Tag Archives: poverty

“Those People”

Most of us have been in conversations that included someone’s dismissive reference to “those people.”

When I was growing up in Anderson, Indiana (with exactly 30 Jewish families in the whole town), the term was often applied to Jews. It was also–and remains–a favored euphemism when race is being discussed by people who don’t like to think of themselves as racists; they just substitute “those people” for the “n” word when discussing the “lower orders.”

“Those people” is also a term frequently applied to the growing number of poor Americans. And it is particularly harmful when used in the context of economic policy. “Those people” wouldn’t need health care if they didn’t eat junk foods and fail to exercise; “those people” wouldn’t need social welfare programs if they weren’t lazy; any benefits provided to “those people” must be closely monitored, because they will use food stamps for candy and/or booze…”Those people” are irresponsible.

Facts and evidence are inconvenient things. Most poor people, according to overwhelming evidence, work 40 or more hours a week. Most recipients of food stamps use them to buy food. And there is growing evidence that needy folks are anything but irresponsible when they are given cash in lieu of benefit programs that are strictly “monitored.”

A recent study conducted by the Roosevelt Institute describes that evidence.

Providing cash directly to individuals has often been met with criticism, suspicion, and fear: the thinking goes that people who need financial assistance are not to be trusted, as their financial position reflects a moral failing rather than a societal one. These objections to cash transfer programs are rooted more in myth than empirical evidence. As the debate about a universal basic income gains prominence, it is important to set the record straight about the behavioral effects of unconditional cash assistance.

In this evidence review, we explore how unconditional cash transfers affected the behavior of recipients in three major natural experiments. While the amounts dispersed and time periods were distinct in each experiment, each provided money without set conditions and without a means test. We synthesize data for the following outcomes: consumption; labor force participation (employment, hours worked, and earnings); education; health; and other social outcomes, such as marriage or fertility choices. Each of these programs shares different components of a universal basic income (UBI), a cash transfer that everyone within a geographic/political territory receives on a regular basis with no conditions on a long-term basis. By understanding the effects of these programs, we can generate answers to how an unconditional cash transfer program might affect recipients in the future.

We may well be transitioning to an economy that simply cannot provide jobs for those who want them. Automation, as I’ve previously noted, is rapidly making many jobs obsolete. Changes in the way we purchase items–especially consumer goods– is inexorably reducing the number of workers in retail occupations.

The transformation of the economic landscape is accelerating, and it is a huge challenge–one which we ignore at our peril.

A UBI–a guaranteed basic income– may or may not be a viable approach to the dislocations to come. But continuing to sneer at the behavior of “those people” and dismissing emerging evidence of the utility of new social welfare proposals is clearly less viable.

A lot of the people who use the phrase aren’t all that far from becoming one of “those people” themselves.

 

Two Countries, Both American

There’s an important new book by Peter Temin, professor emeritus of economics at MIT, titled The Vanishing Middle Class: Prejudice and Power in a Dual Economy.  It paints a depressing  portrait of America and the evaporation of what used to be a healthy middle class.

His assertion: America is no longer a single country. Instead, we are two separate nations, and those nations have dramatically different resources, expectations and fates. As a post to the blog of the Institute for New Economic Thinking put it,

In one of these countries live members of what Temin calls the “FTE sector” (named for finance, technology and electronics, the industries that largely support its growth). These are the 20 percent of Americans who enjoy college educations, have good jobs and sleep soundly knowing that they have not only enough money to meet life’s challenges, but also social networks to bolster their success. They grow up with parents who read books to them, tutors to help with homework and plenty of stimulating things to do and places to go. They travel in planes and drive new cars. The citizens of this country see economic growth all around them and exciting possibilities for the future. They make plans, influence policies and count themselves lucky to be Americans.

The FTE citizens rarely visit the country where the other 80 percent of Americans live: the low-wage sector. Here, the world of possibility is shrinking, often dramatically. People are burdened with debt and anxious about their insecure jobs if they have a job at all. Many of them are getting sicker and dying younger than they used to. They get around by crumbling public transport and cars they have trouble paying for. Family life is uncertain here; people often don’t partner for the long-term even when they have children. If they go to college, they finance it by going heavily into debt. They are not thinking about the future; they are focused on surviving the present. The world in which they reside is very different from the one they were taught to believe in. While members of the first country act, these people are acted upon.

