Employed but poor in America

A superb long form by Matthew Desmond in the Times on the paradox of poverty amidst high employment rate in the US. Sample this,

Over the last 40 years, the economy has expanded and corporate profits have risen, but real wages have remained flat for workers without a college education. Since 1973, American productivity has increased by 77 percent, while hourly pay has grown by only 12 percent. If the federal minimum wage tracked productivity, it would be more than $20 an hour, not today’s poverty wage of $7.25. American workers are being shut out of the profits they are helping to generate. The decline of unions is a big reason. During the 20th century, inequality in America decreased when unionization increased, but economic transformations and political attacks have crippled organized labor, emboldening corporate interests and disempowering the rank and file... Today, 41.7 million laborers — nearly a third of the American work force — earn less than $12 an hour, and almost none of their employers offer health insurance.

The Bureau of Labor Statistics defines a “working poor” person as someone below the poverty line who spent at least half the year either working or looking for employment. In 2016, there were roughly 7.6 million Americans who fell into this category. Most working poor people are over 35, while fewer than five in 100 are between the ages of 16 and 19. In other words, the working poor are not primarily teenagers bagging groceries or scooping ice cream in paper hats. They are adults — and often parents — wiping down hotel showers and toilets, taking food orders and bussing tables, eviscerating chickens at meat-processing plants, minding children at 24-hour day care centers, picking berries, emptying trash cans, stacking grocery shelves at midnight, driving taxis and Ubers, answering customer-service hotlines, smoothing hot asphalt on freeways, teaching community-college students as adjunct professors and, yes, bagging groceries and scooping ice cream in paper hats. America prides itself on being the country of economic mobility, a place where your station in life is limited only by your ambition and grit. But changes in the labor market have shrunk the already slim odds of launching yourself from the mailroom to the boardroom.

Worse still, this state of affairs has an intellectual rationalisation, that "indolence and poverty go hand in hand", we need innovative approaches to address poverty, and so on,

Ask us why the poor are poor, and we have a response quick at the ready, grasping for this palliative of explanation... How can a country with such a high poverty rate — higher than those in Latvia, Greece, Poland, Ireland and all other member countries of the Organization for Economic Cooperation and Development — lay claim to being the greatest on earth?... But rather than hold itself accountable, America reverses roles by blaming the poor for their own miseries... Poor people lacked work ethic, they told me, or maybe a strong backbone or a commitment to a better life...

Here is the blueprint. First, valorize work as the ticket out of poverty, and debase caregiving as not work. Look at a single mother without a formal job, and say she is not working; spot one working part time and demand she work more. Transform love into laziness. Next, force the poor to log more hours in a labor market that treats them as expendables. Rest assured that you can pay them little and deny them sick time and health insurance because the American taxpayer will step in, subsidizing programs like the earned-income tax credit and food stamps on which your work force will rely. Watch welfare spending increase while the poverty rate stagnates because, well, you are hoarding profits. When that happens, skirt responsibility by blaming the safety net itself. From there, politicians will invent new ways of denying families relief, like slapping unrealistic work requirements on aid for the poor.

Democrats may scoff at Republicans’ work requirements, but they have yet to challenge the dominant conception of poverty that feeds such meanspirited politics. Instead of offering a counternarrative to America’s moral trope of deservedness, liberals have generally submitted to it, perhaps even embraced it, figuring that the public will not support aid that doesn’t demand that the poor subject themselves to the low-paying jobs now available to them... Because liberals have allowed conservatives to set the terms of the poverty debate, they find themselves arguing about radical solutions that imagine either a fully employed nation (like a jobs guarantee) or a postwork society (like a universal basic income). Neither plan has the faintest hope of being actually implemented nationwide anytime soon, which means neither is any good to Vanessa and millions like her. When so much attention is spent on far-off, utopian solutions, we neglect the importance of the poverty fixes we already have. Safety-net programs that help families confront food insecurity, housing unaffordability and unemployment spells lift tens of millions of people above the poverty line each year. By itself, SNAP annually pulls over eight million people out of poverty. According to a 2015 study, without federal tax benefits and transfers, the number of Americans living in deep poverty (half below the poverty threshold) would jump from 5 percent to almost 19 percent. Effective social-mobility programs should be championed, expanded and stripped of draconian work requirements.

While Washington continues to require more of vulnerable workers, it has required little from employers in the form of living wages or job security, creating a labor market in which the biggest disincentive to work is not welfare but the lousy jobs that are available. Judging from the current state of the nation’s poverty agenda, it appears that most people creating federal and state policy don’t know many people like Vanessa. “Half of the people in City Hall don’t even live in Trenton,” Vanessa once told me, flustered. “They don’t even know what goes on here.” Meanwhile, this is the richest Congress on record, with one in 13 members belonging to the top 1 percent. From such a high perch, poverty appears a smaller problem, something less gutting, and work appears a bigger solution, something more gratifying. But when we shrink the problem, the solution shrinks with it; when small solutions are applied to a huge problem, they don’t work; and when weak antipoverty initiatives don’t work, many throw up their hands and argue that we should stop tossing money at the problem altogether. Cheap solutions only cheapen the problem... “Study hard, stick to it, dream big and you will be successful” — had been internalized as a theory of life. We need a new language for talking about poverty. “Nobody who works should be poor,” we say. That’s not good enough. Nobody in America should be poor, period. 

Those searching for explanations for the rise of populism and responses to it need to look no far than read this article and internalise its message.