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From the People's Weekly World,8-27-2000
It takes mass struggle to end poverty
By Greg Godwin
A recent study entitled "Does a Rising Tide
Lift All Boats?" discredits the widely held belief that the highly
celebrated economic growth of the last decade has benefited working
people as well as the rich. 
Released at the end of June, this new report was commissioned by the
Con-ference Board, a group that "strives to be the leading global
business membership organization that enables senior executives from all
industries to explore and exchange ideas that impact on business policy
and practices." Despite its avowed pro-corporate, management-oriented
bias, the Conference Board paper depicts an economic system that
miserably fails working people, even in what appears to be the best of
economic times.
These results destroy the myths that buttressed the destruction of the
welfare system. Politicians contended that welfare recipients would be
forced to find jobs and rise out of poverty. Instead, more people are
working and more workers are poor. The number of full-time workers in
poverty actually increased between 1997 and 1998.
The study estimates that nearly five million workers and their
dependents are now poor despite the fact that the percentage of full
time workers in the work force has increased from 61 to 66 since 1990.
While unemployment has fallen and more people have found jobs, more
workers have been forced into jobs that fail to lift them from poverty.
Critics have argued that the impact of poverty on low-income workers has
been blunted by Earned Income Tax Credits. Gene Sperling, the head of
the White House National Economic Council, is quoted by The Wall Street
Journal (June 29) faulting the study for ignoring the Earned Income Tax
Credit. Sperling, maintains that the program "has helped push a few
million people above the poverty line."
The Conference Board research refutes this claim, however, citing the
regressive impact of changes in Federal Income and Social Security taxes
on low-income workers. The increasing tax burden on the poor has more
than offset the benefits of the tax credit. The Conference Board study
cites a 1995 paper by the National Research Council that found that
balancing tax credits against higher taxes actually left more low-income
workers in poverty than the official government figures.
The author of the study, Linda Barrington, is one of the leading
authorities on poverty measurement, co-editing the poverty statistics
for the millennium edition of the Historical Statistics of the United
States. These credentials make the results of her examination of these
trends over the last forty years even more striking. She found that
since the early '70s there has been little relief from the grinding
poverty afflicting low-income workers. In other words, the expansion or
contraction of the economy over the last 30 years has neither reduced
nor increased the level of poverty for low-income workers.
This is a startling result since it implies that the cherished belief of
conservatives and neoliberals, the belief that economic growth will
dissolve poverty, is simply false. Commenting on this study in The Wall
Street Journal (June 29), University of Michigan poverty expert, Sheldon
Danzinger, added "the average wage for a full-time worker without any
college education was 8 percent less last year than it was in 1972."
On the other hand, Barrington notes that the degree of poverty among
working people dropped dramatically from the mid-1960s to the early
1970s. Paradoxically, she attributes this sharp decline to the economic
boom of the 1960s. She coolly notes that "Subsequent expansions have not
been strongly associated with a reduction in poverty among full-time
Perhaps because of shortsightedness, perhaps because of editorial
pressure, Barrington fails to mention the great mass movements of the
'60s that provoked some of the sharpest assaults upon poverty since the
New Deal. In truth, it was not the war based economic expansion that
ameliorated poverty in this period, but the upsurge of popular struggle
for Civil Rights and against the Vietnam War that forced a "War on
Poverty" upon the U.S. ruling class. 
The reason  and the only reason  that poverty declined during the
'60s was the powerful mass movements that forced U.S. elites to allocate
federal funds to improvements in social benefits directed to the poorest
and neediest citizens. It is these very programs that have been targeted
by politicians in recent years. 
Inadvertently, Barrington acknowledges their success in reducing
poverty. As a result of these programs, poverty among full-time, working
families was reduced by more than half from 1966 until 1973. No
significant reduction has occurred since, and, indeed, we now see
poverty rising in spite of strong economic growth.
Barrington's study confirms that non-white full-time workers suffer
greater poverty than their white counterparts. Nonetheless, the
anti-poverty policies of the '60s were remarkably effective in reducing
poverty among minority full-time workers, and succeeded in reducing the
1973 poverty rate to less than one-fourth of what non-white workers
experienced in 1966. This gives the lie to the view that these programs
are ineffective. It also destroys the racist, demagogic charge that only
chronically unemployed, welfare recipients were benefited by the
programs own in the 1960s.
But, minority workers have been "lifted" even less than their write
counterparts by the economic expansion of the 1990s. When Dr. Barrington
looked at regional data, she noted that poverty among full-time
non-white workers has been rising sharply in the Northeast, with over
half of the gains made in the sixties wiped out by 1998. 
The rise in non-white poverty is even sharper in the Midwest, doubling
between 1994 and 1998. The South, too, shows a higher incidence of
non-white poverty, with an increase during this so-called economic boom.
Oddly, the Conference Board study shows a decline of non-white poverty
in the West against the rising trend of poverty among all full-time
workers, both white and non-white. 
In addition to the sharper growth in poverty, minority full-time workers
experience greater fluctuations in and out of poverty. Barrington claims
that these changes  what she calls "economic turbulence"  is at
least two times greater for non-white full time workers than workers
taken as a whole. This means that it is even more difficult for
non-white workers to save and plan for education, retirement, and
familial support. This "turbulence" suggests that the legacy of
employment discrimination, of "last hired, first fired," remains for
minority workers.
Why are people working full-time at greater risk of falling into
poverty? The Conference Board study reveals a clear and distinct answer:
High and middle paying jobs are disappearing in the U.S. only to be
replaced with low paying jobs. 
There is no great mystery here. In 1963, high and middle paying jobs
accounted for 65 percent of all non-supervisory and production jobs. In
1998, that percentage had fallen to 37 percent. Low paying jobs now
(1998 figures) account for 63 percent of all workers. Production workers
have fallen from 30 percent in 1963 to 15 percent of all non-supervisory
and production workers in 1998.
This development has sometimes been described as "the export of high
paying jobs to other countries." While the work may shift to other
areas, this characterization is misleading. The "high pay" is not
exported, but destroyed. And therein lies the essence of the New
Economy: an increase in profits at the expense of working people, an
increase in the rate of exploitation.
The erosion of the minimum wage only worsens the poverty experienced by
low-income workers. In a report on the Conference Board paper, The Wall
Street Journal (June 29) estimates that the federal minimum wage in 1969
was equivalent to about $7.00/hour in today's dollars. This is nearly 36
percent above the minimum wage of $5.15 an hour. Is it any surprise that
low-wage, poverty level jobs are increasing?
The promise of prosperity held out by globalization rests on the faulty
premise that promoting economic growth will benefit everyone. Workers
have been asked to accept NAFTA and other free-market schemes because
these policies are believed to stimulate growth, and thus, raise
everyone's standard of living. Nearly every bourgeois political party in
the developed countries now accepts this thinking as dogma  economic
growth is the surest road to economic justice. 
But the Conference Board study demonstrates that growth does not deliver
the goods to poor and working people. Their examination of tends over
the last 40 years affirms that the working class only gets what it wins.