$2.00 a Day: Living on Almost Nothing in America

Prior to the welfare reform in 1996, Aid to Families with Dependent Children (AFDC) was the main welfare program in the United States. It was first created during the Great Depression and over the years was expanded to help more people in need. At the program’s height in 1994, it covered 4.6 million adults and 9.6 million children. Families with children had the legal right to claim cash assistance through AFDC if they had economic need. The program was not popular with the American public, however, as it was believed to reward indolence and single motherhood. The 1996 reform ended AFDC and replaced it with a new welfare program, TANF.

The 1996 reform expanded aid for the working poor—people who have formal jobs but still struggle economically. The expansion of the Earned Income Tax Credit (EITC) was one of the most significant changes brought about by the reform. It provides low-income workers with a significant boost to their income, giving a helping hand to millions of struggling families each year. The EITC has been popular among politicians and the American public because it is viewed as pro-work.

Medicaid and Medicare—the former for the poor, and the latter for the elderly—are health insurance programs that were created during the War on Poverty in the 1960s, which saw the birth of a number of programs aimed at assisting the poor. It is one source of in-kind assistance that many of the families in this book receive.

The Department of Housing and Urban Development assists low-income families through a program known as Section 8, which provides public housing and rental assistance vouchers. Although there is evidence that Section 8 is very effective at reducing housing instability, the program is underfunded and can only assist a fraction of the families who need it.

The Introduction discusses the Survey of Income and Program Participation (SIPP) administered by the US Census Bureau, which provides the “most accurate accounting possible of the incomes of the poor and the degree to which they participate in government programs” (xvi). Shaefer analyzed the SIPP to find out whether $2-a-day poverty has been rising since the welfare reform in 1996. He confirmed that the number of families living in virtually cashless poverty had doubled in 15 years.

The Supplemental Nutrition Assistance Program (SNAP) is one of the most common in-kind resources received by the families in this book. Although an important resource, SNAP benefits are only meant for buying food. They can’t legally be used to pay rent, utilities, or any other necessity. Trading SNAP for cash is a felony, but it is nevertheless a strategy that some $2-a-day poor resort to when they need the money.