The Poverty Death Spiral

Jul 28, 2016 by

Tom Watkins –

While not much more than an inconvenience when you are of modest means, life becomes a catastrophic penalty when you are truly poor.

For example: a driving ticket. Nearly all of us have experienced this nuisance. Sometimes we begrudgingly admit to ourselves that we deserved it. Other times, we feel we should have been cut some slack. Still other times, we believe the ticket is bogus or that we were “profiled”.

Getting a ticket stings because it usually comes with a hefty fine and the need to take a day off work to head to traffic court to seek out justice – hoping against hope that the police officer won’t show up so you can beat it.

This process leaves you feeling anything but warm and fuzzy about our law enforcement system. It seems more reminiscent of ‘Whack-a-Mole’ or a crap shoot over how much the fine will cost us. The process feels like it is solely for wringing as much money as possible from the driver as if the enforcer’s paycheck is somehow dependent on each defendant.

“$120 fine, no points” the clerk pronounces as though you are to bow in gratitude for this regal display of justice. Suck it up, pay the fine and get on with life?

Of course it hurts – there are so many other ways one might conceivably spend $120 bucks. Yet, this $120 is the same fine whether you make a million dollars a year or a barely livable, minimum wage.

A person with some jingle in their pocket pays the fine with a credit card and then moves on.

But consider the single mom with four kids, earning minimum wage, and taking home $200 dollars a week – she might roll the dice, decide to skip paying the fine, and take her chances in avoiding the law and the paying with money she doesn’t have.


A seemingly rational decision: pay the fine or pay the rent? Pay the fine or get groceries for the kids? It might make perfect sense at the time, but the decision might well be a first twist for the poor into a death spiral.

Trouble begins because the poor are likely to have more frequent interaction with law enforcement. Wealthy people tend not to have noisy mufflers, broken tail lights, broken windshields or other signals that attract police like a moth to flame.

BAM! Busted again? Now it might mean jail time or an impounded car. To a poor person, getting the car out of the impound lot may seem a lot like attempting to find the needle in the proverbial haystack. When and IF you do find the vehicle, new “fees” may well have reached the point where they are more than what your car is worth!

Cha-ching, cha-ching

Dollars quickly add up: Towing fee, impound fee, bail, now a ticket for the new “offense”. Oh, and don’t forget about that original speeding ticket.

While you are trying to scrape up the bail money to get out of jail, you must determine if Social Services has impounded your three kids left alone all weekend long and, may now have to fight charges of child neglect.

Being poor is like being caught in a huge whirlpool that constantly sucks you down.

Poverty: Not “Them” – It is “Us”

In “It’s Getting more Expensive to be Poor”, The Washington Post reports that according to Pew Research, “the median household expenditures, including everything from health care to housing to food and entertainment, grew by 25 percent from 1996 to 2014. Given that incomes haven’t kept pace, that means that most families have less and less money left over after all their spending. And, again, for the poorest third, that leaves them in a particularly dire position.

For those who may be shrugging their shoulders, believing the issue of poverty is a small one in Michigan or America, think again.

Better yet, FEEL again. It is expensive to be poor in America!

According to the U.S. Census Bureau, half of all Americans are poor, or on the edge of poverty. Fifteen percent (46.5 million) are in poverty, while “half of Americans are in or near poverty “. On top of that, Pew reports, 76% of Americans are living paycheck-to-paycheck.”

Michigan’s Poverty Policy

Armed with these facts, I decided to investigate just what the laws and policies ARE in Michigan, enacted (or not) to help our friends, neighbors, and family members survive and thrive in Michigan.

I posed this question to Gilda Jacobs, former state lawmaker (Michigan House, 1999-2002, Michigan Senate 2003-2010) and now President/CEO of the Michigan League for Public Policy ( I got an ear (and heart) full.

Ms. Jacobs informed me that “Over the last few years, there have been a few public policy bright spots in a relatively stormy sky that still hangs over Michigan kids, workers and families living in poverty. While our state has thankfully begun to see some economic recovery, it is still not reaching many people, and a majority of the state policies put in place over the last few years have harmed Michiganders in need more than they have helped them. The data continue to show that poverty is rampant in our state, and we can’t move forward as an entire state when we’re leaving a huge part of our population behind.”


Here’s a quick look at Michigan’s public policy landscape in terms of poverty according to Michigan League for Public Policy:

The Good:

  • The creation of the Healthy Michigan Plan, which expanded Medicaid in Michigan to individuals with lower incomes and currently provides healthcare to around 600,000 residents.
  • After years of work, the 2017 budget includes funding to expand the Healthy Kids Dental program to an estimated 131,000 Medicaid-eligible youths and young adults (ages 13-20) in Kent, Oakland and Wayne counties, now covering all eligible children statewide.
  • The 2017 budget also included significant investments to address the health and human services and infrastructure improvements needed to address the Flint water crisis, which particularly hurt residents with low incomes and people of color. This action and attention must be continued in the years to come.

The Bad:

  • A broad coalition helped avoid the possible elimination of the Michigan Earned Income Tax Credit (EITC) as part of the roads plan passed last fall, but its elimination hangs out there with every state revenue need. In addition, the Michigan EITC was drastically cut in 2011 and should be restored rather than eliminated.
  • While it was cut out of the 2017 budget in the 11th hour, Michigan’s failure to invest approximately $3 million in state money caused the loss of $140 million in federal funding through Heat and Eat that would have restored approximately $76 a month in food assistance for 150,000 low-income households, including seniors and people with disabilities.
  • The 2017 budget also included a moderate increase to Michigan’s child care subsidy for families with low-incomes—a small victory, as our levels are among the lowest in the country—but it included no corresponding state investment, causing Michigan to also lose millions in federal child care funding.

The Ugly:

  • Stringent lifetime limits on public assistance that disregard the struggles of many working families.
  • Ending of assistance for an entire family when one child is truant.
  • An asset test for food assistance that punishes families who have saved up money to weather future economic storms or to invest in their children’s future.

Gilda Jacobs

Gilda Jacobs

It is the League’s goal to use data driven advocacy in order to improve the lives of low income citizens. When one only has bad or ugly options from which to choose, it seems wrong to criticize the poor for making bad decisions. Michiganders should not be forced into a death spiral for being poor.

It sucks to be poor.

But now we are informed on the issues, what actions will we take?

Tom Watkins is the president and CEO of the Detroit Wayne Mental Health Authority. He served the citizens of Michigan as state mental health director and state superintendent of schools. He can be emailed at:, or followed on twitter at:@tdwatkins88

Source: The Poverty Death Spiral |

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