The University of Chicago

School of Social Service Administration Magazine

Volume 20 | Issue 2 | Summer 2013
Extreme Circumstances

A new study shows that the household status of “below the poverty line” is far from one homogeneous category, and that the number of extremely poor families is rising. “Working poor families and non-working poor families have diverged,” says H. Luke Shaefer, A.M. ’05, Ph.D. ’08, an assistant professor at the University of Michigan. “The poor have stratified, just like the rest of society.”

Using more than a decade’s worth of data from the Survey of Income and Program Participation, Shaefer and Kathryn Edin, a professor at Harvard, found that 1.65 million households were living in extreme poverty in mid-2011. That was 4.3 percent of all non-elderly households and an increase of 159 percent over 1996.

What’s extreme poverty? The authors used the World Bank’s benchmark of $2 a day per person in the household, a figure usually used to measure poverty in the world’s most destitute countries. In comparison, the U.S. poverty threshold is more than eight times higher and the Census Bureau considers “deep poverty” about $8.50 per person per day. When public welfare programs—public housing benefits, tax credits and food stamps—are counted as income, the number of extremely poor households in the U.S. is still 613,000. That’s an increase of 50 percent since 1996.

“Nobody really thought there was a lot of poverty at that level in the country,” Shaefer says. “To our knowledge, nobody had ever looked at poverty at quite such a low level here before.”

Shaefer and Edin’s study, “Rising Extreme Poverty in the United States and the Response of Federal Means-Tested Transfer Programs,” was published in the June 2013 Social Service Review. The idea for the research sprang from visits Edin made to poor families, where she discovered that many had no job, received no food stamps and sometimes were living two or three families to a residence.

Part of the reason is that the recession hit low-wage workers hard. “Many of us used to think that low wage jobs were ubiquitous,” says Shaefer. “If you lost one bad job, at least you could get another.” But that’s not the case right now, he says. Moreover, extreme poverty is often associated with mental illness, learning disabilities and other problems that render it difficult or impossible for the heads of households to keep jobs.

Public policies, which have increasingly focused on helping low-wage workers, also play a role (see “Poverty Protection” for more on changes to the social safety net). Families earning above 50 percent of the poverty threshold have seen their aid increase, while families with incomes less than 50 percent of the poverty threshold have seen it decline.

Extreme poverty is not limited to disadvantaged minorities or to single mothers. After adjusting for benefits from social welfare programs, the study found that just over half of the families in extreme poverty are headed by married couples. Sixty-one percent were white, non-Hispanic.

Of course, statistics tell only part of the story. Shaefer and Edin are working on a new study that will try to illuminate the human predicament behind the numbers. To do this they are following a half dozen families to gain insight into the causes of their poverty. “We’re trying to find out more about what’s going on at the very bottom of the bottom,” Shaefer says.