Welcome to Part 9 of the Poverty Story.

In Part 8 we outlined Degenerative Systems and how they work, ending with your story that illustrated how these systems maximize profits by consuming their commodities.

We also talked about how your Level UP Apps allow people to escape a life of perpetual struggle.

Where are we starting from next?

Let’s look at our overall poverty landscape as things are today – mid-2023.

Can we begin with how the U.S. Government defines poverty?

OK.

The U.S. Census Bureau uses income thresholds to determine who is living in poverty. These thresholds vary by family size and makeup but not necessarily by geography. Currently, the threshold for a family of 4 is around $27,000 of annual income. Using these numbers – the Census Bureau has determined that the “official” poverty rate has varied up and down between 15.1% in 2010 to 11.6% in 2021.                     (It is important to note that the government provides economic support for many families that have income levels well above the poverty threshold.)

I remember that Level UP defines poverty as any situation where a person cannot make the income required to live a sustainable life.

That’s correct. And it’s not that this definition itself is revolutionary. The Census Bureau, in their Measuring America document, states, “individuals are considered in poverty if the resources they share with others in the household are not enough to meet basic needs”. The difference essentially boils down to the individual phrases – “resources”, “others in the household” and “basic needs”, which is why we have multiple poverty measures. Take, for example, the official poverty measure from the Census Bureau. It simply uses three times the cost of a minimum food diet in 1963, translated into today’s prices. But the Census Bureau also has a Supplemental Poverty Measure, which uses information about what people spend today for basic needs – food, clothing, shelter, and utilities.

Then, there’s the Poverty Guidelines, established each year by the US Department of Health and Human Services (DHS), and so on, including MIT’s Living Wage, which is closest to how we define poverty. But, by adding sustainability into the mix, we arrive at what we think is a more realistic picture of how many of us, including our colleagues, friends, and family, are poor in the U.S. today.

Let’s review the levels of poverty in the U.S. today.

OK – We’ll cover some of the many metrics of poverty.

Let’s start with the most visible, which are homeless, or un-housed people. These include not just people living on the streets, who are of course some of the most vulnerable, but also people who squat, people who live on friends’ or families’ couches, and then the whole expanding population who live in their cars and vans.

The metrics for 2021 say that 0.7% or up to 1.4% of people are homeless – depending on which source we choose. We use the latter number which we believe may still be under-counting.

Why do you think that’s an underestimate?

Here’s why I say this. Declan and I traveled together up and down I-5 between Seattle and Portland for several years. We’d meet with our Level UP team members weekly, either in Seattle, Portland or occasionally the Eugene area. Our return journey was regularly between 9 pm and midnight on Thursdays, and we were on this travel schedule pre-COVID, during COVID, and post-COVID. There are some substantial “Rest-Areas” off this section of Interstate 5, and we know them all. The biggest is about 10 miles south of Seattle. We took to stopping there almost every Thursday night.

To do your own research on homelessness?

Yes. There were always some people sleeping in their cars there. Maybe 20 cars each night starting 6 years ago. Just before COVID, that number began to increase to around 40 cars on a busy night.

Six months into COVID it was filled to overflowing with 100 or so cars and vans. All of these vehicles were homes – they all had curtains – or makeshift curtains. Sometimes cars were parked on the sides of the entrance and exit – but these were often moved along by the Highway Patrol.

We’d chat with the night owls and others who simply couldn’t sleep, and during those late-night conversations, learned that they knew many of the other people there and recognized a lot of the cars. We found out that many of these people had steady jobs – sometimes two, while some were obviously unemployed. Most were single, some had kids, and some families had 2 cars – basically a type of “2-room” home.

Why was this population growing?

Probably a number of systemic factors. But we did learn from the people we talked to that the cost of rental properties within 60 miles of Seattle, and probably further, had escalated out of their reach. This was compounded by the fact that securing a rental required placing a deposit of 2 and sometimes 3 times the monthly rent. If any of these people passed the usual checks, credit, criminal, and recent home history, they couldn’t come up with that type of deposit.

Undoubtedly a lot of homeless people live in their cars – but how can we come to an accurate count?

