Poverty in Texas

1. Poverty and Politics: About this chapter

This chapter is being developed to support the Texas segment of Poverty and Politics, a version of Government 312L taught by Professor Henry Dietz in the Government Department at the University of Texas at Austin. The topic is part of Dietz's lower division Government class entitled Poverty and Politics that covers poverty and politics in the US and Texas, as well as the Third World.

The course consists of three sections. The first covers areas such as how to define poverty and the various ways poverty has been viewed over time. It also discusses the many explanation that have been offered as to why poverty exists and persists in a country such as the United States. The second examines what policies are in place to confront the issue of poverty, how those policies have changed over time, and what the current strengths and weakness are of policies now in place. The third section deals briefly with global poverty.

For each of the first two sections, the course devotes some time to poverty in Texas. It presents the basic facts and figures that describe poverty in the state, and some of the distinctive characteristics of poverty in Texas. It also looks at what the state has done in the past and does presently for its low-income populations.

This chapter covers a good deal of the information covered in the class, and presents numerous charts and tables and other graphic materials for the students to use. It also has several video interviews carried out with academics and experts who present their various perspectives on various aspects of poverty in Texas.  To see the graphics for this material, go this page -- https://texaspolitics.utexas.edu/educational-resources -- and scroll down to the "Poverty" section.

2. Poverty in Texas

Texas is the second largest state in the United States in terms of population (approximately 24 million people); only California is larger. And while it still retains its traditional image of wide-open spaces, oil fields, and cowboys and ranching, it has since World War II become an urban, industrial state. Indeed, it has three of the ten largest cities in the country (Houston, 4th; San Antonio, 8th; Dallas, 9th; US Census). As Professor Laura Lein of The University of Texas at Austin discusses in the video below, poverty in Texas is multifaceted.



Despite its growth and diversified economy, Texas also has had the less fortunate history since 1980 of having a larger percent of its population living in poverty than the overall US average. Briefly stated, Texas uses a measure of poverty employed by the federal government that calculates a yearly dollar figure; if an individual or a family has an income that is less than this figure, then that individual or family is by definition poor. For example, in 2006, a family of three individuals, two of which were under 18 years of age, was considered to be "in poverty" if the family's total income (wages, salaries, etc.) was less than $16, 242. For a family of four with two under age eighteen, the "poverty line" or "poverty threshold" was $20,444. As Francis Deviney of the Center for Public Policy Priorities discusses in the video clip found below, the definition of the poverty line, however, fails to reflect the modern expenditures of most contemporary households.




A graph of poverty rates in the US and Texas shows that every year since 1980 Texas has had a higher poverty rate than the US. One might well ask why this is the case, and we shall address this question and others as we go along.

What else is distinctive or notable about poverty in Texas? One way to answer this question is to ask how Texas ranks with the other fifty states on a variety of indicators. For example, in 2007 Texas ranked second among all the states in the percent of its populace that was poor (that is, only four states had higher rates). The poverty rate for Texas in that year was 16.5%. The only other state that had higher poverty rates was Mississippi (20.1%). It should be pointed out that the four other states in the top five all have much smaller populations than Texas, and all are predominantly rural, as this table illustrates. This fact alone makes Texas distinct; it clearly has the highest poverty rate of any large industrial state.

But Texas also has far greater numbers of poor people than these four other states. Its poor population in absolute numbers (3.934 million people) is larger by far than the combined poor populations of the other four states (3.9 million for Texas compared to 2.13 million for the other four together (US Census Bureau "Income, Earning, and Poverty Data from the 2007 American Community Survey", p. 15). Indeed, California (total population 36.8 million) is the only state with a larger number of poor people (4.67 million) than Texas. The third and fourth largest poverty populations are in New York (2.8 million) and Florida (2.3 million), but all of these states have significantly lower poverty rates (California 12.7%, New York 14.3%, and Florida 12.5%) than Texas. Texas therefore has both a large number of poor people and a high percentage of its population living in poverty. In 2007, Texas ranked ninth in its poverty rate for the elderly; it ranked forty-ninth in the percentage of its adult population with a high school diploma; and it ranked first, at 24.4 %, in the percent of its populace with no health insurance.

