No Fooling: Inadequate Wages Drive Poverty Numbers

How to build wealth at "the bottom" Part 2

So, here's how we ended in my last post:

. . . a growing underclass struggles with intensive  toxic stress, resulting in a spiral downward for tens of millions of Americans. 

Poverty is growing. 

Poverty is tragic.

Poverty presents possibly the most serious threat to our nation's long-term security. 

What is necessary to overcome these negative forces?  How, in fact, do we build wealth at "the bottom?"

This seems so obvious, but to overcome poverty and its various expressions leading to the toxic stress ravaging so many urban neighborhoods we must create higher income levels among today's working poor. 

How do we do that? 

What steps must we take if we are really serious about attacking the problem of poverty? 

Step one:  raises wages, and not just to minimum wage expected standards.  Wages must rise to a livable level--the paycheck required for a full-time employee to be able to care for himself/herself and whatever family.  Wages have risen for the upper-class at historic and astounding percentages over the past 20 years, while the middle and lower classes have seen wage stagnation and exploitation produce the biggest income gap since the early 20th century.  This must change.

Step two:  provide quality, affordable health care to everyone who works and for the disabled who cannot work.  Health care costs and health disasters drive much of the growth in poverty since the 1990s.  An example of leadership failure in this regard is the state of Texas' refusal to expand Medicaid for our poorest citizens.  Not only is this shameful, it is terrible business practice. 

Step three:  develop and execute on a plan that enables millions of us to prepare for and purchase a home.  Nothing grows real wealth like homeownership. The expansion of efforts to teach financial literacy when coupled with the real prospect of home ownership will only drive incomes in the right direction.

Step four:  expand educational options for everyone.  Creative efforts to re-purpose public schools and libraries as community learning centers for children and adults could produce good results.  Finding ways to reduce student debt for those seeking college opportunities will be essential to progress in filling the mid-level and upper-level skill sets for which employers continually request. 

Step five:  eliminate predatory lenders and lending schemes and provide consumer protection against such unjust businesses.  Payday lenders must be declared illegal enterprises.  At the same time, banks must develop credit products for low-income households as a part of their community reinvestment requirements. 

Step six: require 1-2 years of national service along the lines of AmeriCorps on the part of all our high school graduates.  This "youth corps" effort would come with a monthly stipend and educational awards upon completion of each members tour of service.  Such an effort would provide meaningful work for students, significant impact on communities and pathways to careers across the spectrum of labor sectors. 

Stay tuned for part 3.

Inclusive capitalism?

A good, relatively new friend sent me a message that read in part:

I just emailed to you a column from the NY Times talking about “inclusive capitalism.”  Reading it made me think of your concept of the wealth of the poor.   .   .   .  The fact is that the poor and the middle class have been hammered for too long and there must be a way for them too to share in the wealth they are helping to create.  If our capitalistic society cannot create wealth for the vast majority of our people, then at some point our people will reject it, which would be a disaster.  The secret to our success has been that those who hold the levers of wealth have been far sighted enough to understand that unfettered capitalism will over time devour itself, so balance must be struck with government regulation.  We have managed to do that most of the time, but the balance is now frayed.  Regulated capitalism makes the most sense, because capitalism is the very best way to engineer wealth in a democracy.  We need to keep it that way.

All the best to you in the new year.

 

You can read the article he refers to here.

 

Reactions???

Capital and wages

CEO of major U. S. company "gets it" thanks to Piketty! 

Read all about it here. 

Wages, it's all about wages and labor's share

How do we explain how a place like Dallas, Texas, with its booming economy, continues to grow poorer and poorer at the bottom? 

Conventional wisdom would have us believe that a growing, vibrant economy--like we enjoy in Dallas--would begin to cut into the poverty rate in our city. 

But, it's just not happening. 

Why? 

Read on: 

Growth Has Been Good for Decades.
So Why Hasn’t Poverty Declined?

JUNE 4, 2014

 

campaign: nyt2014_sharetools_mkt_topstories_478QW -- 247890, creative: nyt2014_sharetools_mktg_topstories_478QW -- 373809, page: www.nytimes.com/yr/mo/day/upshot/growth-has-been-good-for-decades-so-why-hasnt-poverty-declined.html, targetedPage: www.nytimes.com/yr/mo/day/upshot, position: MiddleLeftThe surest way to fight poverty is to achieve stronger economic growth. That, anyway, is a view embedded in the thinking of a lot of politicians and economists.

