Monitoring Poverty in the 21St Century
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Pathwaysa magazine on poverty, inequality, and social policy Fall 2011 Monitoring Poverty in the 21st Century Also in this issue: Are Americans getting stingier? Which countries are best at helping the poor? SUBSCRIBE NOW! Would you like to continue receiving a free copy of Pathways? Sign up for hard copy delivery or PDF notification at www.inequality.com Generously supported by: Stanford Center for the the Elfenworks Foundation Study of Poverty and Inequality www.elfenworks.org www.inequality.com U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation www.aspe.hhs.gov Table of Contents 2 Editors’ Note TRENDS 3 Has the Great Recession Made Americans Stingier? Rob Reich and chRistopheR WimeR There’s less money to go around in hard times. Have Americans responded to the downturn by reining in their signature commitment to helping the poor? RESEARCH IN BRIEF 8 A Report on New Poverty and Inequality Research Lucas manfieLd and bRooke conRoy bass More evidence on how credit cards hammer the poor; a new test of whether job ads create gender inequality in the labor market; a surprising ray of hope for the long-term unemployed; and other cutting-edge research. Monitoring PovER ty in t he 21St C ENtuRy 10 the Supplemental Poverty Measure: A New tool for understanding u.S. Poverty Rebecca bLank One of the key architects of the new Supplemental Poverty Measure (SPM) lays out the case for rethinking how we measure poverty, how we understand it, and even what to do about it. 15 understanding Local Poverty: Lessons from New york City’s Center for Economic opportunity maRk Levitan, chRistine d’onofRio, John kRampneR, danieL scheeR, and todd seideL Does an SPM-style measure actually work? A report from the trenches on how the new measure helps us assess and craft antipoverty policy. 20 the Future of u.S. Poverty Measurement chRistopheR WimeR, baRbaRa beRgmann, david betson, John codeR, and david b. gRusky Is it the end of (poverty measurement) history? A discussion of how to move forward in our brave new post-SPM world. INTERVENTIONS 26 Spotlight on…Homeless Prenatal Program bRooke conRoy bass Is there a simple economic case for investing in homeless mothers in San Francisco? The Homeless Prenatal Program suggests there is. 28 How Rich Countries Lift up the Poor Lane kenWoRthy Many countries have experienced substantial economic growth in the last 30 years. But only some countries have passed on the fruits of this growth to the poor. What accounts for such differences in trickling down? 2 Pathways a magazine on poverty, inequality, and social policy Fall 2011 Editors’ Note SenioR EdItors CoPy EdItoR Why devote an issue of Pathways to the seemingly arcane topic of poverty measure- Liz Hogan-Stalnaker David Grusky ment? It might be assumed, after all, that issues of measurement are best left to the Christopher Wimer PRoofreadER wan statistician hunkered down at her or his computer. The contrary premise behind Christine Sabooni ARt DirectoR this issue is that the measurement of poverty, however unsexy it may seem, affects how Robin Weiss WEBSItE Manager Alice Chou we view and address poverty and that it shouldn’t therefore be treated as mere sidebar statistics. EdItorial BoARd It bears noting that the United States was once an innovator in measuring and Kenneth Arrow, Stanford University conceptualizing poverty. To be sure, most nations care deeply about the low-income Peter Bearman, Columbia University population, but the United States and the United Kingdom are the only countries with David Card, University of California at Berkeley state-mandated measures of poverty. Although poverty measurement is, in this sense, a Joshua Cohen, Stanford University distinctively U.S. commitment, that’s not to suggest that we’ve done an especially good Dalton Conley, New York University job of it of late. The first official U.S. poverty measure was developed in the 1960s and Greg Duncan, University of California at Irvine has essentially remained fixed over the last half century despite fundamental change in Kathryn Edin, Harvard University (a) our social programs and how they take on poverty; (b) our health care system and its Paula England, New York University role in generating poverty; and (c) the gender composition of the labor force and, as a Robert Frank, Cornell University result, how children are reared and childcare is afforded. The purpose of this issue is to Mark Granovetter, Stanford University Robert Hauser, National Research Council explore how these and other changes should be taken into account in measuring poverty. Michael Hout, University of California at Berkeley Why has our official poverty measure remained frozen for so long? The simple Jon Krosnick, Stanford University answer: politics. We haven’t developed a politics-protected process for revising and Glenn Loury, Brown University changing our measurement of poverty to the extent that we have for other