THIS IS HOW we deal with poverty today: there is a boy—let’s call him Chris—from a poor family in East London. Like so many others in similar circumstances—in London, in America, in rich countries everywhere—Chris has all sorts of problems: mental health issues, acting out in school, getting in trouble with the police. Chris also has many well-meaning people from government trying to help him: social workers, probation officers, counselors. One day the adults responsible for all the different aspects of his life planned a conference to discuss his situation. There were going to be eleven professionals present. Chris’s mother went to see David Robinson, founder of Community Links, a remarkable organization that for over twenty-five years has been fighting poverty in some of Britain’s poorest neighborhoods. She asked him to come too. “Why?” he asked. There were, after all, already going to be nearly a dozen people there. She pleaded, “I need someone on my side.”
How heartbreaking. She saw the social workers, the court officers—all of them—as her son’s enemies. As David Robinson says, the well-meaning but ineffectual government assistance was so overwhelming that the mother practically needed an assistant to keep up.1 They were all working on her son’s problems piecemeal, with a different caseworker (or more) for each of his problems, pursuing the priorities and processes set by their part of the bureaucracy.
Yes, this is how we deal with poverty today—in a way that is inhuman. Chris and his mother’s personal experience illustrate a broader disease. Today’s vast, complex welfare system is clearly not working: How have we had a ‘war on poverty’ since 1964 and still have so many poor people? With generation after generation in poverty, we’re obviously not dealing with its root causes. But the truly remarkable thing, given how much money we spend on it, is that we’re not even dealing properly with its symptoms.
THE SYMPTOMS OF POVERTY
Every year HSBC, the international bank based in London, recently under fire for its sterling work helping the super-rich—including its own senior executives—avoid taxes, holds its annual general meeting where shareholders gather to discuss financial results, hear executives speak, and make decisions about the company’s governance. These meetings tend to be pretty boring, almost entirely predictable. But in 2003 the meeting was quite different. Sir John Bond, the company’s chairman, had just finished his address. There was a celebratory mood in the air; much of the assembly had centered around HSBC’s planned acquisition of Household International, an American loan company, and William Aldinger, its head, had been persuaded to join HSBC’s management. As is customary, Sir John opened the floor to questions.
Up stood perhaps the last person he would have expected to see. The proud owner of just enough donated shares to earn him a spot at the meeting, the man standing to ask Sir John a question was the man who cleaned his office every night. He said,
Sir John Bond, distinguished ladies and gentlemen, my name is Abdul Durrant, I work in the same office as the board members, the only difference is I don’t operate computers. My function is to operate a mop and bucket. Yes, I am one of the invisible night cleaners. You may be wondering what the hell is a night cleaner doing here: we’re supposed to be invisible. Well, I am here on behalf of all the contract staff at HSBC and the families of East London. We receive £5 per hour—a whole £5 per hour!2—no pension, and a measly sick-pay scheme. In our struggles our children go to school without adequate lunch. We are unable to provide necessary books for their education. School outings in particular they miss out on. In the end, many of our children prefer a life of crime to being a cleaner. . . . Sir John, we have met before. Will you consider your previous decision not to review the cleaning contract with OCS, so that I and my colleagues receive a living wage?3
THE WORKING POOR
Abdul’s story touched everyone in the room, particularly Sir John. It wasn’t just that the story was moving or that people were impressed by Abdul’s eloquence despite the fact that he was so completely out of place. His story was especially poignant because the board had just discussed the pay package for Mr. Aldinger, who was now joining HSBC’s management. His salary? £23 million (in excess of $35 million at the time) over the next three years. It was a contrast too stark for even the most avowed capitalists in the room. Abdul had made his point.
His situation was not—is not—unusual. He is among the 1.4 million or so British workers—about one in twenty—who earn the legal minimum wage.4 In America the Pew Research Center estimates that there are some 20.6 million “near-minimum-wage” earners, constituting 30 percent of all hourly, non-self-employed workers eighteen and older.5 These are the working poor. And for them life is terrible. Their struggles are not just about money but also dignity. Financial poverty leads to deprivations and challenges that are inconceivable for the rest of us. According to behavioral economist Sendhil Mullainathan, “There’s money poverty, there’s time poverty, and there’s bandwidth poverty. . . . One of the things the poor lack most is bandwidth. The very struggle of making ends meet leaves them with less of this vital resource”—a resource essential to performing simple tasks and getting through life.6 The poor are worse parents, they forget to take medications, they make bad decisions. But it is not about lack of love or skills; it’s simply the inability to cope with so many things at once.7 The rich can buy bandwidth in ways the poor cannot—they hire housekeepers, gardeners, assistants, accountants, and nannies. They can go ‘away for the weekend’; they take vacations. They can afford to take their time when making financial decisions. They can buy a shorter commute by choosing to live near where they work.
When poor people are constantly worrying about money, they neglect other areas of their lives. Scarcity of money affects scarcity of time, which in turn affects scarcity of mental bandwidth. All of these things feed on themselves, leading to worse and worse decision making. And although most of us might take a break when life feels overwhelming, the poor cannot. “Poor people can’t say, ‘I’ll take a vacation from being poor,’” Mullainathan explains.8
Unsurprisingly given the psychological stress of poverty, “there’s a strong association between poverty and low mental health,” says Princeton psychologist Johannes Haushofer.9 This has broader health implications. When the poor neglect daily tasks, they also neglect to take care of themselves. “I estimate 12 million Americans living in poverty suffer from at least one neglected parasitic or tropical disease,” says Dr. Peter Hotez.10
We should remember that the working poor are not some ‘underclass,’ bent on cheating the system. Or even teenagers earning a little extra cash in summertime.11 In 2014 over 60 million Americans—including 15 million children—lived in low-wage families.12 They’re not poor for want of trying.13 Low pay is often bandied about in political debates as a talking point. But just think about it for a minute. Think about it on an individual, human level.
