Millions of Americans live in extreme poverty. Here's how they get by. Dylan Matthews, May 13, 2013, Washington Post

...it's worth keeping in mind that even the richest countries haven't completely eradicated extreme poverty. That's the key takeaway from the work of sociologists Kathryn Edin (Harvard) and Luke Shaefer (Michigan), who for the past few years have been trying to nail down the incidence of extreme poverty in the United States. Their latest research is set to be published in the journal "Social Service Review" next month. They use a slightly different measure, defining extreme poverty households as those living on less than $2 a day per person; that's also a World Bank measure, derived from the average poverty line in the developing world, rather than the average in very poor countries.

The results are astonishing. Using data from the Survey of Income and Program Participation (SIPP), a Census program that tracks samples of tens of thousands of households across 2 ¹/₂ to 4 years, Edin and Shaefer estimate that in 2011, 1.65 million U.S. households fell below the $2 a day per person threshold in a given month. Those households included 3.55 million children, and accounted for 4.3 percent of all non-elderly households with children.

That sounds unbelievable, but Shaefer explained that the research was prompted by qualitative work Edin did in households like this. "Kathy and I were talking and she mentioned that she felt like she was going into more and more homes where there was really nothing in income," he said. "They were surviving on food stamps, or in some cases on nothing at all." So they set about investigating whether or not these households showed up on the SIPP. And they did.

So how do these families survive? The safety net is a big part of the story. If you take food stamps, housing subsidies and refundable tax credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) into account, the number of households in extreme poverty is 613,000, or 1.6 percent of non-elderly households with children (compared to 1.65 million and 4.3 percent without transfers). So taking government aid into account reduces the extreme poverty population by 62.8 percent. Then again, there are limits to treating aid as equivalent to cash. As Shaefer said, "You can't eat a housing subsidy."

Civil society also plays an important role. Shaefer noted that follow-up qualitative work he and Edin have done shows that many of these households rely heavily on homeless shelters and soup kitchens, as well as public goods like libraries. "We see people relying on the availability of libraries, since you have to have Internet access to have any chance of getting a job, as most hiring is now done online," he explained.....

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