PDF Summary:$2.00 a Day, by Kathryn J. Edin and H. Luke Shaefer

In the United States, the number of families—including millions of children—living on no more than $2 per person per day has increased substantially since the welfare reforms of 1996. In $2.00 a Day, Kathryn J. Edin and H. Luke Shaefer explore the reasons behind this dramatic spike in extreme poverty.

The authors highlight how changes to social assistance programs, the rise of low-wage jobs with irregular schedules and lack of benefits, and the high cost of housing have contributed to this crisis. They examine the daily struggle to meet basic needs, the shady underground economies that destitute families turn to in sheer desperation, and the varying severity of the problem in different parts of the country based on local economies and support networks.

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• You can create a personal financial buffer by setting aside a small percentage of your income each month. Start with as little as 1% of your paycheck and gradually increase it as you become more comfortable. This fund acts as a safety net for unexpected expenses, reducing the impact of minor setbacks on your overall financial stability.

People who earn very little money encounter heightened challenges because they lack advantages like health insurance, paid leave, and reliable transportation.

The authors emphasize that lacking benefits such as medical insurance, paid leave, and reliable transportation exacerbates the challenges faced by individuals with limited earnings. Many individuals working in positions that offer minimal compensation, particularly in the realm of customer service, often do not benefit from the perks typically linked to full-time employment. This predicament compels families to grapple with the high costs of healthcare and restricts their ability to pause for illness or family emergencies, while also requiring them to create strategies for traveling to their place of employment.

The authors illustrate how the absence of financial support can precipitate a slide into economic hardship. Jennifer Hernandez had to work additional hours at Catalina Spa & Salon to compensate for her cousin's absence due to an injury. The unyielding nature of their work schedule, coupled with a lack of overtime pay, consistently led to exhaustion and illness. Jennifer found herself compelled to leave her employment and move her family to Texas to reside with relatives, since taking unpaid leave was not a viable financial option for her. In her search for affordable child care and housing, she faced a tragic outcome when her decision resulted in her daughter suffering sexual abuse at the hands of a family member, highlighting the severe consequences that can befall working mothers struggling with financial constraints and insufficient support systems.

Other Perspectives

• There are instances where the lack of benefits is offset by other forms of compensation, such as higher hourly wages, tips, or under-the-table payments, which can provide a different form of financial stability.
• Some customer service roles, especially those within larger corporations or public sector organizations, do offer full-time employment benefits, which can include health insurance, paid leave, and other perks.
• In some cases, extended family networks and community support can play a significant role in providing care during illness or emergencies, which can reduce the impact of not having formal paid leave.
• In certain cases, the absence of financial support might encourage individuals to pursue education, training, or other opportunities that can lead to better employment and an improved financial position in the long term.
• In some cases, workers may voluntarily choose to work extra hours without overtime pay for various reasons, such as gaining experience, building relationships, or investing in a future career opportunity.
• In certain cases, individuals might prioritize maintaining independence or stability for their family, choosing to make other sacrifices or seek alternative solutions rather than moving to live with relatives.
• Tragic outcomes such as abuse are complex and multifactorial, and it is an oversimplification to attribute them solely to financial constraints.
• Some working mothers may prioritize and manage their limited resources in a way that mitigates the impact of having limited support systems, suggesting that financial literacy and budgeting skills can also play a significant role in managing challenges.

The rising costs of housing, coupled with stagnant wages, have made it increasingly challenging for many low-income families to find affordable housing.

The rising costs of obtaining housing, coupled with stagnant or declining incomes, have precipitated an affordability crisis for families with limited financial resources. The authors determine that in numerous areas, the income generated from full-time employment at the minimum wage is insufficient to cover the costs related to leasing a simple one-bedroom residence. Families are thus faced with a difficult decision: forgo essential needs such as food and apparel, or grapple with unstable housing circumstances that might result in losing their homes. The authors emphasize the importance of developing a holistic approach that includes generating employment opportunities and carefully distributing governmental assistance for initiatives designed to fulfill housing needs in order to tackle the crisis of accessible housing affordability.

