MONEY

Why Rich People Think the Poor Aren’t That Poor

two couples on a yacht
Mike Watson Images—Getty Images

And why they don't see much need for wealth distribution.

When Jacob Riis published his study of New York tenement life in 1890, he called it How the Other Half Lives, as if people really needed to know.

More than a century later, many of us are still suffering from the same type of myopia, at least according to a recent study by psychologists in the U.K and New Zealand and reported in The Washington Post Tuesday.

The study of 600 Americans, conducted over the Internet, found wealthy people tended to report particularly high levels of wealth in their social circles. While that may not be surprising, that cossetting seemed to lead in turn to wealthier Americans over-estimating average wealth among the general U.S. population — as well as assuming “greater perceived fairness” in the economy.

In other words, the rich still think the most Americans are doing okay– or should be — because they and their friends are.

The results certainly have political implications. The authors suggest the rich might be more open to wealth redistribution if they had a truer sense of America’s income inequality and how the economic landscape appears to the poor.

Students of behavioral finance might also see the new research as the flip side of a behavioral tick that has long bedeviled anyone struggling to keep a budget. It’s long been established that having wealthy friends and neighbors tends to shift your lifestyle expectations: We all want to keep up the the Joneses. But that’s not necessarily healthy for your budget or your sense of well-being.

Read next: Why 15% of Americans Still Don’t Have the Internet

TIME Innovation

Meet the Weapons of the Future

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

These are today's best ideas

1. This isn’t Star Wars: The military weapons of the near future are laser blasters and microwaves.

By Andrea Shalal at Reuters

2. Domestic violence is about power. This idea could level the playing field for survivors.

By Melissa Jeltsen in the Huffington Post

3. Here’s how Japan made something useful out of its golf course boom.

By Ariel Schwartz in Business Insider

4. The world needs ‘Fundraisers Without Borders.’

By Duncan Green in Oxfam’s From Poverty to Power

5. The next generation of superfast computers will use light instead of electricity. Here’s how.

By Ken Kingery at Duke Pratt School of Engineering

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Income Inequality

6 in 10 Americans Will Experience Poverty

worn out dusty shoes with holes in them
Alison Wright—Corbis

It turns out there may be more fluidity between the haves and the have-nots than we previously thought.

Over a lifetime, most Americans will experience at least a year of relative poverty, says a new study.

Between the ages of 25 and 60, over 60% of the population at some point sees an annual income that puts them in the bottom 20% of earners. About 40% will live for a year or more in the bottom 10%

The study’s co-authors, Thomas Hirschl of Cornell University and Mark Rank of Washington University in St. Louis, released a somewhat similar report earlier this year that looked at fluidity at the top of the income spectrum. It found that 70% of Americans will spend at least a year in the top 20% of income by the time they are 60.

Placing the two reports side-by-side shows that income inequality isn’t as static or simple as the haves and have-nots. There are also a lot of people who can be called the have-right-nows. “I think the real danger is that people feel insecurity at the top and bottom,” says Hirschl.

That insecurity, he argues, has helped fuel two seemingly disparate movements: Occupy Wall Street and the Tea Party.

“Insecurity rules large in the human psyche,” he says. “People feel like ‘My problem is a serious problem, and I want the rules to change so I don’t have this problem anymore.'”

Acknowledging the fluidity between the upper and lower echelons of income distribution offers a more nuanced approach to conversations about inequality. “We see very clearly that people have periods of hardship,” Hirschl. “So having a way of distributing goods and services, and dealing with economic insecurity and social inequality, are real questions facing the majority,”

The study is based on data collected regularly by the University of Michigan’s Panel Study of Income Dynamics from 1968 to 2011. It’s measure of poverty isn’t the same as the government’s poverty threshold, an absolute measure based on the ability to meet basic needs. Instead, it’s a relative measure, which Hirschl says matters more “in the context of rising inequality.”

Read next: New York’s $15 Minimum Wage for Fast Food Workers Is The Latest Industry-Specific Hike

TIME Innovation

Releasing Drug Offenders Won’t End Mass Incarceration

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

These are today's best ideas

1. Releasing drug offenders won’t end mass incarceration.

By Oliver Roeder at FiveThirtyEight

2. Here’s the real solution to Greece’s woes. (Hint: It’s not crushing austerity measures.)

By James Surowiecki in the New Yorker

3. The “entrepreneur gene” is a myth.

By Aimee Groth in Quartz

4. To protect the brain health of our children, tackle poverty.

By Joan L. Luby in JAMA Pediatrics

5. Stop obsessing over why people become terrorists.

By Isabel Larroca in the Wilson Quarterly

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Economy

More U.S. Children Live In Poverty Now Than During the Recession

US-CALIFORNIA-POVERTY-HOMELESS
MARK RALSTON--AFP/Getty Images Three year old Saria Amaya (L) waits with her mother after receiving shoes and school supplies during a charity event to help more than 4,000 underprivileged children at the Fred Jordan Mission in the Skid Row area of Los Angeles on October 2, 2014.