 

“The federal government,” Paul Ryan, the House Budget Committee chairman, wrote in The Wall Street Journal, “needs to remember that the best anti-poverty program is economic growth,” which is not so different from the argument put forth by John F. Kennedy (in a somewhat different context) that “a rising tide lifts all boats.”

 

In Kennedy’s era, that had the benefit of being true. From 1959 to 1973, the nation’s economy per person grew 82 percent, and that was enough to drive the proportion of the poor population from 22 percent to 11 percent.

 

But over the last generation in the United States, that simply hasn’t happened. Growth has been pretty good, up 147 percent per capita. But rather than decline further, the poverty rate has bounced around in the 12 to 15 percent range — higher than it was even in the early 1970s. The mystery of why — and how to change that — is one of the most fundamental challenges in the nation’s fight against poverty.

 

Read the entire article here.

 

Reactions?

Workers lagging behind. . .millions can't "make ends meet"

Low wage workers and raising the minimum wage

In 2013, CitySquare worked alongside over 50,000 different individuals.  The vast majority of these neighbors, who worked, earned less that the amount needed to make life work--or as we say, "make ends meet."

A large part of the challenge relates to wage levels.  Unskilled workers must settle for minimum wage pay ($7.25 an hour).  That's just not enough.

Currently, a national discussion is underway again about the pros and cons of raising the national minimum wage to $10.15 an hour.  That would help lift a large number of "sinking ships."

Of course, whenever the issue of increasing the minimum wage standard comes up, critics emerge warning that raising the wage level would force people out of employment, curtail job creation and hurt business, especially small businesses.  In spite of the fact that every serious study over the years debunks and discredits these notions, the argument persists.

The experience of Washington State and of Seattle provides a refreshing backdrop for understanding the economic impact associated with raising the minimum wage.

Check this out!

Reactions encouraged.

James Baldwin on "Poster Children" outcomes

Krys Boyd, host of the KERA radio jewel, THINK, interviewed me earlier this week.  We talked about poverty and my assignment as chair of Mayor Mike Rawlings' new "Task Force on Poverty."  During the course of the interview, she asked me about the poor who battle through and "make it" to a better life.  I acknowledged that a very few do manage to find better lives on their own.  I call them poverty's "poster children."  The whole discussion reminded me of what James Baldwin once said about the idea.  He was quoted  in an Atlantic Monthly essay by Ta-Nehisi Coates.  

Here's what Baldwin said:

The people, however, who believe that this democratic anguish has some consoling value are always pointing out that So-and-So, white, and So-and-So, black, rose from the slums into the big time. The existence -- the public existence -- of, say, Frank Sinatra and Sammy Davis, Jr. proves to them that America is still the land of opportunity and that inequalities vanish before the determined will. It proves nothing of the sort. The determined will is rare -- at the moment, in this country, it is unspeakably rare -- and the inequalities suffered by the many are in no way justified by the rise of a few.

A few have always risen -- in every country, every era, and in the teeth of regimes which can by no stretch of the imagination be thought of as free. Not all these people, it is worth remembering, left the world better than they found it. The determined will is rare, but it is not invariably benevolent. Furthermore, the American equation of success with the big time reveals an awful disrespect for human life and human achievement. This equation has placed our cities among the most dangerous in the world and has placed our youth among the most empty and most bewildered. The situation of our youth is not mysterious. Children have never been very good at listening to their elders, but they have never failed to imitate them. They must, they have no other models. That is exactly what our children are doing. They are imitating our immortality, our disrespect for the pain of others.

Who benefits from minimum wage increase?

Interesting article from The Wall Street Journal on the benefit distribution of an increase in the minimum wage.

What's wrong with this picture?

Read more here!

"As Goes Janesville" film clip

Ain't got no home. . .

Over the past two decades, I've met so many men who could sing this song!

Ain't got no home. . .

A song about my daddy and his people. . .

Wages, families, neighborhoods and the economy

At the beginning of this school year, students from the Honors College at Abilene Christian University began their very special three year course of study that will see them focus as a group on poverty in inner city Dallas.

Already my young friends have turned up ugly evidence of what affects our economy so adversely.  These bright students discovered that in several South Dallas zip codes the average household income hovers around $10,000 annually.  Hard to imagine isn't it?

