Theories on Poverty in the US

Theories on Poverty in the US

• Competing theories with a lot of empirical evidence exist regarding the causes of poverty in the United States
• Theorists and policymakers debate, dividing between those supporting cultural/behavioral arguments and those advocating for structural/economic arguments
• Republicans tend to support the cultural/behavioral thesis, while Democrats lean towards structural causes
• Further examination of the relationship amid cultural/behavioral and structural causes of poverty is needed due to the passage of Personal Responsibility and Work Opportunity Reconciliation Act (1996)

Integrating Perspectives

• Cultural and/or behavioral variables are relevant depending on the degree that historical structural factors condition the environment of economic and social advantage
• Behavioral variables should not be viewed as static dysfunctions exclusive to certain groups but as proxies for cultural mechanisms always at play in all social groups
• The cultural/behavioral and structural perspectives should not be viewed as dichotomous, but interrelated and relatively valid depending on the context

Cultural Explanations of Poverty

• Culture tends to be the explanatory variable when explaining social dysfunction, due to the visible connection between culture and race
• Some theorists and policymakers link poverty to behavior or rational calculation, arguing poverty results from social and behavioral deficiencies
• The "culture of poverty" thesis suggests that individuals create, sustain, and transmit a culture that reinforces social and behavioral deficiencies

Government Policy & Dependence

• A corollary suggests that welfare in the form of cash assistance to able bodied/minded adults creates a culture of dependence contributes to social ills like rising divorce rates
• Oscar Lewis' "culture of poverty" thesis was erroneously associated with blaming poverty on the poor or on a government that keeps them dependent
• The deficient character of the poor and their deviant behavior restrict their access to economic viability and success

Dysfunctional Attitudes and Values

• Rising rates of divorce, single-parent families, teen pregnancy, drug/alcohol misuse, and criminal activity reflect dysfunctional attitudes and values relative to mainstream society
• Herbert Gans argued the poor were "an economically and politically deprived population whose behavior, values - and pathologies are adaptations to their existential situation"
• Oscar Lewis wrote that poverty was an adaptation to objective conditions that tends to perpetuate because of its effect on children, though its incidence was connected to "structural conditions in society"

Moynihan Report

• Daniel Patrick Moynihan's report, The Negro Family: The Case for National Action (1965), contributed to the renewed relevance of cultural causes, investigating poor urban black families
• The disintegration of many of these families could be traced to their matriarchal character, which stood in contrast to the patriarchal character of the larger society.
• The report contributed to a gradual resurgence of behavioral arguments, though Moynihan's recommendations were ignored during the design of Great Society programs
• Conservative scholars argued cash assistance added fuel to the fire of family disintegration by incentivizing against marriage and work
• Myron Magnet argues that poverty comes from "a destitution of the soul, a failure to develop the habits of education, reasoning, judgment, sacrifice, and hard work required to succeed."

Effects of Welfare

• Charles Murray suggests that the welfare system led to welfare dependence and family disintegration instead of real poverty reduction, viewing the poor as rational actors responding to incentives
• Lawrence Mead argued that that the welfare system is too permissive and allows people to take advantage
• Murray and Mead argue that the welfare system contributes to family disintegration by creating incentives for single mothers to remain single or even divorce.
• A cultural/behavioral perspective remains controversial, but the "blaming the victim" mentality retains a hold on perceptions of poverty
• A 1994 poll indicated most respondents stated that welfare spending should be cut
• The durability of the negative perception of "welfare" may be due to its manipulation by politicians

Role of Culture

• If welfare is part of the problem, the poverty rate should be positively correlated with the level of government assistance
• The degree of Republican control should correlate inversely with measures of poverty
• The "culture of poverty" argument is mainly a political one

Social Transmission

• Culture in general should be understood as "a repertoire of socially transmitted and intra-generationally generated ideas about how to live and make judgments"
• It also interacts dynamically with structural factors and condition behavioral outcomes
• A cultural mechanism refers to the process by which a group of similarly oriented people will develop shared behaviors or values based on their common experience of the environment they inhabit
• Behavior is an outcome of an integrative process, with the environment shaped by constraints and opportunities that are subject to manipulation through public policy

