But at the same time, extreme poverty has increased.
What is the cause of the rise in deep and extreme poverty? The Brooking report notes that while there is some disagreement in the literature, the 1996 welfare reforms are often cited by researchers as a primary cause. The work requirements in the measures along with time limits on benefits induced many households to begin working and they ended up better off. But many households were unable or unwilling, and when the cash assistance dried up these households "became reliant on a hodgepodge of government support, such as SNAP, housing subsidies, Medicaid/CHIP" that left them worse off overall.
The point is that transfers to the poor have been decreasing over time.
I'm curious to see how or if Piketty addresses this in his prescription for inequality.The affect of transfers on his redistribution of wealth seems like an important issue to address.It is interesting that transfer payments caused poverty to increase, and also that government support left participants worse off than before.
ReplyDeleteI thought that this was really interesting and agree with Taylor in that I am curious to see how Piketty addresses this in his recommendations. I also think it is very interesting that one of the criticisms of Piketty is that he does not include transfers when discussing inequality, yet it seems that it would strengthen his argument, at least in regards to poverty.
ReplyDeleteI am also interested to see what Piketty's response is to the "issue" of not including transfers. Bronte made a great point; including transfers seems like it would strengthen Piketty's argument when it comes to poverty. So, I have to believe that Piketty has another reason why he has not included transfers in his analysis. I look forward to reading more about this topic and Piketty's response.
ReplyDeleteI have a similar view point as the above commentaries. I think if Piketty were to discuss the issue of taxes and transfers that that would further strengthen his argument. However, Piketty does state that he is solely looking at the increase in income and wealth prior to taxes and transfers. I think it is interesting that government intervention is increasing deep poverty levels but I am not completely surprised that it is doing so.
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