ECONOMIC IMPORTANCE OF POVERTY

Poverty as something that serves functions — the uncomfortable side

Herbert Gans wrote a well-known 1972 essay, "The Positive Functions of Poverty," arguing that poverty persists partly because it's useful to people who aren't poor.

His points included: someone has to do the dirty, dangerous, low-paid work; poverty creates jobs for the professions that manage it (social work, policing, pawnbroking); cheap labor subsidizes the comfort of the middle class; and the poor absorb the costs of economic change.

Gans wasn't defending poverty. He was arguing that if you want to explain why it's so hard to eliminate, follow the incentives of the people who benefit from it.

Gans's argument, then. His 1972 paper "The Positive Functions of Poverty" in the American Journal of Sociology applied functionalist analysis — normally used to explain why useful institutions survive — to something obviously harmful, as a deliberate provocation. The question he posed: if poverty is so costly, why does it prove so durable? His answer: because it's functional for the non-poor, who therefore have little incentive to end it.

He listed about thirteen functions. The main ones:

Economic

• Someone has to do the work nobody wants — dirty, dangerous, underpaid, undignified. A pool of people with no alternatives guarantees that labor supply at low wages.
• Low wages subsidize everyone else's consumption. Cheap domestic help, cheap food, cheap construction all transfer money upward.
• Poverty creates jobs for the people who manage it: social workers, police, prison staff, public health workers, pawnbrokers, moneylenders, landlords of bad housing, sellers of expired goods.
• The poor absorb the costs of change. Highways get routed through their neighborhoods; they're laid off first in a downturn.
• They buy what others won't — day-old bread, secondhand clothes, the services of unlicensed or discredited professionals.

Social and cultural

• The poor serve as a moral contrast. Labeling them lazy or immoral validates the work ethic and the assumptions of those doing the labeling.
• They absorb deviance. Behavior that would be scandalous higher up the ladder gets treated as expected.
• They provide vicarious entertainment — a source of imagined freedom from convention, and later a source of cultural material (blues, jazz, hip-hop) that others profit from.
• Charity toward them gives the comfortable a way to feel virtuous.

Political

• They're politically weak, so they can be made to bear the burden of growth without effective resistance.
• Historically, their votes were available for purchase or manipulation by urban machines.
• They function as a symbol in political contests, invoked by both the left and the right for their own purposes.

What Gans was actually claiming

He wasn't saying poverty is good or that anyone conspires to maintain it. His argument was methodological: most functions of poverty have workable substitutes — automation could handle bad jobs, higher wages could be paid, deviance could be tolerated more broadly — but every substitute costs the non-poor something. So the persistence of poverty reflects a distribution of power in which the beneficiaries can avoid paying those costs.

The criticisms worth knowing

Functionalism gets accused of circular reasoning: showing something has consequences that benefit someone isn't the same as showing those benefits explain its existence. Critics also note the essay can't distinguish "functional for society" from "functional for the powerful," which Gans partly conceded was his point. And empirically, poverty imposes large net costs even on the affluent, which undercuts the notion that they're straightforwardly net beneficiaries.

Still a standard reading in stratification and social policy courses, usually paired with Gans's later book The War Against the Poor (1995) on the "underclass" label.