MDC Insights for Feb. 2015 – The real poverty line

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Mark Pereboom, CEOThe Real Poverty Line

A recent Pew Research Study found that the majority of wealthy Americans believe that being poor is “easy,” citing government assistance as a way for people in poverty to receive payment without doing any work.  The results of the study exposed the large proportion of Americans who misunderstand the reality of poverty in the US.

The “being poor is easy” fallacy has been met with a wave of evidence to the contrary, illuminating the gaps left by public assistance programs.  For example, 11 million of those who are currently in poverty are also employed, but don’t make enough to escape the cycle of poverty. Additionally, the small incomes earned by the poorest fifth of Americans are taxed at a higher rate (10.9%) than the wealthiest fifth (5.4%).  Without strong community support systems, it is difficult to escape poverty.

But beyond listing data that refutes the misconception, it is our responsibility, as engaged and thoughtful community members, to take it one step further.  Statistics are only part of the picture of poverty.  The other part, of course, is the lived experience of the individual.

Fact: Most people in poverty do not have a bank account. Lived Experience: A single mother of two is employed part-time, as she can’t afford childcare for the hours that her children are out of school.  She earns a monthly paycheck of about $1400, but loses 5% of it simply in order to cash it without a checking account.  She pays her bills with money orders that carry hefty fees; without a checkbook it’s the only way.

It’s estimated that she will lose $1200 each year in these avoidable fees alone.  This is one element of one story, providing a lived experience to the simple fact that most low wage earners do not belong to a bank.

A graph of the real poverty line for Pierce County.

According to a living wage study done by MIT, in Pierce County an adult with 2 children is only considered “in poverty” if they make less than $1525 per month. The same study found that this family of 3 would need $3733/month in order to actually get by.  How many individual stories live within that $2208 gap?

By seeking out stories of struggle and inequality, we can begin to see that a day in the life of someone in poverty is riddled with challenges that many of us take for granted.  Poverty is deeper than the statistics that define it, and it is anything but easy.

 

P. Mark Pereboom

MDC President & CEO

 

Sources: MIT’s Living Wage Calculator for Pierce County;
Charles Blow: “How Expensive it is to be Poor” NY Times

Education is the key to break the cycle of poverty.