Welfare Shifts to the “Deserving” Poor … and Not-So-Poor

May 27, 2014

The U.S. is spending considerably more on safety net programs than it did in the mid-1970s, but the poorest families — most of them headed by single mothers — are receiving less.

This is a key finding in the latest of several studies conducted by Professor Robert Moffitt at Johns Hopkins University. He looked at spending the 15 largest “social safety net” programs between 1975 and 2007.

He traced payments from social insurance programs like Social Security for retirees and unemployment compensation and from means-tested programs, i.e. those that limit eligibility to people below a set income level.

Overall safety net spending in real dollars was 74% higher at the end of the period, but families in deep poverty, i.e., below half the federal poverty line, received 35% less than they did the year before Congress replaced welfare as we knew it with Temporary Assistance for Needy Families.

Well, we knew that TANF is a poor excuse for a safety net program — and in various ways, as the Center on Budget and Policy Priorities’ chart book shows.

Moffitt’s findings, however, do far more than confirm this. Basically, as he says, they show that long-standing distinctions between the deserving and undeserving poor “have grown sharper over the last 20 or 30 years.”

“The deserving are those who work, who are married or at least widowed, who have children and who are native born.”

The undeserving are the obverse, Moffitt contends, though I personally think the bans on safety net benefits for recent immigrants have other roots.

Quibble aside, what his data show isn’t merely declining support for the “undeserving” poor. We also see increasing support for famiies who aren’t poor — or even near-poor.

The shift reportedly means that a family of four earning $11,925 a year is probably getting less aid than the same-sized family earning $47,700 — 200% of the federal poverty line.

This is partly because the real-dollar value of TANF cash benefits has dropped so significantly, along with the percent of poor families served — about 43% fewer than in 1996.

At the same time, most of the fastest growing programs serve “specialized populations,” Moffitt says. These include Supplemental Security Income, which helps only lower-income people who are elderly, blind or severely disabled, i.e., those who qualify as deserving because we don’t expect them to work.

Otherwise, most of the fastest growing programs benefit families with at least one worker — the Earned Income Tax Credit and the Child Tax Credit. Childless workers obviously don’t qualify for the latter at all. And their EITC benefit is piddling.

By contrast, a married couple with two children qualifies for a maximum $5,460 credit — and for phased-down credits until their adjusted gross income reaches $49,146.

The one exception, Moffitt notes, is SNAP (the food stamp program), which isn’t restricted to any “specialized population.” But it provides only about $5 per person per day, he says — a generous rounding up, according to CBPP data.

By and large, we see “rising support for those who work and declining support for those who do not, Moffitt says. “If you’re trying and not succeeding, the welfare system today gives you basically nothing.”

We’ve cut support to families without a breadwinner — and to single-mother families in particular — because of a “presumption that they have not taken personal responsibility for their situation,” he explains.

By these lights, earning is a mark of deserving — as is marrying (someone of the opposite sex) and staying married, no matter what.

Poverty betokens some character flaw — at the very least, a failure to try hard enough, as a majority of Republicans (and not they only) apparently believe.

Moffitt understandably believes it would be futile — perhaps counterproductive — to attack the work bias in our safety net programs. He mentions doing more for those who face the largest obstacles to work, e.g., lack of marketable skills and/or affordable child care.

But he also hopes “we could find ways to assist those families who are making an effort, but not succeeding.” Effort then becomes a market of deserving.

And who will decide who’s really trying?

 

 

 


Poverty and Income Inequality Don’t Just Happen

November 12, 2013

Now, here’s an interesting fact to chew over. If the wealth in this country were evenly distributed among adults, each of us would have $301,000.

By this measure, we’re not the wealthiest country in the world. That distinction goes to tiny Switzerland, according to the latest Global Wealth report from Credit Suisse.

But we’ve got, by far and away, the highest percent of millionaires (42%) — and an even larger share (46.5%) of all the people with more than $50 million in the 19 countries the Credit Suisse analysts could compile data far.