However, some of Texas' poverty characteristics are similar to the United States overall. For instance, poverty in Texas is not evenly distributed by race, nor is this the case in any state, as the figures in these charts and graphs illustrate. Texas is now close to being what is referred to as a majority-minority state, which means that the two largest racial minority groups in the state (African-Americans and Hispanics) (are these the proper labels?) will within the next few years together constitute a majority of the of the state's population. According to 2007 US census data from the American Community Survey, 46.5% of Texas' population is white/Anglo, 11% is African-American, and 35.2% is Hispanic. Yet the distribution of poverty by race is no way resembles this distribution. Of the Anglo population, 8.4% is poor, while 23.8% of the African-American and 24.8% of the Hispanic populations are poor. In other words, the rate of poverty among the two minority groups is three times greater than among the Anglo population .

But the distribution of poverty by race in Texas can be looked at in another way. If we take the entire poor population of Texas (some 3.9 million people), how are they divided up by race? 23.8% of all poor Texans are Anglo, and 15.8% are African-American, but well over half (53%) are Hispanic.

How else are poor Texans distributed within the state? As noted above, Texas is now an urban state; as of 2007, 86% of the population lives within a metropolitan statistical area (MSA). An MSA must have a at least one urbanized area of 50,000 or more inhabitants. Texas, in other words, has a higher rate of poverty for its population as a whole than has the US, which is a distinctive characteristic. It is also a large, urban, industrial state, but it has had poverty rates over the years similar to much smaller rural states, another unique characteristic. But that fact that poverty is unevenly distributed across its major racial groupings is not unusual.

There is another aspect of poverty in Texas that is distinctive, and that concerns the very poorest Texans. In 2005, of the thousands of counties in the entire United States, the two absolutely poorest (with populations in excess of 250,000) in terms of median household income (the median income is defined as the half-way point in a distribution - that is, half the households were higher and half were lower) and percentage of population counted as poor were both along the Texas-Mexico border - Cameron County and Hidalgo County. Cameron County, whose county seat is Brownsville, had in 2005 a median household income of $24,501; Cameron Country (county seat McAllen) was virtually the same ($24.684) .

In order to grasp how poorly off these counties are, the median household income in 2005 for Texas was $42,139 and for the United States overall $46,242. Or another comparison: Cameron and Hidalgo were the only two counties in the United States with median household incomes under $25,000; one other nationally (Bronx NY) was under $30,000 ($29, 228), meaning that these two poorest counties were indeed poor. Cameron and Hidalgo counties also had the highest poverty rates of any counties in the United States; each had a rate of about 41%. Again, for comparison's sake, El Paso had a poverty rate of 29%. Finally, of the ten poorest counties in the United States, Texas had El Paso (sixth) and Lubbock (tenth) in addition to Cameron and Hidalgo. Texas was thus the only state to have more than one of the poorest ten counties nation-wide, and it had four. This table illustrates Texas's predominance among the ten poorest counties in the United States.

It may also be of interest to know that by one widely-used standard Texas has the poorest place in the United States. Cameron Park (in Cameron County) is a colonia (see discussion below) that dates back to 1968. Naming the poorest place in the United States depends heavily on population; after all, there are some very small towns scattered across the country of a dozen or so inhabitants that are extremely poor. But if we take as a definition of a "place" any settlement that has at least a thousand households, then Cameron Park was in 2005 the poorest place in the United States. Its 5900 or so inhabitants had a median individual income of $4100; the median household income was $17,000. As noted earlier, Cameron County, the poorest county in the United States, had a median household income of $24,500, meaning that Cameron Park's median income was only two thirds that of the county - and Cameron County is the poorest county in the country. In Texas in 2005, median household income was $42,000. 60% of Cameron Park lived below the poverty line; 20% of its adult population had a high school degree (compared to Texas average of 72%).

There are dozens of additional ways to think about poverty in Texas and to compare Texas with the United States as a whole - education, child care, health insurance, health care and health disparities, housing, access to state services, ad so forth and so on. Rather than examine each of these facets of poverty here, we shall wait until Section 5, which discusses poverty policies in Texas.

3. Inequality in Texas

The question of poverty in Texas is in some ways linked to, but is distinct from, the question of inequality in Texas. The first deals with who is poor - how many people in Texas live below the official poverty line, what counties are poor, how poverty is distributed racially and geographically, and the like. But investigating this question tells us nothing about the difference between the wealthy and the poor in Texas, which is exactly what inequality asks about. Numerous ways have been developed to measure inequality; probably the best known of these is the Gini Index or Coefficient.

