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The Cost of Money: Poverty Rates and Covid-19

Ryan C. Henderson

First Colonial High School

Legal Studies Academy

Abstract

This paper will examine and present information concerning the poverty crisis and COVID-19.

The author will summarize multiple scholarly journals from professors such as William J.

Scarborough from the University of North Texas, look at court cases that pertain to poverty in its

legal aspect, gather the facts from news articles from sources such as the United Nations, and

more. The author will also look at what is being done through the legal system to help those who

have fallen into poverty and what a local food bank does to help those that are in need.
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The Cost of Money: Poverty Rates and Covid-19

Ralph Waldo Emerson once said, “Money often costs too much.” This quote, alongside

others, was Emerson’s way of contributing to the fight against poverty. Poverty has been one of

the biggest issues within civilization dating back thousands of years. Recent estimates show that

9.2% of the world, that is 689 million people, live in extreme poverty. Those who live in extreme

poverty live on less than $1.90 per day (Peer, 2020). During the Coronavirus pandemic the

number of people in poverty have skyrocketed, those with money got more and those without,

they had less luck. However, many people have tried to speak out and help those that have fallen

into poverty. From professors writing scholarly journals to people in Congress proposing a bill

that could help those in need to those on the front lines providing food, shelter, and financial help

to the poor of America. The current approaches and protocol towards poverty in the United

States isn’t working anymore, more and more people fall into poverty with this pandemic going

on and things need to change in order to begin the road to ending this upward trend in poverty.

History of Poverty

Since the beginning of time there have been those who are less fortunate than others.

From the kings of old living in their grand castles overlooking the villages where people dwelled

in the mud and filth to the politicians and the elite of today who sit in their mansions and towers

while people starve beneath their feet.

Scholarly Journals

Everyone has different tools that they can use to help the cause against poverty. Some

professors at universities use the resources that are at their disposal and their minds to conduct

research into the subject and shine light on this issue. Most of the time this information is
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presented through scholarly journals which are their way to tell the world about what is

happening and how it can be fought.

Who is Trying to Help?

According to Collins from Washington University in St. Louis, Landivar from the

Maryland Population Research Center, Ruppanner from The University of Melbourne, and

Scarborough from The University of North Texas, the COVID-19 pandemic is the greatest

challenge that the world has faced this millennium. In this scholarly journal, Scarbourough and

the other authors look back to the Great Recession in the mid to late 2000’s and ways they

attempted to help those in poverty to find a solution to this threat. The pandemic has upended

national economies and dramatically impacted daily lives. The first three weeks of this pandemic

resulted in more than double the amount of people filing unemployment insurance claims than

the peak two years during the Great Recession. Families were already struggling with so many

people losing their jobs, and then the schools began shutting down removing one of the things

that families relied upon. They described Head Start as “a means-tested school readiness

program that offers free childcare and comprehensive family support services for eligible

children in families with incomes below established thresholds.” Many people end up leaving the

workforce when faced with childcare costs at ages five or six. These such exits are more

common in mothers than the fathers since the mothers remain primarily responsible for their

children and their care. Due to COVID-19 the number of people having to exit the workforce has

risen because more and more childcare businesses were shutting down. The United States lacks a

comprehensive childcare system; however, there are a few programs in place to help support

eligible families. The Child Care and Developmental Block Grant (CCDBG), childcare
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subsidiaries, state-funded pre-k programs, and Head Start are among these groups (Collins,

Landiyar, Ruppanner, & Scarborough, 2021).

The CCDBG assists families using financial support to pay for childcare in an attempt to

increase school readiness and give parents the time they need to work or further their education.

Pre-k funding is not tied to sustaining federal sources; however, only nine states and DC have

fully or mostly universal pre-k programs. Head Start is the longest running and currently largest

federally funded early childhood development program. They are a categorical grant program

administered by the Office of Head Start in the Department of Health and Human Services. Head

start programs help children under three years of age through Early Head Start and preschool

centres focus on children three or four. Enrollment into these programs is free for eligible

children under five years of age, live in a family that has an income under the poverty line,

receive another income-based public assistance, be homeless, or live in foster care. Only 9% of

3-year-olds, 12% of 4-year-olds, or about 40% of all preschoolers living below the poverty line

are enrolled in Head Start. Federal funding for Head Start is well below the demand for the

programs. Different states give priority to enrollment, teacher salaries, and curricula. Therefore,

enrollment varies across the country. North Dakota has 100% of eligible families enrolled while

Nevada only has 22%. Only 38% of the eligible children in Virginia are enrolled in Head Start.