According to Temin, the two sectors have entirely distinct financial systems, residential options and educational opportunities, and their inhabitants have very different experiences when they get sick or interact with the law.

Worst of all, those in the low-wage sector have no way out. American social/economic mobility may have been real once, but it is a myth today.

A review of the book in the Atlantic was titled “Escaping Poverty Requires Almost Twenty Years with Almost Nothing Going Wrong.”  The reviewer cites Temin’s assertion that racism, abetted by deliberate policy choices, produced these separate nations:

The upper class of FTE workers, who make up just one-fifth of the population, has strategically pushed for policies—such as relatively low minimum wages and business-friendly deregulation—to bolster the economic success of some groups and not others, largely along racial lines. “The choices made in the United States include keeping the low-wage sector quiet by mass incarceration, housing segregation and disenfranchisement.”…

Many cities, which house a disproportionate portion of the black (and increasingly, Latino) population, lack adequate funding for schools. And decrepit infrastructure and lackluster public transit can make it difficult for residents to get out of their communities to places with better educational or work opportunities. Temin argues that these impediments exist by design.

The book does offer a way out– suggestions for remedying the hopelessness of those trapped in low-income America.

He offers five proposals that he says might help the country return to more equal footing. Some are fairly clear levers that many before him have recommending pulling: expanding access to and improving public education (particularly early education), repairing infrastructure, investing less in programs like prisons that oppress poor minorities, and increasing funding for those that can help build social capital and increase economic mobility. But other suggestions of his are more ambitious and involve fundamentally changing the cultural beliefs that have been reinforced over generations. Temin advocates doing away with the belief that private agencies can act in the interest of all citizens in the way that public entities can, and should. His final recommendation is to address systemic racism by reviving the spirit of the Second Reconstruction of the 1960s and 1970s, when civil-rights legislation helped to desegregate schools and give black Americans more political and economic power.

I agree that changing the culture is imperative; but it is also an incredibly slow and difficult process.

If someone knows how, I hope they’ll share….

And Now A Word From the Fantasy-Based Community

I read Dispatches from the Culture Wars regularly. Ed Brayton is a witty and perceptive commentator with an excellent grasp of America’s constitutional foundations–but his greatest appeal (for me) comes from the fact that he monitors behaviors that I wouldn’t have the stomach to follow. He keeps tabs on the kooks of the far, far right (and sometimes the far, far left)–the “celebrities” of the wacko fringes.

Most of the time, when reading about the pronouncements and delusions of these characters, I take comfort in reminding myself of the limited appeal of whatever brand of crazy a particular figure is peddling.

But this was truly appalling.

Earlier this month, the city of San Antonio (Texas) held a mayoral forum in which candidates talked about the impact of and challenges for non-profit groups in the community.

At one point, current Mayor Ivy Taylor was asked about the “deepest systemic cause of generational poverty.” There’s no simple answer to that, of course, but Taylor’s response wasn’t even close.

“Not even close” is an understatement. Here’s the Mayor’s response.

To me, it’s broken people. People not being in a relationship with their Creator, and therefore, not being in good relationship with their families and their communities, and not being productive members of society. I think that’s the ultimate answer.

As Ed points out, that not only isn’t the “ultimate answer,” it’s an answer that betrays vast ignorance of American economic realities and that displays the sort of breathtakingly smug religious arrogance that you encounter from time to time from people who give religion a very bad name. As Brayton puts it,

Poor people aren’t all poor because they’re “broken” or atheists or in need of a better relationship with their families. (While we’re at it, they’re also not poor because they’re lazy and addicted to welfare checks.)

People are poor, in many cases, because they don’t have opportunities to put their skills to work, they never had access to a quality education, and they live in areas where upward mobility is hard to come by. In some cases, they can work multiple jobs with little sleep and still have a hard time getting out of whatever debt they’re already in. Poverty is tough to overcome. Generational poverty, even tougher.