At the same time, we’ve got 15% of the population — 46.5 million people — so poor as to fall below the Census Bureau’s very low poverty thresholds.

Blogger Matt Bruenig crunched some numbers and found that it would take $175.3 billion to lift every one of them out of poverty, as officially defined.

That may seem like a great deal of money. But it’s only a bit over 1% of the value of the goods and services our country produced last year — and according to my number-crunching, only about $3,770 per person.

Now, I don’t want to lend credibility to the troll who alleges that I’m a “commie terrorist,” but these numbers do get the mind churning.

On the one hand, the Credit Suisse figures underscore how unevenly wealth is distributed. On the other hand, Bruenig’s indicate how relatively little we’d have to redistribute to end poverty — well, not really, but at least according to the measure we use.

As Bruenig says, we have mechanisms to do this. We could, for example, expand the refundable Child Tax Credit and Earned Income Tax Credit. We could expand SNAP (the food stamp program), instead of arguing over how much to cut it.

We could, Bruenig adds, establish a “mild basic income and a negative income tax.” These aren’t radically leftist notions.

Economist Milton Friedman, whom no one would call a leftist, proposed a negative income tax back in 1962. As he described it, people would file tax returns and get a refund of sorts for some portion of however much their income fell below the threshold at which they would owe anything.

This ultimately became the basis for the EITC, but the tax credit helps only people who work and their dependents. And it does very little for parents who earn very little and for those who are childless, even if their earnings are fairly decent.

Though Friedman viewed the NIT as an alternative to existing welfare programs, it wouldn’t have to be. On the other hand, it could replace them if the refunds were big enough to pay for basic needs.

I know economists have concerns about disincentives to work — as, of course, do policymakers. Comfortable hammock and all that.

And perhaps there’s something to this, though I note that we don’t seem to have these concerns when the issue is what are effectively income supports for people who are already well-off, e.g., the various tax benefits to homeowners.

These alone would pay for more than half the cost of lifting everybody out of poverty, according to Joint Taxation Committee estimates that Bruenig cites.

The basic point here, which Bruenig makes well, is that poverty is a function of policies that distribute income unevenly, not a spontaneous phenomenon. Wealth likewise, I’d add.

Policies built into the federal tax code are an obvious example — not only so-called tax expenditures in the individual income tax system, but the tax treatment of assets that are passed on to heirs.

State and local tax policies also enter into the picture, since, on average, they collect the highest percent of income from residents in the bottom fifth of the income scale and the lowest percent of all for the top 1%.

Less obvious, but surely important are school financing policies, which tend to provide significantly more resources for the schools wealthy kids can attend and shortchange the schools for the poorest, who arguably need more.

Insofar as a good education increases future earnings, the uneven distribution of tax dollars contributes to uneven income distribution in successive generations.

Diverse labor policies also affect earnings, of course. These have generally tended to depress wage growth for the vast majority of workers.  And the savings they enable businesses to achieve go to owners, who may be shareholders — and in many large corporations, to CEOs.

Housing, transportation and urban development policies have also played a part by concentrating poor people in pockets of poverty, with limited access to jobs and, as aforementioned, good schools.

I’m sure some of you can think of others.

In short (after what perhaps should have been shorter), poverty and income inequality don’t just happen. We’ve created them — or at the very least, made decisions that foster them.

By the same token, we could make decisions to reduce them. We’ve got the wealth and a wealth of ideas. Not, however, the political will that can come only from a broad consensus that creating the conditions for shared prosperity is a must-do.


Beyond Poverty Reduction to Resetting the Whole Debate

November 4, 2013

Two years ago, Half in Ten relaunched its campaign to cut poverty in half in 10 years. At the same time, it broadened the goal to reflect a vision of shared prosperity.

Now it’s published its second annual update. Like the last, the update reports progress (or lack thereof) according to 21 numeric indicators in four broad categories — poverty today, more good jobs, strengthening families and communities and economic security.