Structural Causes

• Supporters of the "structural" school trace poverty back to structural factors, favoring certain groups over others based on gender, class, or race
• Institutional environments sustain economic barriers, with discrimination based on race and gender creating insidious obstructions
• A patriarchal society that continues to resist women's inclusion may cause the high rate of poverty among women

Racial Discrimination Indicators

• The rise in poverty among women is an important structural level variable, but there is a lack of reliable data going back to 1947
• Historical and contemporary racial discrimination against Blacks is reflected in data on white and black median income
• In 1947, black median income was 51% of white median income vs 62% in 2002
• Closing the gap between black and white median income would positively affect poverty
• Institutional racism and residential segregation are critical structural causes of the severe poverty in the black community.

Oppositional Culture

• Black communities reacted by creating an "oppositional culture that devalues work, schooling, and marriage“
• Wilson argues "social isolation" is the primary culprit, as historical racism erected contemporary barriers to Black Americans' economic success
• As White and middle-class Blacks followed jobs to the suburbs, the people left behind were relatively uneducated, unskilled and lacked mainstream role models
• This led to urban unemployment, low wages, unequal distribution of wealth, and poor social/educational services

Spatial Mismatch

• The urban poor and inner-city Black populations develop deviant behaviors and coping mechanisms due to isolation and rebellion to mainstream culture
• The Spatial mismatch theory hypothesizes that the location and relative access to jobs of the disadvantaged group is more operable than race per se
• Chicago area employers apply preconceived notions based on race, class and even address to prospective employees, affecting perception of a prospective employee's productivity
• Dilulio argues that the majority of the poor are hardworking well intentioned people whose potential for positive actions are severely constrained by fear of their surroundings and social stigma

Economic Factors

• Structural economic factors include unemployment, median income, and income inequality
• Rises in median income have positive benefits for the poor, with poverty rate tracking closely with median income
• Work is the best mechanism for lifting people out of poverty, and the strategies should focus on ensuring a strong and growing economy
• Income is strongly tied to educational attainment; education is not equally accessible because property taxes represent the largest share of local school funding, then quality of education will vary relative to the economic wealth of the locality

Wage trends

• The American economy shifted from manufacturing to services, weakening gains in wages.
• Wal-Mart offers its employees one of the weakest wage/benefits packages
• The service sector is splitting into low-income and high-income service workers, with opportunity in between
• Income inequality causes include the erosion of the "real" minimum wage, the declining influence of unions, and changes in the market demand for skilled labor versus unskilled labor
• Welfare opponents argue employment is the best cure for poverty, but the low wage service sector is expanding the number of "near poor"
• The poor parent is supposed to take care of his/her family based on a near minimum wage job with poor and/or expensive health coverage and child care

Political Ideals

• Republicans tend to favor business over the working class and believe that government interference ultimately hurts more citizens.
• Historically, Republicans have sought to curb domestic spending, especially social spending, based on the ideals of individualism, limited government, and Laissez Faire economics
• The economic system of capitalism depends upon a labor surplus that keeps wages low, which is in some ways contradictory to the republican stance

The Benevolence of the free market

• Equal opportunity seems like the ideal, but equal opportunity does not exist for all citizens
• Republican policies on the benevolence of the free market should be associated with reductions in poverty, however, variation in republican power over the last half century is directly related to variation in the rate of poverty
• The rising prison population has received scant attention in relation to the poverty discussion
• Crime rose during the 1960s while the United States' prison population remained constant from 1947 until the 1970s
• Criminals were receiving more and longer prison terms, thus removing repeat offenders from the streets
• Research suggests that the correlation between crime and imprisonment is tenuous at best, because punishment evolved along with changing economic systems

Controlling the population

• Rising prison population was part of an effort to institutionalize the surplus or unemployable population, to control inflation and the underclass
• Rises in prison population would lower official poverty levels

Poverty Measurement

• Incarcerated people should be included in the official poverty estimate
• The income and consumption of this subgroup excluding the cost of incarceration clearly puts it below the official poverty line
• Increases in the US's prison population reflect responses to crime alone or a more concerted effort to institutionalize the part of the population most likely to need welfare assistance

