How poverty in America works

Poor Americans seem so perplexing to rich Americans because they live in different worlds.

We have two housing and two banking systems. We ask why don’t poor people make different choices but the whole point is they don’t have other choices.

“The system isn’t broken. It’s bifurcated,” writes journalist Matthew Desmond in his 2023 book Poverty, By America. Below I share my notes for future reference.

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Off the Books: The Underground Economy of the Urban Poor

For every $10 spent on goods and services in the American economy, at least a dollar is spent in the “underground economy.” That share has trended up over the last 15 years and two recessions.

That $2.5 trillion in economic activity includes both licit and illicit activities — yes, paying the babysitter cash and buying an illegal gun are both in the underground economy. Poorer nations have higher rates, and likewise, poorer communities in the United States rely more heavily on the informal economy.

Contributing to the academic analysis, American sociologist and ethnographer Sudhir Venkatesh published in 2006 a book called Off the Books: The Underground Economy of the Urban Poor. Backed by years he spent visiting a particular poor neighborhood in Chicago, he chronicled the interpersonal and community dynamics that related to and developed its underground economy. In some ways the book shows its age (as a trivial example, his use of the word “ghetto” feels dated), but in other ways it remains a small, specific window into one community’s underground economy.

“The underground enables poor communities to survive but can lead to their alienation from the wider world,” as the author wrote.

Another of his points I especially liked: “What some might see as a mass of Americans lying about, and out of work, is in many cases an ensemble of persons who lack of private places where they can rest.”

The author renamed his characters and locations for anonymity, but generally follows a neighborhood he calls Maquis Park, including characters like a particular gang leader and an active block leader named Eunice. Below find my notes from the book for future reference.

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The boy in the train station coffee shop

By Christopher Wink | Oct. 8, 2008 |

Worlds – yes, disparate worlds – come to some form of a cross-section in red-eyed, late nights in train stations.

Early Tuesday morning, we were doing that, surfing the intersection of the young and the acutely itinerant – being reminded of the sociological difference between situational and generational poverty.

We, three, were in a 24-hour coffee shop just before 1 A.M., waiting on a 6 A.M. train. A security guard recommended the spot, a few modern chairs off to the side where people buy cups of foam and cream. A young man, a year or two my junior, sat beside me, tapping his foot and twitching in his chair, regularly, if subtly. The kind of movements you might expect at 1 A.M. in a late-night train station coffee shop.

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