African-American, American Indian and Latino children are particularly hard hit

In mid-September 2010, almost exactly two years to the date since the monumental collapse of Lehman Brothers, the New York Times published a bleak statistic: the ongoing Great Recession had driven the U.S. poverty rates to their highest in a decade and a half.

Five years of fitful economic recovery have not yet bettered this situation. According to a new report from the Annie E. Casey Foundation, more than one in five American children, about 22%, were living in poverty in 2013. Data for 2014 are not yet available, but the report anticipates that the child poverty rate remains at an “unacceptably high [level].”

The figure for 2008 was 18%.

General terms are insufficient when explaining the economy’s post-recession rebound. There are a number of conflicting statistics — the fall in unemployment versus the rise in poverty, for instance — but even efforts to compare and assess these inconsistencies do not successfully capture the nuances at hand, most of which are dictated by demographic cleavages built on racial lines.

Noting only a “few exceptions,” the report states that “on nearly all of the measures that [it] track[s], African-American, American Indian and Latino children continued to experience negative outcomes at rates that were higher than the national average. Overall unemployment rates have fallen, but the unemployment rate for African-Americans is currently 11 percent — 2.4 percentage points higher than where it was prior to the economic crisis. Nearly 40 percent of African-American children live in poverty, compared to 14 percent of white children.

“The fact that it’s happening is disturbing on lots of levels,” Laura Speer, the Casey Foundation’s associate director for policy reform, told USA Today. “Those kids often don’t have access to the things they need to thrive.”

The Casey Foundation is a philanthropic group that seeks to enable underprivileged children to overcome hardships in pursuit of a brighter future. The foundation is based in Baltimore, a city where systematic inequities contributed in part to a series of protests and demonstrations this past spring.

Read next: Why America is Falling Behind the Rest of the World

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TIME Behind the Photos

How One Photographer Is Mapping America’s Poverty

Matt Black shows how extreme poverty can be found all across America

For more than 20 years, photographer Matt Black has been exploring issues of poverty, migration and farming in California’s Central Valley, painting a picture of extreme economic hardship in one of the country’s richest states.

Last year, he took to Instagram for his latest project, Geography of Poverty, using the social app’s mapping feature to pinpoint California’s poorest communities. His goal was “to get people that are on Instagram to picture themselves in these places,” he said in December after being named TIME’s Instagram Photographer of the Year.

Now, after spending two decades concentrating on California’s Central Valley, Black is expanding his project to the rest of the country.

“Occasionally, with my work in the Central Valley, I get the feeling that people can dismiss it by saying that it’s happening in some weird place in the middle of nowhere in California; that it’s an outlier,” he tells TIME. “But I know very well that the Central Valley is not an outlier. You can find similar communities and similar circumstances throughout the country.”

This knowledge forms the basis of the second chapter of Geography of Poverty, one that is taking the 44-year-old photographer all over the country, from California to Oregon, Louisiana, Tennessee and New York, among many other states.

Published by MSNBC, Black’s extended Geography of Poverty project is composed of two elements — the photographer’s road trip across America, plus four extended reports, written by Pulitzer Prize winner Trymaine Lee, that provide more context to the issue of poverty and economic hardship in four regions of the country. “You get the scope and breadth of the story through Matt’s road trip, but you also get a deeper dive from Trymaine,” says Amy Pereira, MSNBC’s director of photography.

For Black, the goal was to use the road as a storytelling mechanism. “Every stop along the way has a level of poverty above 20%,” he says. “I wanted to find a continuous route that linked all of these towns, which are no more than a couple of hundred miles from each other. And the fact that you can link all of these communities from coast to coast and back again is telling.”

As Black travels across America, he shows the people and communities he’s photographing a map where he’s marked all of his stops. “A lot of people have been blown away by it,” he says, as they’ve realized that “it’s not so much about the individual circumstances as it is about the collective whole.”

“What really dawned on me is how connected these places are,” he adds. “I’ve driven all the way across the country, but in a lot of ways I feel I still haven’t left the Central Valley. It feels like one place. Uniting them in this kind of visual document is challenging but immensely satisfying because it feels like I’m making a statement that needs to be made.”

The overall project, while not unprecedented in scope, has necessitated the heavy involvement of teams of developers and designers at MSNBC, says Pereira, as the entire hosting platform had to be coded from the ground up, especially when it came to linking Black’s Instagram posts to MSNBC’s mapping feature.

The photographer also had to seek additional financing from external organizations such as the Magnum Foundation, the Pulitzer Center — a foundation that usually funds non-domestic projects — and the Economic Hardship Reporting Project. “I think it’s heartening for photographers to know that it’s possible,” says Black. “You [can] put something together like this and get the resources to do it.”

For Pereira, Black’s personality and personal experience are part of the project’s overall success. “Matt has a sensitive and keen eye,” she says. “His humanity is so inherent that you can’t help but feel it in his images. He’s devoted his life work to telling a story of people who are very marginalized by their social-economic situation. He’s spent his whole life around these communities. He understands this on an intimate level. There are more than 45 million people living in poverty in the U.S. and people don’t want to see it. They’re busy with their own struggles and their own lives. Matt is showing people in a sensitive way.”

