Poverty Boom USA FWD

Tom Boland (wgcp@earthlink.net)
Sun, 28 Mar 1999 10:30:09 -0800 (PST)

FWD  Boston Globe - March 21, 1999 - page E07


     By Robert Kuttner, 03/21/99

Welfare reform is trumpeted as a splendid policy success. Nationally, the
rolls have declined from over 11 million people in early 1997 to under 8
million today. Some of this reflects the strong economy, but most of it
reflects tough policies that push people off welfare and discourage new
claimants from ever getting on.

Governors can proudly tell you precisely how their case loads have
declined. Wyoming leads with an astonishing 90 percent decline since 1993,
followed by Wisconsin with an 86 percent drop.

What they can't tell you, because most don't really want to know, is how
many ex-recipients are economically worse off, in low wage jobs or on the
street. This is research that private institutions have begun to do, with
only grudging help from government.

In this era of near-full employment, soaring stock markets, budget surplus,
and general prosperity, the poor have become what Justice Brandeis called a
''despised minority.'' Their poverty is widely assumed to be their own
fault. (Since the majority of the poor are children, born into their
poverty, the claim is odd, unless one can identify antisocial behaviors in
utero.)  While patronage of soup kitchens and food pantries, as well as
homelessness, all continue to rise, news coverage of poverty falls.

Yes Magazine recently reported that articles in The Washington Post
mentioning homelessness declined from 149 in 1990 to 45 in 1995 to just 17
last year. The poor are not just politically unpopular, but invisible to an
inured middle class.

Eight years into an economic boom, the poor continue to lose income. The
income of the bottom fifth has declined steadily, from 5.4 percent of the
national total in 1979, to 4.6 percent in 1989, to 4.2 percent in 1997.
Their real purchasing power is below 1979 levels.

Their public benefits also keep being slashed in the name of economic
incentive and budget discipline. One little-appreciated government program
which has not been cut, the Earned Income Tax Credit, is all that has kept
welfare reform from being a total catastrophe. Under EITC, a breadwinner
gets a ''refundable tax credit'' - in other words, a wage subsidy.

But even supplemented by EITC, which can add a few thousand dollars yearly
for a large household, the $5.15 minimum wage is far from a ''family
wage,'' given costs of child care and health care. And other than EITC,
programs that directly benefit the poor are under budgetary siege.

However, most such programs do not have the negative incentive effects
attributed to the old welfare system. Programs like food stamps simply
relieve poverty directly. Housing subsidies make it possible for low-income
families to live outside of squalor. And programs directed at children and
those who care for children increase the likelihood that poverty will not
be passed along to the next generation.

Although welfare reform is far more punitive than it needed to be, it has
one useful side effect. By pushing poor women into low-wage jobs, it
invites us to look closely at the bottom end of the labor market.

Most of the poor, of course, hold jobs and work hard. They work in nursing
homes taking care of our elderly parents, they enter data, clean toilets,
push brooms, ship inventory, and sling fast food. They are the people, as
Jesse Jackson used to say, who ''take the early bus.''

The writer Barbara Ehrenreich, on assignment for Harpers, recently went
underground and worked in a Florida fast food joint. She found the pay
impossible to live on. Some of her co-workers were literally living in
their cars; others were working 16-hour days.

One encouraging development is that unions are once again organizing the
working poor. A notable recent success was the unionization of 70,000
home-care workers in Los Angeles by the Service Employees International
Union. But most low wage workers are unrepresented. The current boom
demonstrates that even when the private economy runs at full bore, it is
not enough to lift working families out of poverty.

It also demonstrates that most poverty is not the result of dysfunctional
or pathological behaviors, just crummy wages and weak bargaining power.

Candidate Bill Clinton, before he was reborn as a New Democrat, urged that
anyone who worked full time should not have to live in poverty.

This very reasonable principle is neither all that costly to society, nor
all that difficult to bring about. It is just tragically out of fashion.

[Robert Kuttner's is co-editor of The American Prospect. His column appears
regularly in the Globe.]


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