But this doesn’t begin to do justice to what Half in Ten has produced. Each of the four major chapters begins with a lengthy analytic narrative, with lots of data sprinkled in the text and in graphics. Category-specific policy recommendations follow.

Then come the indicators themselves. These are amplified by graphs and tables, many of which provide race/ethnicity breakouts and/or lengthier timeframes than the indicators proper.

So we actually have many more indicators than just the 21 the campaign established as benchmarks. We also have a higher-level policy framework for the to-dos in the chapters that address them.

A forward by Sister Simone Campbell, a leading voice in the progressive faith-based community, and a concluding call to action by top executives of Half in Ten’s parent organizations give meaning to the title of the report — “Resetting the Poverty Debate.”

Both take off from the 50th anniversary of the declaration of the War on Poverty that we’ll observe in January. We’re also reminded of the 50th anniversary of the March on Washington that we recently celebrated — in particular, of the inclusiveness that Dr. Martin Luther King, Jr. called for.

There’s no way I can summarize all this in a blog post. Even a bare account of the indicators themselves would run on too long. Let’s just say, we see some year-over-year progress on a handful of measures, more backsliding and a lot of stasis.

I may return to some of the specifics. At this point, I’ll try to pull out what I see as the major messages.

The first is that increasing income inequality is a major threat — not only to progress on the benchmarks, but to the social cohesion that would generate the political will for that.

The second is that our policymakers in Congress are having the wrong conversation — a “tone deaf debate,” as co-author Erik Stegman terms it. They’re at odds over how to replace sequestration, which they agree (for different reasons) is harmful.

Where they aren’t so far apart is on the need to keep whittling down the near-term deficit, though it’s much lower than it was when we got into all this budget-slashing business.

Results from the Census Bureau’s Supplemental Poverty Measure show that major safety net programs and others that benefit low-income Americans have lifted millions out of poverty.

They’re threatened now, as the debate over SNAP (the food stamp program) and the renewed calls for curbs on Social Security benefits indicate.

Beyond this, we see nothing to suggest that Congress will make the investments needed to create more jobs — unless and until something resets its priorities.

Nor does it seem inclined to enact policies that would ensure that such jobs as do exist are “good,” e.g., pay enough to at least cover the costs of basic necessities and offer critical protections and benefits like paid sick leave.

Nor to invest more in education and training that would enable more low-income people to qualify for good jobs. Or to make high-quality child care affordable for those who’d still have to pay a big chunk of their wages for care at market rates.

Third, the War on Poverty reminds us that poverty reduction and a considerable degree of shared prosperity are possible.

Between 1964 and 1973, the poverty dropped by 43% to an historically low 11.1%. And “the numbers and incomes of the middle class grew steadily,” the report says — though we still had (and have) marked disparities by race, ethnicity and gender.

Fourth, we need a strategy for these times, not a War on Poverty II. The report cites changes not only in our economy, but in our workforce and demographics.

Besides, says Sister Simone, “war is the wrong metaphor” now — most importantly, because “poverty is not a foreign enemy.” It’s “woven into the fabric of our economy” as a result of developments that our policies have enabled — and the ideology that’s sustained them.

We need to reject the false notion that “our nation is rooted in individualism,” she says, and look instead to the “communal relationship” expressed in the preamble to our Constitution.

Widening wealth and income gaps generate fear. In the face of it, we the people need to “reweave society” through “conversations about our shared values and the fact that we all do better when disparities are diminished.”

We need to “reframe the national debate.” This, as I earlier noted, reaches further and deeper than the specific measures the report recommends.

And it’s finally what the report seeks to achieve. It certainly gives us a lot to converse about — and a common fact base to start from.

Highly recommended.


Moving Beyond Trayvon Martin to Issues of Economic (In)Justice

September 23, 2013

Professor Gary Gutting has written one of the most thoughtful, far-reaching analyses of the Trayvon Martin case that I’ve seen.

