Matthew Desmond on America’s Poverty Crisis

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL ANCHOR: Climate disruption, of course, as to global poverty. Our next guest believes that can be eradicated, but only by getting enough people to make the change. Despite being the richest country, the United States has a higher rate of poverty than any other advanced democracy. Pulitzer Prize winning author Matthew Desmond examines the dire situation in his new book, and he’s joining Michel Martin to explain why the problem persists.

(BEGIN VIDEO CLIP)

MICHEL MARTIN, CONTRIBUTOR: Thanks, Christiane. Professor Matthew Desmond, thank you so much for talking with us once again.

MATTHEW DESMOND, AUTHOR, “POVERTY BY AMERICA” : Oh, it’s pleasure to be back.

MARTIN: The last time we talked with you, we talked about your book “Evicted”, critically acclaimed, bestseller, it — just as the title implies that dug into the origins and the scope of the eviction phenomenon in the U.S. Now, your latest book, “Poverty by America”, kind of deals with similar ideas but it feels different. I mean, in a way, it feels like a book that you’ve been kind of waiting to write your whole life. Do you want to talk a little bit about that?

DESMOND: Yes, that’s right. You know, I’ve been researching and reporting on poverty all of my adult life. I’ve lived in really poor neighborhoods. I’ve done into the — dug into the statistics. But I just didn’t feel like I had an answer to this really pressing question, which is why? Why there’s so much poverty in this incredibly rich country? And so, this book is my response to that question. But I think there’s always been something about the American poverty debate that didn’t sit well with me. And I remember reading a line by the novelist Tommy Orange where he writes, these kids are jumping out of the windows of burning buildings, falling to their deaths. And we think that the problem is that they’re jumping. And when I read that I was like, man that sounds like the poverty debate. And we have been focused so much on the poor themselves. And we need to be focusing on the fire, you know, who lit it? Who’s warming their hands by it. So, this is a book about the fire. This is a book about how some lives are made small so others may grow.

MARTIN: You say that poverty is often material scarcity piled on chronic pain piled on incarceration piled on depression piled on addiction on and on it goes. Talk a little bit about some of the people that you profile in the book and the way you say that poverty kind of isn’t just one thing. It’s a thing that piles on and folds in on itself.

DESMOND: Yes, that’s right. I mean, when I was spending time in Milwaukee for my last book, I met grandmothers living without heat in Wisconsin, you know, sleeping under blankets all winter long, hearing (ph) that the space heater didn’t go out. I saw kids evicted all the time. The courtroom in the eviction court room is just brimming over with children facing homelessness and eviction every day and that’s in city — in cities all across the country, you know. America harbors a hard bottom layer of poverty, and it’s not just about a lack of money. It’s about a lack of choice. It’s about pain. It’s about humiliation. It’s about the nauseating fear of eviction on and on it goes, which I think should spur us to moral action, you know. It could really drive us to address this problem because poverty isn’t just a lack of income. It’s this exhausting collection of social maladies and problems.

MARTIN: Is it your argument that the United States is fairly unique in that among affluent nations? That you just don’t find appear (ph) economies in which the level of misery is what it is in the United States?

DESMOND: That’s right. We really are in a class all our own when it comes to the level of poverty that we tolerate amongst all this wealth. There’s no other advanced democracy that has the kind of poverty that we do and the depths of poverty that we have. And, you know, while abroad I often heard Europeans used the phrase American style deprivation, you know, they can see it. Our child poverty rate is twice what it is in Germany or South Korea or Canada, for example. We are really lagging behind other advanced democracies when it comes to addressing poverty in our borders.

MARTIN: Your point of view is that poverty persists in the way that it persists because the non-poor benefit from it. Why do you say that?

DESMOND: Well, we often consume the cheap goods and services that the working poor produce. Now, those of us invested in the stock market like health returns, even though those returns often come at the cost of a human sacrifice with poorly paid labor. A lot of us really protect our tax breaks, like our mortgage interest deduction. But those tax breaks really accrue to the wealthiest among us. And doing so stars anti-poverty programs because we invest a lot more in subsidizing affluence than alleviating deprivation. And then the country continues to be segregationist. We continue to build walls around our communities and hoard opportunity behind those walls. We need to tear down those walls and we need to start taking responsibility for all the scarcity in our midst.

