The Poorest of the Poor Conference
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The U-M Institute for the Humanities and the Center for International and Comparative Studies (CICS) hosted a conference on February 5th and 6th 2007 on the continuing challenges of global poverty entitled The Poorest of the Poor. Participants included U-M and visiting experts from public policy, population studies, education, public health, business, and philosophy. Presentations and the ensuing discussions addressed challenges in measuring poverty, the role of private enterprise at the bottom of the pyramid, the health consequences of stigma, the credit and housing crises in the U.S., and a debate on accountability to the poor. The conference was underwritten by Richard A. and Susan Mayer, and was the latest offering from the Crossing the Diag: Humanities in Dialogue series, and was presented in conjunction with the LSA Citizenship Theme Year.
Health, Hope, and Despair
Public Health Panel
By Rachel Snow
Public health specialists from U-M and Columbia University highlighted how discrimination, stress, and stigma—as experiential dimensions of poverty—contribute to negative health outcomes. Mark Padilla (U-M Public Health), drawing on his recent study of AIDS risk in the Caribbean, spoke of the stigma and health consequences for men losing agricultural jobs, and moving into sex tourism. Arline Geronimus (U-M Public Health), described the growing evidence of somatic effects from discrimination and stress, and the negative health consequences for Black Americans. Cindy Colen (Columbia University) showed that improved income alone is inadequate to deflect the health effects of discrimination. While white women who move up the income ladder from birth to adulthood have infants with higher birth weights, black women with similar income gains do not experience these positive health effects.
Mark Padilla’s forthcoming book with University of Chicago Press is entitled, Caribbean Pleasure Industry: Tourism, Sexuality, and AIDS in the Dominican Republic.
Doing Business at the Base of the Pyramid: Poverty Alleviation and Business Innovation
By Ted London
The base of the pyramid (BoP) is a term typically considered to represent the more than four billion people in the world whose purchasing power parity is less than approximately $5 per day., Over the past several decades, billions of dollars have been spent in the name of poverty alleviation, and the results have been modest, at best. There is ongoing pressure for aid agencies to explore new avenues to poverty alleviation, and a BoP enterprise approach is gaining prominence. BoP enterprises are market-oriented ventures developed to help improve the living standard of the poor, shifting the development model from one of dependence to one of collaboration, and using innovative business models and enterprise to help alleviate poverty.
The William Davidson Institute will sponsor a conference, “Business with Four Billion: Creating Mutual Value at the Base of the Pyramid” on September 9–11, 2007. For more information, visit www.bop2007.org.
Panelists from the U-M Ross School of Business included Ted London, director of the Base of the Pyramid Initiative of the William Davidson Institute; Robert Kennedy, executive director of the William Davidson Institute; and Michael Gordon of the Ross School.
Counting the Poor
From the Panel: Measurement Techniques and Poverty
By Sanjay G. Reddy
Until around 1980 there had been no effort to produce internationally comparable poverty statistics or comprehensive regional and global poverty estimates. The first significant global poverty estimates were those published in 1990 in the World Bank’s World Development Report, which they have updated periodically. The method of global poverty estimation adopted by the Bank as well as by almost all of its recent critics may be described as a ‘money-metric’ approach. The phrase ‘money-metric’ is used here to signify that the international poverty line (IPL) is defined in relation to a money amount rather than an explicit conception of human well-being.
The money-metric approach to global poverty estimation is inherently flawed. It lacks both coherence and meaningfulness. The approach lacks coherence because a concept of ‘equivalent’ purchasing power (needed to translate the IPL both spatially and temporally) cannot be defined without a conception of the purpose to which that purchasing power is intended to be put.
There is an alternative to the money-metric approach, astounding in its simplicity, which can bring about global poverty estimates that are both coherent and meaningful. The alternative is a capability-based approach, which seeks to identify whether individuals possess sufficient income to achieve the income-dependent ‘elementary human capabilities’ (following the concept introduced by Amartya Sen).
The specification of the elementary capabilities (for example, the ability to be adequately nourished) that must be possessed by an individual in order that he or she be deemed ‘non-poor’ should be undertaken at a global level, through a transparent and broadly consultative process. The manner in which this conception should be translated into detailed poverty lines in each country (for example, through requiring that poverty line incomes suffice to attain a certain level of calories and nutrients deemed adequate for individuals) might also be specified to a degree at the global level. This approach offers a potential foundation for a ‘people-centered’ alternative to the current ‘money-metric’ approach to global poverty assessment.