The Gini Index compares the actual distribution of a population and income with a hypothetically perfect distribution. For example, if a society had a perfectly equitable distribution of income, everyone would receive exactly the same income; there would be no need to talk about the wealthiest third or quarter or fifth of the population. However, in every human society of any size and duration, someone always has more income than someone else, so the question is not one of whether inequality exists (it does), but rather one of how much inequality there is.

The Gini Coefficient ranges from 0.0 to 1.0; the greater the income inequity in a society, the higher the Gini Coefficient. If a society existed where every member had exactly the same income as every other member, its Gini Coefficient would be 0.0. On the other extreme, if in a society one member received all of the income and no one else received anything, then its Gini Coefficient would be 1.0.

What societies have the least and greatest degrees of inequality? As a rule, the Scandinavian countries (Norway, Sweden, Denmark, Finland) have the world's lowest Gini coefficients (around .20-.25); some countries in Africa and Latin America have the highest (.60 or higher). The United States as a nation has a Gini Coefficient of around .47; this figure has been rising steadily since the 1980s.

The Gini Coefficient has been calculated for Texas. In 1999 it was .47, while in the same year it was .46 for the United States as a whole. In 1979, twenty years earlier, both the US and Texas had coefficients of .415, meaning that inequality had risen both nationally and in Texas. In 1999, Texas was tied with Florida for the sixth highest Gini Coefficient of all of the states; only New York (.499), Louisiana (.483), Mississippi (.478), Connecticut (.477) and California (.475) had higher. In 2007, Texas had the 4th highest (.473), with only Louisiana (.478), Mississippi (.48) and New York (.5) registering higher Gini Coefficients. Texas is only one of three states to rank in the top five in each category - that is, to be in the top five in poverty rate and income inequality (the other two are Mississippi and Louisiana).

We have already noted that Texas has some of the poorest counties and places in the United States. But it also has some of the wealthiest. In 2006, for example, Plano (a Dallas suburb) had the highest median household income of any city over 250,000 in the United States - $71,560. Sugarland (a Houston suburb) had the ninth highest median income - $86,231 - in the country for cities between 66,000 and 250,000. And Frisco, a city in the same size category as Sugarland, had the second lowest poverty rate in the United States at 2.1%.

These figures all argue that Texas is among the most unequal of states in the United States; its wealthy are wealthy on a nation-wide basis, while its poor live, by some standards, in the poorest places and counties in the entire country.

4. Colonias

A distinctive characteristic of Texas poverty is the concentration of extremely low-income communities along the Texas-Mexican border. Universally referred to as colonias, these settlements date back to perhaps the 1950s. They consist of irregular communities, generally created on unincorporated country land, that for the most part initially lack most basic facilities - water, sewerage, electricity, paved streets and sidewalks, and the like - and where much of the housing is at least initially self-help and substandard. In many ways they closely resemble the ubiquitous squatter settlements or shanty towns of Third World cities.
Colonias are found in all of the border states (California, Arizona, New Mexico, Texas), but the largest number of people and settlements exist in Texas. According to figures from the Secretary of State's office in , Texas has approximately 2300 colonias with a total population of at least 450,000 people (accurate figures are difficult to come by); the great majority are Hispanic. About two thirds of all colonia inhabitants are US citizens; about 85-90% of all those under age eighteen were born in the United States.

These settlements are located for the most part in Texas' border counties . They have come into existence as developers divided worthless or unused agricultural land into small lots, put in little or no infrastructure, and then sold these lots to low-income individuals who wanted affordable housing. As already discussed, some of the nation's poorest counties exist along the Texas border; per-capita median incomes in counties such as Starr, Hidalgo, Cameron and Maverick counties average less than half of the overall Texas state median. Cameron Park, discussed earlier and labeled as the poorest place in the United States with at least a thousand households, is a colonia.

Colonias fill a need for low-income housing, which exists in limited supply in border counties and cities. Most low-income households have little knowledge of, or access to, standard housing. They have no collateral for bank mortgages; their incomes are low and/or unpredictable; and a lack of English-language skills may prevent them from seeking assistance. Lots in colonias are frequently sold through a system known as "contract for deed", which means that the developer offers a low down payment and low monthly payments, but that the buyer has no title until he makes the final payment. In years past these contracts for deeds often had high interest rates and if (as is frequently the case) the contract was not recorded with county authorities, then a developer could reclaim the land if the buyer misses a payment and then resell then land, along with any improvements that had been made. In 1995 the state legislature passed the Colonias Fair Land Sales Act to address such problems, but land titles and foreclosures remain a major problem for the colonias.

