Poverty: don’t treat the symptoms, treat the disease

From Chris Rhomberg, sociology professor at Fordham University, is this editorial “We Forgot to End Poverty“. In the season of Toys for Tots, soup kitchens, and in-the-spirit-of-Christmas altruism, it’s important to figure out why the United States still has tens of millions of its people living in poverty. As he writes:

Both sides attempt to “reform” poor parents to push them into the low-wage labor market, but neither side questions the failure of that market to provide families a secure way out of poverty.

Even as unemployment edges downward, millions of Americans remain poor, exposing a basic flaw in the TANF approach: the lack of jobs that pay a living wage.

It comes down to this: there are two ways that welfare ceases to exist. Either poverty is eradicated and people no longer need state assistance, or welfare is gutted or transformed without dealing with structural problems in labor and education. The United States with the bipartisan welfare reform bills in the mid-1990s, assistance was capped and shortened, continuing to shrink in its scope and amount in the past two decades. This would make sense if welfare reform was getting rid of poverty, but it hasn’t. Escaping poverty requires jobs that don’t exist and wages that are not offered- plenty of people in poverty work full-time.

Source: http://www.nj.com/njvoices/index.ssf/2011/09/census_us_poverty_rate_broke_1.html

So policy needs to keep in sight the major social problem. If the goal is to reduce welfare, make it cheaper and more efficient, you can do that. But that requires a narrow view that ignores why welfare exists in the first place. Never lose sight of the core problem. Welfare is the symptom of an underlying illness. To erase welfare does not cure anything, merely remove a way that we are reminded of poverty’s extent and persistence.

Fast food poverty wages: a tax on everyone

In a few hours I’ll join in a series of protests, for December 4th will be the latest set of strikes by fast food workers. In around 150 cities at least some workers will walk off the job, joined with the low-wage workers in major international airports. The past 18 months has seen a dramatic change in the national discussion on wages. $15 an hour was viewed as a pipe dream. Yet with the election of Kshama Sawant in Seattle, running with $15 as her central policy goal, and an overwhelming majority of San Francisco voters voting in favor last month, things have changed. The debate in Washington about small, incremental increases that may not even keep pace with inflation has been overshadowed by the idea of radically higher wages that lift hundreds of thousands of people out of poverty.

These strikes will have the same conservative criticism, in particular that these companies cannot absorb higher prices, and your favorite items will see a sharp price increase.

I’ll break this down into the simplest form I know. Higher wages will increase item prices, but in a given industry that will hold true across the board. A hamburger costs an extra dollar, but all restaurants will face the same reality. This isn’t an issue for bottom-rung workers because they have more money to spend, and in fact their wages will usually increase by more than the prices do. Workers in Seattle will be going from about $9 to $15 plus inflation. Prices are not going up by two-thirds.

But won’t people just above the minimum wage have problems? No, because one of the fundamentals of the labor hierarchy is that wage hikes at the bottom echo throughout the system (PDF). If $10/hr workers go to $15, $14/hr workers in different jobs will go to $19, or something similar. Wage increases for the working poor are good for everyone.

The most crucial thing I want to get across is that we all pay for the current wage levels in fast food restaurants. Fast food workers received about $7 billion in government assistance because their wages fall below what is needed to survive. All taxpaying people in the United States subsidize these low wage policies. Unlike paying more for a burger after a higher wage law passes, this cost is not optional. We can choose not to eat at McDonalds (and really, why would you?) , but taxes are compulsory.

Almost all situations like this boil down to this: the economy is complicated. Groups like Heritage want to scare the public with the specter of high prices, but that ignores positive effects from higher wages, and current costs that we pay for low wages.

Finally, I want to speak out about the civil war among labor in this country. Many people look down at fast food workers. I understand that. But what happens to them will affect you- especially those in the lower echelons of the labor hierarchy. Strikes are inconvenient (oh lord, the BART transit strike in the Bay Area got tech workers into a frenzy), but there will never be an empowered working class unless the bottom has strength.