Imagine if it were you. Imagine you got up every day, worked to the point where you were so exhausted you couldn’t move, worked so hard you felt permanently, achingly guilty that you weren’t spending enough time with your children and were missing moments with them that would literally never come again; imagine you worked like that, but your wages were so low that you still didn’t have enough to live on. You’d then have a choice: you might take on an additional job, spend even less time at home, burden your body even more. Or you could take the physically easier but emotionally more difficult choice of giving up even more of your humanity: on top of all the other indignities you could go to the government, give up your independence, and ask for a welfare payment—a handout, even though you were working as hard as you possibly could. Imagine how that would make you feel. This is a scandal.
We ended slavery because it was inhuman and wrong. As we saw in Chapter 5, it is time to end animal cruelty, because it’s inhuman and wrong. And now I want to show you how we can end the moral scourge represented by the very notion of the ‘working poor.’ I’m not arguing this on the basis of ‘efficiency’ or ‘growth’ or any other financial or economic objective. I’m arguing this because I think it’s morally unacceptable that anyone who works should not be able to live off what they earn.
The policy intervention most obviously aimed at helping to end poverty pay is the government-established ‘minimum wage,’ based on the principle that no one should work without fair compensation. The idea got its start in 1896 when Australians, having just seen the abolition of slavery, resolved to treat all workers with dignity. They believed it was morally necessary to recognize workers as human beings, rather than costs of production, which is what many, as slaves, had literally been considered just a short time before. “It would demean us all,” argued Alfred Deakin in 1896, an Australian legislator and later prime minister, “if those who made our food and clothing or tended to our comforts and well-being were treated as inferior beings.”14 By 1907 Australia’s minimum wage had become a symbol of pride—and a beacon for reformers worldwide.
Britain owes the roots of its minimum wage to Sir Winston Churchill, a champion of free markets, who backed the country’s first minimum-wage legislation in 1909. Arguing for it in Parliament, Churchill put it as well as anyone: “It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions.”15
In America the first minimum wage came with the Fair Labor Standards Act of 1938. Enacted by President Franklin Roosevelt, it was part of a broader fight to improve working conditions in Depression-era America. As it is today, the minimum wage was a controversial issue and inspired court challenges and prolonged political fights before it was passed and signed.16 Since then, although a federal minimum wage has been the floor, different jurisdictions like states, counties, and municipalities have opted to raise it higher to account for local conditions and priorities.
The actual introduction of the minimum wage comprehensively defeated the arguments of those who had opposed it: it seemed to have no negative impact on employment or the economy more generally, and today at least the idea has bipartisan support.17 But $7.25 an hour isn’t enough. Some 21 million American workers make less than $10.10 an hour, the minimum wage President Obama declared as a national aim (about $21,000 a year).18 Some 42 percent of American workers make less than $15 an hour (just over $31,000 a year), the wage many worker advocates want the minimum wage raised to.19
Earning your own living is essential to human dignity, and psychologists have shown that autonomy and independence are vital for well-being. Yet millions of people work full time while being paid by their employers at a level they can’t live on. Although it’s impossible to know exactly how many work full time or part time, some 27 million families and individuals qualified for the Earned Income Tax Credit (just one of many forms of public assistance designed to benefit low pay workers) in 2013, including 11 million children. Of those, the EITC lifted 6.2 million people—3.2 million children—out of poverty.20 These families worked—some perhaps even made above minimum wage—but they were forced to rely on welfare handouts from the government. How can the minimum wage be an antidote to poverty when it doesn’t provide enough to live on?
None of us should feel comfortable living in such a society. That many should have to work multiple jobs—tough, physical, and sometimes demeaning jobs—in order to make ends meet is surely unacceptable. Of course, there’s a distinction between part time and full time: if you work twenty hours a week, you shouldn’t expect to make the same as someone who works forty hours. But if you work full time, you should be paid enough to live on. End of story. There will, of course, always be people on benefits out of necessity, like the elderly or disabled, but society, quite rightly, does not expect them to work for a living. Everyone else should. There should be no such thing as the working poor.
A ‘LIVING WAGE’ is the amount that’s enough to live on if you work full time, based on the costs of food, housing, energy, transport, basic leisure, and so on. There are various definitions, and the rate is different in different places (the MIT Living Wage Calculator breaks down the living wage by county and by household type).21 In Australia—way back in 1907—the minimum wage was a living wage: that’s how it was defined.22 It’s what Churchill meant too when he equated a minimum wage with a living wage. But today the minimum wage is obviously not enough to live on. If it were, we wouldn’t need to top it off with welfare payments. Wouldn’t it be better—more human—if we dealt with this by paying a living wage in the first place? After many years of campaigns and advocacy by a wide range of individuals and organizations (including by me in the UK version of this book), Conservative chancellor of the Exchequer George Osborne introduced Britain’s first National Living Wage in his 2015 budget. It’s not perfect: it will take until 2020 to come fully into effect and ought to be higher to take into account proposed cuts in the welfare budget, but it does make Britain the only country in the world to uphold the value of work by mandating a living wage.
In the United States the issue is much more contentious. There is no political consensus around raising the minimum wage, let alone raising it to the level of a living wage. But what is impossible to ignore, what is in fact a moral failure, is that so many millions of ‘hard-working Americans,’ so beloved of the politicians’ slogans, are forced to live in the most inhuman way, for no real reason, trapped there by political inertia and pointless bureaucracy.
DO THE RIGHT THING—IT PAYS
There is an assumption that requiring employers to pay a living wage will cost jobs on a massive scale. As the original opponents of a minimum wage argued, higher wages mean higher costs for employers. But we don’t need to speculate about this. We can look at some of the companies that have implemented a living wage. Like Costco.