In addition to such legal issues, a variety of other challenges exist. Access to potable water and sewer services, for example, is not only an inconvenience for the residents but is a major public health problem. Most colonias do not have a sewer system, meaning that residents have to rely on septic tanks that may be too small or inadequate; in addition, drainage in these areas is likely to be poor and if septic systems overflow, sewage can pool and present significant health risks.

But even if a colonia has an adequate sewer system, border counties do not have facilities to treat wastewater, and wastewater can go untreated or inadequately treated into canals or streams and rivers that eventually drain into the Rio Grande or the Gulf of Mexico. Many colonia residents have no access to potable water in their homes and must either drive somewhere to purchase it in barrels and/or depend on well water than can be contaminated.

Not surprisingly, the colonias have much higher incidences of disease than any other part of the state. Hepatitis A, salmonellosis, dysentery, cholera and tuberculosis occur much more frequently in the colonias than elsewhere. This problem is compounded by a lack of medical services: shortages of primary care providers, resident difficulties in accessing health care because of long distances to travel, fear of losing wages for time spent away from work, lack of awareness of available care, and no health insurance.

Unemployment is yet another problem. While statistics are spotty, most studies agree that colonia unemployment sometimes reaches five or six times the state average. Under-employment also presents difficulties for many residents, since many have seasonal work (field labor, construction) or are migrant workers who live in the Valley only part of the year. And finally, education for children is a constant problem. Schools may or may not exist in a colonia; for low-income families sending a child to school can be a substantial sacrifice; and establishing residence for a school district that services city but not county residents is often difficult to do.

While a variety of programs exist that are aimed at assisting the colonias (see Part III), these come from several sources - municipal, county, state, federal, and non-governmental agencies (churches, charity groups, etc.) - and this multiplicity is itself a problem since many of them come and go depending on the political and economic climate.

The colonias thus present an extraordinary combination of factors that have created poverty that is geographically and racially concentrated and that from almost any perspective presents enormous problems for their inhabitants and for the authorities that confront them.

5. Why does poverty exist and persist?

Explanations as to why poverty exists and persists over time have bedeviled observers for centuries and have not surprisingly given rise to enormous debates and arguments. All of the great religious creeds - Christianity, Judaism, Islam, Buddhism and all the rest - spend a good deal of time telling their followers what the more fortunate among them should do for the less fortunate, but they say little about why some people have more material wealth than others.

One reason for this absence may be that for most of the history of humankind, the vast majority of people were poor. Most societies consisted of a small wealthy elite and a large number of poor, with little in between, and one reason for this state of affairs lay in the energy available to produce goods and services. Most energy came from animate (i.e., animals, including human beings) sources of energy. Human beings dug the soil and /or often pulled a plow (or guided animals that did); the wealthy had slaves, and the poor did for themselves. Inanimate sources of energy (e.g., water power for a mill) were useful but limited. Poverty was simply a fact of life for the great majority of human beings up until the latter part of the eighteenth century, and explanations as to why that was the case - "the poor ye shall always have with you" - were largely fatalistic in nature.

But in the late eighteenth and early nineteenth centuries the Industrial Revolution changed everything. A whole litany of discoveries and inventions that took advantage of inanimate sources of energy - coal and steam in particular - meant that productivity could be multiplied many times over, and that goods and services previously affordable only by the wealthy started to become available to many more people as the cost per unit dropped. As the nineteenth century advanced and as a middle class began to emerge, it became possible for the first time to ask if poverty might be reduced and eventually eliminated as the Industrial Revolution really took hold and as more and more consumer goods and services at lower prices raised the standard of living for more and more people.

As these fundamental changes took place, competing explanations arose as to why everyone was unable to benefit. One school of thought saw poverty as deprivation - the poor were deprived of basic goods for one reason or another, generally inadequate monetary income. Another saw exploitation as accounting for inequalities in a society - industrial capitalism required that some percentage of people be poor so that the wealthy could thrive. Inequality was yet another explanation; the poor were poor relative to the conditions under which the majority of citizens live in a given society, often because of discrimination based on gender, age, race, class or ethnicity. Structural conditions were yet another; this explanation argued that certain laws or traditions in a society maintain certain groups in poverty by excluding them from education or from other means of improving themselves. Finally, there were cultural and/or individual explanations that argued that individuals (or members of a group) are poor because of certain attitudes or behaviors that they had.

