New York Times, September 17, 2018: Americans want to believe jobs are the solution to poverty. They’re not
In recent decades, the nation’s tremendous economic growth has not led to broad social uplift. Economists call it the “productivity-pay gap” — the fact that over the last 40 years, the economy has expanded and corporate profits have risen, but real wages have remained flat for workers without a college education. Since 1973, American productivity has increased by 77 percent, while hourly pay has grown by only 12 percent. If the federal minimum wage tracked productivity, it would be more than $20 an hour, not today’s poverty wage of $7.25.
American workers are being shut out of the profits they are helping to generate. The decline of unions is a big reason. During the 20th century, inequality in America decreased when unionization increased, but economic transformations and political attacks have crippled organized labor, emboldening corporate interests and disempowering the rank and file. This imbalanced economy explains why America’s poverty rate has remained consistent over the past several decades, even as per capita welfare spending has increased. It’s not that safety-net programs don’t help; on the contrary, they lift millions of families above the poverty line each year. But one of the most effective antipoverty solutions is a decent-paying job, and those have become scarce. Today, 41.7 million laborers — nearly a third of the American work force — earn less than $12 an hour, and almost none of their employers offer health insurance.
The Bureau of Labor Statistics defines a “working poor” person as someone below the poverty line who spent at least half the year either working or looking for employment. In 2016, there were roughly 7.6 million Americans who fell into this category. Most working poor people are over 35, while fewer than five in 100 are between the ages of 16 and 19. In other words, the working poor are not primarily teenagers bagging groceries or scooping ice cream in paper hats. They are adults — and often parents — wiping down hotel showers and toilets, taking food orders and bussing tables, eviscerating chickens at meat-processing plants, minding children at 24-hour day care centers, picking berries, emptying trash cans, stacking grocery shelves at midnight, driving taxis and Ubers, answering customer-service hotlines, smoothing hot asphalt on freeways, teaching community-college students as adjunct professors and, yes, bagging groceries and scooping ice cream in paper hats.
America prides itself on being the country of economic mobility, a place where your station in life is limited only by your ambition and grit. But changes in the labor market have shrunk the already slim odds of launching yourself from the mailroom to the boardroom. For one, the job market has bifurcated, increasing the distance between good and bad jobs. Working harder and longer will not translate into a promotion if employers pull up the ladders and offer supervisory positions exclusively to people with college degrees. Because large companies now farm out many positions to independent contractors, those who buff the floors at Microsoft or wash the sheets at the Sheraton typically are not employed by Microsoft or Sheraton, thwarting any hope of advancing within the company. Plus, working harder and longer often isn’t even an option for those at the mercy of an unpredictable schedule. Nearly 40 percent of full-time hourly workers know their work schedules just a week or less in advance. And if you give it your all in a job you can land with a high-school diploma (or less), that job might not exist for very long: Half of all new positions are eliminated within the first year. According to the labor sociologist Arne Kalleberg, permanent terminations have become “a basic component of employers’ restructuring strategies.”
While Washington continues to require more of vulnerable workers, it has required little from employers in the form of living wages or job security, creating a labor market in which the biggest disincentive to work is not welfare but the lousy jobs that are available. Judging from the current state of the nation’s poverty agenda, it appears that most people creating federal and state policy don’t know many people like the ones for whom they are creating said policies. Meanwhile, this is the richest Congress on record, with one in 13 members belonging to the top 1 percent. From such a high perch, poverty appears a smaller problem, something less gutting, and work appears a bigger solution, something more gratifying. But when we shrink the problem, the solution shrinks with it; when small solutions are applied to a huge problem, they don’t work; and when weak antipoverty initiatives don’t work, many throw up their hands and argue that we should stop tossing money at the problem altogether. Cheap solutions only cheapen the problem.
We need a new language for talking about poverty. “Nobody who works should be poor,” we say. That’s not good enough. Nobody in America should be poor, period. No single mother struggling to raise children on her own; no formerly incarcerated man who has served his time; no young heroin user struggling with addiction and pain; no retired bus driver whose pension was squandered; nobody. And if we respect hard work, then we should reward it, instead of deploying this value to shame the poor and justify our unconscionable and growing inequality.