On the one hand, he says, blacks responded to Trayvon as a symbol of the groundless, racist suspicions familiar to black males, e.g., whites crossing streets to avoid them, stop-and-frisks, the car door locks clicking that President Obama mentioned.

So, I should add, did some non-blacks.

But for others, Gutting says, Trayvon symbolized “disturbing realities” about all too many young black men, e.g., that they’re likely to drop out of school, commit violent crimes and engage in other anti-social behaviors.

So we’ve got two opposing moral judgments, but neither reaches the “deeper issue” — the fact of “a fundamental injustice in our economic system.”

Dr. Martin Luther King opened his famous March on Washington speech by proclaiming that “the Negro is still not free…. [He] lives on a lonely island of poverty in the midst of a vast sea of material prosperity.”

This is still true 50 years later for 28% of blacks, Gutting says, citing last year’s official poverty figure. And the root cause is the way our free enterprise system works.

It’s geared primarily toward enabling individuals to amass personal wealth. And them’s what has gets, at the expense of them’s what don’t.

The end result is “a socioeconomic underclass deprived of the basic goods necessary for a fulfilling human life: adequate food, housing, health care and education, as well as meaningful and secure employment.”

Gutting asserts that “people should be free to pursue their happiness in the competitive market” — an odd conflation of happiness and riches.

But, he continues, “it makes no sense to require people to compete in the market for basic goods” because if they don’t have them, they’ve “little chance of gaining them in competition” with those that do.

We’ve got scads of evidence for this. For example, we’ve got research showing that more than 40% of children raised in the bottom fifth of the income scale stay there as adults — and more than half if they’re black.

And other studies showing that children of wealthy parents start kindergarten ahead of the pack — and stay there, while a very large number of poor children start with disadvantages that cause them to fall further and further behind.

And data showing that even the poor kids who make it through high school are far less likely to go on to college — and less likely to graduate if they do. Costs and other financial pressures are, for blacks, the single most important reason, according to yet other research. And probably not for them only.

These differences carry over into competition in the labor market, of course.

Last month, only 3.5% of workers with a bachelors degree or higher were jobless and actively looking, as compared to 7.6% with a high school diploma or the equivalent and 11.3% with less.

The wage premium of a college degree is similarly marked — and due partly to the fact that more highly educated people are far more likely to be working, as Catherine Rampall at The New York Times notes.

Last year, the median earnings of men with a bachelors degree were nearly twice those of men with a high school degree or the equivalent — and more than two and two-thirds times those of men with less.

Even more marked disparities for women. The median for those without a high school diploma or the equivalent was a mere $14,867 — well under the federal poverty line for a two-person family.

And so income inequality replicates itself from generation to generation, with the rich getting richer and the poor, if not actually poorer, at least increasingly disadvantaged.

Gutting says that “[w]e need to move from outrage … to serious policy discussions about economic justice, with the first issue being whether our capitalist system is inevitably unjust.”

If it is, can we feasibly reform or even replace it? If it isn’t, what methods does it offer for rectifying the injustice represented by the continuing existence of an “underclass” — one that “given our history, will almost surely be racially defined?”

These are good questions — and the kind a philosophy professor can pose.

I’ve got a hard time imagining our policymakers and those who seek to influence them sitting down to discuss whether we should overhaul our basic economic system.

But we surely should have some productive discussion about leveling the playing field.

The recent Census report tells us that the top fifth of households got more than half of all income, while the bottom fifth got 3.2%. But this may actually understate income inequality because the Bureau doesn’t count capital gains.

A new analysis by economists Emmanuel Saez and Thomas Piketty estimates that the top 1% captured 95% of the income gains during the first three years of what’s supposedly our recovery. The share of income that flowed to the top tenth of that percent last year is the highest on a record dating back to 1917.

We don’t have to favor a post-capitalist system to know that there’s something wrong when the wealthiest families — the top 0.1% — had incomes over $10.2 million, while 46.5 million people lived in poverty.


