
( Cover Design by Barbara M. Bachman) / Penguin Random House )
Matthew Desmond, sociology professor at Princeton University, 2015 MacArthur fellow, author of the Pulitzer Prize-winning book Evicted: Poverty and Profit in the American City (Crown, 2016) and his latest, Poverty, by America (Crown, 2023), draws on research and reporting to make the case that poverty persists in the U.S. (at higher levels than in other advanced economies) because affluent Americans benefit from it.
[music]
Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, again, everyone. Of all the essential truths that underlie the day-to-day news stories we talk about on this show, this may be the most important one. We live in the most prosperous country, probably in the history of the world, but we have among the highest rates of poverty, and they haven't changed in decades, even as the number of billionaires has skyrocketed.
Joining us now is perhaps the most important scholar of poverty in the US today, Matthew Desmond, who's been exploring why that is, and is out with a new book that actually proposes solutions to get us unstuck from perhaps the most shameful fact about the society we live in and that underlies, as I say, so much of our wrenching and polarizing politics.
Some of you know sociologist Matthew Desmond from his Pulitzer Prize and National Book Critics Circle Award-winning 2016 book Evicted: Poverty and Profit in the American City. It is said to have influenced the CDC's eviction moratorium as a central response to the pandemic. He is also a MacArthur Genius Grant winner.
Heads up if you think this book is not about you. Yes, it's about the people in the economic basement, and yes, it's about those at the very top who Bernie Sanders might call the 1%, but it's just as much about how Americans more in the middle, often without realizing it, contribute to keeping poor people poor, and some things we can do to change that. Get ready for a new analysis and for proposed solutions. The book is simply called Poverty, by America, and maybe you saw The New York Times essay adapted from the book this month called Why Poverty Persists in America.
Matthew Desmond is a sociology professor at Princeton. Professor Desmond, welcome to WNYC.
Matthew Desmond: It's great to be here, Brian. Thank you.
Brian Lehrer: Can we start with your definition of poverty? How do you define poverty for the sake of your book?
Matthew Desmond: Officially, poverty is an income level. Last year, if you had a family of four and you fell below $27,000, around there, you were officially poor, and there's 30 million of us in America that fit that bill. That's like the entire population of Australia. Poverty is not just a line. It's this exhausting piling on of pain and agonies and humiliations. It's often chronic pain on top of the nauseating fear of eviction, on top of putting your hands in a public defender, on top of not giving your kids enough to eat. It is this incredibly painful misery in America, and it means that millions of us are denied freedom and flourishing in this land of dollars.
Brian Lehrer: You write that the late 1970s was the most economically equitable moment in modern history in this country. Can you start by describing conditions in the US in the late 1970s?
Matthew Desmond: Back then, one in three workers belonged to a union. Unions were powerful, they really flexed their muscles. CEO pay was reined in and worker pay climbed. Just one statistic. Between 1945 and 1979, real wages, that's inflation adjusted wages, increased by about 2% every year. You had a job, you saw your pay going up, you had some benefits, you could advance in the company, but since 1979, real wages have increased only about 0.3% every year. Worker power has waned, CEO pay has skyrocketed, and for many workers without a college degree, they're getting paid less today in real terms than they would 40 years ago.
Brian Lehrer: You mention non-unionized workers. You cite 1981, just after the late '70s, as a certain turning point when the nation's unionized air traffic controllers went on strike at US airports and President Ronald Reagan fired them all. They were federal workers, so he could do that. Reagan believed in trickle-down economics. Did that mass firing trickle down from one workforce to the broader economy?
Matthew Desmond: It did not. I quote a book called Radical Markets in my new book, and the author is right. We're promised economic dynamism in exchange for inequality, and we got the inequality, but the dynamism has never showed up. We were actually a more productive economy when unions were strong than we were today. Not only have workers lost power, but the economy is much more sluggish than it used to be.
Brian Lehrer: What would you say about that productivity? How do you measure, if you're going to make that claim, more productive workforce when there was more unionization?
Matthew Desmond: Well, this gets a little wonky, but bear with me. The Bureau of Labor Statistics just defines productivity as the transfer of inputs to outputs. That is if you can make five birdhouses in five hours, if you can transfer that and make five birdhouses in one hour, you're more productive. The country was much more productive when more of us were in unions, when more of us had collective bargaining power than it is today. That actually matters for things like wage growth and just overall economic health.
Brian Lehrer: You also wrote that you used to assume that Reagan cut aid to the poor and that's why poverty increased, but you were wrong. Reagan didn't cut aid to the poor?