The vast majority of poor Americans work 40 or more hours a week at jobs that don’t pay a living wage. (Not that it is relevant, but a sizable majority of them identify as Christian, and profess a “relationship” with a “Creator.” Atheists in the U.S. actually tend to be well-educated and financially comfortable–when you aren’t constantly struggling to put food on the table, you have the time and resources to ponder theological questions and consider counter-majoritarian conclusions…But I digress.)

I’ve written before about the United Way of Indiana’s description of ALICE families (Asset Limited, Income Constrained, Employed) and the huge gap between what those families need simply in order to survive and the pitifully inadequate public and private resources available to them.

There are a lot of things policymakers could do to decrease poverty: raise the minimum wage, reinstitute Reagan-era tax brackets, strengthen unions, eliminate the ACA in favor of “Medicare for All”…and jettison a self-satisfied ideology that blames poverty on a lack of productivity and an inadequate “relationship with the Creator.”

The fact that Americans elect people who mouth such inanities (beginning with Donald Trump and definitely including Mayor Ivy Taylor) is evidence of a different kind of poverty.

 

 

 

And How About That Budget?

Once upon a time, when self-righteous folks made speeches about their deep levels of concern about this or that issue, skeptical listeners would respond by telling the speaker to “put your money where your mouth is.” That rejoinder reflected a widely-held recognition that talk is cheap—that a person’s real priorities could only be determined by examining the level at which one “walked the walk,” including where a person put his or her money.

There are many differences between government budgets and personal ones, but there is also one undeniable similarity: you can determine governments’ priorities by following the money, by seeing what measures and programs public officials want to fund—or defund.

For example, the GOP’s persistent efforts to defund Planned Parenthood are entirely consistent with its belief that male dominance should take priority over women’s health.

Donald Trump has sent his preferred budget to Congress, which will have the last word on expenditures, and we can be sure that the budget that emerges (assuming one does) will differ significantly from its current form. That said, there is significant Republican support for the President’s priorities in this Congress, and those priorities should appall anyone who actually cares about poor or middle-class Americans–or the future of the planet.

The President is advocating enormous increases for America’s already bloated defense budget, at the expense of widely valued programs like the Corporation for National and Community Service, the Corporation for Public Broadcasting, Legal Services, the National Endowments for the Arts and Humanities, and Low Income Home Energy Assistance Program, among many others.

The Corporation for National and Community Service promotes volunteerism in distressed communities, and provides college stipends for those who serve those communities. Legal Services—already inadequately funded—provides critically important legal assistance to people who cannot afford to hire a lawyer to fight predatory lenders and slum landlords, get divorced, or access Medicaid and Medicare, food stamps and other benefits to which they are entitled.

Much sarcasm is generated by the periodic efforts to “save Big Bird,” but public broadcasting and the Endowments for the Arts and Humanities bring unbiased news, cultural events and civic conversations to citizens who would not otherwise have the opportunity to explore those perspectives.

It’s hard to look at this budget without seeing a deliberate effort to kick people when they’re already down,an effort to further impoverish the people who are most disadvantaged by depriving them of everything from legal assistance, to heat in the winter, to educational entertainment.

Trump’s proposed budget also cuts funding to the Environmental Protection Agency by nearly a third; and eliminates support for climate change research as “a waste of taxpayer money.”

It is difficult to understand this Administration’s wholesale rejection of science and climate change as anything other than a cynical subsidy to the bottom lines of fossil fuel companies. The environmental dangers of this assault have been widely discussed, but its cynical subtext has not: the effects of environmental degradation will fall first—and hardest–on poor Americans.

Flint, Michigan is hardly the only disadvantaged community with contaminated water.

Nor would polluted water be the only likely result of the savage cuts to EPA programs: there is likely to be a return of the smog and poor air quality that once characterized our urban areas, and fewer efforts to eliminate lead in the soil and house paint in older, more deteriorated neighborhoods.

This budget rewards the privileged with tax credits while waging war on the people least well-equipped to fight. It is an exercise in cruelty, not to mention stupidity—a short-term political map to long-term disaster.