equally cru- Hazel Markus, Stanford University cial labor force statistics. The resulting paralysis in poverty measurement means that Douglas Massey, Princeton University the government doesn’t have the high-quality data it needs to make those decisions that Susan Mayer, University of Chicago are properly political. If we measured poverty with a well-crafted tool, we would then Charles Murray, American Enterprise Institute have the opportunity to take the poverty implications of major policy decisions into for Public Policy Research account. We would also have the opportunity to choose not to take those implications Katherine Newman, Johns Hopkins University into account. In the absence of a well-crafted measure, that crucial political choice is, by Thomas Piketty, Paris School of Economics default, wrested away from all of us. Woody Powell, Stanford University Barbara Reskin, University of Washington There is, of course, much good news on this front. In our opening piece, we’ve asked Richard Saller, Stanford University Rebecca M. Blank, Acting Secretary of Commerce and Under Secretary for Economic William Julius Wilson, Harvard University Affairs, to describe the new Supplemental Poverty Measure (SPM), a carefully revised measure that overcomes many of the problems that have long plagued the official mea- StanfoRd CENtER FoR the Study sure of poverty. The next article, authored by a team from New York City’s Center for oF PovERty ANd inequALIty Building 370, 450 Serra Mall, Stanford University Economic Opportunity, shows how a local SPM-style measure works in practice and, Stanford, CA 94305-2029 in particular, how it can be used to evaluate the effectiveness of local, state, and federal Tel: 650-724-6912 Fax: 650-736-9883 antipoverty policies. In the third and final piece, a team from the Stanford Center for Email: [email protected] the Study of Poverty and Inequality weighs in to discuss the near- and long-term future Website: www.inequality.com of poverty measurement, with a special focus on how the SPM, revolutionary though it The Stanford Center for the Study of Poverty and is, might yet be improved. Inequality is a program of the Institute for Research The development of a credible state-mandated definition of poverty is critical pre- in the Social Sciences. Funding from the Elfenworks cisely because there isn’t any intrinsic dividing line that separates the poor from the Foundation gratefully acknowledged. For more non-poor in the way that, say, serfs were distinct from lords in the feudal period. As information, go to www.elfenworks.org. such, it’s an important task of the government to fix that line, to give it some institu- This publication was supported by Grant Number tional backing, and thereby allow the rest of us to assess what generates poverty and AE00101 from the U.S. Department of Health and how best to reduce it. Although the SPM won’t play any role in administering U.S. Human Services, Office of the Assistant Secretary welfare programs, it does nonetheless provide much-needed weight behind a given set for Planning and Evaluation, and awarded by Sub- of measurement decisions. We’ve dedicated this issue to assisting that historic process stance Abuse Mental Health Service Administration. in some small way. Its contents are solely the responsibility of the —David Grusky & Christopher Wimer, Senior Editors authors and do not necessarily represent the official views of the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, and awarded by Substance Abuse Mental Health Service Administration. 3 Pathways Fall 2011 Has the Great Recession Made Americans Stingier? By ROB ReIcH AnD ChristopheR WIMeR mericans have long been, and continue to be, a because the economic downturn affected individual income famously charitable people. While Europeans and wealth so much, it may have generated substantial declines have well-developed and comprehensive wel- in individual giving, which is troubling because it’s individual fare states, the United States has always relied giving, by live and dead donors, that accounts for roughly 80 more on private charity to fund collective percent of all charitable dollars. goods, including aid and assistance to the poor. But how does The chief source of data on charitable giving over time comes this dependence on charity play out during economic down- from the Giving USA Foundation, an organization devoted to turns? Does it increase as well-off Americans respond to the promoting research, education, and public understanding of rising needs that a recession spawns? Or have Americans and philanthropy. The Giving USA Foundation estimates, for every American institutions tightened the purse strings during hard year since 1968, the amount of giving for four different types times despite such rising needs? of giving sources and nine types of giving recipients. As Figure There’s good reason to worry about a possible substantial 1 shows, the economic downturn of 2008 has given rise to one decline in giving.