Matthew Desmond: He cut some aid, but not all aid. He gutted public housing. He reduced HUD's budget by almost 70%, 7-0%. We just never recovered in terms of our investment in affordable housing, but other programs directed at the poorest families in America actually grew under Reagan's administration and continued to grow after it. If you look at spending on our 13 biggest means-tested programs, things like Medicaid and Food Stamps, we went from about $1,000 a person the first year Reagan was elected to about $3,400 a person the first year Donald Trump was elected. That's a 237% increase.
That makes our stalled progress on poverty even more frustrating and baffling. It's certainly not the case, as some conservatives claim, that, "Well, this is evidence that government spending doesn't work." That's just completely false. It is evidence that we need to do much more if we're going to end poverty in America.
Brian Lehrer: Well, let's talk about ending poverty in America because part of your book is solutions. Before we do that, I want to go through some basic demographics with you. Who's poor in the United States and what percentage of them are full-time workers?
Matthew Desmond: Gosh, [chuckles] I don't have this data right here in front of me, but a lot of them are full-time workers. There was a study out of the Urban Institute that found that only 2% of poor folks were disconnected from the labor market for a reason we didn't really understand, the data couldn't tell us. This picture of the welfare-dependent, non-working poor person is really a picture that isn't supported by data. If you dig into the data, you learn that welfare avoidance, the fact that a lot of folks are leaving money on the table in terms of food stamps not claimed or earned income tax credit not claimed in an incredibly high way. This isn't a picture of welfare dependence as much as a picture of welfare avoidance.
Brian Lehrer: If you have these stats top of mind or at hand, how disparate are poverty rates by race and by gender?
Matthew Desmond: African Americans are roughly twice as likely to fall below the poverty line as white Americans, and Black poverty and white poverty are not the same thing at all. One example is just the neighborhoods poor white and poor Black families live in. Poor Black families tend to live in neighborhoods of extreme concentrated poverty, where their neighbors are poor, their neighbors' neighbors are poor, but poor white Americans tend to live in much more economically diverse neighborhoods, which means their kids go to better-resourced schools, their housing is often more dignified. I think that's one way race and poverty collide.
The gender ratios of poverty are fairly equitable, but we have seen a decline of labor force participation among men without college degrees and an increase of labor force participation among women.
Brian Lehrer: Listeners, my guest, if you're just joining us, is Princeton sociology professor Matthew Desmond. His new book is called Poverty, by America. Listeners, why does poverty persist in this country more than other industrialized democracies in your opinion? Give us your theories or ask Matthew Desmond a question, 212-433-WNYC, 212-433-9692, or tell us your personal experience if you are poor or have ever been poor and want to talk about structural reasons for that. 212-433-WNYC or tweet @BrianLehrer.
All right, let's talk about what has worked to reduce poverty and some of the things that you propose as solutions for now. President Lyndon Johnson, as you reference in the book, had his so-called War on Poverty policies in the mid-60s, and sure enough, you write, that 10 years after those programs were started, there was only half the poverty that there was in 1960. That would seem like remarkable progress. What programs do you think made the biggest difference?
Matthew Desmond: Probably Social Security, establishing Social Security in a major way. Also, Medicaid, and really getting the country seriously invested in healthcare for low-income families. Making food stamps permanent, starting Head Start also had major returns on investment. Remember, the War on Poverty and the Great Society were launched during a time where the job market was really delivering as well. That was a one-two punch with poverty. Today, the job market is just not delivering for so many American workers, and so not only do we need to deepen our investments in anti-poverty spending, but we also need different investments. We need ways to stop exploitation in the labor market and the housing markets.
Brian Lehrer: You cite the percentage of Americans in poverty over the years and how stubbornly consistent those percentages have been since 1970; 12.5% then, 10.5% just before the pandemic. Within that, as I'm looking at your numbers, there have been peaks and valleys. One that jumped out at me was that in 2010, the poverty rate in America was 15%. By 2019, it had dropped to 10.5%. That's like a third less poverty. Did something happen in the 2010s that was really helpful?
Matthew Desmond: Well, after 2010, of course, there was the economic recovery after the Great Recession. One of the things that's encouraging about the numbers you cite is the fact that we can make giant differences in ending poverty in the country. One of the best examples we've seen in recent years is during COVID. With the extended Child Tax Credit and rental assistance and unemployment insurance, we cut child poverty by almost half in six months, in six months, and the investment was pretty simple.
The Child Tax Credit is just a wonky way of saying, for middle-income and lower-income families, they just received a subsidy that said look, we recognize you're raising kids and we want to invest in that. That cut child poverty by 46% in six months. We have the resources and we know how to do this.
Brian Lehrer: In 2020, you wrote a New York Times op-ed called How Trump's Race-Baiting Lets Liberals Off the Hook. As you know, of course, it was largely about towns in the New York City suburbs that voted heavily against Trump, but their housing policies contribute to keeping poor people poor, you assert. Where is that and how?
