Poverty is the constant fear that it will get even worse.

To truly alleviate poverty on a large scale, we must fix a system in which normallife experiences such as childbirth can translate into economic insecurity. Mostof the poor are not unexplainable anomalies in an otherwise well-functioningsociety. Instead, they are the normal consequence of structural arrangementsguaranteed to produce economic insecurity.

Consider another example—education. It is true that in most countries, asin the United States, a higher level of educational attainment is typically as-sociated with a lower risk of economic insecurity. But the penalties associatedwith low levels of educational attainment, and the rewards associated with highlevels of attainment, vary significantly by country. Full-time workers without ahigh school degree in Finland, for instance, report the same earnings as thosewith a high school degree. In the United States, however, these workers ex-perience a 24 percent earnings penalty for not completing high school.23 InNorway, a college degree yields only a 20 percent earnings increase over a highschool degree for full-time workers, versus a much higher 68 percent increase inthe United States.24 The percentage of those with a high school degree earningat or below the poverty threshold is more than 4 times higher in the UnitedStates than in Belgium.25

Indicative of howclose many Americans are to poverty, a recent study by the Federal ReserveBank found that 37 percent of Americans do not have enough savings put asideto protect them from a $400 emergency.20

economic insecurity will strike a majorityof the population but will do so for a relatively short period of time.

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