Wealthy Frenchman

Friday, May 11, 2007

The Millions Left Out


The United States may be the richest country in the world, but there are many millions — tens of millions — who are not sharing in that prosperity.

According to the most recent government figures, 37 million Americans are living below the official poverty threshold, which is $19,971 a year for a family of four. That’s one out of every eight Americans, and many of them are children.

More than 90 million Americans, close to a third of the entire population, are struggling to make ends meet on incomes that are less than twice the official poverty line. In my book, they’re poor.

We don’t see poor people on television or in the advertising that surrounds us like a second atmosphere. We don’t pay much attention to the millions of men and women who are changing bedpans, or flipping burgers for the minimum wage, or vacuuming the halls of office buildings at all hours of the night. But they’re there, working hard and getting very little in return.

The number of poor people in America has increased by five million over the past six years, and the gap between rich and poor has grown to historic proportions. The richest one percent of Americans got nearly 20 percent of the nation’s income in 2005, while the poorest 20 percent could collectively garner only a measly 3.4 percent.

A new report from a highly respected task force on poverty put together by the Center for American Progress tells us, “It does not have to be this way.” The task force has made several policy recommendations, and said that if all were adopted poverty in the U.S. could be cut in half over the next decade.

The tremendous number of people in poverty is an enormous drag on the U.S. economy. And one of the biggest problems is the simple fact that so many jobs pay so little that even fulltime, year-round employment is not enough to raise a family out of poverty. One-fifth of the working men in America and 29 percent of working women are in such jobs.

Peter Edelman, a Georgetown law professor who was a co-chairman of the task force, said, “An astonishing number of people are working as hard as they possibly can but are still in poverty or have incomes that are not much above the poverty line.”

So the starting point for lifting people out of poverty should be to see that men and women who are working are adequately compensated for their labor. The task force recommended that the federal minimum wage, now $5.15 an hour, be raised to half the average hourly wage in the U.S., which would bring it to $8.40.

The earned-income tax credit, which has proved very successful in supplementing the earnings of low-wage working families, should be expanded to cover more workers, the task force said. It also recommended expanded coverage of the federal child care tax credit, which is currently $1,000 per child for up to three children.

A crucial component to raising workers out of poverty would be an all-out effort to ensure that workers are allowed to form unions and bargain collectively. As the task force noted, “Among workers in similar jobs, unionized workers have higher pay, higher rates of health coverage, and better benefits than do nonunionized workers.”

In a recent interview about poverty, former Senator John Edwards told me: “Organizing is so important. We have 50 million service economy jobs and we’ll probably have 10 or 15 million more over the next decade. If those jobs are union jobs, they’ll be middle-class families. If not, they’re more likely to live in poverty. It’s that strong.”

The task force made several other recommendations, including proposals to ease access to higher education for poor youngsters, to help former prisoners find employment, to develop a more equitable unemployment compensation system, and to establish housing policies that would make it easier for poor people to move from neighborhoods of concentrated poverty to areas with better employment opportunities and higher-quality public services.

Mr. Edelman, an adviser on social policy in the Clinton administration, stressed that there is no one answer to the problem of poverty, and that in addition to public policy initiatives, it’s important to address the “things people have to do within their own communities to take responsibility for themselves and for each other.”

But he added, “It is unacceptable for this country, which is so wealthy, to have this many people who are left out.”


At 12:23 PM, Blogger Kevin said...

What makes no sense about this is that at the same time that many people like Mr Herbert complain about poverty and low wages, they insist that we welcome immigrants to take jobs at poverty level wages.

The reason the employers pay poverty level wages is BECAUSE THEY CAN. They can always find people to do even the hardest, dirtiest jobs for low wages and no benefits because they can find workers desperate enough to work for low wages. If they couldn't find them they would HAVE TO pay more. But when they can't find cheap labor, people like Mr Herbert (and the Chamber of Commerce) yell, My God! There's a labor shortage! Bring in more immigrants to mop floors and pick crops for minimum wage!

Yet both parties are supporting immigration bills that do not require employers who sponsor immigrant "guest workers" to prove that there is a real shortage of American workers by offering to pay middle class wages and medical benefits.

First rule of economics, the "Law of supply and Demand", implies that if there were a real shortage, wages would be rising. Wages are not rising because it is Government Policy to keep wages low by not allowing that law to operate. We just bring in more immigrants. And people who do care about the effects on wages are just called racist, often by people like Mr. Herbert.


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