Families also gain other services besides childcare and childhood development through Head

Start. These services support housing stability, children’s health and well being, parents’

continuing education, and financial security (Collins, Landiyar, Ruppanner, & Scarborough,

2021).
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The article, “Head start and families' recovery from economic recession: Policy

recommendations for COVID-19” investigates one central question: Did the state-level

availability of Head Start at the height of the last economic recession influence both the rise of

family poverty and its decline in the post-recession recovery years. The American Community

Survey (ACS) is the most comprehensive source of information from approximately 3.5 million

households annually. They looked at the results of this survey from the years before, during, and

after the economic recession. Looking at just the families that have children under the age of five

brings the total number of households to 1,540,486 across America (there were between 132,000

and 146,000 families per year). They used growth-curve analysis to test the effects of state-level

childcare support programs on long term rates of poverty. Unemployment peaked at 10% in Oct.

2009 and remained above 9% through Sept. 2011 (Collins, Landiyar, Ruppanner, &

Scarborough, 2021).

The results of their investigation were as follows: family poverty rates rose during and

immediately after the recession. About 21% of families with young children lived below the

poverty line in 2006. This rose to 23.4% in 2009 and continued to ascend until 2011 when it hit a

peak at 23.4%. Since 2012 there has been a steady decline in the rate of poverty in families with

children under 5. By 2016 only 21.5% of families were living in poverty. States where Head

Start was more accessible had flatter curves over the course of the recession than those that did

not. Overall, the research that has been done in this article has concluded that the states that had

access to the Head Start programs had a lower poverty rate increase. These results imply that

access to childcare and family support services helped families from falling into poverty and

helped others out of poverty. They concluded that increased funding expanding Head Start
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enrollment would be an extremely productive use of stimulus funds. During the Great Recession

the government made sizable donations to the program and that going into a similar and possibly

worse recession because of the pandemic giving more money to Head Start would be in the

government’s best interest (Collins, Landiyar, Ruppanner, & Scarborough, 2021).

Covid-19 and Global Poverty

Giovanni Valensisi Wrote “COVID-19 and Global Poverty: Are LDCs Being Left

Behind?” as an assessment of the effect that COVID-19 is having on poverty around the globe.

The rise in COVID-19 cases has caused the economy to have to prepare for the devastation of a

recession that will be the worst since the Great Depression. They estimated that in 2020 there

would be between 9 and 35 million more people working in poverty than before. Through an

analysis of the potential impact on poverty in relation to the pandemic they predicted a scenario

in which the world output contracted by 5% and 140 million people would fall into extreme

poverty (Valensisi, 2020).

In Valensisi’s results he tells about how the economic fallout needs more attention and in

some places it may need more than even the health emergency. This crisis has invoked a supply

shock as well as a demand shock thus reducing the amount people and companies can make

exponentially and forcing many companies to lay some workers off to preserve their profit. The

global count of people that live below the poverty line is expected to rise from 8.2% to 9.1% (a

rise of 68 million people), effectively devastating the progress made in the past three years. The

amount of people worldwide below the US poverty line is expected to rise from 20.8% to 22.6%

(an increase of 140 million people). The paper “COVID-19 and Global Poverty: Are LDCs

Being Left Behind?” having reviewed the COVID effects on the world economy, has predicted
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an extreme rise in the amount of people that will be living under the poverty line and stated that

domestic policies should be implemented that will help those that are affected by this pandemic

(Valensisi, 2020).

Poverty in Covid Times

The Covid-19 pandemic has brought unforeseen challenges and changes to how the world

works. At the beginning of this pandemic many buildings had to close down in order to comply

with the guidelines for the lockdown. With their business closed many people got fired, those

who were already barely holding on financially got pushed off the cliff. Some people, however,

have gained from the pandemic and a small amount of those people have worked towards

helping the less fortunate citizens that need it.

Poverty Rates

The article “COVID Pushes Millions More Children Deeper into Poverty, New Study

Finds”, by the UN, was written with the purpose of informing the people who read it about the

child poverty rates and how they have risen during the quarantine. There was a study that was

conducted by the UN where they looked at access to education, healthcare, housing, nutrition,

sanitation and water in many countries around the globe. What they found was that child poverty

has increased by about 15 percent since the beginning of this pandemic and around 45 percent of

children were severely deprived of one of the fields they took into account. The reason behind

this increase? The article expresses that the reason they are looking to is the lockdown. When

these procedures were implemented many families fell into poverty and those on the verge of

getting out were sucked back in. However, the article states that if governments step up and
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implement programs to assist these people with the needs they are lacking then a whole

generation of victims could be prevented (United Nations, 2020).

