We Need More Than Just More Jobs

“Poverty in America: Why can’t we end it?” Professor Peter Edelman asks. Or maybe the New York Times headline writer asks, since Edelman proceeds to tell us that we can — and how.

Top of the to-do list is to create more jobs that pay decent wages.

Well, how do we do that?

We need a full employment policy, Edelman says. This, I take it, means both public investments and diverse fiscal and labor policy changes that would achieve — and then sustain — a negligible unemployment rate.

We’d have more jobs, but also a relatively small pool of jobless job seekers. Employers would thus have to offer decent wages if they wanted to hire people qualified for the jobs they needed to fill.

Professor Robert Pollin, author of the new Back to Full Employment, says this happened in the 1960s and again in the late 1990s, especially for people “at the low end of the labor market.”

Progressives, Edeleman among them, also call for larger investments in education and skill-development.

Not the answer, according to an analysis by the Center for Economic and Policy Research.

We’ve already got a higher percent of college graduates in the workforce than we did at the end of the 1970s. Yet the share of good jobs, as CEPR defines them,* is smaller — and was even before the recession set in.

The problem, it says, isn’t that workers’ skills haven’t kept up with the pace of technological change — though many allege a “skills mismatch” as the source of our persistently high unemployment rate.

It’s that workers have lost their bargaining power, especially those at the middle of the income scale and below.

Diverse changes in the labor market are responsible for this, e.g., jobs outsourced from the public sector and from local manufacturing to cheap labor markets overseas, a “dysfunctional immigration system” that depresses both wages and other aspects of job quality.

For these and a variety of other reasons, many of the top-growing occupations are in service areas where wages are characteristically low — retail sales, home care, food preparation and other restaurant work, etc.

These jobs obviously can’t be exported. Nor can the people who do them be replaced by machines.

But barring policy changes, they’ll still be low-wage jobs with few or no benefits.

I’m all for improving our public education system and for making it possible for low-income people to go to college — and graduate. We’ve got a long way to go.

But if every working-wage person in the country had a college degree, we’d just have even more college graduates doing work well below their competencies — and effectively pushing out people whose skills match the job requirements.

So we obviously need more good jobs for these current and future college graduates.

But if we’re going to end poverty, we need to make those low-paying service and other proliferating bottom-of-the-barrel jobs better too.

I’ll have more to say about this. In the meantime, Happy Labor Day to you all.

* A “good job” pays at least $18.50 an hour — the 1979 inflation-adjusted median for men. It also offers employer-subsidized  health insurance and an employer-sponsored retirement plan. CEPR considers other aspects of job quality important, e.g., paid sick leave, but couldn’t get reliable data to measure changes since the end of the 70s.

“Poverty Is First and Foremost a Problem of Work”

A thought-provoking Q&A session with Professor Peter Edelman and Heather Boushey, a senior economist at the Center for America Progress.

The occasion was Edelman’s new book, So Rich, So Poor. And like the book, the discussion revolved around poverty in America — why we have so much of it, what we could do to have less.

For both Edelman and Boushey, the key to both is work. Poverty is “first and foremost a problem of work,” Boushey said.

She wasn’t referring to the current shortage of it, but rather, as Edelman later put it, “work that produces a decent income.”

Back in the mid-1970s, “something happened to male wages,” Boushey said. The “something” was a leveling-off in their real value — and an actual drop in wages for men with, at most, a high school diploma.

Family incomes were “held up by women.” Many more of them in the labor force and remaining there after marriage or rejoining when things got tough.

But workplaces are generally “hostile to families,” Boushey added. And it’s still the case that work/family conflicts affect women more than men.

The bigger issue, however, is the growing number of single-mother families — a major theme in Edelman’s book.

No second income here. And wage losses — job losses too — because there’s no dad around to help cope with the child who gets sick or the late-announced scheduling changes that throw child care arrangements out of whack.

Family-friendly workplaces won’t solve the wage problem, however.

Edelman attributed it in part to macroeconomic policies, citing trade and immigration specifically.

He’s referring, among other things, to trade agreements that advantage imports from countries with low labor standards.

Also, I would guess, to policies that allow employers to import temporary workers who will accept lower wages than would otherwise have to be paid. Policies that enable U.S. companies to maximize profits by exporting jobs belong in this category too.

Coming at the issue from a different angle, Boushey said that our macroeconomic policies need to focus on good jobs — specifically, on developing “human capital” by investments in education.

Edelman concurred. He’d like our high schools to offer pathways to work other than college prep — vocational and technical training for bona fide careers.

