Halving US Poverty in 10 Years

A Washington think tank, the Center for American Progress, has published a strategy for halving US poverty in 10 years. While I applaud their goal, I find it too timid and think their strategies wrong-headed. Their analysis fails to consider why we have poverty in the first place, and proceeds to design bandaids. If we are going to eradicate poverty, we must go to the root of the problem, and in my judgment, CfAP has not pursued the problem to its root and thus cannot do more than attempt to trim its branches. Pruning poverty’s branches is not going to rid us of poverty. It may move some people we acknowledge as “in poverty” to “out of poverty” as we officially define it, and perhaps they can achieve half their goal, declare victory, and call the rest of the problem intractible.

But living just above the poverty line is little better than or different from living somewhat below it, and we’re kidding ourselves if we accept the poverty line as a meaningful statistic. See this page and this page and the related pages linked there.

They start with some facts which I find to be well chosen and well stated

One in eight Americans now lives in poverty. A family of four is considered poor if the family’s income is below $19,971—a bar far below what most people believe a family needs to get by. Still, using this measure, 12.6 percent of all Americans were poor in 2005, and more than 90 million people (31 percent of all Americans) had incomes below 200 percent of federal poverty thresholds.
Millions of Americans will spend at least one year in poverty at some point in their lives. One third of all Americans will experience poverty within a 13-year period. In that period, one in 10 Americans are poor for most of the time, and one in 20 are poor for 10 or more years.
Poverty in the United States is far higher than in many other developed nations. At the turn of the 21st century, the United States ranked 24th among 25 countries when measuring the share of the population below 50 percent of median income.
Inequality has reached record highs. The richest 1 percent of Americans in 2005 held the largest share of the nation’s income (19 percent) since 1929. At the same time, the poorest 20 percent of Americans held only 3.4 percent of the nation’s income.

And then they move on to four principles:

The United States should set a national goal of cutting poverty in half over the next 10 years. A strategy to cut poverty in half should be guided by four principles:

Promote Decent Work. People should work and work should pay enough to ensure that workers and their families can avoid poverty, meet basic needs, and save for the future.

Provide Opportunity for All. Children should grow up in conditions that maximize their opportunities for success; adults should have opportunities throughout their lives to connect to work, get more education, live in a good neighborhood, and move up in the workforce.

Ensure Economic Security. Americans should not fall into poverty when they cannot work or work is unavailable, unstable, or pays so little that they cannot make ends meet.

Help People Build Wealth. All Americans should have the opportunity to build assets that allow them to weather periods of flux and volatility, and to have the resources that may be essential to advancement and upward mobility.

“People should work.” Yes! “Work should pay enough” Yes! But their analysis fails to show why there isn’t enough work available and why wages are insufficient to support a family. THESE ARE NOT UNKNOWNS!

Opportunity for all. Yes! But their analysis doesn’t get to the reasons there is not currently opportunity for all.

Ensure economic security. Yes! I’m all for safety nets. But before that, I’m more concerned about creating the sort of economic environment where relatively few of us need them, and when we do, it isn’t for very long.

Help people build wealth. Yes! But when we refer to wealth, we ought not to be treating “home equity” as wealth. (That will sound peculiar to most readers. And it will be the subject of another blogpost. But most home equity is land value, and land value is not something created by individual (or corporate) human effort, and therefore should not be treated as personal (or corporate) wealth – rather, a just and logical and humane system would treat land value as our commonwealth, which would put us on the path to solving our poverty problem and a number of other problems. So what kind of wealth could people build other than home equity? Ownership in businesses of various kinds – other than land ownership and natural resources – that is, the products of one’s own labor!!

But then they move on to their 12 key steps. Most of them are programs of one kind or another. Here they are … I’ve omitted the details:

We recommend 12 key steps to cut poverty in half:

Raise and index the minimum wage to half the average hourly wage.

Expand the Earned Income Tax Credit and Child Tax Credit.

Promote unionization by enacting the Employee Free Choice Act.

Guarantee child care assistance to low-income families and promote early education for all.

Create 2 million new “opportunity” housing vouchers, and promote equitable development in and around central cities.

Connect disadvantaged and disconnected youth with school and work.

Simplify and expand Pell Grants and make higher education accessible to residents of each state.

Help former prisoners find stable employment and reintegrate into their communities.

Ensure equity for low-wage workers in the Unemployment Insurance system.

Modernize means-tested benefits programs to develop a coordinated system that helps workers and families.

Reduce the high costs of being poor and increase access to financial services.

Expand and simplify the Saver’s Credit to encourage saving for education, homeownership, and retirement.

I do not question their intentions – that is, that they are well intentioned. But notice that they are careful not to rock any boats. No privileges that enrich some of us and therefore impoverish many others are questioned or threatened. The private sector’s incentives are not changed. Poor people get subsidized, via income tax credits, housing vouchers, other benefits programs – rather than us all doing the (radical!) work of understanding how our system is set up to bless some of us with perpetual gifts from the commons and curse others with funding those gifts – and, further, of eradicating the blessing and the curse to set us all equal.

The proposal goes on to say that the effect of doing these things would be to halve the percentage of Americans who live below the poverty level within 10 years, and the annual cost of doing so would be $90 billion, considerably less than the tax cuts given to the highest-income and highest-net-worth folks in 2001 and 2003 legislation.

Wouldn’t it be more effective to tear poverty out at the root, rather than merely trimming its branches a bit? Wouldn’t it be better to undertake measures that will naturally raise wages? naturally create jobs? naturally share treat our commonwealth as the fountain for common spending, while permitting those who work to keep what they actually produce? The root of our problems is that we are permitting certain “privilege-holders” to pocket as private treasure that which rightly belongs to the commons. Until we reverse that, we simply aren’t going to fix the problem. We’re only going to put a few decorations on it.

We owe our children more than that. We owe each other better than that. Don’t we?

I’ll return to my favorite quote, and ask that we think and act radically, not in fear of special interests, whose boats do need to be rocked:

He who sees the truth, let him proclaim it, without asking who is for it or who is against it. This is not radicalism in the bad sense which so many attach to the word. This is conservatism in the true sense.

We ought to be conserving the commons as our common treasure, not permitting its privatization. If you doubt, remember how concentrated America’s “net worth” is:

Top 1% of us: 33.38% (Bottom 99%: 66.62%)
Next 4% of us: 24.13% (Top 5%: 57.51% – Bottom 95%: 42.49%)
Next 5% of us: 11.99% (Top 10%: 69.50% – Bottom 90%: 30.50%)
Next 40% of us: 27.95% (Top 50%: 97.45% – Bottom 50%: 2.54%)
Bottom 50% of us: 2.54%

Make the case for me why the boat doesn’t need rocking, please!

source: http://www.wealthandwant.com/issues/wealth/50-40-5-4-1.htm, Table 2, line 01 – Federal Reserve Board Survey of Consumer Finances data for 2004. Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004.