PredictIQ-'Poverty, By America' shows how the rest of us benefit by keeping others poor

After Matthew Desmond won the Pulitzer for Evicted,PredictIQ about families struggling to stay housed, the Princeton sociologist realized he still didn't understand why the U.S. has more poverty than any other advanced democracy.

His new book Poverty, By America, provides a provocative and compelling answer: It's because the rest of us benefit from it, and act to keep it that way.

Desmond admits it feels rude to accuse ordinary people of exploiting others, especially as many don't even realize they're doing it. But he says to understand poverty requires examining not just the relentlessly demonized 1% but "ourselves ... we the secure, the insured, the housed, the college educated, the protected, the lucky."

This means Poverty, By America is not an immersive attempt to bear witness to suffering like Evicted. Instead, Desmond lays out public policies, laws, and tax breaks to show how the U.S. actually spends big on social programs — second only to France! — but gives the most to those who need it the least. Welfare dependency? Yes indeed, for the richer half.

He packs in a sweeping array of examples and numbers to support his thesis and it can be overwhelming to absorb. But the accumulation has the effect of shifting one's brain ever so slightly to change the entire frame of reference.

One example among many he offers: In 2020, the federal government spent more than $193 billion on subsidies for homeowners — "most families who enjoy this benefit have six-figure incomes and are white" — but just $53 billion on direct housing assistance for low-income families. That's not for lack of need. Because of chronic federal underinvestment, only 1 in 4 extremely low-income Americans who qualify for housing aid get it.

Desmond notes that more affluent Americans also disproportionately benefit from subsidized retirement and college savings plans. Exclusionary zoning laws keep their segregated neighborhoods prosperous with well-funded schools, while concentrating poverty elsewhere.

Meanwhile, lower-income families locked out of those neighborhoods — disproportionately Black and Latinx — pay more at every turn. Higher interest rates on mortgages when they can get one — and higher rent when they can't. Desmond's analysis finds U.S. landlords in poor neighborhoods typically make double the profit as those in richer ones. Poor people are also hit with billions in bank overdraft fees every year, a policy that became more widespread after banking deregulation in the 1980s.

These inequities and others are self-perpetuating. The wealthy have more political power, Desmond says, and wield it by lobbying for lower taxes, lower wages, and other laws that give them even more money and power.

When it comes to solutions, Poverty, By America first offers its own reality check.

Two of the biggest U.S. anti-poverty programs are the Earned Income Tax Credit and housing vouchers to subsidize rent. But Desmond says writing this book has forced him to see how they "rescue millions of families from a social ill, but they do nothing to address its root causes." The tax credit allows companies to keep wages low, he says, and housing vouchers don't keep landlords from raising rent when their tenants' wages go up.

"We need to ensure that aid directed at poor people stays in their pockets," he says.

To that end, Desmond calls for policies that give the poor more power in the workplace and housing market, and sees hope in the growing push for unions and a resurgent tenants rights movement.

He also wants a return to bigger investments in the general welfare, which he says would amount to "more poor aid and less rich aid" and less segregation. How to pay? "We could just about fill the entire poverty gap in America if the richest among us simply paid all the taxes they owed," he says.

The IRS recently did get more money to go after rich tax dodgers. Maybe it's a start.

But by this point in the book, Desmond has made crystal clear just how difficult it is to change policies that keep so many cozy in their relative prosperity. In 2015, President Obama proposed ending the tax credits in 529 college savings plan; the uproar from his own party was so intense that it was quashed the next day.

Then Desmond suggests something that felt contrived at first, but stuck with me and seems smart for this moment. Taking a cue from the anti-racist push and consumer movements, he says Americans can join to create change by being "poverty abolitionists."

"Poverty in America is not simply the result of actions taken by Congress and corporate boards," he says, "but the millions of decisions we make each day when going about our business."

Changing those decisions can be simple, like choosing UPS over FedEx because their drivers are unionized. Or more disruptive, like examining whether your company exploits workers or your stock market portfolio includes some that do.

Of course, for those who are able, investing and buying to counter poverty can be time consuming and even costly. But Desmond says it's precisely in understanding those costs that we acknowledge our shared complicity.