Intermittent versus intergenerational poverty

From The High Chances of Being Poor by Matt Bruenig.

Bruenig raises an issue which has intrigued me for a good while but for which I have not had the necessary information to address - how do you effectively communicate poverty? Not the issue of what it means to be poor, but the issue of how we form pictures of who is poor. The catalyst for this issue, for me, has been the statistic derived from BLS data that for those who have 1) finished high school on time, 2) gotten a job, any job, and stayed employed, and 3) gotten married, stayed married and not had children before marriage, there is a less than 2% chance of them being in poverty at any given point in time. While that is a powerful and useful piece of information, it is an incomplete picture. While less than 2% at any given point in time is a powerful endorsement of traditional morality, it doesn't answer the question - If I do all these things, what is my chance of ever being in poverty?

The information Bruenig presents addresses a slightly different question. Regardless of my behaviors, what is my chance of ever being in poverty?

In their 2001 paper, Rank and Hirschl used PSID data to determine that 51 percent of people experience poverty (as defined by the Census) at some point in in their life between the ages of 25 and 75.

So in this graph, you notice that at age 25, around 6% of people have experienced poverty (presumably in that very year). And then from there, the number grows and grows. It cannot decline obviously because you cannot un-experience poverty. By the time folks reach age 75, 51% of them have experienced at least one year of poverty.

The answer is that I have a 50% chance, by the time I am 75 of having at some time experienced at least a year of poverty.

That's a good first step. But there's more that needs to be elucidated if we are to understand the dynamics of poverty. Not just how many people have ever experienced poverty, which the above information addresses. We also need to know durations and ideally circumstances.

The reason resides in the definitions and terms. A middle class 18 year old attending university, with a part time minimum wage job working towards becoming a medical doctor is technically in poverty from a cash flow perspective, perhaps for a number of years. The reality is that they have access to resources above and beyond what they themselves produce and are likely over a lifetime to never be in material-want or in poverty as we would normally understand it.

So what we really want to know is how many people have how many separate instances of poverty up to some threshold age (such as 75), the average duration of poverty per instance and the cumulative number of years in poverty. This more complicated picture is much more useful for understanding the nature of poverty and what policies might be appropriate. The person, who has by 75, had ten instances of poverty each averaging a year in duration, has probably led a much more precarious life with different policies appropriate to those circumstances than has someone who had a single ten year stretch. As an exercise, imagine a nursing student working towards a specialized degree, in year six becoming pregnant and abandoned, with four years following as a single parent who then is able to find full-time professional employment for the rest of her career. Ten years in poverty but reasonably in control of her life circumstances versus someone dipping in and out of poverty every two or three years.

The reason I think this is important is that the policies necessary to address once-off occasions of poverty arising from bad luck and incidental circumstance are materially different than those arising from prolonged and even intergenerational poverty. Both have to be tackled but differently. Right now, I think we do a spotty but perhaps adequate job of dealing with intermittent poverty but almost nothing about entrenched intergenerational poverty.

Ultimately I suspect that we can only improve dealing with intermittent poverty once we have addressed intergenerational poverty but that is a desirable strategic goal which has only weak tactical support.