Separating Family Needs Fulfillment From Family Income

Separating Family Needs Fulfillment From Family Income


In calling for a society that makes it possible to meet basic needs at modest levels of family income, what we might call "a basic needs approach to America," I hear echoes of a penetrating discourse that occurred in international development economics in the 1970’s and was embedded in The New Directions legislation that redefined the purposes of US Development Assistance in 1973.

Three approaches to the problems facing the poorest countries of the world were counter poised, trickle-down, growth with equity, and basic needs. The first two are familiar to our current policy discourse. With exceptions, Republicans concern themselves with rapid growth of the overall pie, maintaining that a rising tide lifts all boats; Democrats point out that almost all the benefits, for decades has been going to the top 1%, and they call both for using the tax system to rectify this imbalance, for strengthening unions and other steps that might assure more equitable growth.

For ten years, when I worked for USAID (the Agency for International Development) I was a fierce advocate for the third approach, basic needs. The most compelling case was infant mortality. Across the world, infant mortality rates have startling differences. In wealthy societies, especially among those with average or higher income levels, it is a very rare tragedy, perhaps occurring fewer than five out of a thousand live births. A pregnant woman fully expects to have her baby and to celebrate a birthday a year later. And no one worries that a one-year old will be alive at age five. It was not this way for most of human history. In the early years of the United States only half the time did children reach age five. All parents could expect that some of their children would die, typically half of them. This situation persisted in poor countries well into the twentieth century. And today is still one in ten in the poorest places.

The leading cause of death for infants in poor countries, is dehydration caused by diarrhea, which itself has multiple causes. It turned out, however, that rather than waiting multiple decades for aggregate growth to bring about a decline in such deaths, it was possible with a simple packet of sugars and salts (costing pennies to produce) to counteract such dehydration. When properly pursued, even in the poorest areas, infant mortality could be cut in half in two years.

What would it mean to approach the United States today, not for the poorest among us, but for the middle class, through a basic needs lens? (Poverty is a special case). I envision these steps:

  1. For each of the major spending categories of the household budget, to ask, "What are the core needs we are trying to meet through our consumption?"
  2. Of each of those needs, ask, "How well are we doing as a society? -- Are they being met?"
  3. If not overall, then "Where are we failing? Is it just a matter of the very poor, or are we failing for those with modest or middle class incomes as well?"
  4. Then, outside the very poor, "What can be done about it? Will higher levels of income solve the problem? To what extent, and over what time frame?"
  5. When we sum up such answers across the household budget, even if higher income is the answer, "What's the total growth for modest income households? Are they no longer modest income?"
  6. And finally, to achieve needs fulfillment for modest and middle class households, "Is there a better solution than looking to higher income levels?"