The authors illustrate the challenges the families in their study encountered in finding housing that fit their budget constraints. Even with assistance from a homeless shelter to cover part of her rent, Jennifer Hernandez struggled to pay for a modest one-bedroom apartment in an area known for its affordability. Rae McCormick, despite working full-time at Walmart, could not find a place of her own and relied on doubling up with friends and relatives, often in overcrowded and unsafe conditions. Susan Brown, along with her family, was forced to leave their apartment and subsequently moved into a run-down home that belonged to one of their relatives. The financial well-being and overall stability, security, and health of a family are influenced by the availability of accommodations that fit their budget.

The need for housing support exceeds what government initiatives such as Section 8 housing subsidies can supply.

The book highlights the importance of programs such as housing subsidies and public residential projects in providing families with constrained budgets stable and reliable housing options. The financial support for these initiatives is substantially insufficient and does not match the growing needs. The case put forth by the authors suggests that as the gap between essential needs and the resources families have at their disposal widens, an increasing number of households are forced to get by on just two dollars per day, making it more challenging for them to find sufficient housing.

The book offers compelling examples of what happens when there is inadequate backing for programs designed to assist people in securing housing. Modonna Harris, a single mother in Chicago, was unable to secure a housing subsidy even though she was homeless and had a teenage daughter. Many families found themselves in prolonged anticipation of the chance to obtain public housing assistance and Section 8 vouchers within the city, a situation that greatly impeded the housing stability of those most in need. Jennifer Hernandez found a steady place to live with the help of a short-term grant from a shelter for the homeless, following times when she managed to get by on an income that did not exceed two dollars daily for various intervals. The program significantly supported her family's welfare, but it was limited to one year, after which she faced the challenging task of securing cost-effective accommodation in a competitive market with her limited means.

Context

• Lack of stable housing can lead to a range of negative outcomes, including poor health, educational disruptions for children, and increased stress and anxiety, which can perpetuate cycles of poverty.
• Some experts suggest exploring alternative housing solutions, such as community land trusts or cooperative housing, to provide more sustainable and affordable options for low-income families.
• The widening gap often refers to increasing economic inequality, where the wealthiest individuals see significant income growth while low-income families experience stagnation or decline in earnings.
• Rising income inequality exacerbates the housing crisis, as wealthier individuals drive up property values and rents, making it harder for low-income families to find affordable options.
• Government housing programs often face budget constraints and policy limitations, which restrict their ability to meet the needs of all eligible families, highlighting the need for policy reform and increased funding.
• The demand for Section 8 vouchers far exceeds the supply, leading to long waiting lists. In many areas, the wait can be several years, and some lists are even closed to new applicants due to overwhelming demand.
• Shelters often serve as a critical safety net for those experiencing homelessness, providing not only temporary housing but also access to resources and support services aimed at helping individuals transition to stable living situations.
• Short-term grants or assistance programs, like the one Jennifer received, are often designed to provide temporary relief. However, they do not address long-term housing stability, leaving recipients vulnerable once the assistance ends.

Landlords encounter the difficulty of keeping their properties in livable states while simultaneously determining rental prices that are high enough to compensate for their costs, potentially leading to a deterioration in the standard of living spaces.

The authors note the challenges faced by diligent landlords in offering housing that meets affordability, security, and quality standards, particularly for families with limited financial resources. Individuals with limited financial resources frequently have to choose between homes that require substantial repairs or those situated in areas notorious for elevated levels of criminal activity and a scarcity of local facilities. The authors argue that it is an oversimplification to hold unethical landlords solely responsible, considering that these property owners are caught in a complex system where providing housing at genuinely affordable prices often is not economically feasible.

