Living on $5 per day or less in the United States

We read stories about people in the developing world living on $1 or $2 a day and it's easy to think that's all happening somewhere else. But there is also extreme poverty in the United States, and I think many Americans would be shocked to learn there are actually families trying to get by on a few dollars per day right here in the United States.

Rebecca Blank, an economist at the University of Michigan and the Brookings Institution, studies this group and has recently published a report highlighting some new and disturbing trends. While this group has always existed, the numbers have been increasing since welfare reform legislation in 1996.

Blank describes these families as "disconnected," and by that she means those in which the parent does not work, or works only a small amount, and the family does not receive cash welfare payments as part of the national welfare program Temporary Assistance to Needy Families (TANF).

Blank's study focuses exclusively on families made up of single mothers. She estimates there are some 2.2 million single mothers, with an average of 1.8 children per mother, or about 4 million children, who are disconnected. The average annual income of this group is between $4,287 and $4,435. Using a simple calculation, I figure that comes to roughly $4 - $5 per day. Three people (single mother, two children), over 365 days, use up $4,435 at a rate of $4 - $5 per day. 

Families this poor are likely to have many problems. Some of the most common are as follows:

• Less education and more learning disabilities
• High levels of past or current levels of substance abuse
• High rates of depression and forms of mental illness as well as more physical health problems
• Young children or larger families and are more likely to be caring for someone with health issues
• A history of domestic violence or violence in a current relationship

The last thing I'm interested in here is assigning responsibility for any of these. The point I want to highlight is the current welfare system does a terrible job in making sure these families get the help they need. These families may be poor for the reasons above, but they are disconnected because the welfare system fails them. Blank explains, "[F]ederal requirements create a strong incentive for states to remove disadvantaged women from their caseload through time limits and sanctions: this may increase the number of disconnected women and their children who face serious poverty."

Welfare reform legislation in 1996 was intended to get welfare-dependent parents into the workforce and begin moving them towards self-sufficiency. For the majority of parents who have been on TANF, it has at least gotten them into the workforce. But for the hardest cases, meaning parents who face the greatest barriers to obtaining or maintaining a job, welfare reform has been a cruel reckoning. As Blank's research shows, this is not an insignificant number of families either.