the average middle-class family received $7,100 more in government aid than it paid in federal taxes, a serious return on investment. The claim that
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The most recent data compiling spending on social insurance, means-tested programs, tax benefits, and financial aid for higher education show that the average household in the bottom 20 percent of the income distribution receives roughly $25,733 in government benefits a year, while the average household in the top 20 percent receives about $35,363.[36] Every year, the richest American families receive almost 40 percent more in government subsidies than the poorest American families.
The rich and the poor soon unite in their animosity toward public goods—the rich because they are made to pay for things they don’t need and the poor because what they need has become shabby and broken.
How do we, today, make the poor in America poor? In at least three ways. First, we exploit them. We constrain their choice and power in the labor market, the housing market, and the financial market, driving down wages while forcing the poor to overpay for housing and access to cash and credit. Those of us who are not poor benefit from these arrangements.
Second, we prioritize the subsidization of affluence over the alleviation of poverty. The United States could effectively end poverty in America tomorrow without increasing the deficit if it cracked down on corporations and families who cheat on their taxes, reallocating the newfound revenue to those most in need of it.[4]
Third, we create prosperous and exclusive communities. And in doing so, we not only create neighborhoods with concentrated riches but also neighborhoods with concentrated despair—the externality of stockpiled opportunity. Wealth traps breed poverty traps.[5] The concentration of affluence breeds more affluence, and the concentration of poverty, more poverty.
We are not polarized from each other. We are polarized from our electeds.” The majority of Americans believe the economy is benefitting the rich and harming the poor. The majority believe the rich aren’t paying their fair share in taxes. The majority support a $15 federal minimum wage.[7] Why, then, aren’t our elected officials representing the will of the people? This we must demand of them.
