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Posts Tagged ‘Brookings

The poverty of suburban America

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The Brookings study said that poor residents in cities and suburban poor residents resemble one another demographically and economically. Similar shares of poor residents in cities and suburbs are working age, worked full- or part-time in the past year, held a bachelor’s degree, or lived in deep poverty (with incomes less than half the poverty line).

The Brookings study said that poor residents in cities and suburban poor residents resemble one another demographically and economically. Similar shares of poor residents in cities and suburbs are working age, worked full- or part-time in the past year, held a bachelor’s degree, or lived in deep poverty (with incomes less than half the poverty line).

During the decade 2000-10 in the USA, for the first time the number of poor people in major metropolitan suburbs surpassed the number in cities. Between 2000 and 2011, the poor population in suburbs grew by 64% — more than twice the rate of growth in cities (29%). By 2011, almost 16.4 million residents in suburbia lived below the poverty line, outstripping the poor population in cities by almost 3 million people.

These are some of the grim findings of ‘Confronting Suburban Poverty in America’, a report by the Brookings Institution, and the implications of this report and its contents are that much more significant for Brookings is conservative in its outlook and advocacy.

The Brookings study has explained that some of the rapid growth, over the last decade, of suburban poverty in America’s cities is a result of changing demographic trends. One factor proposed is that many impoverished workers and youth from the inner cities have been chased out by gentrification and the destruction of public housing over the preceding decades and were able to find relatively more affordable housing in the suburbs.

Another factor is the gutting of American manufacturing (the globalisation syndrome and the endless search by the capitalist class to exploit the lowest wage conditions to be found on the planet). This condition drove many to seek unskilled, low-wage work in the service industries (if those prisons of drudgery and mental sterility can be called ‘service’, for they are designed to reduce the mind and diminish the spirit).

During the 2000s in the USA, suburban poverty rose as regional economies declined, the housing market collapsed, jobs continued to sprawl outwards within metropolitan areas while job growth in lower-paying occupations was faster than middle-class job creation. Chart: Brookings

During the 2000s in the USA, suburban poverty rose as regional economies declined, the housing market collapsed, jobs continued to sprawl outwards within metropolitan areas while job growth in lower-paying occupations was faster than middle-class job creation. Chart: Brookings

Suburban poverty has grown steadily in the USA over the last decade, given a sharp impetus by the housing market plunge and subsequent economic crisis. According to the authors of the Brookings study, nearly 75% of home foreclosures have occurred in the suburbs of America. As the website of the International Committee of the Fourth International (ICFI) has pointed out, the steep fall in property values has had devastating effects for working and even middle class families: last year, a Federal Reserve report revealed that the median net worth of US families had plunged nearly 40 percent between 2007 and 2010.

Workers’ wages, which stagnated throughout 1980s and 1990s, have been under concerted attack through the financial crisis, even as the stock market has recovered and reached new heights. The growth of social misery revealed in the report explodes the myth – widely peddled over previous decades by whichsoever political grouping occupied the White House – that the population living in US suburbs is uniformly complacent and economically secure.

The study has shown that the biggest increase in suburban poverty has occurred in the South and Southwest of the USA. Poverty in the suburbs of Phoenix, Arizona rose by 134.2%; Las Vegas, Nevada by 139.3%; Austin, Texas by 142.5%; and Atlanta, Georgia by 158.9%. However, there were a number of other cities spread throughout the country, many in former industrial areas, which also saw increases in poverty of 100% or more, including Detroit, Michigan (114.7%), Minneapolis, Minnesota (127.9%), Boise, Idaho (129.7%), Denver, Colorado (138.2%), and Salt Lake City, Utah (141.7%).

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Who’s poor and who isn’t – the flawed $1.25 formula

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The $1.25 a day poverty line is neither realistic nor is it any use to governments of less industrialised countries. It is time this ‘global poverty line’ is rejected.

An early stage shanty settlement of rural labourers, in Maharashtra, western India

Once again a major international thinktank has released a ‘big picture’ prognosis about global poverty. Once again the $1.25 a day line has been used to confirm that in developing countries, poverty is on the retreat and that the current model of economics is working for the poor by yanking them over that troublesome dollar line.

