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Monday, April 16, 2007

On Yardsticks, Or, Remember This War?

It is likely that most readers of these pages are familiar with microlending, and by extension, Mohammad Yunus, the winner of the 2006 Nobel Peace Prize.

Microlending (the extension of small amounts of capital to the world’s poorest people) has become a huge part of Bangladeshi life, as just one example, and there are many excellent discussions of what the concept means to the world.

There is even a movement among traditional capitalists to enter this market, thanks to the efforts of Yunus’ Grameen Bank and others.

But I’m a “bury the lead” kind of writer, and for that reason, microlending will not be a part of our discussion today.

Instead, let’s discuss a forgotten war.
A war we started over 40 years ago against an intractable enemy.

Remember the War on Poverty?

The Declaration of War was issued March 16th, 1964 by a previous Texas President, Lyndon B. Johnson, in a Special Message to Congress; and we have fought the War ever since.

There is a strange similarity between this war and the Global War On Terror: the lack of a defined victory.

Fortunately for us, Mohammad Yunus has presented a “roadmap to victory”; in the form of “Ten Indicators to Assess Poverty level”.

Considering that few of us have a better understanding of poverty than Mr, Yunus, it might well be to our benefit to see how we’re doing from his perspective.

So let’s have a look, shall we?

1) The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house with a tin roof, and each member of the family is able to sleep on bed instead of on the floor.

25,000 Takas are about $362 US, so let’s interpret this to mean “homeless” here.

It is estimated that just under 750,000 Americans are homeless-44% of whom do not have access to shelters.

95,000 families are homeless-in fact the numbers show a roughly 60/40 split between single persons who are homeless and persons in families who are homeless.

There seems to be progress in resolving single-person homelessness, but the problems facing families have not yet decreased, as far as I could tell.

2) Family members drink pure water of tube-wells, boiled water or water purified by using alum, arsenic-free, purifying tablets or pitcher filters.

We’re not doing so well on this one, I’m afraid. One in six Americans drinks contaminated tap water-including residents of Tucson, who are treated to radioactive water. The intent of the current Administration seems to be in favor of reducing, rather than raising standards, suggesting no good news ahead for this metric.

3) All children in the family over six years of age are all going to school or finished primary school.

40 million Americans “have pressing literacy needs”; and 30 million have “the most minimal ability” to read or write English, we are told. Further, 42% of adults have a high school education or less, and 66% of those who did graduate high school don’t have the skills to attend college.

By the way, 2/3 of the jobs in the US require education beyond high school.

4) Minimum weekly loan installment of the borrower is Tk. 200 or more. ($3 US: author’s note.)

Instead of trying to do a dollar-to-dollar comparison, let’s consider the broader concept of Mr. Yunus’ measurement: the idea that access to credit is vital to move up from poverty.

Just as in Bangladesh, access to credit allows you the chance to start a business, access to education, and the chance to own property. A “sub-prime” credit status in America means you pay higher interest rates, might not get a job, and will likely pay more for insurance products, if you can get them at all. Large numbers of “sub-prime” borrowers in a community causes the entire community to be affected.

Estimates suggest as many as 130 million Americans (43%) are “sub-prime” borrowers.

5) Family uses sanitary latrine.

Based on numbers quoted above, at least 41,000 families do not have this access (95,000 families divided by the 44% who are unsheltered), and some larger number of single Americans as well (198,000 is my guess, again based on numbers provided above). For purposes of comparison, as many as 20% of residents of the developing world lack such access.

6) Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes.

I could not find a good number for how many Americans lack adequate clothing, but consider this: a Google search of the phrase “clothing bank” yields 77,900 hits, and if you follow the links there appears to be a wide geographic dispersal around the US. Here’s an example of a clothing bank operated by a PTA for over 40 years.

7) Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so that they are able to fall back on these sources of income when they need additional money.

91 million Americans garden, although of course, not all of those are growing food. It is reasonable to assume, however, that if needed, a large number of this total would begin to grow food, if possible.

Community gardens are another alternative for those not owning land, and there are at least 6,018 of these operating across the country. Customers presumably are available at the 3,700 farmer’s markets around the country.

Additionally, in this country, we can also consider home based businesses as an income supplement, and it is reported that 19.5 million businesses with no payrolls (of the Nation’s 27 million total businesses) exist in the US.

8) The borrower maintains an average annual balance of Tk. 5,000 in her savings accounts. (Just under $73: Author’s note.)

For purposes of comparison, the average Bangladeshi earns $380 annually, suggesting a 19% savings rate is recommended. How is the US doing? We have a negative annual savings rate (a corner we turned in 2004), and have never posted an annual savings rate above 4% in this century.

9) Family experiences no difficulty in having three square meals a day throughout the year, i. e. no member of the family goes hungry any time of the year.

You’ll be happy to know that since 2006, no American is going hungry. On the other hand, 35 million of us (12%) experience “very low food security”. I’ll let the readers provide the appropriate comments regarding the “improvement”.

10) Family can take care of the health. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate healthcare.

At least 46 million Americans can not pass this test, and the numbers are getting worse.

So how did we do?

By my count, five of the ten metrics are trending in bad directions (numbers 2, 3, 8, 9, and 10), one is neutral (5), and four are not what I currently consider particularly bad (1, 4, 6, and 7).

Do the results suggest we are a nation in poverty? Maybe not, but it does paint a picture of a country moving closer to poverty, and doing it faster all the time.

And as we said at the top of the diary, if anyone knows poverty, it’s Mohammad Yunus.

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