Costco isn’t just big in the United States; it’s the second-largest retailer in the world.23 Its business model is simple: huge warehouses, cheap products, stacked high. And yet Costco pays its workers way over the living wage. Repeat: way over the living wage. In the United States employees earn, on average, $20.89 per hour, not including overtime. And 88 percent of employees have employer-sponsored health insurance.24 For Costco a living wage is good business. Writing to Congress in support of a higher minimum wage, CEO Craig Jelinek wrote, “We know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty.” Consider that 70 percent of Costco’s warehouse managers got their start on the floor, stacking boxes and collecting carts. Turnover is 5 percent for those who have been there over a year. It’s easy to understand where the loyalty comes from: management has increased wages every three years. During the 2009 downturn, when retail shops were laying employees off and cutting pay and benefits, founder and then CEO Jim Sinegal decided to do exactly the opposite: he gave workers a raise of $1.50 an hour. According to CFO Richard Galanti, “The first thing out of Jim’s mouth was, ‘This economy is bad. We should be figuring out how to give them more, not less.’”
How much do these ‘generous’ policies cost? Admittedly, lower profits in the short term. But in the long term this ethos has paid off. Last year Costco made over $2 billion in profits.25 Its share price has more than doubled since its prerecession peak. And it’s not as if Costco is passing on these costs to customers. It has a general policy to mark items up at no more than 15 percent. For Costco, paying employees well makes financial sense. Of course, every company is different. But Costco demonstrates a fundamental principle: a living wage is not necessarily bad for business or jobs, even in a sector with as slim margins as grocery and discount retailing.
THINK ABOUT THE money a company makes as a surplus: it can choose to distribute that in various ways. Simplistically a company can choose to invest its profits in new technology or innovative processes, it can give that money to its customers in the form of lower prices or higher value products for the same prices, it can give the money to its shareholders, or it can give the money to its workers in the form of higher pay and benefits. Obviously most well-run companies do a combination of these things. But what is the balance? At Costco it’s tilted more toward workers. But elsewhere across the economy, instead of sharing more of their surplus with workers, companies have been choosing to give it to shareholders. Could that be because senior executives’ pay and compensation are now so closely tied to their company’s short-term share price? Whatever the motivation, the end result is that over the last ten years companies on the S&P 500 have spent almost 90 percent of their profits on shareholder dividends and stock buybacks.26
The most frustrating part is that, as Costco has found, treating your workers fairly and paying them a living wage can actually help your business and, in the long term, boost share price. It is a lazy assumption, contradicted by the evidence, that putting shareholders first is the best way to succeed. It’s especially ironic given the example set by one of America’s great heroes of capitalism, Henry Ford. Ford doubled the daily wages of his employees amidst a deep recession in 1914, declaring, “If an employer does not share prosperity with those who make him prosperous, then pretty soon there will be no prosperity to share. That is why we think it good business always to raise wages and never to lower them. We like to have plenty of customers.”27 He’s not alone. Jack Welch, the former chief of General Electric, recently said that maximizing shareholder value “is the dumbest idea in the world.”28 Paul Polman, CEO of Unilever, has called it a “cult.”29
Better-paid employees work harder, are more open to changing job roles to suit their company’s needs, and call in sick far less—one business that adopted the living wage reported a drop in absenteeism by as much as 25 percent.30 Living wage employers see higher morale (among all employees, not just the low-paid ones), an improved reputation, and lower staff turnover.31
One objection you hear to the idea of a universal living wage is that although it may be possible for large or even medium-sized businesses, it would be devastating for small businesses. And that matters a lot when so many of the working poor are in the retail and hospitality sectors, where small firms dominate. It turns out that here, too, there’s no iron rule—it’s a question of choice. If you build higher wages into your business plan, you can make it work: a restaurant in Philadelphia, William Street Common, attracted national attention when it banned tipping in favor of a flat-rate 20 percent service charge and chose to pay all its employees at least $15 an hour. The trend is spreading: now Joe’s Crab Shack, a popular seafood chain, is testing the model out in 18 of its 130 restaurants across the country.32
Still, no matter how much evidence you provide or how many case studies you cite, people will ask, “How can we afford it?” If we really want to make this happen, we need to make it easier for businesses. We need a ‘business-friendly living wage.’ Here’s how it can be done.
The debate over low pay and the working poor captures only half the argument. It’s not just about wages; it’s also about taxes—business taxes. Think about what an inadequate minimum wage actually is. It allows a company to pay workers less than they need to live because the government will make up the difference through welfare. A minimum wage that’s too low for people to live on is a subsidy to business. In policy circles the fashionable vehicle for these subsidies is the concept of the ‘tax credit’ paid to low-wage workers; here in America, the Earned Income Tax Credit (EITC) is the leading example. The EITC gives unemployed people incentives to get into work, even if it’s low paid. It has partly achieved that aim and done some good in lifting people from poverty,33 but research shows that although wage subsidies like this increase employment, they also depress wages by allowing employers to pay less: one study found that for every dollar spent on the EITC, only 28 cents were a net benefit to the recipient; 72 cents were captured by the employer in the form of lower wages paid.34
In the end it’s still welfare, with the government topping up low pay—a subsidy to the employer and an insult to the worker. It’s especially shocking that free marketers and conservatives seem to support these subsidies to businesses, presumably because they are branded ‘tax credits.’ What a triumph of spin. The really mad part is that at the same time as receiving wage subsidies from the government, companies are paying corporate and payroll taxes to the government. This is an insane merry-go-round of money: a company pays low wages to its workers; it pays tax to the government; the government then takes the tax and gives it back to the workers.
