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KERA's One Crisis Away project focuses on North Texans living on the financial edge.

Exploring The Poverty Industry: 'Children And The Poor Being Mined For Revenue'


Government programs are in place to help impoverished families, orphans, the disabled and the elderly. Sometimes, though, the money from those programs doesn’t make it to the people in need.

On Think, Krys Boyd talked with University of Baltimore law professor Daniel Hatcher, about how these funds are often syphoned off by local governments. Hatcher is the author of “The Poverty Industry: The Exploitation of America’s Most Vulnerable Citizens.”

The KERA Interview

Daniel Hatcher on …

… what he calls the poverty industry:

“With the poverty industry, you have state and state human service agencies partnering with private companies. Here rather than coal being mined or rock being mined for coal, you actually have children and the poor being mined for revenue that is unfortunately often diverted from the intended purpose.”

… why this is happening:

“I think sometimes you’re seeing this happen increasingly because states are increasingly cash-strapped. States across the country, both red states and blue states, have been unwilling to raise sufficient revenue through general taxation so they’re looking for money elsewhere, wherever they can get it.”

… how money is taken from foster care children:

“I represented a former foster child in Baltimore who entered care at age 12 when first his mother died. Then while he was in foster care, they located a brother who might have become a placement resource. His brother dies. Then they locate his father who is a potential placement resource and his father dies … the foster care agency realizes that after the father dies that child is eligible for survivor benefits because the father worked and paid into the system and earned this benefit that belonged to the child, but the state never told the foster child it was applying for the money. Never told him that the agency was taking over control of the money. And then they took every payment from this child to replenish state coffers.”

… Texas using Medicaid funds:

“Texas is an example that has used some of these elusory schemes to maximize federal Medicaid funds over the years and then much of the funds that are again intended to provide care for the vulnerable populations have been diverted to general coffers. Now once it’s in general revenue it might be used to those who need help, but like you indicated in the beginning of the show it could be used for just about anything once it’s in the general funds.”