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Inequality

Who’s to blame for Indiana’s inequality?

Research & Commentary
September 19, 2016

by Sheila Kennedy

Where did the belief that the poor deserve to be poor come from? Meet John Calvin.

In 2007, I wrote a book called God and Country, in which I examined the religious roots of ostensibly secular policy preferences—things like climate change, foreign policy and economic systems. It was when researching that book that I came to appreciate the longstanding effect of Calvinism on American attitudes toward income inequality.

As I wrote then, the theological precept that arguably had the greatest effect on colonial economic activity was the Calvinist doctrine of predestination, which held that God had decided the ultimate fate of each person at the moment of creation. Predestination included the belief that the faithful discharge of one’s calling — the diligence with which a person worked– was evidence of the depth and sincerity of that person’s faith.

Predestination, especially when coupled with the doctrine of original sin, convinced believers that the suffering of the poor must be intended by God as a spur to their repentance.1162481

In other words, the poor were poor for a reason, and helping them escape poverty might actually thwart God’s will.

The belief that people are poor because they are somehow morally defective wasn’t universal, but it was widespread — and that suspicion of poverty, that belief that poor people are somehow lacking in moral fiber or responsible for their own condition, has profoundly influenced American culture. Understanding that attitude about poverty is central to any effort to understand today’s arguments about income inequality.

Of course, there are cultural attitudes, and then there are facts.

The facts are that, aside from children, the elderly and the disabled, poverty in the United States is experienced primarily by those we call the working poor. Most poor people in the U.S. work forty or more hours a week; they simply don’t make enough money to live.

Let’s look at my own state of Indiana. ALICE is an acronym that stands for Asset Limited, Income Constrained, Employed. According to the United Way, ALICE families are those with income above federal poverty levels, but below what it actually costs to live in their communities. In Indiana, 36 percent of all households live below the ALICE threshold. About 14% are below the poverty level.

To put that another way, there are 908,000 households in Indiana that cannot make ends meet. I want to emphasize: these are families and individuals with jobs, and most of them don’t qualify for social services or income supports.

The United Way’s ALICE report calculates the cost of living for each county, and takes differences in cost of living into account when it identifies ALICE families. In Marion County, where I live, a single individual living needs $18, 396 a year, or 9.20 an hour, to survive; a family with two adults, an infant and a preschooler needs $51, 972, or 25.99 an hour.[pullquote] In Indiana, 68 percent of jobs pay less than $20/hour, and three-quarters of those pay less than $15/hour.[/pullquote]

In Indiana, 68 percent of jobs pay less than $20/hour, and three-quarters of those pay less than $15/hour.

Most of us, reading those numbers, say to ourselves: if over a third of Indiana households can’t make ends meet, there must be programs that bridge the gap, right?

Wrong.

In fact, the number of Hoosier households receiving government aid — what most of us call welfare — totaled about 9,000 families in 2014, and emergency payments from local welfare offices like the Township Trustees actually declined by 13 percent.

calvin_on_his_death_bed

Calvin on his death bed. Wikimedia Commons

Just to sum up: the total gap between sufficiency and actual income — that is, the amount of money that would be needed every year to bring all Hoosier households up to the ALICE threshold — was $34.2 billion in 2014. Those households earned $15.8 billion. They received $15.1 billion in combined charity and government assistance. That left a gap of $3.3 billion dollars.

It would take 3.3 billion dollars of additional wages or government welfare or charitable support to bring Indiana families up to subsistence.

The numbers are staggering, but they only tell part of the story. The human costs of poverty and inequality to both individuals and society are immense, but we seem to accept those costs.

Americans have certainly not demonstrated the political will to address the issue. It’s easier to attribute poverty to those “lazy” people who refuse to pull themselves up by their (nonexistent) bootstraps than to identify and reform the systemic inequities that make it difficult or impossible for many hardworking people to achieve self-sufficiency.

It’s undoubtedly unfair of me, but I blame Calvin . . .

Sheila Suess Kennedy teaches law and public policy in the School of Public and Environmental Affairs at Indiana University Purdue University at Indianapolis. Her scholarly publications include eight books and numerous law review and journal articles. Kennedy, a frequent lecturer, public speaker, and contributor to popular periodicals, also writes a column for the Indianapolis Business Journal. She blogs at www.sheilakennedy.net.

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