Walmart, a leading low-wage employer, has figured out how to milk the taxpayer even more.35 It benefits from what I’ll call ‘Walmart Welfare.’ A significant percentage of Walmart employees—as many as 15 percent in one state—don’t make enough to afford their own groceries.36 They are forced to rely on food stamps to feed their families, which they use to buy food at Walmart at the end of their shift. America’s taxpayers are helping to cut Walmart’s labor costs while directly contributing to its sales. Walmart, the country’s largest private employer and chief recipient of food stamp monies, is also likely the country’s largest employer with employees on food stamps.37 In 2013 the store made an estimated $13.2 billion from taxpayer-funded food stamp revenue—18 percent of all US food stamp receipts and 4 percent of its annual sales.38 For Walmart it’s a virtuous cycle; for its employees, it’s just vicious. A report by Americans for Tax Fairness calculated that Walmart employees require $6 billion in welfare annually.39
Economically, low pay is an unfair subsidy to big business. Politically it contributes to the need for a vast bureaucracy to slush money around the system. Socially it perpetuates cycles of welfare and a loss of human independence and dignity. Morally it dishonors the work of millions of people on whose labor society depends.
Here’s a simple way to end it: let’s introduce a federal living wage in America and cut employers’ taxes by the same amount they’re paying in higher wages. Of course, the exact level would have to vary from place to place. But a federal mandate would require local authorities to set the minimum wage in their area at a level that every full-time worker could live on, without government or other handouts. The crucial element of this change, however, would be the compensating reduction in business taxes—aiming for a revenue-neutral impact on employers. The business tax cut would pay for itself in two ways: less spending on public assistance programs and higher income tax receipts from workers’ raised salaries.40
THE CAUSES OF POVERTY
A business-friendly federal living wage would, by definition, end in-work poverty. But that isn’t nearly enough; we need to tackle the causes of poverty too. In far too many cases poverty is generational, handed down like some perverse inheritance within a family. To end poverty we must break that cycle. Although economic policies can help fight the symptoms of poverty, it is social policy that will help us fight the causes. That has to start with children—like Sasha.
Sasha lives in the Bayview, one of San Francisco’s poorest communities. Violence is rampant not only in her neighborhood (she knew three people who were murdered) but also in her home: when her father drinks, he’s physically abusive. He’s in prison, but although he’s not there to abuse her, his absence causes other problems. Sasha’s mother had to work evenings to make ends meet, but because she couldn’t find a babysitter for Sasha, she lost her job and, with it, the income to pay the rent. Now they live in subsidized housing, but not before a bout of homelessness. Meanwhile Sasha—ashamed of herself and her family—is almost always tense with her mother, who is depressed but, because she is uninsured, is unable to get effective mental health treatment. Sasha has a hard time focusing in class, so she misbehaves: she is jumpy and often overreacts to provocation. She was recently suspended for kicking another girl. Her action wasn’t justified, but she thought she was being threatened. After a life in her shoes, it was the only way she really knew how to respond. Sasha is eleven years old.41
She is also a patient of Dr. Nadine Burke Harris, a local pediatrician. Her medical training took her to some of America’s best universities: Stanford, Harvard, Berkeley. Yet when she chose where to locate her medical practice, she came to one of the country’s most difficult neighborhoods.42 Soon after setting up her pediatric clinic in the Bayview, Burke Harris grew uneasy. She knew, as we all instinctively do, that being poor is not good for anyone’s health. It’s difficult to eat right; sleep is often disrupted; getting exercise is hard. But even these basic realities couldn’t explain the common health problems she was seeing across her patients—conditions like asthma, learning disabilities, behavioral issues—far in excess of what was normal for children at their age. She began to wonder whether these conditions were somehow connected to the children’s challenging circumstances. What if her patients’ health problems were actually symptoms of something deeper, something more structural in their lives?
TOXIC STRESS
In 1985 Dr. Vincent Felitti was running an obesity clinic in San Diego, California. And he was stumped. Around half the patients who were participating in the program, designed for those who were massively overweight, were dropping out, even when they were losing weight. He wanted to know why. He brought a couple of hundred of them into his clinic and asked them a standard set of questions, like, “How much did you weigh when you started first grade?” “How much did you weigh when you started high school?” “How old were you when you married?” For a while nothing unusual surfaced. Then he made a mistake.
“I misspoke,” he remembers. “Instead of asking, ‘How old were you when you were first sexually active?’ I asked: ‘How much did you weigh when you were first sexually active?’ The patient, a woman, answered: ‘Forty pounds.’” Not quite understanding her, he asked the same question again. Her first sexual experience, it turned out, was with her father when she was four years old. Felitti was dumbfounded. “I remembered thinking: ‘This is only the second incest case I’ve had in 23 years of practice.’” So he continued the line of questioning with others. “About 10 days later, I ran into the same thing. It was very disturbing. Every other person was providing information about childhood sexual abuse. I thought: ‘This can’t be true. Someone would have told me in medical school.’”
Still not convinced he wasn’t somehow biasing his patients, he asked other doctors at the clinic to ask the same thing. Sure enough, of the 286 people interviewed, most of them had been the victims of sexual abuse. For some, eating was a coping mechanism, a ‘drug’ that made them feel better, soothing depression, anger, fear. For others, being overweight provided a form of protection: in the case of one man, it had prevented other kids from beating him up in the school yard. For one woman, being fat made her an undesirable rape victim (when she was seven, her father told her the only reason he wasn’t abusing her sister was that she was fat).