Sanjay Reddy is assistant professor of economics at Barnard College, and assistant professor in the School of International and Public Affairs at Columbia University where he teaches courses on world poverty and on development economics.
Excerpted from the article, “Counting the Poor: The Truth about World Poverty Statistics,” by Sanjay Reddy, in Socialist Register, 2006, pages 169−178.
America’s Persisting Poverty Problem
From the Panel: Poverty in the United States: Up and Down the Class Ladder
By Sheldon Danziger
More than 40 years ago, the “paradox of poverty amidst plenty” troubled President Kennedy and led him to instruct his Council of Economic Advisers to plan antipoverty initiatives that became the foundation for the War on Poverty, declared by President Johnson in 1964. Poverty fell rapidly in the decade following the War on Poverty, as the economy boomed and government adopted new social programs (e.g., Head Start, Food Stamps, Medicare) and expanded benefits in existing programs (e.g., Social Security, Aid to Families with Dependent Children).
Since the early 1970s, however, poverty has fallen little, primarily because of large economic forces like globalization, technological changes, and the decline in unionized manufacturing jobs. For three decades, inflation-adjusted wages have stagnated for the median full-time worker, and wages and employment prospects have deteriorated for less-educated workers. Between 1973 and 2003, for example, (see chart) the annual earnings of the bottom fifth of male workers fell from about $16,000 to about $12,000, the annual earnings of the middle fifth of male workers declined somewhat, while the earnings of the top fifth increased substantially. Poverty persists, not because government does too much to help the poor, but because the economy has failed to deliver the benefits of prosperity widely.
The U.S. is unique among industrialized nations in tolerating high poverty rates. These high rates will not be substantially reduced unless government does more to help low-income workers and those willing to work but unable to find jobs. There are many feasible anti-poverty policies working elsewhere. For example, the Blair government launched a war against child poverty in the U.K. during the late 1990s and child poverty decreased dramatically. Also, with stronger antipoverty policies, Canada has lower poverty rates than the U.S. Hurricane Katrina revealed the lack of compassion for the poor in the U.S. Too many policymakers and much of the American public continue to believe that government policies cannot resolve the problem of poverty in the U.S., leaving the burden of poverty on the poor themselves.
Sheldon Danziger is Henry J. Meyer Distinguished University Professor of Public Policy and co-director of the National Poverty Center at the U-M Gerald R. Ford School of Public Policy.
The Hidden Poor: Middle-Class Bankruptcy in the United States
From the Panel: Poverty in the United States: Up and Down the Class Ladder
By Teresa Sullivan
Bankruptcy has not always been thought of in conjunction with poverty because the poorest of the poor are not thought of as credit-worthy. Even the poorest of the poor may have substantial debt, however, and many middle-class Americans now face income interruptions that make paying even routine obligations difficult. Using data from the 1981, 1991, and 2001 waves of the Consumer Bankruptcy Study, this paper compared the changes in the income, assets, and debts of Americans who have filed for bankruptcy. The data show that, despite the rapid increase in the numbers of bankruptcies, the economic position of the people filing for bankruptcy has deteriorated. The proportion of debtors whose incomes classifies them as “in poverty” has increased. The implication of these data is that even people who think of themselves as middle class may be more economically vulnerable than the public conversation seems to anticipate.
Teresa Sullivan is provost and executive vice president for academic affairs and professor of sociology at U-M.
The Place of the Poor in the Theory of Justice
By Daniel Herwitz
A number of panels in The Poorest of the Poor conference were about issues of measurement, health, and economic strategy. These panels invited Socratic conversation, but it has also been the purview of the humanities to propose and defend ideal concepts of justice, and with them concepts of human rights and human obligation. In the light of a recent turn in the theory of justice away from issues of class and the distribution of goods to greater emphasis on recognition, identity, and group rights, it seemed critical to bring philosophy to this conference. Questions of law in relationship to impoverishment, of human obligation, and also of the final utility of wealth in relation to indices of happiness were discussed by U-M’s own, significant philosophers, including Stephen Darwall (John Dewey Collegiate Professor, Department of Philosophy), who discussed “Accountability to the Poor;” Elizabeth Anderson (John Rawls Collegiate Professor and Thurnau Professor, Department of Philosophy and Women’s Studies), who presented “Justice for the Poorest of the Poor: A Problem of Accountability,” and Peter Railton (John Stephenson Perrin Professor and Thurnau Professor of Philosophy), who concluded with “Poverty Amid Affluence: How to Worry, and How Not to Worry, about Well-being.”
Daniel Herwitz is director of the U-M Institute for the Humanities and Mary Fair Croushore Professor of Humanities.