MARTIN: Let’s just put this into different buckets if we can, although you make the argument that it’s all related. So let’s just talk about direct government subsidies, you know, per se. One of the things you point out in the book is that from 1980 to 2017, there was a 237 percent increase in federal spending on poverty programs. That’s not a small amount of money. I mean, just in total dollar terms. So, why is it that the kind of misery you describe persists given that level of spending?

DESMOND: Well, some might say it’s because government spending doesn’t have a real effect on poverty, but that’s just wrong. You know, there’s a massive pile of research that shows the government programs directed at our poorest families are incredibly effective, even efficient. They prevent millions of families from plunging into hunger and homelessness every year. But they clearly aren’t enough right now. And part of the reason is because we have not fully addressed the unrelenting exploitation of the poor and the labor market and the housing market and in the financial market. Let me just give you one quick statistic. Every day, $61 million are pulled out of the pockets of poor families in terms of overdraft fees, check cashing fees, payday loan fees. Every single day. You know, when James Baldwin wrote how expensive it is to be poor, he couldn’t even have imagined those kinds of numbers. And so, unless we address that exploitation, we’re not going to build sturdy, permanent foundation on which we can climb out of poverty for everyone.

MARTIN: Well, one of the other points you make though is that even with direct federal assistance that in most places, actually, you say that the majority of that money doesn’t actually get directly to people who are under-resourced. That there are only two states where a majority of their assistance under the TANF program, which is the main — used to be called welfare, maybe still is —

DESMOND: Yes.

MARTIN: — actually goes directly into cash assistance that most states. It goes to other places. Where does it go?

DESMOND: Yes, well —

MARTIN: What does that money do?

DESMOND: Yes, let’s break it down. There’s kind of two points that I think are important here. One point is that a dollar in the federal budget doesn’t mean a dollar in a family’s pocket. So, you take this program called TANF for cash welfare. For every dollar budgeted for TANF, only 22 cents ends up with a family in terms of direct aid. Why? Well, because states get a lot of leeway about how they spend their money, and they’re really creative about how to do it. You know, states have used that money to spend on Christian summer camps or abstinence only classes, marriage initiatives, things like that. Many of these things don’t have anything to do with reducing poverty. Other states just simply sit on the money. You know, Tennessee, last time I check, was sitting on over $700 million in unspent welfare funds. Hawaii was sitting on enough to give every poor kid in its state $10,000. So, that’s one thing that’s going on. And the second thing that’s going on that’s important is that a lot of poor families don’t take advantage of programs that they need and deserve. We hear a lot about welfare dependency but if you look at the data, the bigger problem is welfare avoidance. The fact that families are leaving billions and billions of dollars on the table every year. You know, one in five elderly Americans, for example, who could qualify and received food stamps, they don’t take advantage of that.

MARTIN: Why is that? Is it just too hard that it’s actually just the actual process of getting these benefits is just too hard or why don’t people get it, or because there’s a stigma attached to it, or because —

DESMOND: Yes.

MARTIN: — you make it humiliating for people to get it? What — why is it that people don’t get the benefits that they actually are entitled to?

DESMOND: Yes, all that is part of it. And we used to think stigma was the biggest reason why folks weren’t relying on these programs. But it seems a much bigger reason is that we have made them unnecessarily hard and complicated. We’ve wrapped these programs in red tape and regulations, and we may make it incredibly confusing. This is also very hopeful, though. You know, there are studies that show that just like increasing the font or connecting people with someone on the phone can actually bring a lot more benefits to families that that need them today.

MARTIN: You know, one exception to that, of course, was during the COVID crisis, when the government made an effort — the federal government made aggressive efforts to, kind of, get money to people directly. And of course, there was a lot of debate and grinching about that. I mean some — there were some people who said, oh my gosh, you know, it’s you — we’re paying people not to work. But just in that time period in which the federal government was supporting — was offering additional cash assistance to people because of the COVID crisis, did that make a difference in alleviating poverty for some people?

DESMOND: It made a huge difference, historic difference. We were able to reduce child poverty by 46 percent in six months. Six months. How? We expanded the child tax credit, which was just basically a check. Mail the families with moderate and low incomes. Cut child poverty almost in half. We reduced evictions to historic lows, months and months and months after the eviction moratorium ended, renters finally got a breath, and were able to stay in their home and not face homelessness during the pandemic. And it didn’t seem to cost jobs. You know, in some states, it got rid of those extra benefits early and other states didn’t. The states that got rid of the benefits they didn’t see their job numbers jump up. Job growth was basically tied between states that kept some of the benefits and those that didn’t. So, we made these historic incredible investments in reducing poverty. I would like that to become the new normal.