Despite many doctors’ skepticism, Felitti found allies in Dr. David Williamson and Dr. Robert Anda, epidemiologists at the US Centers for Disease Control and Prevention. After years researching childhood trauma, determining which questions they would ask, and setting up the questionnaires, they began a trial in 1995. By 1997 they had asked over seventeen thousand patients passing through a San Diego clinic about ten types of childhood trauma, including sexual, verbal, and physical abuse, family dysfunction, and emotional and physical neglect. They then were able to draw correlations between childhood circumstances and health conditions.43
The home environment, they discovered, played a crucial role in the health of the people they interviewed, particularly the children. Of the ten specific adverse childhood experiences (ACEs, as they dubbed them) they asked about, some two-thirds of the study participants had had at least one.44 The doctors created a simple scoring system: one point for the presence of each type of ACE in a child’s life. For example, if your parents had divorced during your childhood, you had a score of 1. If you were abused and had divorced parents, you had a score of 2. And so on. As traumatic experiences added up—as the ACE score increased—the worse the health outcomes. In the 1998 article where they published their results, they wrote that compared to someone with no ACEs, someone with an ACE score of 4 was 3.9 times more likely to have emphysema or chronic bronchitis, 2.4 times more likely to have hepatitis or jaundice, and 1.6 times likelier to have had skeletal fractures. They also found a significant relationship between ACE scores and risk factors for heart disease, liver disease, and cancer. Those with an ACE score of 4 or higher were 2.2 times likelier to smoke, 1.6 times likelier to be obese, 4.6 times likelier to have been depressed in the past year, and over 12.2 times likelier to have ever attempted suicide.45
NADINE BURKE HARRIS’S own experiences in her Bayview clinic—and her hunch that something deeper was going on with her patients than just the symptoms of poverty—led her to Felitti and Anda’s research. She realized she was witnessing ACEs taking place . . . in real time. Her patients’ problems had little to do with health per se; they had everything to do with their family environments. Sasha’s domestic problems—the alcoholic father who physically abused her and her mother, the violence and murder all around her—these were not just unfortunate coincidences alongside her health problems. They were their cause. And the connection? A phenomenon called toxic stress.
Not all stress is bad. Positive stress is a mild response to a challenge or exciting event, like an exam, a big sports game, or a public performance. Although it might not feel great in the short term, experiencing positive stress as a child can help build strength and grit. Tolerable stress is severe and negative but is usually in response to a one-off event, like a death in the family. If managed with the help of a caring adult, a child can overcome tolerable stress. But toxic stress is different. It is toxic—literally poison. Medically defined as the “extreme, frequent or extended activation of [the body’s] stress response without the buffering presence of a supportive adult,”46 toxic stress is exactly what you would imagine is created by those ACEs. In the absence of enough compensating warmth, love, and affection from at least one parent or primary caregiver, it creates physical, molecular changes in the brain.
When the body senses stress or anxiety, it activates defenses that cause chemical and physical reactions. As it is temporary, positive or tolerable stress doesn’t pose a problem. But repeated stress disables the ability to respond correctly. “If you are growing up in an environment where there are constant threats, the brain adapts in a way that reacts to those threats,” explains Burke Harris. Children exhibit relatively minor symptoms like the inability to sit still. But as adults they become unable to cope and wind up behaving destructively. “When we were evolving, the threats were saber-toothed tigers and lions and bears, and this made a ton of sense,” says Burke Harris. “Whatever it is, you’d have to jump on it and beat the crap out of it in order to survive. Nowadays when you do that, you end up incarcerated or, if you’re trying to sit still in a classroom and the kid next to you hits you or pokes you, then you end up getting kicked out of class. What we see in children who are experiencing toxic stress is tremendous difficulty in self-regulation.”47
Children with toxic stress have higher levels of the long-term stress hormone, cortisol, in their brains. This is particularly problematic for younger children because of neuroplasticity, the way our brains physically change and evolve. Neuroplasticity isn’t unique to stressed children—everyone’s brain architecture and chemistry are affected by experiences. But children younger than five years old are especially vulnerable to environmental stressors. This is because there are two types of neuroplasticity. One is synaptic plasticity (the strength of connections between brain cells), which occurs throughout our lifetimes. The other is cellular plasticity (the number of those connections), which occurs primarily in the first five years of a child’s life. The elevated levels of cortisol from toxic stress disrupt that development and can cause long-term damage. For children, failure to inhibit the stress hormones in their brain inhibits their own maturation. This permanent, toxic stress leads not just to bad health outcomes for children but bad life outcomes that are at the heart of the fight against poverty.
THE COSTS OF POVERTY
Welfare in America costs $212 billion per year.48 Alcohol addiction: $223.5 billion.49 Illicit drugs: $193 billion.50 Child poverty: $500 billion.51 Crime: $194 billion.52 Each cohort of high school dropouts costs the economy around $150 billion.53 These social problems, almost by definition, are overwhelmingly concentrated among the poor. As the saying goes, some of this “will always be with us.” But so many of these costs would be reducible, avoidable, if we took more interest in their deep, structural causes rather than just (expensively) addressing the symptoms. This would mean addressing poverty on a more human level, concentrating on the individual person from their very earliest days and how they end up part of a ‘social problem.’ All those big numbers—the costs of welfare, crime, addiction—are composed of individual people with their own stories and circumstances. And one thing we can now say with confidence is that for a vast majority of them, adverse childhood experiences—and the toxic stress that goes with them—are part of their story and circumstances.
We typically attempt to intervene after kids commit crime or drop out of school, but we fail to prevent these problems in the first place. By the time the ‘system’ even realizes someone like Sasha exists, she is already deeply in crisis and needs lots of costly help to get out. But if we look at where ACEs mostly arise, it’s at home, in the family context. That’s not surprising: the family is the core unit of life. Families care for each other, teach each other, play together, eat together, love together. Most importantly families raise children. Generally, happy and successful children tend to come from stable, loving families; troubled children tend to come from troubled homes.
There are caveats, of course. Some people who are extremely successful—and sometimes even happy—grew up in homes that were far from being stable and loving. There’s a theory that overcoming early adversity was for many of the world’s most successful people a direct spur to their accomplishments. But what we don’t know—and will never know—is: What if the adversity wasn’t a spur but a harness, that they achieved amazing things despite the difficulties they experienced at an early age? Imagine how much more might have been possible. And remember, it’s not just about avoiding social costs; it’s about the benefits too, the benefits to all of us if children develop in the right way from an early age.
FAMILY FIRST
Here’s the big idea. The easiest, most effective, most cost-effective way to end poverty, reduce inequality, promote better health and well-being, cut crime and antisocial behavior, spur entrepreneurship and innovation; the best way to achieve the outcomes we all want for our society and economy; the single-most valuable thing we can do in government and outside of it to make the world a better place for all . . . is to invest in the infrastructure that matters most: the human infrastructure of the family.