This, he said, is especially important for youth — most of them racial and ethnic minorities — who are in danger of becoming disconnected from both school and work.

Solutions like these could perhaps lift more of the upcoming generation into the endangered middle class. But what about people who are already working age?

Some, of course, are doing very well, thank you. But, according to Edelman, half the jobs in our economy pay less than $34,000 a year. For a family of four, that’s less than 150% of the federal poverty line — the standard commonly used for low-income.

No silver bullets identified. Edelman, in fact, said he was “very concerned about the next decade.”

He floated some policy changes that could make a difference, but added that we’d first have to decide we have “an income problem.” We’re not facing up to that, he said.

People deflect attention from the wage issue, e.g., by blaming single mothers for having children. Those low on the income scale think that’s where they are because of their “failings” — or because that’s “just how things are.”

Edelman is refreshingly optimistic. We’ve “had other times that were really terrible,” he said. Think of the robber-baron era at the beginning of the 20th century.

But then “people stood up.” They voted to put an end to it. We’re “voting against our own interests now” — and at a time when “we need the largest we we can get to defend what we have.”

Recall that Congressman Paul Ryan, among others, is claiming that we’re helping people too much — and for too long.

So where will the “largest we” come from? Ironically, given the context, Edelman’s said that what we need to do is get people outside of think tanks thinking and talking about poverty — or perhaps about specific poverty-related problems.

This seems to me one of the big challenges of our time.

What will create a broad-based, sustained conversation about work, wages, income supports and the rest? What will translate talk into a political force?

Why Are So Many People So Poor in America?

The gross national income in our country was nearly $14.6 trillion in 2010 — more than $47,300 for every man, woman and child.

So, as Professor Peter Edelman observes, if the GNI were divided equally, everyone would be middle class.

But, of course, it isn’t. In fact, a greater share has been flowing to the notorious 1% for quite awhile now. For Edelman, this is a key reason it’s so hard to end poverty in America — the subtitle of his new book, So Rich, So Poor.

Or more precisely, income inequality is a key reason. For the last 40 years, he says, “our economy has been very unkind to the bottom half of our people.”

At the very bottom, we’ve got nearly 20.5 million people so poor that their household incomes fall below 50% of the Census Bureau’s very low poverty thresholds.

In 2010, about six million — roughly one in 50 — had no income at all except the cash value of their food stamp benefits. For a family of three, this meant, at most, $526 a month — and, of course, available only to buy groceries.

We’ve got terrific public policy, Edelman says. It’s simply not true, as some say, that anti-poverty programs don’t work. Without them, over 40 million more people would be poor.

But the enactment of the Temporary Assistance for Needy Families program ripped “a terrible hole … in the safety net.”

In fact, “welfare is gone,” Edelman says. It’s “basically disappeared in large parts of the country” because states have no obligation to provide cash assistance (or any equivalent) to families who would qualify according to a common standard of need.

This, however, is only one part of Edelman’s far-ranging analysis.

We’ve had “a flood of low-wage jobs,” he says. And “people in the bottom half have been absolutely stuck.”

Well, not quite, but pretty damn near. Between 1968 and 2010, inflation-adjusted incomes of households in the bottom half grew, on average, about half a percent a year.

And at the end, incomes of households in the bottom tenth averaged just $11,904 — well under the federal poverty line for a family of two.

It’s a stretch to attribute this to a flood of low-wage jobs, however. And I doubt Edelman means to.

If there are relatively more of those jobs now, it’s partly because our economy has fewer living wage jobs for workers with no more than a high school education.

Many of been exported to low-wage countries. Many have simply vanished. When was the last time you called, say, the gas company and didn’t get a recorded message?

I suppose it’s also the case that more jobs have become low-wage — relative at least to rising living costs.

What we know for sure is that wages have been stagnating for a long time. In other words, workers haven’t been getting a fair share of productivity growth, as they did during the post-World War II period.

This is especially true for workers without a college education.

The Economic Policy Institute reports that real wages for high school graduates in the private sector increased by 4.8% between 1989 and 2010 and by just 2.6% for those in state government. During the same period, productivity, i.e., the total output of goods and services per hours worked, grew by 62.5%.

Lots of reasons for this. I’ve mentioned a couple. A fine paper from the Economic Policy Research Network takes up these and many others.

Edelman deals not only with low-wage work, but with poverty children inherit from their parents, disparities rooted in race and gender discrimination and the problems single parents (usually mothers) face trying to support themselves and their children.

Also housing policies, public education and, as Nation blogger Greg Kaufmann says, “much, much more.”

