Living Poor

[Jacinda Saleeby]

Around700 million people live on less than $2.15 per day, the extreme poverty line. Extreme poverty remains concentrated in parts of Sub-Saharan Africa, fragile and conflict-affected areas, and rural areas.

After decades of progress, the pace of global poverty reduction began to slow by 2015, in tandem with subdued economic growth. The Sustainable Development Goal of ending extreme poverty by 2030 remains out of reach.

Global poverty reduction was dealt a severe blow by the COVID-19 pandemic and a series of major shocks during 2020-22, causing three years of lost progress. Low-income countries were most impacted and have yet to recover. In 2022, a total of 712 million people globally were living in extreme poverty, an increase of 23 million people compared to 2019.

From information gathered in household surveys to pixels captured by satellite images, data can inform policies and spur economic activity, serving as a powerful weapon in the fight against poverty. More data is available today than ever before, yet its value is largely untapped. Data is also a double-edged sword, requiring a social contract that builds trust by protecting people against misuse and harm, and works toward equal access and representation.

The COVID-19 pandemic demonstrated that years of progress in reducing poverty can quickly disappear when a crisis strikes. Prevention measures often have low political payoff, with little credit given for disasters averted. Over time, populations with no lived experience of calamity can become complacent, presuming that such risks have been eliminated or can readily be addressed if they happen. COVID-19, together with climate change and enduring conflicts, reminds us of the importance of investing in preparedness and prevention measures comprehensively and proactively.

Contributing to and maintaining public goods require extensive cooperation and coordination. This is crucial for promoting widespread learning and improving the data-driven foundations of policymaking. It is also important for forming a sense of shared solidarity during crises and ensuring that the difficult policy choices by officials are both trusted and trustworthy.

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Worldwide, a child under the age of 15 dies every five seconds, mostly of preventable causes that poverty exacerbates. And though impoverished living conditions are often perceived as confined to cities, the poverty rates in rural areas continue to exceed those in urban areas in several countries, including Romania, Indonesia and the U.S.

In many regions of the world, the number of low-income households far exceeds the affordable housing units available. In the U.S., for every 100 renter households classified as extremely low-income, just 35 rental units are both available and affordable. Globally, the housing affordability gap, meaning the difference between income available for housing and the market price of a standard housing unit in a region, amounts to nearly $650 billion per year.

Nowhere in the U.S. can a worker earning the federal or prevailing state minimum wage rent a two-bedroom apartment without having to pay more than 30% of their income. In fact, a minimum wage worker must clock nearly 127 hours per week, more than three full-time jobs, to afford a two-bedroom rental, or 103 hours per week, more than 2.5 full-time jobs, to afford a one-bedroom, according to the National Low Income Housing Coalition.

But a safe, decent, affordable place to live can make a real difference in the life of a family. Homeownership has long been the primary way for families to build wealth. Homeownership also offers stability because monthly mortgage payments are predictable whereas rents can increase year over year. A stable home is important for academic achievement. Children who change schools as their families move in search of more affordable housing can struggle to keep up academically.

Habitat for Humanity proves that decent housing can be a path out of poverty for families in need of a hand-up, and every day, you help us partner with families in the U.S. and nearly 70 other countries to create stable homes and vibrant neighborhoods.

Together, we have helped millions of people build or improve the place they call home. With your help, we also advocate to improve access to decent and affordable shelter and offer a variety of housing support services that enable families with limited means to make needed improvements on their homes as their time and resources allow.

Yet there is another reason I hesitate to call myself poor: the cultural baggage associated with the word. Poor people are lazy, stupid, immoral, shameless and incapable of making smart decisions. Poor people are losers; our country loves winners. We want poor people to trade their rags for riches. We want them to embody the American dream.

Sure, I look for practical ways to save. The local electric company has a reduced rate for lower-income users. I cook simple meals that cost practically nothing. I shop for loss leaders and use coupons and rebates. Yard sales, thrift shops and dollar stores supply most other requirements.

So he asked the US Federal Housing Administration to back a loan. The FHA, which was created just six years earlier to help middle-class families buy homes, said no because the development was too close to an "inharmonious" racial group.

So the next year, this white developer had an idea: What if he built a 6-foot-tall, half-mile-long wall between the black neighborhood and his planned neighborhood? Is that enough separation to mitigate risk and get his loan?

We often talk about increasing wealth inequality, with the rich getting richer and poor getting poorer. That's certainly a problem, but something we should be even more concerned about is what is happening to our neighborhoods. There are now more extremely poor neighborhoods and more extremely rich neighborhoods.

In the midst of the civil rights movement, between 1955 and 1970, about one in three black children grew up in very poor neighborhoods, where more than 30 percent of people were in poverty. Virtually no white children grew up in those very poor areas.

This study showed there is very little intergenerational mobility in black families. If you're black and your parents grew up in a poor neighborhood, then you probably ended up in a poor neighborhood too.

But last year, Harvard researchers Raj Chetty, Nathaniel Hendren, and Lawrence Katz went back to look at how these people fared in the long term. And they found that the people who moved to the nicer neighborhoods were earning significantly more than those who stayed in public housing.

One way Sharkey, the NYU sociologist, looked at this phenomenon was by measuring how neighborhoods affected kids' IQ. He looked at where the kids grew up and where the kids' mothers grew up. Here's are the results:

In Connecticut, Mark Abraham of DataHaven surveyed 16,000 people last year in one of the most comprehensive state surveys ever. And one of the more personal questions he asked was: How happy were you yesterday?

If the neighborhood has a high crime rate and it's not safe for your kids to be outside by themselves, then you wouldn't let your kids play outside. This means they are getting less exercise, which leads to higher obesity rates. And more health problems. And so on.

In Montgomery County, Maryland, there is a law that says if you're building a new subdivision of homes, about one in eight must be moderately priced. And for a third of the moderately priced homes, you have to give first dibs to the public housing authority so it can be turned into low-income housing.

So low-income families, who had an average income of $22,460 in 2007, apply to live in these homes. Rent costs about a quarter of the market value. And apartments are randomly assigned, which means they can end up in low-income neighborhoods or mixed-income neighborhoods.

Researcher Heather Schwartz thought this was a great opportunity to conduct an experiment: How much better do the kids in the mixed-income neighborhoods do, compared with the ones in low-income neighborhoods?

She looked at about 850 students with limited household resources, about 72 percent of whom were black. Because their housing was randomized, they went to school in a wide spectrum of environments. Schwartz analyzed what happened to them over a five- to seven-year span (from 2001 to 2007).

What she found was astounding: The students who attended the schools with wealthier schoolmates (where fewer than 20 percent qualified for free or reduced meals) far outperformed those who went to school with poorer students.

The result is that by the end of elementary school, the poor students who attended the wealthier schools made a huge dent in the achievement gap between themselves and the wealthier students. Meanwhile, the achievement gap remained the same for students in poor schools.

One part of this is that places with higher housing costs generally had better outcomes, so only people with money could move to these areas. But the researchers isolated a neighborhood's effects by comparing people who were at the same level of income distribution. Below, we're comparing families at the 25th percentile:

That's what some advocates want, and this can be made possible with vouchers and where public housing is, and a handful of other strategies. This can be expensive but has shown to work with small samples.

Another idea is a universal basic income, which would pull everyone out of poverty. In short, the government would write a check to everyone, kind of like how Social Security writes a check to old people.

Another approach is to focus on poor mothers. Programs in Connecticut, and elsewhere, provide mental health services, basic needs, and job skills to mothers. The hope is to mitigate the effects of having a mother who grew up in a poor neighborhood.

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