Monday, May 6, 2013

How Expensive is Poverty?

“Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” –James Baldwin
Wow! In all my studies of poverty, I have not come across such a powerful statement. Think about it…how expensive is poverty?

Let’s take a step back and define poverty. Poverty is the condition of not having enough income to meet basic needs for food, clothing, and shelter. 

Who suffers from poverty? 

“Women and girls make up 70% of the 1 billion people living on less than a dollar a day” -

The “working poor” or individuals stuck in poverty despite efforts to maintain employment -Nightingale & Fix

 Immigrant families - Nightingale & Fix

“1 in 5 American children—some 12 to 14 million” – Brooks-Gunn & Duncan

“Another one-fifth [of children] lived in families whose incomes were no more than twice the poverty threshold” - Brooks-Gunn & Duncan

For 4.8% of all children and 15% of children who ever became poor—childhood poverty lasted 10 years or more. 

Now back to that initial question.  
How expensive is poverty?

As Brooks-Gunn and Duncan’s Table 1 notes, “physical health (low birth weight, growth stunting, and lead poisoning), cognitive ability (intelligence, verbal ability, and achievement test scores), school achievement (years of schooling, high school completion), emotional and behavioral outcomes, and teenage out-of-wedlock childbearing” is the price children in poverty pay.

For poor adults, the working poor, immigrant families, and adolescents the costs of poverty can be attributed to inadequate nutrition; homelessness or poor housing; lower quality neighborhoods; exposure to environmental toxins, family violence; crime; less access to friends, services, and jobs.

Women in poverty are more vulnerable to injury, death from violence, and have fewer opportunities for education and employment.

What is the expense of poverty for the Nation?

According to Holzer, Schanzenbach, Duncan, and Ludwig (2007) the expense of childhood poverty alone costs “about $500 billion per year, or the equivalent of nearly 4% of America’s Gross Domestic Product (GDP).

More specifically:

  •     Reduces productivity and economic output by about 1.3% of GDP
  •     Raises the costs of crime by 1.3% of GDP
  •     Increases health expenditures and reduces the value of health by 1.2% of GDP.”

What can we do to help?

It essential for us as family educators and professionals to support those in poverty by assisting them in meeting basic needs, offering them emotional and family supports, providing them with the tools and skills needed to be successful at school and in the workplace.

Rank (2004) shares that when families in poverty have a strong support network to help them cope with poverty they often develop a perception that they are “okay” or “fine” and the environment is so familiar and supporting that they lose desire (possibly without knowledge) to find means for overcoming poverty. We need to confront these false perceptions and help break the viscous cycle of poverty for families because the expense is too high—these families deserve better. 


  • Brooks-Gunn, J. and Duncan, G. J. (1997). The effects of poverty on children. Future of Children, 7(2). 55-71.
  • Holzer, H., Schanzenbach, D. W., Duncan, G. J., and Ludwig, J. (2007). The economic costs of poverty: Subsequent effects of children growing up poor.
  • Nightingale, D. S. & Fix, M. (2004). Economic and labor market trends, Future of Children, 14, 48–59.
  • Rank, M. R. (2004). The disturbing paradox of poverty in American families: What we have learned over the past four decades. (Pp. 469-490). In Coleman, M. & Ganong, L. H. Eds. Handbook of Contemporary Family: Considering the Past, Contemplating the Future. Thousand Oaks, CA: Sage Publications.

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