Following the money in this budget leads directly to dystopia.

 

 

 

 

Those Pesky Facts

One of my earliest research projects when I entered academia focused on an element of the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996,”  (PRWORA) aka welfare reform. I looked at the consequences of the measure’s invitation to (undefined) Faith-Based Organizations to help government agencies provide welfare services.

Needless to say, the “armies of compassion” envisioned by George W. Bush failed to materialize, since the invitation was based largely on fanciful–indeed, “faith-based”–beliefs about the capacities of the invitees.

I mention this in order to explain my heightened interest in a recent “spat” between Peter the Citizen and Arthur Brooks.

In “The Dignity Deficit: Reclaiming Americans’ Sense of Purpose,” Arthur Brooks, president of the American Enterprise Institute (AEI), emphasizes the importance of work requirements for welfare programs and suggests that the 1996 welfare reform law provides a model for other safety net programs:

Putting more people to work must also become an explicit aim of the social safety net. Arguably, the greatest innovation in social policy in recent history was the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The PRWORA, which became synonymous with the phrase “welfare reform,” made several major changes to federal policy. It devolved greater flexibility to the states but established new constraints, such as a limit on how long someone could receive federal welfare benefits and a work requirement for most able-bodied adults.

As Peter points out, PRWORA changed a number of programs, but what Brooks is lauding is TANF (Temporary Assistance for Needy Families). Peter, like Brooks, is a political conservative; he was a  former member of the Reagan Administration whose “portfolio” was welfare programs.
And he begs to differ.

For the past two years, I have been writing papers as a citizen to highlight TANF’s many problems. My hope is that conservatives will adopt more “rigor” in their assessment of the 1996 law and use evidence rather than ideology in developing reform proposals.

Brooks claims that TANF reduced poverty, and that its “lessons” about “the dignity of work” should be extended to other poverty programs. Peter convincingly demolishes the first assertion, and provides copious data to prove his point. Although he clearly agrees that there are “lessons” to be learned,  the content of those lessons differs significantly from what Brooks suggests.  I really encourage readers to click through and read the entire paper. The exchange illustrates the difference between ideology and intellectual integrity–between seeing what you want to see and seeing what the evidence shows.

What really caught my eye, however, were the following observations (emphasis mine):

TANF’s block grant structure creates a situation in which states don’t have the resources to run meaningful welfare-to-work programs, as the amount is not adjusted for inflation or demographic changes. This problem is exacerbated when state politicians divert scarce funds to plug budget holes….

In fiscal year (FY) 2015, just 25 percent of TANF funds were used to provide basic cash assistance and just 7 percent were for work-related activities, despite the fact that the number of poor families with children was higher in 2015 than in 1996. In many states, TANF has become a slush fund used to supplant state spending and fill budget holes…

Since TANF’s inception, states have used tens of billions of federal TANF dollars to simply replace existing state spending. For example, Jon Peacock of the Wisconsin Budget Project explains how “a significant portion of the federal funding for … assistance is being siphoned off for use elsewhere in the budget, to the detriment of the Wisconsin Works (W-2) program and child care subsidies for low-income working families.” It would be one thing if poverty had declined in Wisconsin since TANF’s enactment, but the poverty rate for children in Wisconsin grew from 14.3 percent in 1997 to 18.4 percent in 2011. If the supplanted funds were used to fund other programs for poor families, the practice would be less harmful, but that doesn’t seem to be what happens in Wisconsin. According to Peacock, “That shell game uses TANF funds to free up state funds [general purpose revenue] (GPR) to use for other purposes, such as the proposed income tax cuts.”

Trump’s budget–which combines utter fantasy with gratuitous cruelty (eliminating Meals on Wheels!?)– contains deep cuts to Medicaid and proposes to  fund what’s left through block grants, facilitating–and probably ensuring– precisely the sort of “shell game” that the states have played with TANF.

Anyone who thinks that the monies sent to the states via Medicaid block grants would all be applied to the costs of providing medical care for poor people is smoking something, and it’s hallucinogenic.