Matthew Desmond: A major cause of poverty in the United States is segregation. We continue to build walls around our communities, hoard opportunities behind those walls, and that concentration of affluence also creates a side effect; a concentration of poor neighborhoods. Liberals and conservatives both contribute to segregation. In fact, one study found that liberal homeowners were less likely to vote yes on an affordable housing project than conservative renters, which suggests that above a certain income level, maybe we're not so polarized after all. Maybe we're all segregationists above a certain income level. I think the country has to confront that fact, and we need to tear down the walls and finally embrace broad prosperity.
Brian Lehrer: Are we seeing that same debate play out now as Governor Kathy Hochul is trying to mandate denser housing development in Westchester and Long Island in particular so there's less of an affordable housing shortage in the whole region, but local politicians are resisting a change to their notions of suburban life?
Matthew Desmond: We're absolutely seeing that. Look, there's really great research that shows that when affordable housing is built so it blends into the surrounding community, when it's well-managed, it has no effect on property values. There's amazing research that shows that when our schools become more integrated, the children who were previously denied that opportunity do much better, and the children who were already in those schools don't get thrown off track. This is a real opportunity for us to make sure our values don't stop where our property line begins.
Brian Lehrer: Trey in the Bronx, you're on WNYC with Princeton sociology professor and poverty scholar, Matthew Desmond. Hi, Trey.
Trey: Hey, good morning, Brian. Great show. There's so many things they could do, Brian. They know what they could do. They just won't do it. They could give tax credits to renters. Why is it only for homeowners that pay mortgages? Renters pay rent all year. Normally, it's even more, especially in New York and California, it's more than 30% of your income, sometimes it's 50%, 60%, 70% of your income. Why not give some of that money back? They could, but they won't. They could give tax credits to single people. Why are single people the most heavily taxed persons in America? Okay, just because you're single means you're rich? It's single people working two and three jobs. Give them some money back.
The list goes on and on, Brian. They know what to do. They just don't care.
Brian Lehrer: Thank you, Trey. Matthew Desmond?
Matthew Desmond: Trey brings up this incredibly important point, the fact that we do a lot more in this country to subsidize affluence than to fight poverty. He brought up the mortgage interest deduction. In 2020, we as a nation spent $193 billion, billion with a B, on homeowner subsidies. Most of that money went to families with six-figure incomes. That year we spent only $53 billion on direct housing assistance to the needy. How does that make sense, that we give the most to families that have plenty already? I think we need to rebalance our safety net and make deeper investments in equal opportunity.
Brian Lehrer: Another thing that you wrote that really jumped out at me about subsidizing the affluent rather than subsidizing the poor is what you write about banking. Because you point out that banks subsidize free checking, for example, and higher interest rates for the better-off depositors on the backs of lower-income depositors, just the opposite of what would be economic justice. How does that happen, for example?
Matthew Desmond: Every year, banks collect between $11 billion and $12 billion in overdraft fees. You can overdraw your account by $20 and end up paying $200 for it because banks can charge you fees multiple times during a day. Only 9% of clients are charged overdraft fees. Who are the unlucky 9%? Well, they're the poorest folks at a bank. They're folks that are holding really low balances. They're poor folks made to pay for their poverty.
Who benefits from that? Surely the corporate banks do, but so do many of us who enjoy free checking accounts because they are subsidized by the poorest neighbors using the banks. It's an example of how, as James Baldwin said, it's incredibly expensive to be poor, and this is another way that the poor are exploited.
Brian Lehrer: Yes. After reading your stuff, maybe I was therefore hyper-aware, but I walked by a bank just this weekend that was offering 3.5% interest on a money market account, but only if you deposit more than $10,000. There it is, right?
Matthew Desmond: Right. I've had a lot of folks write in after they've read the book or the early essays and say, "When I was a student struggling to become a doctor, my health insurance was way more than it is than now that I'm a doctor. I can afford to pay more but don't have to," and a lot of American life works like that. Which suggests that low-income folks aren't paying so much because it's riskier to lend them money or it's riskier to rent to them. They're paying so much because they often don't have another choice. They have to take the best bad option because it's the only one available, often.
Brian Lehrer: Danielle in Westchester, you're on WNYC with Matthew Desmond. Hi, Danielle.
Danielle: Hi. I have two questions. The first one is around the dramatic cuts to housing that was mentioned, under Reagan, the 70%. I was wondering if housing costs are not addressed, since there are substantial proportions of household expenses, can you actually fix the long-term poverty issues that we have? It sounds like without changing the assistance given and making affordable housing more available to the majority of Americans, this is just going to be a persistent issue that you're going to have to provide patchwork for.
Then the second question is I wondered what the author feels about Heather McGhee's work, The Sum of Us, and how it relates to his work around the causes of poverty and the persistence of poverty in America.
