In the U.S. and abroad, a new generation of data-driven programs is testing ways to help the poor to save more, live better and find their own way to economic security
The U.S. and other wealthy nations have spent trillions of dollars over the past half-century trying to lift the world’s poorest people out of penury, with largely disappointing results. In 1966, shortly after President Lyndon B. Johnson declared war on poverty, 14.7% of Americans were poor, under the official definition of the U.S. Census Bureau. In 2013, 14.5% of Americans were poor.
The U.S. and other wealthy nations have spent trillions of dollars over the past half-century trying to lift the world’s poorest people out of penury, with largely disappointing results. In 1966, shortly after President Lyndon B. Johnson declared war on poverty, 14.7% of Americans were poor, under the official definition of the U.S. Census Bureau. In 2013, 14.5% of Americans were poor.
World-wide, in 1981, 2.6 billion people subsisted on less than $2 a day; in 2011, 2.2 billion did. Most of that progress came in China, while poverty has barely budged in large swaths of sub-Saharan Africa, South Asia and Latin America.
Is it time for a new approach? Many experts who study poverty think so. They see great promise in a new generation of experimental programs focusing not on large-scale social support and development but on helping the poor and indebted to save more, live better and scramble up in their own way.
Linda Hanson of Duluth, Minn., 64 years old, works as an administrative assistant at a local organization for the disabled; her husband, Glenn, 65, is a retired city bus driver. Today, the Hansons have achieved some financial stability, but by early 2014, they were in trouble: Linda had lost her previous job, their catering business had failed and they had racked up about $28,000 on their credit cards.
Overwhelmed by the debt, they struggled even to make the minimum monthly payments, said Mrs. Hanson—until they heard about Pay and Win, an experimental program offered by Lutheran Social Services in Duluth to encourage struggling borrowers to manage their debts. Those who steadily pay down their loans each month are eligible for raffle drawings.
“When you know you have a hope of winning,” says Mrs. Hanson, “what a motivation!” The Hansons soon got their finances in order and felt less overwhelmed. In January, the Hansons got a surprise windfall: They won the program’s grand prize of $5,000, which they committed to use to pay down the principal on their debt. “We’re going to be OK now,” says Mr. Hansen.
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