Examining competing perspectives

• This analysis aims to establish empirically the extent to which these competing perspectives can be shown as interrelated in their impact on poverty
• The explanatory power of cultural variables should be viewed in terms of cultural mechanisms, not in terms of deficient values and behaviors that remain static
• The degree to which cultural mechanisms are operable is only relevant within the context of the historical structural factors that condition the environment

Cultural Factors

• The American political culture valued individualism, liberty and equal opportunity and was forged within larger environmental contexts
• Robert Putnam demonstrates how cultural factors and institutions interrelate and suggests divergent cultural factors inherent to regions led to disparate levels social capital economic and political success
• In an essay on the microeconomics of cross-national prosperity, Michael Porter makes relevant observation: "The question is not whether culture has a role, but how to understand this role in the context of the broader determinants of prosperity"

The Economic System

• The way people behave in a society has much to do with the signals and incentives that are created in the economic system in which they live
• Workers in developing nations have a poor work ethic, then asks whether or not there is any reward for hard work within the existent system
• Poor workers or welfare recipients who are raised in a system in which equal access to education and other support services is not assured, then near poverty level wages may be the best one perceives as achievable
• As individuals become more constrained, their perspective will narrow and then adapt and their children inherit a conditioned world view

The Research variable

• Aggregated national data for the United States between 1947 and 2002 will be the sole focus of this analysis
• Dependent variable is number of poor families per 100,000 (US population). to ensure comparability, data series have been converted to rates per 100,000
• Serial autocorrelation is a risk because the regression analyses will focus on time series data thus variables were first order differenced meaning the analyses will test all relationships in terms of annual change rather than annual level
• structural level independent variables tested include prison population, median income, black median income and white median income gap , the Gini index, unemployment, and republican control

Republican Control

• Viewing prison is subject to debate because as a structural level variable may be subject to debate, however, for this analysis, it shall serve as a proxy for shifts in economic and social management that are designed to positively affect economic performance
• the gap in median the gap in income between Blacks and Whites is well-documented which serve as a proxy for institutional racism. median income, unemployment and the Gini index are well documented correlates with poverty
• behavioral/cultural theorists point to various social pathologies which cause and reinforce their condition and suggest there should be criminal activity, teenage pregnancy (proxy for sexual activity among teenagers), and the rate of divorce

Welfare Trends

• increases in welfare has no effect on teen pregnancy however, a significant although minimal relationship was established with divorce as the dependent variable
• The hypothesis retains if should retain any validity, then one or more of the "cultural" variables should show correlation as part of a larger structural model
• Total direct payments from the federal government may be viewed as either a proxy for welfare dependence, in an ideal world then there should be an inverse relationship between associated spending and rates of poverty
• the welfare system harm on economic growth comes from allowing able-bodied/minded adults to be taken care of, and that it should be associated with financial disincentive for marraige

Data series: 1947-2002 insights

• Model I tested the correlation between annual change in the "culture" variables alone with the annual rate of change in the number of poor families per one-hundred thousand with no one variable standing out
• change in divorce only to attained validity within these models when welfare spending is included or Model II, suggests the initial results and the correlation between divorce and total direct payments to individuals (as a percent of GDP) seem to lend support
• Model III, all independent variables were found to significant except per capita gross domestic product (PCGDP) and the ratio of black family median income to white family median income so and is not surprising that no relationship could be found between the ratio of black median income to white median income
• Model IV takes the structural/political variables show with significance meaning Given the data and the model, annual change in prison population, the Gini index, unemployment, median income, and the degree republican control explain approximately 71% of the variation in poverty over the last half century
• The relationship between poverty and prison population is more difficult to assess, but it seems apparent that annual change in the incarceration rate over time on society affecting that, which is independent from annual change in the crime rate
• Increases in conservative power should correlate directly with poverty

Ugandan Poverty

• The rapidly changing American economy and growing economic inequality is causing certain segments of the population to be left behind
• Since the political will does not seem to exist in order that equal opportunity begins with them US's poverty problem will grow
• In a study regarding the Sebei of Uganda by anthropologist Walter Goldschmidt indicated there society could be traced to "changing socioeconomic circumstances