These explanations - and the arguments between and among them - are still very much around as we move into the twenty-first century. For simplicity's sake, many scholars (and politicians) have distilled all of these explanations down into two: individualistic versus systemic explanations. The first sees poverty as an individual failing of some sort, arguing that if an economic system gives everyone the chance to do well, then an individual (or group) that does not do well has only itself to blame. In its simplest form, the poor are poor because they are lazy, unwilling to work, and want a hand-out. In contrast, the systemic explanation sees the economic system as imperfect and that some groups or individuals will not or cannot do well because of these imperfections. Thus the system needs adjustment before everyone can do well. In its simplest, the poor are poor because of the system, and nothing will or can change until the system can be changed.

The first of these is a more conservative explanation, stressing as it does individual responsibility and initiative; the role of the state was to stay out of the way and to let the free market economy operate. The second is a more liberal view since it emphasizes the need for the system to be improved; therefore the state has a definite role to play in correcting the shortcomings of the free market. And within the United States these two points of views have been debated for decades on a partisan basis; the Republican Party is associated with the individualistic point of view and the Democratic Party with the systemic.

The situation in Texas is somewhat different. Virtually all historians and observers agree that since it became a state, Texas and Texans have by and large embraced the individualistic perspective. From the late nineteenth century on, when the post-reconstruction constitution was ratified, Texas politics was dominated by the Democratic Party, but that party's ideology was a conservative perspective that stressed "rugged individualism" and a minimal role for the state. And as the Democratic Party became increasing liberal during the 1970s, Texas moved quickly away from its traditional alliance with the Democratic Party and became a Republican stronghold.

Texas thus clearly tends toward the conservative side, but as we have noted, boiling complex social and economic problems down to facile explanations does not provide a complete or especially useful basis for coming to grips with poverty in the state. Rather than take a position on one side or the other, we shall instead examine some facts about poverty in the state that may give us a more comprehensive understanding of why poverty exists and persists in the state as it does.

5.1 Wages and employment

As noted earlier, Texas has a somewhat lower median household income than does the United States as a whole. In 2003 The Economic Policy Institute reported that Texas had 91% of the median income of the US ($39,200 in Texas versus $43,300 for the US). And the hourly median wage in Texas for the same year was 88% of the national average ($12.01 versus $13.62).

These figures suggest that wage-earners in Texas lag behind the rest of the country and, simply put, earn less. In addition, since 1979 a worker earning the national median saw his/her income increase by 10% in 2003, which is not a large increase - but the same worker in Texas saw his or her wages increase by only 2.4%, while the cost of living increased a great deal more.

These figures alone also offer one explanation as to why Texas has the problems it has: its wages are lower and have increased much less over the last thirty years. Therefore we might have some evidence to ague that some Texans are poor because they are deprived of wages sufficient to rise above the poverty line. To explore this possibility further, we can focus on low-income families in particular. Families in the bottom or poorest fifth (or quintile) of the total population are frequently counted as the poorest; after all, 80% of all families have higher incomes. In 2003, such a low-wage worker was paid 89% of what his or her national counter-part earned ($7.56 vs. $US 8.46). And since 1979, the US average low-wage worker saw wages increase by 6.9% (adjusted for inflation), but the Texas worker's wages increased 1.0%.

What accounts for this wage structure?

In the first place, Texas has had for many years an unemployment rate that is higher than the national average. A high employment rate suggests a surplus of labor - i.e., more people are looking for work than there are available jobs. This imbalance means that employers can offer lower wages and workers (especially those with few skills) will have little alternative but to accept them. And a high unemployment rate also means that moving up the ladder toward better-paying jobs and better income will be difficult.

Second, among low-income Texas a relatively large percentage works part-time, and does so involuntarily. That is, many bottom-quintile income Texans work part-time, even though they might like full-time work. In 2003, a fifth of all part-time workers in Texas wanted to find full-time work but could not do so; this figure compares with the national average of 14.7% nationally.


Keywords: poverty