The observations from property owners, as discussed by the authors, illuminate the challenges associated with providing affordable accommodations. A couple from Cleveland struggled to keep their financial stability due to the fluctuating earnings and precarious employment of their tenants who earned low wages. Landlords often encountered financial uncertainty due to periods when rental income was interrupted while they managed the eviction of tenants and the search for new occupants. A property owner in Cleveland devised a strategy to generate modest profits through the purchase of run-down single-family homes, carrying out just the necessary repairs, and then selling off these assets as maintenance costs increased. This strategy, although it decreased rental expenses, also resulted in deteriorating housing conditions in city regions.

Other Perspectives

• There are various programs and subsidies available in many areas that can assist landlords with the costs of maintaining properties, such as tax deductions for repairs or government-funded grants for low-income housing, which can mitigate the financial burden on landlords.
• The idea that landlords struggle could be challenged by the existence of successful affordable housing models and landlords who have found a balance between affordability, security, and quality, indicating that the struggle is not universal among all landlords.
• The focus on repairs and safety may inadvertently ignore other important factors that tenants with limited financial resources consider, such as proximity to work, schools, and community support systems, which might lead them to prioritize these aspects over the state of repair or neighborhood safety.
• The responsibility for housing issues is shared among various stakeholders, including government bodies, which may fail to enforce regulations or provide adequate support for both landlords and tenants.
• Property owners have the ability to screen and select tenants, potentially mitigating the risk of financial instability by choosing those with more stable employment.
• While landlords do face financial uncertainty from interruptions in rental income, they can mitigate this risk through various means such as requiring security deposits, purchasing insurance, or setting aside a reserve fund for such eventualities.
• It could be pointed out that the strategy of minimal repairs and selling when maintenance costs rise is not the only viable business model, and that there are property owners who invest significantly in their properties to ensure they are of a high standard, thus contributing to the improvement of housing conditions.

People surviving on a mere two dollars daily utilize various strategies, some of which are not sanctioned by law, to sustain their livelihoods.

Families in extreme poverty must resort to a variety of strategies to generate any cash income, including selling plasma, scrap metal, and even SNAP benefits.

The authors describe the resourceful and sometimes drastic steps taken by families who manage to survive on a mere $2 daily to navigate their economic circumstances. The book highlights the absence of a reliable economic safety net, which forces families to rely on a range of informal and occasionally illegal activities to scrape by financially. The authors contend that while such strategies are essential for fulfilling fundamental necessities, they frequently entail substantial legal, physical, and psychological dangers, driving families deeper into societal exclusion.

The book outlines the diverse strategies that households in severe financial distress employ to ensure they have enough income. Individuals surviving on a mere $2 daily frequently adopt different tactics to make ends meet, including participating in plasma donation for compensation, collecting items to recycle in exchange for cash, and occasionally trading food stamps for currency. These efforts, while providing a small sum of income, fail to substantially improve long-term stability or the chances for financial advancement.

These informal and sometimes illegal activities, while necessary for survival, can carry significant legal, physical, and psychological risks.

The authors argue that people with severely constrained resources, when turning to unofficial or illegal means to cope with their fundamental requirements, face significant perils that could deepen their exclusion and expose them to numerous hazards. They highlight how these activities can lead to legal ramifications, health problems, and emotional distress, creating a cycle of vulnerability that can be difficult to break.

The book offers powerful examples that demonstrate the harmful consequences associated with such methods of survival. Jessica Compton, a young mother from Johnson City, Tennessee, often found herself in the position of having to sell her plasma as a means to support her family. Aware of the potential harm to her well-being, she nonetheless prioritized the necessity to obtain essential supplies to cater to the needs of her offspring, such as infant hygiene products and nourishment. In Chicago, single mother Jennifer Hernandez was confronted with a severe crisis and began trading her food assistance vouchers for cash to meet her family's urgent needs. She knew that breaking the law and the risk of getting caught came with serious consequences, but the pressing need to provide essential clothing for her children took precedence over her fears of possible legal action.

Context

• Plasma donation involves extracting blood, separating the plasma, and returning the remaining components to the donor. It can be time-consuming and physically taxing, often requiring regular visits to donation centers.