Matt Black is a freelance photographer based in California. Follow him on Instagram @mattblack_blackmatt. See more of Geography of Poverty project on MSNBC.

Olivier Laurent is the editor of TIME LightBox. Follow him on Twitter and Instagram @olivierclaurent.

TIME United Kingdom

Watch This 20-Year-Old Legislator Completely Own the U.K. Parliament With a Dazzling Speech

So what were you doing at 20?

At 20 years old, Mhairi Black may be the youngest lawmaker in the U.K. Parliament since 1667, but she has already shown to her peers in the House of Commons that when it comes to issues of social justice, she will pull no punches.

In her stunning debut speech Tuesday, the Member of Parliament for the Scottish constituency of Paisley and Renfrewshire South attacked the government for rising poverty levels, the reliance on food banks and cuts to the welfare system.

Black, who has just graduated from Glasgow University, said Britain had “one of the most uncaring, uncompromising and out-of-touch governments that the U.K. has seen since Thatcher.”

She called out the chancellor George Osborne for abolishing housing support for under-21-year-olds, saying that, “We are now in the ridiculous situation whereby, because I am an MP … I am also the only 20-year-old in the whole of the U.K. the chancellor is prepared to help with housing.” (British lawmakers who do not live in London get housing subsidies from the government.)

Black’s Scottish National Party won an unprecedented number of seats in May’s general election, and she lambasted their political rivals, the Labour Party, for forgetting “the very people they are supposed to represent.”

She ended her rousing speech by calling on all the parties of the opposition to work together to “be the signpost of a better society.”

 

TIME families

Black Children Still Most Likely to Live in Poverty, Study Says

Poverty rates for white, Hispanic and Asian children have declined

Poverty has fallen for kids in white, Hispanic and Asian families in the last five years, but not for black children, according to a new study from the Pew Research Center.

About 38% of black children are still living below the poverty line, according to Pew‘s study of Census data, and black kids are still about four times as likely as white or Asian kids to grow up poor. And for the first time since 1974, there are more poor black kids (4.2 million) than poor white kids (4.1 million), even though there are three times as many white children in America.

There are even more poor Hispanic children than any other group (5.4 million,) partly because the Hispanic population is larger and younger than other minority groups, but the data shows a small decline in poverty rates among Hispanic children in the last few years. Black children are the only group that have not shown a decline in the poverty rate since 2010.

Rates of child poverty have fluctuated widely over the last 25 years. In the mid-1980s, almost 50% of black children were growing up poor, but in the early 2000s that number dropped to around 30%. Since then, the child poverty rate among black families has been slowly creeping up again, approaching 40%.

Still, the study shows that both black and Hispanic children are significantly more likely to grow up poor. Although children make up only 27% of the black population, 38% of poor black Americans are kids. And while only 32% of the Hispanic population are children, almost 43% of Hispanics living in poverty are children.

[Pew]

 

TIME poverty

Americans Are Still Well Off Compared to Rest of World, Despite Falling Income

A new Pew report says 56% of the U.S. population was in the world's high income group in 2011

Much has been made of the death of America’s middle class in recent years, but on a global scale, it’s still thriving. A recent Pew study says that as of 2011, a whopping 88% of Americans qualified as either upper-middle income or high income on a global scale.

Those impressive figures remain in spite of the fact that the median income of U.S. households has dropped nearly $4,000 from its 2001 level of $55,526 (in 2013 dollars). Fifty-six percent of Americans still live on more than $50 per day, far exceeding the global average of 7%. The study notes that the high standard of living in the U.S. may skew perspective on poverty and the middle class:

This is not to say that the U.S., along with other advanced economies, does not struggle with issues of income inequality and poverty. But given the much higher standard of living in the U.S., what is considered poor here is a level of income still not available to most people globally.

According to the study’s author, Rakesh Kochhar, the analysis takes into account cost of living, which is likely to be far higher for Americans than for most others around the world.

Read the full study and analysis here.

TIME poverty

Overlooked Group of Americans Battling Hunger, Report Says

At least 8 million Baby Boomers are currently facing hunger in the U.S.

Those fighting hunger in the U.S. usually focus on the youngest and oldest Americans, but there’s another group struggling to make ends meet: Baby Boomers.

A new study, funded by the AARP Foundation, found that at least 8 million Boomers—those between the ages of 50 and 64, also dubbed the “youngest old”—are facing hunger, according to the food bank network Feeding America. These “pre-seniors” are especially vulnerable to hunger because they do not yet qualify for programs the support senior citizens, including Social Security and Medicare.

In addition, Boomers are also struggling with employment: according to the Feeding America survey, two-thirds have not worked in the past year due to a disability or other health problems.

“The data suggests that there will be an increased need among seniors given that the number of Baby Boomers aging into their senior years is growing,” Maura Daly, a spokeswoman for Feeding America, told USA Today.

[USA Today]

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