Thursday, July 6, 2017

The Roots of Poverty

I recently had a debate with my father over whether poverty and racial wealth disparities were primarily due to environmental factors and bad public policies, or whether poor decision-making was the primary culprit.

My father argued a point similar to George Will's column in today's Washington Post. Based on recent sociological research from the American Enterprise Institute and the Institute for Family Studies, Will argues that a series of life choices known as the "Success Sequence" insure against poverty:

"The success sequence... is this: First get at least a high school diploma, then get a job, then get married, and only then have children. Wang and Wilcox [the authors of the study], focusing on millennials ages 28 to 34... have found that only 3 percent who follow this sequence are poor."
"Eighty-six percent of the Wang-Wilcox millennials who put 'marriage before the baby carriage' have family incomes in the middle or top third of incomes. Forty-seven percent who did not follow the sequence are in the bottom third"
While these findings seem intriguing, they fail to explain the U.S.'s high rate of poverty relative to other developed nations. Crucially, these countries have lower marriage rates and more out-of-wedlock births, contradicting Will's thesis. Some might object that these relative poverty figures (50% of the median income) are a poor measure of deprivation, since the U.S. is a wealthier nation than many other OECD countries. However, Switzerland and Norway have higher per-capita incomes than the U.S., more out-of-wedlock births, lower rates of marriage, and much lower rates of poverty.

It's worth digging into the data a bit more to examine why other countries with higher rates of out-of-wedlock births have lower poverty rates. Interestingly, it's not because their single-parent households are unusually prosperous. Rather, single-parent families are consistently poorer than two-parent households across OECD countries. However, the poverty rates of different family types vary between nations. While 11% of Sweden's single-working-parent households are in poverty, that rate is 35.8% in the U.S. Switzerland's rate is 21.6%, Norway's is 5.9%, and Denmark's is 5.1%.


Beyond ignoring these relevant international figures, Will omits several uniquely American problems that cement inter-generational poverty. For one thing, American zoning laws are often stricter than in other countries, driving up housing prices and preventing the poor from living in better neighborhoods. America also has a long history with racism that infects hiring practices, lending, and the justice system. Furthermore, America has an extraordinarily unequal education system, a relatively weak social safety net, and staggering income inequality. Wang and Wilcox's research elucidates the benefits of the "success sequence", but fails to explain why the United States does worse than other developed nations. Until they do, I reckon that it's worth considering the many other factors linked to poverty, most having to do with public policy and socioeconomic circumstances.

2 comments:

  1. 1. For the individual, especially someone with few family resources on which they might rely to 'rescue' them from their mistakes, Will's "success flowchart" is really what they need to focus on because that is what they can impact. The focus on institutional impediments to minority success also ignores the much bigger impact that poor have on their life success. Think of it this way, we are all swimming, some of us in a still lake and some of us with bigger waves. The bigger waves make mistakes and poor swimming costlier but ultimately to get to the other shore, you need to swim. Those were the choices.
    2. Second the whole panoply of other issues you cite are certainly impediments (except for zoning which with some exceptions is mostly an issue that builders don't want to build low income/low cost housing without a govt subsidy because it's not profitable, high rise or not). but you just assume or imply they are as important as individual choice. I see no evidence for that.
    3. Hiring discrimination exists, but if you are 16 and dropped out of school that seems irrelevant. By and large, north Mpls and St. Paul east side schools are plenty resourced for success, but if the kid doesn't show up, he doesn't get the education.
    4. None of this is to ignore the problems minorities and especially blacks have with residual racism in society but the focus on those impediments ignores the bigger impacts of their too often poor choices. That was true with Daniel Patrick Moynihan (that paragon of racism!) wrote his piece in 1974 and it remains just as true today!




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  2. One last thing, most people in the U.S. accept the lower service, lower tax model that we have (that's all relative as I would hardly call us low tax! But I digress).... Few us us want to be Scandinavia or West Europe so those comparisons with their large public safety nets are not that interesting.

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