Most families work well. In their own ways they do a good job of preparing their children to succeed as adults. All we need to do is help the minority of families where that’s not happening to get their act together—to become at least as good as average. That single change would do more to end poverty and improve our society and economy than anything else. And it is possible. We have done much harder things than this. We have mobilized resources on a much bigger scale, more quickly, than would be needed for this. We have invaded countries. We have put a man on the moon. Now we can end poverty—the human way.
We are getting this so wrong at the moment. We leave it far too late to pay attention to the things that matter. A child’s path is a little like steering a large ship. Shifting 1 degree at the start is much easier than making a 90-degree course correction later on, hundreds of miles away from harbor. For children, acting early to make sure they’re on track means fewer kids will get into trouble as teenagers or young adults. It’s a lot harder to help a delinquent youth or a dropout than it is to help a toddler. Social problems begin early and then multiply. Stress, as other recent studies have found, is contagious, adding to cycles of toxic stress in struggling families.54 And one of the biggest sources of stress is family structure itself, specifically in the form of children raised without their father, or a consistent father figure, in the home. Men who don’t stay around to raise their children are one of the primary causes of social breakdown. Families break at different points, but many do so in part because of the stress of having children. And the experience of family breakdown, combined with the circumstances of poverty, leaves an often-indelible imprint on the children affected.
Recall David Robinson of Community Links in East London and the boy with eleven caseworkers. That story doesn’t just make the case for streamlining social services for families; it also points to a broader issue. Even when government tries to help people living in poverty, it often does so haphazardly. The problems of poverty don’t neatly stack into whatever program we’ve created to tackle them.
We’ve seen throughout this book that in many policy areas we try to compensate for their complexity by putting them into neat boxes—‘silos’ in policy-speak—thinking that by simplifying or neatly packaging and assigning them to a particular agency, law, or program, everything will be made easier. This is inherently not human; the human world is a messy place, and most things are interconnected. Many chapters in this book overlap with each other, and that’s not a coincidence. After all, you can’t solve unemployment without thinking about education; you can’t think about health without thinking about food. And no social issue can be solved without thinking about our most fundamental social unit, the family.
Instead of helping the East London boy piecemeal—in school, through his probation officer, or in his after-school program—those efforts should have been put into a broader context: What is his family situation? What is his home physically like? What were his ACEs? Is he suffering from toxic stress? To turn around the lives of troubled children and help them escape poverty for good, we don’t just need to streamline the help we give them; we need to provide the right infrastructure for them to succeed. We need to help their entire family.
If we fail to take a broad view of a family and its problems, solutions will only be patches that treat symptoms rather than the underlying cause. Poverty stems from multiple things going wrong: perhaps the stress of a difficult relationship or a breakup leads to substance abuse and the loss of a job; perhaps someone who has received government assistance and training can’t get a job because she can’t afford childcare or transport to work. These problems are all related, and those who suffer them are often least equipped to handle them. If you have a stable income or a good social-support network, a breakup or substance abuse can be overcome. But if several of these things happen at once, that missing support network exacerbates the severity of each problem. For children born into families living under these circumstances, they’re swimming against the tide from before they’re even born.
All this is made much worse, of course, by the scale and distance of government. The parts of government that typically provide services for families are responsible for many hundreds of thousands of people. It’s no surprise that these large bureaucracies end up putting their own systems and procedures first—often in the name of ‘efficiency’—and the individual circumstances of real people a distant second.
That’s why we need organizations like Single Stop USA. With over one hundred locations, it has helped over 1 million households since 2007 gain access to benefits and services. Staff educate clients about programs that might be helpful for them and help determine their eligibility. They also help them navigate the bureaucracy that life throws at them. Founder Michael Weinstein recalls a client who was having trouble with his landlord. Weinstein helped the client find a legal advocate but also helped him set up a bank account to handle financial transactions like rent. “The landlord was paid. The problem disappeared. Single Stop is a problem-solving device.”55
Promise Neighborhoods is another such program present in dozens of communities across the country. Based on Harlem Children’s Zone (HCZ), a now deservedly well-known program in New York that aims to provide cradle-to-college services in a comprehensive fashion, Promise aims to bridge service providers. Rohan and I visited HCZ and met its inspiring, charismatic leader, Geoffrey Canada, while we were researching policy ideas in 2010. The HCZ model focuses programs not only on children—its centerpiece is a series of charter schools—but also on the environment around them. Among the many programs are parenting classes, coaches for teachers, healthy eating initiatives, tax preparation clinics, test-prep classes, and more. HCZ recognizes the importance of early childhood, so it targets expectant parents and works with them and their children until college. Its Baby College gives parents tools and advice, whereas its Three-Year Journey program works as a weekly support network to which parents bring their children. As the parents meet and take part in workshops, their children play together in a structured environment.
As children grow up, they and their families get age-appropriate support, from a recreation center to an employment and technology center, where, in addition to getting access to technology, youths can get tutoring and academic counseling. Tying all these programs together is communication: rather than have dozens of agencies independently handling these tasks, a child or family works within a single network.56 The result is an elimination of red tape as well as continuity and stability.
The goal of Promise Neighborhoods is to spread the HCZ model across the United States with grants from the Obama administration to existing local organizations in poor communities. The Promise Neighborhood Institute (PNI), meanwhile, provides training, tools for continuous feedback, and lessons from best practices across the country. In a way PNI exemplifies the localism I discussed in Chapter 2: local service delivery that helps communities solve their own problems, buttressed by a central infrastructure that provides support that can only be organized at scale.57 These efforts show promise, but they are only in the nascent stages of development. We need to encourage these essential experiments.
But in the end, however it’s organized or delivered, it comes down to the individual, human level: one person working with one family to help its members get their lives back on track. These services flourish on the basis of simplicity: having one counselor, adviser, or advocate is better than ten. That simple idea was the starting point for one program I’m especially proud of having helped start in government in the UK.