Early Investments Can Give Low-Income Kids a Better Chance for a Better Life

June 5, 2013

The research I recently wrote about makes a persuasive case for lifetime income inequalities that begin when children are very, very young.

But, as the title of this post suggests, we can choose to mitigate the disadvantages low-income children are born to. President Obama has proposed a multi-part initiative that would give a boost to some programs that do.

Rich and Poor Beginnings

Unequal life opportunities begin even before children are born. Studies tell us that poor mothers are less likely to get good prenatal care or enough of the right kinds of foods.

For these and other reasons, e.g., high levels of stress, they’re more likely to give birth to babies who weigh very little. These babies are at high risk for physical and learning disabilities — and ultimately chronic illnesses.

Other seeds for long-term economic disadvantage are also health-related, as the Academic Pediatrician Association’s summary of the “life-altering effects” of child poverty shows.

Still others have to do with how parents raise their kids — how much time they spend talking to them, answering their questions, playing with them, reading to them, etc. Or if not they, then other caregivers.

Highly-educated parents — mainly mothers — make a greater investment of time in such activities than mothers with less than a high school degree, even though they’re more likely to be employed.

One pay-off, according to an oft-cited study, is that young children of well-off parents hear about three and a half times as many words per hour as those of poor parents.

The more words the children heard, the better their performance when they got to the fourth grade.

A Better Start for Low-Income Kids, But Not Enough of Them

Early childhood education programs — for both parents and their kids — can help compensate for some of the disadvantages that cause poor children to get left behind, even before they start first grade.

Voluntary home visiting programs, for example, help low-income parents raise children who will enter kindergarten healthy and with the skills their well-off peers usually have.

A recent Washington Post article focuses on a fine example of one of these. “Preschool in its earliest form,” the writer calls them.

High-quality child care can make an important difference as well. But it’s inordinately costly for low-income parents who don’t have vouchers to subsidize it, as most apparently don’t.

And even if they could get a voucher, they might not find a suitable slot. In the District of Columbia, for example we’ve got waiting lists because providers don’t get reimbursed for their costs.

The Early Head Start program offers an alternative for low-income children under three. And like regular Head Start, it addresses their health and nutrition needs, as well as their social and intellectual development.

But in 2010, it served fewer than 4% of eligible children. And this was a year when the program had an infusion of money from the Recovery Act.

Head Start itself reached only about two-fifths of the children eligible, according to the National Women’s Law Center’s estimate.

In fact, only 65% of four year olds in the lowest income bracket go to preschool at all, as the Commission on Equity and Excellence in Education recently reported. And it’s often low quality, the Commission adds.

The participation rate is even lower for the poorest three year olds — about 42%.

But states are spending less on pre-K. Total funding dropped by more than $548 million in the 2011-12 school year alone.

And, as you’ve undoubtedly read, an estimated 70,000 low-income preschoolers will get fewer — and in some cases, no — services from Head Start, thanks to sequestration.

President’s Early Childhood Initiative

President Obama’s proposed Fiscal Year 2014 budget includes an initiative billed as an Early Education for All Americans plan.

As CLASP reports:

  • Most of the money — $75 billion over 10 years — would go to states that agree to expand preschool slots for four year olds whose families are at or below 200% of the federal poverty line.
  • A $1.4 billion investment would expand child care slots for infants and toddlers. These would provide full-day care in programs that agree to meet the quality standards set for Early Head Start.
  • Another $750 million would fund competitive grants aimed at giving states incentives — and some help — to expand their preschool programs and, if needed, beef up quality.
  • And $15 billion would expand home visiting programs for at-risk children.

To fund the preschool part, the President wants Congress to increase the federal tax on tobacco products.

You can imagine the pushback — from the tobacco companies, corner stores and, of course, Republicans in Congress who oppose all tax increases (except for low-income families).

So the President’s proposals face an uphill battle, as they would even if the funding source were different.