We haven’t been able to figure that out. Many of these people will not volunteer even to their families, and certainly not to their employers that they are basically permanently homeless.

From our experience, we estimate that the number of homeless in this “living in car or van” category multiplied at least 4-fold in recent years and has not declined yet.

What’s the next metric or group you want to discuss?

This is a group known as the “working poor”, which consists of 45% of the US population.

If you fall in this category, it means that after paying for very basic housing, food, and transport, other essentials like medical and dental care get postponed indefinitely. (“Almost half of all Americans work in low wage jobs”, CBS News, Dec 2019 – In the article, “low wage” was defined as a median income of $18,000)

Do you also think this category size is underestimated?

We have no way of knowing – but I will point out that $18k median monthly income means half of this group makes less than $1,500 a month. We’ve done the math, almost any single person making less than $2,500 a month and paying normal rent or mortgage, is working poor.

This level of income rules out homeownership and, in most cities, any rental that is more than a single room in a shared house. It covers basics with no extra, no reserve, no medical, no vacations, and no room for crises.

If it’s a family, then the number needed to escape poverty is at least $3,800/month and that’s in a supportive situation – with family, friends, and food stamps.

Are these numbers - $2,500 for a single person, $3,800 for a family - the lowest income from which to begin to build a sustainable life, where they have some reserves that can buffer them from falling back into poverty?

Yes, for most of the U.S. – but only if they have a supportive and stable work environment – which today, many of us do not. Of course, this is an outcome our Level UP Apps are designed to achieve – and it’s one of our first priorities.

From there, each additional Level UP App can move them closer to this universal goal – “being able to live a sustainable life”.

Looking at these income numbers, I see that they are many times the minimum wage – is this achievable in today’s economy?

Great point.

Your question illustrates the “system that profits from poverty’s” brainwashing of our culture through decades of messaging on their behalf.

We know that for the majority of industries, paying much more to take care of their employees leads to robust outcomes for everyone in the short and long term.

I’ll get to that real-life story that illustrates many of these benefits soon.

Yes – I remember.

For now, we can also see that company profit margins in several sectors are extraordinarily generous for shareholders but not so much for workers. This is on the way to revolutionary change – all through enlightened self-interest.

That makes sense – and some companies are already there?

For sure.

The trailblazers are the 100,000-plus Benefit Corporations and their equivalents including Lemonade, a company that provides consumer-friendly and configurable insurance. Their CEO Daniel Schreiber was referring to this shift when, in a recent article, he talked about the new normal of doing business:

"Not only can you do well by doing good," he said, "But soon, there won't be any other way to do it."

Sounds hopeful.

Yes – even better – inevitable.

To complete this section, you believe that the “working poor” comprise 45% of the US population. Perhaps more.

Correct.

What’s the next group you’d like to highlight?

That’s homeowners – or actually the inverse – working people that, under the “system that profits from poverty”, cannot, today, and will not, in their lifetimes, qualify to purchase a home.

The numbers show that 65% of our working population falls into this group.

(Supporting Data: 75% of working Americans make less than $70,000 - ASEC Data 2016-2020, and multiple other sources. According to Federal Reserve Economic Data, the median price of houses sold in 2022 was $428,700. The average sales price in the same period is higher, at $507,800. There are just five states where a family with an income of $50k may still qualify to purchase a home, where affordable homes sell for $150,000 on average. These states include WV, AR, IO, AL, and MS.)

And owning a home is the foundation of multi-generational wealth.

Absolutely – and having some wealth to pass along to your children is a game changer for their opportunities – and their children’s.

I know there’s much more we could drill down into, but for now, what’s the takeaway?

From these statistics, we consider that a full 65% of working Americans are living unsustainable lives with no significant buffer between their current situation and being financially overwhelmed.

This 65% are the target beneficiaries for our Level UP Apps, and the majority of this group can create more sustainable lives by bypassing the barriers that keep them trapped in poverty, or on the brink.

And they also represent the “commodities” that the “system that profits from poverty” relies on to survive.

Absolutely – well summarized.