WE KNEW INTUITIVELY—AND then once we took office had the detailed research to back it up—that a relatively small group of completely broken families suffers and creates the most problems in British society. These families, around 120,000 of them, cost taxpayers some £9 billion ($14 billion) annually (£75,000, or $117,000, per family on average).58 Their interconnected problems—unemployment, debt, substance abuse, violence, educational failure—read like a template for the adverse childhood experiences Nadine Burke Harris sees in San Francisco. For decades government at all levels had failed to get a grip on these deep problems, and I was determined that we would be different. I also knew that a traditional bureaucratic approach would never work. We needed something more human, and I knew exactly the person for the job.
If you want to meet the personification of a ‘human’ civil servant, meet Louise Casey. A former deputy director of the British homeless charity Shelter, she came to prominence when Tony Blair appointed her head of the Rough Sleepers Unit in 1999 to solve the decades-old problem of homeless people sleeping out on the streets of London. She succeeded—and then went on to take a number of high-profile positions in government. Her Wikipedia entry describes her as “known for being outspoken.” You can say that again.
In 2011 we asked Louise to lead a new Troubled Families Unit with a dedicated budget and very clear brief: £448 million in funding over three years to turn around the lives of those 120,000 most chaotic, dysfunctional families by the end of the Parliament in 2015.59 The crucial difference was the approach: a more human one, focusing a family worker on each of these families. The family workers would be given the training and discretion to respond creatively to the very different, human needs of the people they were trying to help. “On the whole most politicians think there are two ways to get something done in government. One is to pass laws through Parliament. Of course, you can get some change through passing laws,” Louise explains, “but it’s a blunt instrument. The other way is through fiscal change. When it comes to poverty or families, either they think they need to change the laws, that is, introduce a measure to tackle antisocial behavior, or they think the thing to do is tax credits.”60
“Large institutions,” she says, “operate around numbers and targets; they don’t operate around people, behavior, and change.” But that institutional setting is especially problematic for troubled families and their plethora of problems. “My families have an average of nine very significant problems and multiple agencies around them, each operating within their own systems. It’s no shock to me that you can often find over fourteen different agencies running around them.” The approach Louise’s team takes is to try to work with families to get to the root of their problems. They recognize that these problems are not based in government, so neither are the solutions; instead, they try to understand the exact context of a family’s situation, in all its complexity. They work on the family’s terms, not the government’s. For instance, in many cases a family might be receiving state services that are either unhelpful or counterproductive, so the Troubled Families Unit will stop them. In other cases they work with local councils, police, health, voluntary, and community sectors to ensure coordinated, unduplicated services for families. As with Single Stop, Harlem Children’s Zone, and Promise Neighborhoods, taking complexity out of people’s lives is one of the best antidotes to their problems.
Perhaps most importantly, instead of being reactive, the unit tries to be proactive, asking how it can prevent a family from falling into further crisis. “I met this girl who lived a life of abuse, handing it on to her three children. [Because she was a drug abuser, the social workers] said ‘prevention’ and prescribed her methadone so she doesn’t go out and shoplift anymore. That’s not prevention!” Louise exclaims. “That is too late and not enough done. The problem is no one wants to go about it directly. People think that’s judging families: some on the Left don’t like it because they think it’s judging the poor; some on the Right don’t like it because they can’t accept that these people need help getting back on their feet and it’s not just about getting a job.”
This is the whole point: we need to get out of an ideological mindset and think about these people as they are, not as our grand political theories paint them. “I profoundly think that when you’re dealing with people like my families, they need an inspirational, sometimes judgmental mentor,” Louise says. “You need a human being to enter their lives skillfully, lovingly, and to create a connection with them where everyone else has otherwise failed to connect.”
Sometimes the best person can be found within the family itself. Louise’s most profound insight into how best to help troubled families is simple: most parents—even abusive ones—love their children and are their best hope for a successful childhood. “I can predict the families that have histories of abuse; they have a lack of boundaries: no sense of what’s right and wrong, no sense of how to create relationships with people, how to love well. People beat people even though they love them.” Although there is a line to be drawn and children should be protected from abusive parents, the default reaction shouldn’t be for government to swoop in and alienate them. Children’s relationship with their parents is the most important relationship in their life, and to sever it without working to repair it first is dangerous and short-sighted. That’s why we need a different model that works as much as possible within the communities in which children live, a model that avoids making ideological and presumptuous pronouncements. That is the point of the Troubled Families Unit and its shift to a more human policy approach. It is already showing results: by February 2015 almost 90 percent of families it has worked with have turned their lives around.61
THERE ARE MANY more families where children are growing up in intergenerational poverty than the truly chaotic and dysfunctional families who are the focus of Louise’s work. Without action, we can be pretty sure that the children in those families will be the ones who end up on welfare, in the criminal justice system, or, at the very least, lacking the opportunities most of us take for granted. As my former colleague in the UK government, policy adviser Richard Reeves, puts it, “The bigger challenge is to help the millions of parents who are not directly threatening their children, but are nonetheless damaging their long-term life chances by raising them poorly. Targeted interventions often seem to make the most sense in terms of making the best use of limited resources. But precisely because they are targeted, they run the risk of creating a stigma.”62 When I was thinking about our family policies and how to help this wider group without stigmatizing them, an answer came to me in the most personal possible way, in the form of one of the great British inventions, an innovation we can trace all the way back to England over 150 years ago.
THE HUMAN FACE OF SOCIAL POLICY
In 1862 the first health visitors were employed by the English municipality of Salford, known in those days as ‘sanitary visitors,’ and introduced in response to the high levels of infant mortality and poor living conditions in nineteenth-century working-class areas. The idea was for trained workers to come into people’s homes and develop a trusting relationship with families over time, proffering advice on nutrition, health, looking after young children—whatever a family needed. In 1929 health visiting was made a universal statutory service, and it has evolved considerably over time, including its incorporation into the world of professional nursing in 1945 and then fully into the National Health Service in 1974. But it was my personal, human experience of health visiting at the time of the birth of my first son that convinced me that Britain’s long tradition of health visitors could be the centerpiece of a modern revitalization of family policy.