They’re no magic bullet. But they’d do a good bit to help ensure that, in his words, “none of our children start the race of life already behind,” as so many poor kids do now.


Why Are Poor Children Still Getting Left Behind?

May 23, 2013

Professor Sean Reardon tells us some things we may not have known about something we thought we did.

We all probably knew that children with rich parents do better in school than children from poor and near-poor families.

We find evidence in standardized test score differences between schools in wealthy and poor neighborhoods.

Here in the District of Columbia, for example, math and reading proficiency rates have generally risen at schools in the wealthiest wards and dropped in the rest, especially the very poorest.

We see the same income-based disparities in scores on the National Assessment of Educational Progress tests, which are broken out to let us compare those for students whose families are poor enough to qualify them for free or reduced-price school meals with those for the rest.

And, Reardon adds, in scores on SAT-type tests.

Well, the school reform movement is supposed to do something about this — hence the decision to name the law that’s brought us our high-stakes testing regime “No Child Left Behind.”

It obviously hasn’t closed the education gap between poor children and the rest. But Reardon’s analyses show this isn’t because poor children aren’t scoring higher on the achievement tests we use to measure classroom learning.

It’s because rich children are scoring a whole lot higher than they did in the 1980s — so much so that there’s now as big a gap between their scores and those of middle-class children as between the scores of the latter and those of the poor.

Reardon traces the gap back to children’s earliest years. Rich children, he says, are starting kindergarten better prepared to learn — thus ahead of the rest when they get to first grade.

Children from poor families start school at a disadvantage, according to a Brookings Institution analysis.

Fewer than half have the “pre-academic skills,” e.g., the ability to recognize letters and numbers, and the sorts of learning-related behaviors that make them ready for kindergarten, e.g., the ability to pay attention and not act out.

By fourth grade, 83% of them test below proficient in reading — in other words, don’t demonstrate the competency they’re supposed to have. Nearly half test below basic, i.e., don’t have even a partial mastery of the requisite grade-level skills.

Fourth grade is when children are supposed to begin reading to learn, rather than learning to read. If they can’t read, they fall further and further behind.

They get frustrated, of course — whether held back, as they may be in 14 states, or passed on to a higher grade, where they can’t do the work. Needless to say, they’re likely to drop out and become part of the next generation of poor parents.

Like others, including the Brookings expert, Reardon attributes school readiness in part to what parents spend on “cognitively stimulating experiences.”

Wealthy parents, he says, are now choosing to spend much more on those experiences because “educational success is more important than it used to be, even for the rich.”

The spending he’s talking about isn’t just money for things like top-notch child care and pre-school education. It’s time taking kids to interesting places, reading to them, talking with them, etc.

Poor and middle-class parents are spending more on these than they used to, he says, but not nearly as much more as the rich.

So we need a multi-pronged strategy to “move toward a society in which educational success is not so strongly linked to family background.”

Reardon is altogether on board with making high-quality child care and pre-school available to poor and middle-class children, as the President’s proposed budget seeks to do.

Reardon also recommends expanding programs that help low-income parents learn how to “become better teachers,” e.g., through home visits by professionals or trained peers who help them understand their children’s developmental needs and how to meet them.

Some money in the President’s proposed budget for this also.

And Reardon would like to see “greater business and government support for maternal and paternal leave” — this, I trust, means paid leave parents can use to tend to their children’s needs.

All these things would undoubtedly help, though many poor parents would still be hard put to make the investments Reardon rightly thinks would help level the playing field for their kids.

It’s one thing to know you should read to your children and talk to them, even before they’re old enough to understand what you’re saying. Quite another to do this when you’re working multiple jobs because one doesn’t pay enough.

When you’re trying to figure out where the next meal will come from, now that you’ve run through your family’s food stamp allotment — or where your family will sleep now that you’ve gotten an eviction notice.

When you yourself don’t know how to read, as approximately 32 million adults in this country don’t.

This isn’t to say that all poor children will struggle in school. Some will do extremely well, as others have in the past.

