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Poverty, By America is Matthew Desmond’s attempt to define American poverty, examine the factors causing it, and present a solution to this seemingly intractable problem. Over the course of the book, he balances statistics and large-scale analysis with real-life examples to show the deleterious effects of poverty. Approximately 38 million Americans live below the poverty line, meaning one in nine people overall and one in eight children. In addition, millions more live on incomes so close to the poverty line that they still struggle to afford basic necessities. Yet the United States is the wealthiest country in the world, with seemingly more than enough resources to provide a stable financial life to all its people. Desmond contends that poverty persists in America as a result of corporate and governmental policies that allow affluent people to benefit while poor people suffer. He calls for his readers to become “poverty abolitionists,” not just passively lamenting the status quo but actively working to build a more economically just nation.

Read more about Main Idea #3: Americans can eradicate poverty if they choose to do so.

After establishing how intersecting and cascading disadvantages and misfortunes make poverty a life-limiting source of pain, trauma, and instability, Desmond examines the patterns that perpetuate it. While many studies of poverty discuss the lives of poor people, seeking out individual misfortunes or mistakes that created poverty, Desmond argues that the root of poverty is not the behavior of poor people themselves but of the affluent people who benefit from exploitation of the poor. He cites 50 years of decreasing American wages as a principal cause of poverty. Wages have gone down as the power of labor unions to enable collective bargaining has declined. In addition, corporations increasingly avoid paying workers as permanent employees, whether by using staffing agencies that compete to provide cheap labor or by hiring individuals to work as independent contractors, often without benefits or job stability. While there are structural explanations for wage decreases, the bottom line is that affluent consumers benefit from the low prices and high stock investment returns made possible by these low wages.

Read an explanation of a quote about how poverty is not a result of the actions of poor people.

Desmond argues that different housing and banking systems exist for the poor, separate from and inferior to those that exist for the affluent. For affluent people, the housing market functions to provide both shelter and investment. Public policies support homeownership for the affluent, providing a system in which property almost always increases in value. This allows affluent people to use their homes as investments, both as collateral for loans with favorable interest rates and as seed money for the next generation to buy homes of their own. Affluent people who purchase rental property as a means of passive income profit from the rents paid by poor people, who are often unable to get mortgages to buy similar housing. The conventional banking sector offers loans at interest rates constrained by the federal government, but it functionally excludes poor people as customers by means of onerous fees and refusal to offer loans to people below a certain income threshold. In the vacuum left behind, predatory payday lenders exploit poor people, offering loans with ultra-high interest rates that end up costing many times what a comparable loan would cost an affluent person at a conventional bank.

Read 9 brief Questions & Answers about Poverty, By America.

Government systems also favor affluent people. Desmond argues that affluent people effectively receive large amounts of money from the government in the form of tax breaks. Most income tax breaks reward behavior that is unaffordable for poor people, such as homeownership and saving for children’s college funds. Since lower-income people pay less in income tax but spend more of their total income on sales tax, they pay taxes at about the same rate as middle-class people and at a lower rate than the wealthiest Americans, says Desmond. At the same time, affluent people seek to lower their taxes further, reducing the money the government can spend on public goods and services. As affluent people abandon public systems, like schools, for instance, in favor of private versions, funding drops further, degrading the quality of public services. Instead of high-quality public services accessible to all, Desmond argues that the country ends up with a split system of underfunded, low-quality public services and high-quality, high-cost private versions used by those who can afford them.

Read about Main Idea #2: Affluent people benefit from systems that maintain poverty.

Despite the complexity of the problem, Desmond maintains that a mixture of governmental and individual action can end poverty in the United States. Although his vision depends in part on affluent people sacrificing some of their unfair advantages, he maintains the wealth gap is so great that affluent people can afford to make those changes in return for the benefit of living in a more equitable society. To that end, he calls on his readers to become “poverty abolitionists,” bringing the same desire for shared freedom to this mission as 19th-century abolitionists brought to ending slavery. In addition to closing tax loopholes enjoyed by corporations and the very wealthy, Desmond calls for making the tax structure more equitable overall. He advocates ending economic segregation of communities by repealing zoning laws that restrict building housing for low-income people in wealthy areas. Finally, he calls for his readers to take economic justice into account in their purchasing habits, evaluating companies for their labor practices, just as they might judge environmental policies, before making purchases. The reward, he says, will be life in a more free and just society, where no one has to fear the misfortune of living in poverty.

Read an important quote about Matthew Desmond’s case for how Americans can bring an end to poverty.

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