Other Perspectives

• The idea that people resort to illegal activities could inadvertently perpetuate stereotypes about the poor as lawbreakers, ignoring the fact that people of all socioeconomic statuses commit crimes and that poverty does not inherently lead to criminal behavior.
• The emphasis on the risks associated with these activities might overshadow the failures of societal structures that leave individuals with no other choice but to engage in them, thus diverting attention from the need for systemic change.
• The concept of a "cycle of vulnerability" may be too deterministic, as it does not account for the agency and resilience of individuals who, despite engaging in such activities, find ways to navigate and mitigate the associated risks.
• It could be argued that there should be more comprehensive support systems in place to prevent individuals from having to make such choices, rather than individuals having to resort to illegal means to meet their basic needs.
• Prioritizing immediate needs over potential risks might not always result in the best long-term outcome for the family, as the consequences of illegal actions could include incarceration or loss of custody, which would ultimately be more detrimental to the family's well-being.

Families frequently depend on philanthropic organizations and communal areas such as libraries for essential services, yet these do not adequately replace a robust financial support system.

Edin and Shaefer argue that while public facilities like libraries and shelters, along with private charitable organizations, offer essential support, they should not be considered substitutes for comprehensive government programs designed to help families in poverty. The authors note that the availability and state of these resources vary widely by location, and that, even in the best circumstances, they often do not provide enough support to enable families to overcome poverty.

The writers emphasize the vital role that such resources play in assisting families with their financial management. Jennifer Hernandez relied heavily on the support of various community groups and the accessibility of public spaces while she was without a home in Chicago. She utilized free resources to support her children, including dental services and educational materials, and spent a significant amount of time at the community library, a sanctuary that offered comfort and safety, allowing her family to participate in reading, finish homework, and connect with others in the neighborhood. The support provided some stability and help, yet it fell short of delivering the consistent financial security typically associated with well-paying jobs that include benefits, or a dependable welfare system such as the now-defunct AFDC.

Other Perspectives

• The effectiveness and reach of philanthropic organizations can vary greatly, meaning that while some families may rely on them, others may find them inaccessible or inadequate due to geographic, economic, or cultural barriers.
• In some cases, local charities and community organizations have a better understanding of the specific needs of their community, which can lead to more effective assistance than standardized government programs.
• The focus on variation by location might overlook the efforts and improvements made in resource distribution and quality enhancement in recent years, which have aimed to reduce such disparities.
• The effectiveness of community resources in helping families overcome poverty may be underestimated, as their impact can extend beyond immediate financial relief to long-term benefits such as education and skill development.
• The assistance provided by community groups and public spaces may not be sustainable in the long term, as they often depend on fluctuating funding and volunteer support.
• The comfort provided by a library can be subjective; some patrons might find the environment stressful or distracting due to noise, crowding, or other factors that can vary from one library to another.
• Some individuals may find that the social capital gained through interactions at philanthropic organizations and communal areas is instrumental in finding job opportunities, which can lead to consistent financial security, highlighting an indirect but valuable contribution of these resources.

The experience of subsisting on a mere two dollars daily differs greatly throughout the United States, influenced by the strength of local informal economies and the presence of solid community support networks.

The incidence of severe destitution, characterized by individuals subsisting on a daily income below two dollars, varies significantly throughout the United States, and is largely shaped by the availability of informal employment opportunities and the strength of local support networks. The authors argue that in areas with limited employment prospects and weak support networks, families are more vulnerable to extreme poverty, which compels them to adopt survival tactics that could be more hazardous and harmful than those used by people in regions with more robust economies.

The authors draw attention to the profound differences in family life and economic situations when comparing individuals in vibrant urban centers like Chicago and Cleveland to those in the Mississippi Delta, a region plagued by enduring poverty and limited employment opportunities. In Chicago and Cleveland, despite the challenges of irregular employment, insufficient income, and a dearth of low-cost housing options, families were able to engage in a broader spectrum of unofficial economic pursuits, including the sale of blood components and the gathering of materials for recycling, while also drawing on a more robust network of community support provided by public and philanthropic entities.

