It Would Be Great If It Worked

There's been a peculiar political battle playing out lately over Paul Ryan's latest proposals to reduce poverty. Noah Smith provides a brief description of the proposal:

A few days ago, Republican Congressman Paul Ryan released a plan for helping people out of poverty. He unveiled the outlines in a talk at the American Enterprise Institute, a Washington-based think tank that seems to have emerged as the intellectual center of the so-called reform-conservatism movement. The plan involves making large block grants, called Opportunity Grants, to states, and instructing them to implement a raft of antipoverty programs. The most innovative of the programs involves having social workers directly help poor people take concrete steps to improve their lives in a number of dimensions.

For a while now it's been an article of the faith on the left that Ryan hates the poor, so obviously this has to be evil, but figuring out why has led to some interesting mental gymnastics in which conservatives have been arguing that long term poverty really is a problem which needs programs to reduce it while progressives respond that the number of long term poor is too small to bother about and most people in poverty just need a couple checks to get them out of a hard patch.

Over at a site called Demos, Matt Bruenig makes a somewhat more sophisticated attempt to explain why conservatives think this kind of plan would work while progressives know it won't:

In response to Ryan, many commentators pointed out that people do not need life contracts to go on to boost their market incomes because they already do that (myself,Weissman, Bouie). These writers point out that people move in and out of poverty a lot. Even though the poverty rate stays pretty steady year to year, "poor people" are not the same people each year.

Although these rebuttals have been fairly modest in scope, they actually lay bare a fundamental difference in the way right-wingers and left-wingers understand poverty.

Theory One: Poverty Is Individual

The right-wing view is that poverty is an individual phenomenon. On this view, people are in poverty because they are lazy, uneducated, ignorant, or otherwise inferior in some manner. If this theory were true, it would follow that impoverished people are basically the same people every year. And if that were true, we could whip poverty by helping that particular 15% of the population to figure things out and climb out of poverty. Thus, a program of heavy paternalistic life contracts to help this discrete underclass get things together might conceivably end or dramatically reduce poverty.

Theory Two: Poverty Is Structural

The left-wing view is that poverty is a structural phenomenon. On this view, people are in poverty because they find themselves in holes in the economic system that deliver them inadequate income. Because individual lives are dynamic, people don't sit in those holes forever. One year they are in a low-income hole, but the next year they've found a job or gotten a promotion, and aren't anymore. But that hole that they were in last year doesn't go away. Others inevitably find themselves in that hole because it is a persistent defect in the economic structure. It follows from this that impoverished people are not the same people every year. It follows further that the only way to reduce poverty is to alter the economic structure so as to reduce the number of low-income holes in it.

Which is true? Structural Poverty

To figure out which theory is true, the easiest thing to do is answer the question: are impoverished people the same people every year or different ones? The individual theory predicts that they are the same people (and further that they need paternalist intervention to get their act together). The structural theory predicts that they are different people (and further that we need to alter the economic structure to make things better).

As all of the commentators linked above mentioned, longitudinal surveys show that impoverished people are not the same people every year. The last SIPP (three-year longitudinal survey done by the Census) had around one-third of Americans finding themselves in episodic poverty at some point in the three years, but just 3.5% finding themselves in episodic poverty for all three years. The PSID data show that around 4 in 10 adults experience an entire year of poverty between age 25 and 60. If you count kids, the number of people who experience at least one year of poverty rockets even higher of course.

Now, this sounds plausible, but once you think about it for a few minutes, all sorts of problems occur.

As Megan McArdle points out, the fact that over a long period of time, lots of people move through poverty briefly doesn't mean that at any given time the majority of people in poverty programs aren't long term, nor that the majority of the actual money spent doesn't go to those who are stuck in long term poverty.

Noah Smith writes on his personal blog that if it were true that most people who experienced poverty were only poor briefly and after that they were fine, we wouldn't need help them at all because they could just borrow. (Which we know is not the case.)

And, of course, there's no reason to believe that individual and structural poverty are mutually exclusive categories. What if it's people with a lack of education or with certain problems who invariably end up the victims of structural problems? Wouldn't helping them resolve those problems get them out of poverty? What if one of the big structural problems is that a significant portion of the population has a bad education, or a drug problem, or an unstable family, or any number of other factors which are known to push people into poverty. If we reduced the number of people with those problems, we might actually fix some of the structural problems.

However, while I think that many of the critiques of Ryan's proposal have problems, it seems to me that there's a pretty basic problem with the program idea as well. As with a lot of ideas for intervening to help people, its success would rely to a great extent on it being done well.

Think, for a moment, about the problems with programs like Head Start, which provides pre-school programs for poorer children. There have been repeated pilot tests in which a program finds really outstanding educators, puts them with pre-school age at-risk children, and gets great results. The problem is that when you scale this to millions of kids in Head Start, the program ends up having no measurable effect. The reason is that it's hard to have a massive program the success of which hinges on having outstanding individuals doing hard, low paid, and thankless work. (And in the long run, we tend to keep programs aimed at helping the poor low paid and thankless.)

Similarly, I would imagine that for a lot of people stuck in long term poverty, spending some serious time with a really great caseworker to figure out their lives would be helpful. But let's think about how huge programs that serve the poor end up actually being run: On a low budget, by over-worked caseworkers, under tough conditions. While spending thoughtful time with a great caseworkers might be helpful, standing in line in order to get rushed through a goals process by a over-worked, under-paid and possibly under-competent caseworker is not going to help anyone -- not even the caseworker. It'll frustrate the people the program is meant to help, add another layer of humiliation and paperwork to dealing with poverty, and provide very little actually good life advice.

By contrast, the idea of simply throwing a little more money at the long term poor may not do very much to help get them out of poverty -- but throwing money is something that even the government is pretty good at doing. Ryan's proposal might be better if it could actually be executing well, and perhaps it's worth trying, but I think there are some pretty good conservative reasons to be skeptical of the government's ability to put together a program which would actually help people get their lives figured out.