But the growing body of research tells us that far more will be left behind if we wait till they’re six — and then focus mainly on getting them up to speed for the standardized tests that No Child has made so inordinately important.


Income Ladder Hard to Climb If You’re Born at the Bottom, New Report Shows

July 26, 2012

Many news stories and opinion pieces on the latest report from the Pew Center’s Economic Mobility Project — as well there might be.

Because “pursuing the American dream,” as the report is entitled, could be as rewarding as chasing a will o’ the wisp — especially for those born to low-income parents and most especially of all if they’re black.

At the very least, the report gives the lie to our “rags to riches” story. It’s “more of a Hollywood fairytale than an actual reality,” says Ethan Gelling at the Corporation for Economic Development, echoing the Pew project manager.

I think we need to parse the data into two separate issues, as the Pew analysts also do.

One is economic mobility as measured by movement up or down the quintiles into which income is commonly divided.

As the Pew analysts say, economic growth — especially at the top — puts the major rungs on the income ladder further apart. Obviously harder then to climb from one to another.

That’s how we can have what, at first blush, seem two contradictory findings. On the one hand, 93% of adults in the bottom fifth have family incomes higher than their parents did. On the other hand, only 57% move up into a higher fifth — and only 13% into one of the top two fifths.

Some argue that the root cause, i.e., the grossly disproportionate distribution of the wealth our economy generates, is bad in and of itself.

Rakim Brooks at Demos, for example, warns that the public as a whole loses trust in institutions “when it begins to associate the rich with the fortunes of the country.”

Others have said that income inequality is partly responsible for the credit crunch so many households now find themselves in.

People, they say, often define their wants upward, based on what they see richer folks have. They buy — or rather, make down payments on — houses they can’t afford. They put all sorts of “status-defining” goods on credits cards — enormous flat-screened TVs, designer accessories, etc.

I’m rather more preoccupied with the second issue. Do people in the bottom fifth have enough to live on, plus a modicum of what the Pew analysts call wealth and some others refer to as assets?

Do they, in other words, have a reserve for costly emergencies? A cushion against plain old hard times? Some resources to give their children a good start in life?

The answer from the Pew project is a resounding No.

The median income of families in the bottom fifth was a paltry $19,202 in 2009 — nearly $2,850 below the federal poverty line for a family of four.

And their median wealth, i.e., assets like home equity, money in the bank, a car, was just $2,748 — about $4,690 less than the bottom fifth had a generation ago.

The two figures are, I assume, closely related. If you’re, at best, making barely enough for basic needs, you’re not squirreling away money for a rainy day — let alone investing in mutual funds and the like that will, in the long run, make your nest egg grow.

Why families in the bottom fifth are in such bad straits is a much more complex question. Panelists at a recent all-day conference co-hosted by Demos and partners went at it from many angles.

I’ll mention here only what seemed one broad consensus. A college education — at the very least, enough to earn an associate’s degree or certificate — is a big part of the solution.

Yet, as we know, college is getting very expensive. Pell grants, which the lowest fifth could qualify for, rarelyt cover the costs — and now have new restrictions that tend to rule out self-supporting work during enrollment.

I don’t suppose I need to say anything about loan burdens — except perhaps to note that they surely seem especially formidable for potential students in the bottom fifth, whose prospects for moving up the income scale are iffy, at best.

Yet the Pew figures indicate that their families can’t help them.

Nor, indeed, will the parents all have the resources to provide what their infants and toddlers need to do well when they start school, e.g., a healthful diet, high-quality child care, time to read to them, take them to the zoo, etc.

Fewer than half of poor children are “school ready” when they start kindergarten, according to a study from the Brookings Institution. Three-quarters of children in families with moderate and high incomes are.

And when you start behind, you tend to stay behind, as some Pew figures on reading skills show.

Not surprising then that the dropout rate for low-income students is five times the rate for students from high-income families.

This is one way that income inequality passes from generation to generation. Not just inequality, but poverty too.


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