Tuesday, July 12, 2005

Class, Mobility and Opportunity

So, how do we, as a nation, build an economic system that stimulates growth while providing opportunity for as many of our citizens as possible to move up and out of poverty?

According to all the data, we are rapidly moving toward an economic system that, from a class standpoint, "freezes" folks in place, especially at the bottom.

The notion that anyone in America can pull themselves up by hard work, determination and persistence just doesn't hold up under the weight of the evidence now available. Even worse, it is now clear that class status is inherited and further solidified as it moves from one generation to the next.

Can nothing be done?

Are there no alternatives?

While it is obvious that not everyone in a capitalist economic system will be able to reach the upper echelon of wealth, it is simply untrue that public policy can have no affect on the status and prospects of the very poor and those positioned today toward the bottom of the economic pecking order.

The history of our nation reveals that public policy can impact economic status for large segments of the population. Consider, for example, recent chapters in American history.

Post-Depression economic and social policy lifted almost the entire nation out of economic despair and set millions on a path toward what would become middle-class America.

In the aftermath of World War II the GI Bill provided educational opportunity to a large segment of the population returning from national service.

For all of the criticism and revisionist history directed toward Lyndon Johnson's "War on Poverty," his public policy strategy, coupled with historic Civil Rights legislation passed during his watch, produced positive results for millions of very poor Americans of all races. The hard data from this period does not lie nor mislead.

The fact is we can do better as a nation and as people of faith.

It is no accident that American class mobility has been curtailed. Economic policy since 1980 has produced its intended results. Supply side economics, with its much heralded "trickle-down" effect that promised new jobs, new markets and new opportunities, has failed and failed miserably. The gap between rich and poor in our nation continues to widen.

What can be done to restore the legitimate and realistic prospect of economic mobility for those at the bottom?

Obviously, we must grow the economy. What does that mean for public policy makers as they consider what is needed at the bottom among low-income and very low-income Americans?

Here are just a few rather obvious steps we could begin taking today that would have great, long-term affect on our economy while establishing a more just system for everyone.

1. Don't just restore, but increase dramatically funding for PELL grants aimed at assisting low-income students to go on to college. Further, simplify the process for obtaining these important educational grants. Currently, the nation has turned back and away from students who seek support for higher education. This is not only morally wrong, it is stupid.

2. Increase the appropriation for the Earned Income Tax Credit program. This initiative rewards working people by providing a tax refund annually. Research reveals that most families and individuals use these funds to pay off debt, obtain transportation or take other actions that help stabilize their lives financially.

3. Extend healthcare coverage to more working people. Rather than cutting programs like Medicaid and the Children's Health Insurance Program (CHIP), we should be increasing funding for low-income workers. In the process we would be assisting small business owners who can no longer afford to provide health benefits to their employees.

4. Reverse recent cuts made by the U. S. Department of Housing and Urban Affairs (HUD) to the Section 8 housing choice voucher program. This creative and highly effective effort allows low-income working families to choose rental property anywhere vouchers are received as payment by landlords. Rather than cutting this program, we should be finding more funding to allow our working citizens to secure fit and affordable housing as they work for better futures. Currently, thousands of working Americans find themselves on long waiting lists to receive voucher assistance. Refusal to allow the voucher initiative to grow curtails affordable housing development and impacts the nation's economy.

5. Encourage skills training programs that result in workforce development for jobs that cannot be outsourced to foreign countries. The nation needs tradesmen and women. Carpenters, plumbers, electricians, transportation workers, environmental experts and foundation specialists will be needed in any growing national economy. Funding training programs that meet this need will be smart for the nation and for those at or near the bottom of our economy.

6. Do not make permanent the current tax cut strategy for those at the top. Do not eliminate the Estate Tax. Work to make our nation's tax code less regressive and more equitable, especially for low-income persons. Use the increase in funding to underwrite the initiatives discussed above, as well as others.

Establishing justice and fairness in the economy will involve political will and the courage to face tough choices, some of which will not be popular in all quarters.

Getting the nation--all of the nation--moving upward again calls for sacrifice, political will and a kind of practical faithfulness few leaders have considered.

[Photo by Hal Samples--www.herotozero--"Everything"]


David Mills said...

One way to bridge the gap is to bring down the cost of living. Advances in technologies are bringing down the cost of production of just about everything, yet these advances are not translating into lower prices because of the failure of the market mechanism.

Everywhere we either have monopolies or comfortable oligopolies and until we recognise that all the rhetoric about fair and open competition is just smoke, the gap between the rich and the poor will continue to widen.

For instance, in Australia, we've just learned that by the time our potatoes reach the shop, there is a 4000% increase in price. Justified, few believe so.

Anyway, most interesting article.

Larry James said...

Thank you, David. You raise an issue that no one discusses in the U. S.

Capitalism needs regulation if it is to work for more people.