This time, the thinktank is the Brookings Institution, USA. Here’s their bottomline. Most of the poverty reduction we have seen in the last decade has happened because of the economic growth in China and India, where, until the end of the 20th century, a large number of the world’s poor lived. That growth in Asia not being matched by similar growth in Africa is the reason, Brookings has explained, for Nigeria heading towards being home to the largest population of poor by 2015, more so even than India. Poverty will be an African problem, according to Brookings.

As many other high-profile thinktanks have done over the years, Brookings has proferred its poverty prognostications [pdf] based on a few givens in the world of macroeconomics. One is that $1.25 a day, the World Bank’s revision of its own dollar-a-day definition which is now of some vintage, is the most reliable way to set a global poverty line. Two is that economic growth has brought many people in developing countries out of poverty and will continue to do so. Three is that the kind of growth that we have witnessed (and participated in) in China is the best anti-poverty solution to be found.

A vegetable vendor pushes his cart over a bridge across the river Ganga, near Kanpur, Uttar Pradesh, India

Based on these ‘givens’, which I shall turn to in a moment, the world’s development specialists and macroeconomists who measure poverty have lately been waxing enthusiastic about the prospect of providing all poor people in the world cash supplements, which they are sure will bring them out of poverty. The cost, they say, is relatively quite small, at about $66 billion. This cash transfer, to each and every poor person, will cost less now than it would have done only five years ago, they have said.

Well, yes and no. All programmes, even ones that distribute cash to people, cost money to run. If you have to distribute on a regular basis enough money to enough poor people at the rate of more than $1.25 a day, that distribution itself is going to be huge and enormously complicated, and of course quie expensive too. Faced with this question, they do have a ready answer, which goes something like this: recent advances in biometric identification technologies—such as fingerprint and iris scanning—have greatly expanded the promise of implementing large-scale welfare programs in poor countries. No doubt, the technology is there and it has been proven to work. However we who work in the field know well that a gizmo in the hand is not exactly worth a meal on the table, so to speak.

That’s the nuts-and-bolts part of the proposal to buy our way out of poverty. A far more troublesome set of questions concerns the ‘givens’ this whole idea is based on. Let’s look again at $1.25 a day to start with. In most developing countries, this is in mid-2011 equivalent to about a litre of petrol. It will buy about three kilos of rice in some countries, pay for two autorickshaw commutes in others, or buy 10-15 litres of water in some cities (this year on World Water Day the UN said that “Someone living in an informal settlement in Nairobi pays 5 to 7 times more for a litre of water than an average North American citizen”).

Built-up shanties along a Mumbai highway, leading to suburbs bristling with expensive new high-rise residential blocks.

That daily line also works out to $37.50 (EUR 26.25) a month. What can an individual buy with that much for a month? Can she buy shelter which does not leak when it rains, can she buy baby food for her children and medicines for her aging parents? Can she pay for schoolfees? Can she afford even a kilowatt hour of electric power a day with that money? Can she stock her kitchen with the cereal, fresh vegetable and lentils her family needs? Never mind $1.25 a day – can she do this on $2 a day in Cairo, Mumbai, Rio de Janeiro or Nairobi?

I can’t see a ‘yes’ answer to any of those questions, anywhere. Next, on what basis do the thinktanks and multilateral lending banks (World Bank, IMF) continue to say that economic growth removes poverty? They use variations of the GDP-divided-by-population formula, and ask th macroeconomists to make the appropriate adjustments for income categories and rural-urban distribution. The trouble is, the real world of poverty doesn’t function the way these models and formulae do. Economic growth has meant the continuing and deepening inequality of income. The ‘richer’ a country gets based on GDP, the more unequal the distribution of the money amongst its people. That’s the very reason the ‘advanced’ economies of Western Europe and North America put in place social safety nets (whose very much poorer cousins are the cash transfer programmes in vogue nowadays).

The truth is plainer and far more visible. There is no let-up in poverty, not in the numbers of poor, and not in how far under the poverty line they are. Any other view may be well-intentioned but misguided. [Thanks to From Poverty To Power, the blog by Duncan Green of Oxfam, for mentioning the Brookings report.]

Written by makanaka

July 31, 2011 at 01:24