How is it Being Opposed?

In an Interview with Jim O’Neill, the former chairman of Goldman Sachs Essence

Management, he says that he does not know what it will take to recover economically from this

pandemic and warns to be wary of those who claim that they do. However, he stated that he is

“pretty sure” that the worst has passed. Most of the world is slowly coming out of their

lockdowns and beginning to go out and increase their economies. He said that later in the year

there could be an economic “boom” because of the amount of economic stimuli. He thinks that

the rebound back into the higher economy could be a V shape but wouldn’t bet his life on it. The

consumer is the key factor in the economy and the fear that going out will spread the virus is

holding it back. He says that once COVID-friendly environments open up the economy will

begin to recover (CNBC, 2020).

Businesses are more focused on maximizing profits and need to start to change their view

on their company. The government is also a factor as they could shape how the businesses reach

societal goals moving into the future. He believes that within the next decade companies will

begin to improve the quality of employment rather than the amount of employees they have

(CNBC, 2020).

Trends that have been going on for years along with this evolution of businesses is going

to make it much harder on younger people to be able to go out and find a job or buy a house.

Later on in the years when the younger people begin to take over the economy he believes that
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they will be more focused on preserving the environment and fighting climate change (CNBC,

2020).

Legal Help

In the modern world there is almost no way to get anything done without hitting a legal

roadblock. There are a multitude of cases that deal with the issue of poverty and many examples

of time when the law was not on the side of the common man. Despite all of the setbacks and

challenges that are in the path many find a way to persevere and break through to the other side.

Many win court cases that set a precedent in the favour of those in poverty and some people in

political office press for legal solutions that will assist the needy.

Past Cases

The issue for the case of Frank v. Walker is whether or not everybody needs a photo ID in

order to vote in the state of Wisconsin. The legal principle for this case is a statute that the state

of Wisconsin enacted requiring that all who want to vote in an election must present a photo ID

in order to do so. While the majority of people can obtain a photo ID, not everyone can. Some

people cannot afford to pay for one, some cannot get one because they need specific credentials

from social security, but they need a photo ID to get said credentials, and some people cannot

present the papers that could be needed such as birth certificates because they were lost in some

event like a fire. Plaintiffs searching for relief for these people say that preventing these people

from voting for the rest of their lives because they cannot obtain a photo ID would be

unconstitutional. The law was deemed unconstitutional and the court decided that those who

could not obtain identification could still vote by affidavit. This case is related to poverty and
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Covid-19 because it shows that at some level the government has done some things to help those

in poverty even if they still need more to live comfortably (Frank v Walker, 2016).

Proposed Bills in Congress

There is currently a bill in Congress, H.Res. 67. This proposal expresses that Congress

has a moral obligation to end both adult and child poverty. It also expresses that minimum wage,

Covid, and other issues accelerate the rate of poverty in the US and opens up the House of

Representatives to adopt policies that will help to prevent and slow these events leading to the

growth of poverty (H.Res. 67: Expressing, 2021).

Potter’s House

Potter’s House is a non-profit organization based out of the Virginia Beach United

Methodist Church at 18th street. Established in the late 1990’s, this organization is run

completely by volunteers and is funded through donations made throughout the year and

contributions from the Church. They strive to help those who are in need by helping provide

their needs that they cannot afford by themselves. Those that qualify for assistance are the

homeless, the working poor and the nonworking poor. They help those that need it by providing

sack lunches, running a food pantry, helping with rent, and so much more. In short, this

organization is doing the best they can to help those in Virginia Beach that have fallen below the

poverty line (Cassidy, 2021).

Conclusion

Adlai Stevenson once said, “A hungry man is not a free man.” Many people see those in

poverty and think, “they should get a job,” or, “they need to work to better their life.” Some

people do not realize that those in poverty have a harder time getting a job and paying for food or
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shelter. Every little bit helps them on their long journey to crawling over the poverty line. It is for

this reason that Potter’s house was established and why I partnered with them for my senior

project. Potter’s house feeds the hungry but for every person they give food there are many more

starving. This is why they are always open to donations and why I decided to do a canned food

drive. 100% of the cans raised by my project will be donated to Potter's House so that they can

distribute them to those in need. However, even if after my senior project you find yourself with

an excess of canned food and no need for them I ask you to consider donating to an organization

such as Potter’s House that will distribute them to those that need food.
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References

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Beaumont, P. (2021, February 3). Decades of progress on extreme poverty now in reverse due to

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