Brian Lehrer: Thank you, Danielle. Anyone interested in hearing Heather McGhee talk about her book, The Sum, S-U-M, of Us, she was just on the show recently for that book. You can go back to our archives. Professor Desmond, Danielle has got two questions there.
Matthew Desmond: To her first question, she's right. It's absolutely essential that we just recognize that without a stable affordable home, everything else falls apart. The book calls for deeper investments in affordable housing and a lot of different ones. We can do this by building out our public housing infrastructure. We could do this by providing on-ramps to families into home ownership that they're often shut out from. There isn't a single right way to address housing, but there clearly is a single wrong way, which is the way we're doing it now, which forces most poor families who are renters to pay at least half of their income to housing costs and often experience eviction as a common feature of their life.
The second question about Heather McGhee's book, The Sum of Us, which I highly recommend, is a really interesting question. Heather was approaching this question about how white and Black communities, during integration, how white communities often cut off their nose to spite their face in a way. They'd say, "Oh, we have to share our public pools with Black families? Well, we'll fill up the pool. No one gets a pool." I think there's some deep wisdom in there.
I think my book is slightly different. It asks many of us who are privileged, who are economically secure, who are well-housed and well-fed, to really consider how we do contribute to other folks' poverty in our investment decisions, our consumption choice, the way we protect our tax breaks, the way we guard our communities, and really try to take ownership of that and take a little less from the government. It is asking for us to really consider some skin in the game, but we don't just give. We're going to get something too. All of us.
The elimination of poverty in this land is an investment in a safer country, a happier country, a freer country, and a country without this kind of emotional violence that many of us feel by participating in this [unintelligible 00:21:52] [crosstalk]--
Brian Lehrer: Well, for people who want to do what you just proposed, can we do it as individuals, or do we need to do it as citizens who are advocating public policies?
Matthew Desmond: Yes, I think both are really important, actually. A lot of times we say the policies aren't the hard part, the public will is the hard part. Well, how do we build that? I think one way we build that is to change the way we shop, change the way we invest, change the way we talk about taxes. I think one way we can do that is by going to our Tuesday night zoning board meeting and standing up and saying, "Look, I'm not going to be a segregationist. I refuse to deny other kids opportunities that my kids have had by living here. Let's build this thing."
A lot of the tension between structural changes and individual changes, I think they actually collapse when you think about it. Obviously, we need big, bold policies, but we need to build a political will and put upward pressure on our corporate and political leaders to get there too.
Brian Lehrer: We've got about three, four minutes left. Let me touch on some solutions to poverty that other people discuss that maybe you don't emphasize as much and just get your quick takes. One is a more social democracy or a democratic socialist approach. Guaranteed annual incomes, like Andrew Yang ran for president on, as a monetary floor for Americans. Baby bonds, like Senator Cory Booker has proposed, so every American has money to build a middle-class life on, theoretically, when they reach 18. A universal child care system like in France, or other paid family leave policies from the social democracies in Scandinavia. What about that whole bucket of social democracy solutions?
Matthew Desmond: I think there's some real wisdom in there, and one of the wisdom points is that we can afford to do this. A recent study showed that if the top 1% of Americans just paid the taxes they owed, we could raise an additional $175 billion a year. That's almost enough to pull everyone out of poverty. I think that along with these deeper investments, though, in ending poverty, we'd also need to confront exploitation. Because if we don't confront exploitation in the labor market and the housing market and financial market, we do risk some of that money not ending up in the pockets of families.
Brian Lehrer: Conservatives, as you know, raise a whole other group of things, especially family breakdown. An op-ed in the New York Post, for example, recently cited what we often hear from that point of view, referring to the strength of Black families in America, Black families in particular, but it, I think, applies to all families in America, they would say, before what they cite as white liberal Hollywood's free-love culture normalizing sexual promiscuity. Now it says just 25% of Black babies are born to married women and the poverty rate in the Black community is higher. What do you say to basically the family breakdown theory?
Matthew Desmond: Well, single parents in Ireland, in Italy, in Sweden and many other countries are not disproportionately poorer than the general population. Why? It's because those countries have made deeper investments in their people, especially through programs that benefit all citizens. We could follow suit by investing in programs like affordable child care or paid family leave. Wouldn't it be great if every family in this country, no matter it's shape, did not fall below a certain level?
Brian Lehrer: There, we will leave it with Matthew Desmond, MacArthur Genius Award winner, Pulitzer Prize Winner, and National Book Critics Circle Award Winner for his last book, Evicted, now out with a new book called Poverty, by America. Thank you so much for making everybody think.
Matthew Desmond: Thanks, Brian.
Copyright © 2023 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.
New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.