Review of "$2.00 A Day" by Kathryn J. Edin and H. Luke Shaefer

I bought this book (for under $2.00 on Kindle in an Amazon sale) due to Bryan Caplan recommending it in his book list on poverty. I do not recommend reading this book.

I only thought the starting chapter and the conclusion were good (though they could have been much better), along with, to a minor extent, the chapter on a small business owner thrust into disability and having to take care of some 20 family members in his home. The first chapter describes how and why America’s cash welfare system was replaced with a system that “subjects able-bodied adult recipients to work requirements” (p. 7). The conclusion describes some ideas the authors have for fixing America’s government assistance programs to the poor.

The meat of the book is several detailed anecdotes of people who have experienced $2.00 a day poverty, mostly women and mostly bouncing from low paid job to NEETdom. The people the authors survey in detail do, with hardly any exceptions, exactly what you would do if you were stuck in their situation. All of them, though often victimized by others (for instance, by thieves who steal copper plumbing before the person interviewed in detail moves into or works in a home), are portrayed as purely rational actors (with the exception of the small business owner mentioned above taking out a home equity loan to purchase a pizza shop). The problem with these anecdotes is that the plural of anecdote is not data. Though the book has some aggregate statistics on the $2.00 a day poor, there is not nearly enough of them.

An important point made in the book is that different states design their welfare programs differently and the parts of the country poor people tend to move away from often have little in the way of opportunity for cash income for the very poor from government, charitable, or business sources.

Despite the academic origin of the book’s authors, the authors’ policy recommendations in the conclusion remain surprisingly conservative. Though the authors reject returning to the old AFDC, there is strikingly little description in any part of the book of what was wrong with it, other than that it was discordant with (unfortunately only sparsely described) “American values”.

Though the conclusion largely focuses on job creation as the most important strategy to “lift up the $2-a-day poor” and the book earlier pointed out the Great Recession ruined the Sandusky pizza store of the small business owner mentioned above, there is strikingly little discussion of monetary policy or any other form of business cycle stabilization, as opposed to more generic stimulus for job creation for people willing and able to work and at risk of $2.00 a day poverty -after all, if the primary problem for the $2.00 a day poor is lack of employment, it certainly makes sense to advocate a monetary policy that promotes stable job growth, particularly avoiding a deficiency in aggregate demand such as that which occurred during the Great Recession and its aftermath.

The single most annoying part of this book was a complete lack of international comparisons. Poverty exists in every country, but it was at least worth looking at ways to deal with it from rich and even upper middle income countries. The authors do nothing of the kind.

Perhaps the most important (though rarely noted) point of the book is that culture is downstream from policy -while AFDC resulted in rationalization among its recipient welfare mothers against getting a job, America’s current tax credit and spending policies result in rationalization among poor mothers in favor of getting a job - “In the years prior to welfare reform, in-depth conversations with hundreds of single mothers on welfare illuminated their belief that taking a full-time job would greatly detract from their ability to be a good parent, especially if they had young children… Now [the typical single mom] was telling researchers that to be a good parent, she had to model the value of education by getting a job.” (p. 32).

The largest deficiency in the meat of the book was failing to examine the nature and origins of unusual preferences overrepresented among the very poor. Though I am not much of a Caplanian on poverty, the chapter on a household and their surroundings in the Mississippi Delta dramatically underdescribes the commonality of their town’s residents’ lack of personal virtue, only pointing this out by the report the one police officer hired “to patrol the streets part-time” in the small town “was quite certain that most of the town’s residents would be imprisoned by week’s end (p. 143)”.

I’ll read the Caplan recommended From Prophecy to Charity next.

Rating: two out of five stars