If you and/or your family had to make do with $10,000 a year, what sorts of things would impinge on your life, your decisions, your attitudes and your expectations?  Hard, but very good and fair questions for those of us who are doing so much better to ask and answer honestly.

The Dallas Morning News published a story last Sunday (9/23/2012, 4B) on a group of Wal-Mart workers who have organized against the pay practices and scale of the company's wages.  The group, Organization United for Respect at Walmart, demonstrated in Dallas' Uptown neighborhood the day before the report hit the paper.  Protesters claimed that Wal-Mart didn't pay them enough to purchase the health care plan offered by the company or to participate in the 401 (k) benefit plan.

According to Wal-Mart, the average pay to its employees in Texas is $12.31 an hour.  According to the union, the company's average hourly wage for the nation stands at $8.81.

If the company is correct about its Texas employees, a person working a full-time, 40-hour-a-week job and paid for 52 weeks (both unlikely assumptions) will earn $25,605 annually.

If the union is correct and making the same assumptions, a Wal-Mart employee will earn $18,325 annually.

What is life like for households living on wages at this level?  

How do marriages fair?

What health issues do these families face?

How is the psychological health of these wage earners?

What are neighborhoods like for communities who earn wages at this level?  

How do wages affect housing stock?

Public schools?

Code enforcement and neighborhood amenities?

What  impact do wages at this level have on local economies and on economic development?

What factors are at work here to encourage or discourage the development of retail outlets?

How is job growth in these areas?  

The realities of capitalism force on us tough questions about how we might make changes to help our working poor neighbors  These realities make a strong case for the expansion of public efforts such as the Earned Income Tax Credit program.  They also argue persuasively for increased investment in public education, early childhood programs and workforce training initiatives to enhance and diversify the skills of our labor force.

Things will not improve unless we get involved and begin to insist on the needed changes.

Aerial photos capture Opportunity Center Progress!

Working, but still poor. . .

Here at CitySquare, we've known the hard truth for a very long time.  Most of the low-income people with whom we work also work at a job, often more than one job. 

The problem is not work. 

The problem is pay and earning power. 

Consider the analysis of Bill Quigley that follows.  Take time to go to the complete text of the report.  Then, tell me what you think. 

Is it realistic to think that everyone who works should be able to sustain themselves by that work?

Working and Poor in the USA
Sunday 22 January 2012
By: Bill Quigley, The Center for Constitutional Rights

"Our nation, so richly endowed with natural resources and with a capable and industrious population, should be able to devise ways and means of insuring to all our able-bodied men and women, a fair day’s pay for a fair day’s work.” -Franklin Delano Roosevelt, 1937

Millions of people in the US work and are still poor. Here are eight points that show why the US needs to dedicate itself to making work pay.

To read the entire report click here.

Work

What Work Is

By Philip Levine

(Listen to Levine read  his poem here.)

We stand in the rain in a long line
waiting at Ford Highland Park. For work.
You know what work is--if you're
old enough to read this you know what
work is, although you may not do it.
Forget you. This is about waiting,
shifting from one foot to another.
Feeling the light rain falling like mist
into your hair, blurring your vision
until you think you see your own brother
ahead of you, maybe ten places.
You rub your glasses with your fingers,
and of course it's someone else's brother,
narrower across the shoulders than
yours but with the same sad slouch, the grin
that does not hide the stubbornness,
the sad refusal to give in to
rain, to the hours wasted waiting,
to the knowledge that somewhere ahead
a man is waiting who will say, "No,
we're not hiring today," for any
reason he wants. You love your brother,
now suddenly you can hardly stand
the love flooding you for your brother,
who's not beside you or behind or
ahead because he's home trying to
sleep off a miserable night shift
at Cadillac so he can get up
before noon to study his German.
Works eight hours a night so he can sing
Wagner, the opera you hate most,
the worst music ever invented.
How long has it been since you told him
you loved him, held his wide shoulders,
opened your eyes wide and said those words,
and maybe kissed his cheek? You've never
done something so simple, so obvious,
not because you're too young or too dumb,
not because you're jealous or even mean
or incapable of crying in
the presence of another man, no,
just because you don't know what work is.

Labor and Capital

"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

Abraham Lincoln

(1861 State of the Union Address)