In areas like the Mississippi Delta, the collapse of the formal economy has given rise to an underground economy that is closely linked with the community's social ties.

The authors delve into the unique situations in the Mississippi Delta, where the collapse of the conventional economy, shaped by factors such as the mechanization of agriculture and persistent racial inequalities, has given rise to a pervasive underground economy that infiltrates nearly every aspect of social existence. The authors argue that in such situations, with limited opportunities for formal employment and inadequate safeguards for those at risk, individuals along with their households frequently resort to unregulated or illegal activities as a crucial but hazardous means of survival.

The authors offer an in-depth portrayal of this hidden financial domain through narratives of families residing in the unassuming neighborhoods of Jefferson and Percy. Martha Johnson, a grandmother who is raising her grandchildren, sustains her family with the modest earnings from a snack shop she runs within her residence. She uses her government food assistance to buy goods that she resells at a markup, thereby generating enough funds to sustain her household. However, this reliance on informal work comes at a cost—she faces the risk of being penalized by the housing authority or the IRS, and her family's food security is jeopardized as she is compelled to exchange food stamps for essential living expenses.

Context

• Changes in government policies, such as reductions in welfare support and lack of investment in job training programs, have exacerbated economic instability in the region.
• The underground economy is often intertwined with local cultural practices and traditions, where bartering and informal exchanges are common and accepted as part of daily life.
• Limited access to quality education has resulted in a workforce that is less competitive in a modern economy, further contributing to the collapse of the formal economy.
• The Mississippi Delta has experienced significant economic changes over the decades, particularly due to the decline of agriculture as a primary industry. Mechanization reduced the need for labor, leading to widespread job losses.
• Engaging in informal or illegal activities can expose individuals to legal risks, including fines or imprisonment, which can further destabilize families and communities.
• Operating an informal business from home can violate local zoning laws or housing authority regulations, potentially leading to fines or eviction.
• In areas with high poverty rates and limited job opportunities, residents often face significant economic challenges. This can lead to creative, albeit risky, strategies to make ends meet, such as using food assistance for resale.
• Income from informal or unreported work is still subject to taxation. Failure to report this income can lead to fines, back taxes, and other legal consequences from the Internal Revenue Service (IRS).

Children raised in such environments often face a higher risk of mistreatment and are more susceptible to feelings of despair, which can result in lasting negative effects.

Children growing up in environments of extreme poverty and a prevalent informal economy face a heightened likelihood of abuse, exploitation, and a sense of hopelessness, as the study's authors contend. The authors emphasize that when informal and illicit behaviors become commonplace, it creates a perilous environment that obscures moral boundaries for young people, making them more susceptible to harm. The authors emphasize that these encounters can have lasting impacts, potentially shaping a young person's outlook and trajectory in life.

Tabitha Hicks' early years spent in Percy poignantly illustrate the significant influence her surroundings had on her development. Tabitha, struggling with extreme poverty and hunger, was coerced into a sexual relationship by her high school gym teacher, who exploited the situation for his own gain. Tabitha grappled with challenges, and the pervasive hardships and constrained opportunities in her environment caused her to question her self-worth and harbor concerns regarding a future that seemed bleak and uncertain.

Other Perspectives

• The presence of an informal economy doesn't always lead to negative outcomes for children; in some cases, it can provide families with necessary resources and opportunities for economic participation that are not available in the formal sector.
• Some young people may be exposed to informal and illicit behaviors but never directly participate or be harmed by them, indicating that other protective factors may play a more significant role in their development.
• While it is true that early encounters with abuse and exploitation can have lasting negative effects, it is also important to recognize the resilience that many children demonstrate. With the right support and interventions, some individuals can overcome their adverse experiences and lead fulfilling lives.
• The story of Tabitha Hicks, while compelling, is a single anecdote and may not represent the experiences of all children in similar circumstances; other factors such as personal temperament, support systems, and chance encounters can also play significant roles in a child's development.
• It is important to consider individual differences in coping mechanisms and psychological resilience, which can lead to a wide range of outcomes for people in similar challenging environments.