The key, as with so many of the most successful policy interventions, is the human touch. Health visitors, who first come into your home at a time of great stress and anxiety—the birth of a child—have the potential to become the single-best way to help families with problems, way beyond the immediate pressures of caring for a newborn. Home visiting can be much more than an early-warning system; it can be a central component of a more human family policy—and not just in the UK. I think we need this—urgently—in America too.
Home visitors could offer a lot more than just checking that a baby is well fed and looked after; they should be trained for the fully fledged family work that the best of them already perform. They can identify relationship problems, parenting problems, substance-abuse problems, mental health issues—and then direct families to locally available help and support. It’s natural for home visitors to be the primary connection between the state and families. They are already in the home, and not because anything’s gone wrong. And unlike other agents of government, they are trusted: the bonds they’ve forged with parents and children can be built upon. They are the human face of social policy.
We know this approach really works. From its origins in Victorian Britain, home-visiting services have been emulated in many other countries, including the United States. One of the world’s most evaluated social policy interventions is the Nurse-Family Partnership (NFP) service first developed by David Olds, professor of pediatrics, psychiatry, and preventive medicine at the University of Colorado in Denver. It is very similar in intent to the concept of health visiting in Britain, although in the United States it has been focused on low-income families since its conception in the early 1970s. Studies show that it works: one by the RAND Corporation showed that children in the program end up being arrested less, while their mothers have fewer children and spend less time on welfare. For high-risk mothers each dollar invested in NFP produced $5.70 in value.63
As part of the Affordable Care Act, the Obama administration started the Maternal, Infant, and Early Childhood Home Visiting Program, which, as of 2015, had funded NFP and other similar programs like Child First with $1.5 billion.64 Although it’s still too early to know the end results, early indications are that the program, which has drawn bipartisan support, is working. Children in NFP or similar programs perform better academically and are less likely to live in a home with safety hazards—and thus require fewer emergency treatments for injuries. Later on they are less likely to abuse drugs or alcohol or break the law. Meanwhile parents are less likely to have more children, fathers are more involved in childrearing, and families use less welfare.65
We’ve seen that families living in poverty are already overburdened with too many social workers and state agents. A home visitor can be a coordinator of care—when operating properly, a guide to the best that the state, voluntary, and private sectors have to offer and the definition of a more human public sector. That’s why, in government in the UK, we chose to overhaul the health-visitor service by investing in recruitment, training, and organization. If we created a similar program right here in America, we could revolutionize the practical help families get, creating a practical, effective—and cost-effective—ladder out of poverty.
So let’s do it: a Universal Home Visiting Service across America for every child in every home. A home visitor would be a registered nurse with additional training in broader nonmedical family issues, such as those that have dominated this chapter. Home visitors would have deep knowledge not only about which solutions work across the many situations that face families but also in the local resources and support services that could help each family. We now know from the evidence that what happens before a child gets to elementary school is actually more important in determining their life chances than what happens once they’re in school. So let’s think of home visiting just like elementary school: mandated across the United States but implemented locally, in the context of the neighborhood.
To ensure it remains the truly life-changing—and long-term cost-saving—program it should be, caseloads for each home visitor must be capped, allowing for a proper amount of time to be dedicated to each child and family. And when I say “proper time,” I mean it: daily visits for the first two weeks of a child’s birth, weekly for the first three months, monthly for the rest of the year, and then quarterly until enrollment in preschool or kindergarten. This is the level of investment required. Anything short of that will almost certainly degenerate into an expensive waste—and a missed opportunity to end poverty in America while transforming the opportunities for all children, not just the poorest.
Of course, there are many details to work out—specific visiting schedules; training; connecting with local services; overall funding, management, and accountability; and how home visitors’ safety will be guaranteed in tough neighborhoods where families often need them the most. But if we’re serious about giving every American child an equal shot, this is what we have to do—and I’m going to make it my life’s work to make it happen.
I WROTE IN Chapter 2 about the terrible waste caused by government’s short-term approach. Our children are not line items on budgets; their childhoods are not measurable in quarterly increments. The early interventions I’ve described in this chapter are the most effective—and, for those who count money, cheapest—way to solve big social problems. But they don’t mesh well with the political calendar. Poverty is a complex, difficult issue that takes time, effort, and resources to solve. The old bureaucratic approach has made little headway—except to expand the bureaucracy. A more human way is better: in the short term, a business-friendly living wage to make sure no one who works full time is poor. For the long term, fighting the causes of poverty with one-to-one help for the families for whom poverty is a cycle that needs to be broken.
Central to fighting poverty is avoiding the glib and patronizing assumption that if only the poor acted like the rich, they would be better off. Yes, wealthier parents often practice better habits, but it’s not because they are more loving or better parents. They’re certainly not ‘better’ in any moral sense. It’s because they have built-in advantages, both economic and social resources, often inherited and entrenched for generations. Poor parents, however, as we’ve often seen, have to struggle against impossibly difficult, seemingly immutable circumstances that they themselves might have been born into. Those circumstances are frequently rooted in broader social ills, from institutional racism to the failures of past antipoverty programs. It’s not just a matter of telling them they should try harder. Thus, society has dual responsibilities: first, to extend a hand to help people overcome the obstacles they face, and then to work to fix those structural obstacles in the long run. “When the evidence is overwhelming that we fail kids before they fail us, when certain programs would actually save public money while elevating personal responsibility,” writes Nicholas Kristof, “isn’t it also time to stop making excuses for our own self-destructive behaviors as a society?”66
Building the right support for families is like the construction of great physical infrastructure: you won’t see results immediately, but in the end it will be hugely effective and worthwhile. That’s how we will end poverty for good.