MARTIN: And let’s talk about sort of non-cash, the kind of non-cash, non- direct government, you know, assistance or lack thereof. Talk about the ways in which you feel like these income subsidies, redound to the benefit of the middle class and the upper class, upper middle class and not necessarily to the poor. Talk a little bit about that, if you would. Give one or two examples.

DESMOND: Sure, when we think about the welfare state, we usually think about cash welfare, public housing, things like that. But we should also think about things like the mortgage interest deduction, the 529 savings plan, cash break — excuse me, tax breaks we get for wealth transfers in America. That’s also part of the welfare state. You know, both tax break and a government check cost the government money, and both of those put income in someone’s pocket. And so, if you add up all the benefits that the government is doling out, social insurance, tax breaks, means tested programs to the poorest families, you learn that every year in America the top 20 percent of us receive about $36,000 from the government. And the bottom 20 percent receive only $25,000 from the government. That’s almost a 40 percent difference. We’re doing a lot more to guard fortunes than we are to expand opportunity.

MARTIN: What role do you think race plays in this? Because one of the things I noticed about the book is that, you know, race is a part of it, but race isn’t all of it. But I am interested in whether you think that there’s an interplay between the way we think about race, the way we act on race in this country, and the way these systems persist.

DESMOND: Yes, absolutely there is. It’s impossible to write a book about poverty in the United States with also — without also writing a book about race and racism in the United States. A big way race — a big role race plays in the story is segregation. You know, white Americans — and especially white affluent Americans continue to be the most segregated group in the country. You know, we’ve built these communities where, basically, the only folks that can live in the communities are affluent homeowners, the majority of whom are white in this country. And so, thinking about an end of poverty is also thinking about how to tear down those walls and embrace kind of open, more inclusive communities. And so, race plays a huge role there. It also plays a huge role until like how people see and understand the poor. There’s a lot of really discouraging studies that show that folks are more likely to vote yes on an anti-poverty program if they think the benefit isn’t going to African American families, that’s really discouraging. And so, I think that the country’s legacy of racism and the country’s legacy of economic exploitation have gone hand in hand since the founding.

MARTIN: Your book has been incredibly well received. I’ve been really interested in that. And I’m curious what you make of it.

DESMOND: I think the country is ready for this conversation. I think there’s so many of us that are fed up with the old tropes and old stories of poverty and bootstrapping and responsibility. And I think that we want a more-fair society. I think many of us who are not poor, many of us who are privileged feel complaisant (ph) in all this poverty around us, and it drags us all down. And so, many of us are struggling, also want a language and a new story about why it’s so hard to get ahead in the land of the free. So, I don’t know. I think that there’s — you know, this is a driving issue of our day. This is a morally urgent issue that many Americans want to have this conversation here.

MARTIN: You did not grow up wealthy. In fact, you talk about it very openly in the book, and I think very movingly. You’ve experienced your parents losing their job, you’ve experienced losing your home because of it. You’ve experienced having to work really hard to get through school. Not having all the choices that you wanted to make. How do you understand your own story in the context of all this?

DESMOND: I was given opportunities from the government. I was given things like student loans, and we often don’t think about a student loan as a government program, but it is. I was given a tuition remission at my state university, that helped a lot. And I think that I’m — I was able to recognize the way that the government intervened in my life in ways that really did result in social climbing. And I want a government that does more of that for everyone. I want a government that is truly obsessively committed to ending poverty because I think that’s a government that’s obsessively committed to freedom and happiness in equal opportunity. And so, if that means that I need to give up a few things that I now receive because of, you know, I’m a member of the professional class, that’s totally a bargain I’m willing to make. So, for example, you know, could it be the case that homeowners who get this big benefit from the government, the mortgage interest deduction, start really thinking about that. You know, 2020 we as a nation spent $190 billion on homeowners’ subsidies, but only $53 billion on direct housing assistance of the needy. In a world where eviction is commonplace, in a world where most renting families spend at least half of what they have on housing cost, that seems to be out of lock with our values and priorities. I’d like to bring that more into balance.

MARTIN: Professor Matthew Desmond, thanks so much for talking with us today.

DESMOND: Thanks, Michel. Always a pleasure and privilege.