Notwithstanding the complexities, however, Edelman believes that poverty in our country is not an unsolvable problem — or rather, collection of problems.

We need “much more political will” to attack them. That, he thinks, will require, above all, a widely-shared view that it’s in our common interest to have “an economy that includes everybody.”

The sticking point here, he says, is that the vast majority of us middle-class voters think we have more in common with the people at the top than the people at the bottom.

This, I suppose, has something to do with the extraordinary hold the myth of boundless upward mobility has on our imagination. The Great Recession has certainly shaken it, though by how much and for how long is hard to say.

But, says Edelman, if we in the middle don’t see “which side of the line” we’re really on — that our fate rests with what happens to the bottom half — “we are cooked.”

Let’s Recall Poverty Before the Safety Net

Huffington Post blogger Dan Morgan looks back nearly 50 years to tell us what poverty was like in his early reporting days.

This is an important, timely post because it reminds us of how poor people lived — and died — before the creation of today’s safety net.

Here in the District of Columbia, Morgan found “people living in basement apartments with dirt floors. Many were hungry, cold and short of coal for stoves. Some children were staying home because they had no shoes.”

Found a penniless woman with no coat to brave the cold weather for a trip to the social service agency. A blind man who made the trip, but was living with his nine children in an unheated place because the agency wouldn’t — or couldn’t — help him buy fuel.

In California, Morgan met a family that had lost three babies to dehydration while picking cotton there in 1936.

Still dreadful conditions 20 years later, he writes, when Michael Harrington chronicled farm worker poverty in that agriculture-rich state.

Morgan cites some evidence that safety net programs have lifted Americans out of poverty.

For example, the official poverty rate for seniors dropped from 28.5% in 1966 to 9% in 2010, at least partly because the federal government started indexing Social Security retirement benefits to cost-of-living increases.

Two other examples based on the Census Bureau’s supplemental poverty measure. You can see them in this nice infographic from the Half in Ten campaign.

But Morgan’s main point is that safety net programs have changed the quality of poverty.

In other words, poor people, by and large, don’t suffer the same acute, life-threatening deprivations as they did before we began building the network of programs that make up today’s safety net.

Morgan focuses on what may be our biggest success — federal nutrition assistance programs.

“Clinical malnutrition,” he writes, “has given way to what government and private agencies call ‘food insecurity.’”

“Poor nutrition, not malnutrition is the biggest problem” now, says anti-hunger expert and advocate Joel Berg.

And indeed, according to the U.S. Department of Agriculture’s 2010 figures, children in only 1% of American households sometimes didn’t get enough to eat because their parents couldn’t afford to feed them.

WIC alone, Berg estimates, has prevented 200,000 babies from dying at birth.

“Progressives,” Morgan concludes, “should not be timid about extolling this achievement. And conservatives, above all, should welcome it” because safety net programs “enable millions more people to participate in the great American market,” e.g., by using food stamps to buy groceries, vouchers to pay rent to private landlords.

Many conservatives do appreciate the safety net, Morgan says. But, even by his own showing, many don’t.

For example, he quotes Newt Gingrich, whose latest tome notes that the 2009 poverty rate was about the same as when the War on Poverty began. “What did we get in return?” Newt asks — a rhetorical question if ever there was one.

We hear the same thing from the Republican Study Committee, which counts a large majority of House Republicans as members.

“Americans have spent around $16 trillion on means-tested welfare,”* it says. “Even with all these resources devoted to assistance for the poor, poverty is higher today than it was in the 1970s.”

This is the send-up for its broad-gauge attack on virtually the whole range of federal programs that constitute the safety net.

And RSC member Paul Ryan, who chairs the influential House Budget Committee, has personally championed radical safety net cuts.

As we head into the Fiscal Year 2013 budget season, both the administration and Congress will be looking for ways to reduce non-defense spending by $54.7 billion.

“The safety net will be a fat target,” Morgan warns.

Some major programs won’t get hit by the automatic cuts the failure of the Super Committee will trigger. But that doesn’t mean they’re safe, since Congress is perfectly free to change them — or the law that partly protects them.

Other programs are wide open, as the Congressional committees and subcommittees parcel out the mandated reductions.

We often focus on defects in the safety net — people who aren’t served, people who are but not sufficiently. This is still important.

But, taking a leaf out of Morgan’s book, I feel we urgently need to show how much good safety net programs do — and to revive the history of what poverty in America was like before them.

* This figure comes from the arch-conservative Heritage Foundation — a not always reliable source. The RSC is also indebted to the Foundation for its uniquely expansive definition of “welfare”.