Brazil's Incredibly Successful Social Program: Pay the Poor

From GOOD:

Brazil’s poor are rising to create a new middle class in the country and are contributing to the economic boom there. 

Tina Rosenberg reports in today’s New York Time’s Opiniator column:

Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country.  Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians.  Poverty has fallen during that time from 22 percent of the population to 7 percent.

How has this happened? Rosenberg describes one social program that has made it all possible: giving money to the poor.

The program, called Bolsa Familia (Family Grant) in Brazil, goes by different names in different places. In Mexico, where it first began on a national scale and has been equally successful at reducing poverty, it is Oportunidades. The generic term for the program is conditional cash transfers.  The idea is to give regular payments to poor families, in the form of cash or electronic transfers into their bank accounts, if they meet certain requirements.  The requirements vary, but many countries employ those used by Mexico: families must keep their children in school and go for regular medical checkups, and mom must attend workshops on subjects like nutrition or disease prevention.  The payments almost always go to women, as they are the most likely to spend the money on their families.  The elegant idea behind conditional cash transfers is to combat poverty today while breaking the cycle of poverty for tomorrow.

Poverty Task Force Releases Recommendations on Economic Security

The Arkansas Legislative Task Force on Reducing Poverty and Promoting Economic Opportunity has released its recommendations for cutting our state’s poverty in half over the next decade.

From Arkansas Advocates for Children and Families (AACF):

LITTLE ROCK - After a year of research, the Arkansas Legislative Task Force on Reducing Poverty and Promoting Economic Opportunity today released a series of recommendations aimed at cutting poverty in the state in half in 10 years. The report includes 31 recommendations to build family economic security for all Arkansans.

“Poverty hurts individual Arkansans, but it also has a long-term impact on our economy,” said Rich Huddleston, co-chairman of the task force and executive director of Arkansas Advocates for Children and Families. “Our businesses need a healthy, educated workforce. To get there, we need to ensure that our children are in good health and get a quality education.”

The task force recommends that Arkansas adopt a goal of reducing poverty to pre-recession levels in five years and by half in 10 years. More than one in five Arkansans-527,400-live on incomes below the federal poverty line, which is $22,000 for a family of four. More than one in four Arkansas children lives in poverty. A 2006 study estimated that child poverty costs the Arkansas economy $6.2 billion a year.

You can download the full report (PDF) here. Learn more about Arkansas’ participation in the Half in Ten campaign here.

Winning the Class War

From The New York Times:

The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. As The Times reported this week, U.S. firms earned profits at an annual rate of $1.659 trillion in the third quarter — the highest total since the government began keeping track more than six decades ago.

The corporate fat cats are becoming alarmingly rotund. Their profits have surged over the past seven quarters at a pace that is among the fastest ever seen, and they can barely contain their glee. On the same day that The Times ran its article about the third-quarter surge in profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.”

Anyone who thinks there is something beneficial in this vast disconnect between the fortunes of the American elite and those of the struggling masses is just silly. It’s not even good for the elite.

Stimulus Keeping 6 Million Americans Out of Poverty in 2009, Estimates Show

jonathan-cunningham:

This analysis, which comes one day before the Census Bureau will release updated poverty figures (for 2008), examines seven of the recovery act’s provisions — two improvements in unemployment insurance, three tax credits for working families, an increase in food stamps, and a one-time payment for retirees, veterans, and people with disabilities — and finds that they alone are preventing more than 6 million Americans from falling below the poverty line and are reducing the severity of poverty for 33 million more. Those 6 million people include more than 2 million children and over 500,000 seniors. This analysis includes state-specific estimates for California, Texas, Florida, New York, and Illinois.

Something physical to point to when people demand accounting for the stimulus money spent.

Transitioning in and out of Poverty

abbyjean:

• Significant numbers of people move into poverty throughout their lives. Slightly more than half (51.4 percent) of the U.S. population experiences poverty at some time before age 65 (Rank and Hirschl 1999). The chance of becoming poor is roughly 4 percent a year, but this figure does not reflect the number who cycle through poverty over the course of their lives. People are more likely to experience poverty at younger ages. About 35 percent of people are poor between age 20 and 40, compared with 23 percent who are poor between age 40 and 60 (Rank and Hirschl 2001). Also, household heads under age 25 are significantly more likely to become poor (McKernan and Ratcliffe 2002).
• The likelihood of becoming poor is higher for blacks, Hispanics, those in households headed by women, and those with lower levels of education. Poverty entry rates are about twice as high for blacks as whites—about 11 percent versus 5 percent (Burgess and Propper 1998; Ribar and Hamrick 2003). The difference between those in female-headed households with children and married-couple households with children is even larger. Single-mother households become poor at a rate of 15.7 percent a year, compared with just 2.8 percent for married-parent households (Ribar and Hamrick 2003).