This isn’t a problem specific to the current moment. We’ve been drowning in a flood of low-wage jobs for the last 40 years. Most of the income of people in poverty comes from work. According to the most recent data available from the Census Bureau, 104 million people — a third of the population — have annual incomes below twice the poverty line, less than $38,000 for a family of three. They struggle to make ends meet every month.
Half the jobs in the nation pay less than $34,000 a year, according to the Economic Policy Institute. A quarter pay below the poverty line for a family of four, less than $23,000 annually. Families that can send another adult to work have done better, but single mothers (and fathers) don’t have that option. Poverty among families with children headed by single mothers exceeds 40 percent.
Wages for those who work on jobs in the bottom half have been stuck since 1973, increasing just 7 percent.
It’s not that the whole economy stagnated. There’s been growth, a lot of it, but it has stuck at the top. The realization that 99 percent of us have been left in the dust by the 1 percent at the top (some much further behind than others) came far later than it should have — Rip Van Winkle and then some. It took the Great Recession to get people’s attention, but the facts had been accumulating for a long time. If we’ve awakened, we can act.
Low-wage jobs bedevil tens of millions of people. At the other end of the low-income spectrum we have a different problem. The safety net for single mothers and their children has developed a gaping hole over the past dozen years. This is a major cause of the dramatic increase in extreme poverty during those years. The census tells us that 20.5 million people earn incomes below half the poverty line, less than about $9,500 for a family of three — up eight million from 2000.
Why? A substantial reason is the near demise of welfare — now called Temporary Assistance for Needy Families, or TANF. In the mid-90s more than two-thirds of children in poor families received welfare. But that number has dwindled over the past decade and a half to roughly 27 percent.
One result: six million people have no income other than food stamps. Food stamps provide an income at a third of the poverty line, close to $6,300 for a family of three. It’s hard to understand how they survive.
At least we have food stamps. They have been a powerful antirecession tool in the past five years, with the number of recipients rising to 46 million today from 26.3 million in 2007. By contrast, welfare has done little to counter the impact of the recession; although the number of people receiving cash assistance rose from 3.9 million to 4.5 million since 2007, many states actually reduced the size of their rolls and lowered benefits to those in greatest need.
Race and gender play an enormous part in determining poverty’s continuing course. Minorities are disproportionately poor: around 27 percent of African-Americans, Latinos and American Indians are poor, versus 10 percent of whites. Wealth disparities are even wider. At the same time, whites constitute the largest number among the poor. This is a fact that bears emphasis, since measures to raise income and provide work supports will help more whites than minorities. But we cannot ignore race and gender, both because they present particular challenges and because so much of the politics of poverty is grounded in those issues.
We know what we need to do — make the rich pay their fair share of running the country, raise the minimum wage, provide health care and a decent safety net, and the like. But realistically, the immediate challenge is keeping what we have. Representative Paul Ryan and his ideological peers would slash everything from Social Security to Medicare and on through the list, and would hand out more tax breaks to the people at the top. Robin Hood would turn over in his grave.
We should not kid ourselves. It isn’t certain that things will stay as good as they are now. The wealth and income of the top 1 percent grows at the expense of everyone else. Money breeds power and power breeds more money. It is a truly vicious circle.
A surefire politics of change would necessarily involve getting people in the middle — from the 30th to the 70th percentile — to see their own economic self-interest. If they vote in their own self-interest, they’ll elect people who are likely to be more aligned with people with lower incomes as well as with them. As long as people in the middle identify more with people on the top than with those on the bottom, we are doomed. The obscene amount of money flowing into the electoral process makes things harder yet.
But history shows that people power wins sometimes. That’s what happened in the Progressive Era a century ago and in the Great Depression as well. The gross inequality of those times produced an amalgam of popular unrest, organization, muckraking journalism and political leadership that attacked the big — and worsening — structural problem of economic inequality. The civil rights movement changed the course of history and spread into the women’s movement, the environmental movement and, later, the gay rights movement. Could we have said on the day before the dawn of each that it would happen, let alone succeed? Did Rosa Parks know?
We have the ingredients. For one thing, the demographics of the electorate are changing. The consequences of that are hardly automatic, but they create an opportunity. The new generation of young people — unusually distrustful of encrusted power in all institutions and, as a consequence, tending toward libertarianism — is ripe for a new politics of honesty. Lower-income people will participate if there are candidates who speak to their situations. The change has to come from the bottom up and from synergistic leadership that draws it out. When people decide they have had enough and there are candidates who stand for what they want, they will vote accordingly.
I have seen days of promise and days of darkness, and I’ve seen them more than once. All history is like that. The people have the power if they will use it, but they have to see that it is in their interest to do so.Continue reading the main story
The rapid rise in the proportion of foreign-born residents in the United States since the mid-1960s is one of the most important demographic events of the past fifty years. The increase in immigration, especially among the less-skilled and less-educated, has prompted fears that the newcomers may have depressed the wages and employment of the native-born, burdened state and local budgets, and slowed the U.S. economy as a whole. Would the poverty rate be lower in the absence of immigration? How does the undocumented status of an increasing segment of the foreign-born population impact wages in the United States? In Immigration, Poverty and Socioeconomic Inequality, noted labor economists David Card and Steven Raphael and an interdisciplinary team of scholars provide a comprehensive assessment of the costs and benefits of the latest era of immigration to the United States.
Immigration, Poverty, and Socioeconomic Inequality rigorously explores shifts in population trends, labor market competition, and socioeconomic segregation to investigate how the recent rise in immigration affects economic disadvantage in the U.S. Giovanni Peri analyzes the changing skill composition of immigrants to the United States over the past two decades to assess their impact on the labor market outcomes of native-born workers. Despite concerns over labor market competition, he shows that the overall effect has been benign for most native groups. Moreover, immigration appears to have had negligible impacts on native poverty rates. Ethan Lewis examines whether differences in English proficiency explain this lack of competition between immigrant and native-born workers. He finds that parallel Spanish-speaking labor markets emerge in areas where Spanish speakers are sufficiently numerous, thereby limiting the impact of immigration on the wages of native-born residents. While the increase in the number of immigrants may not necessarily hurt the job prospects of native-born workers, low-skilled migration appears to suppress the wages of immigrants themselves. Michael Stoll shows that linguistic isolation and residential crowding in specific metropolitan areas has contributed to high poverty rates among immigrants. Have these economic disadvantages among low-skilled immigrants increased their dependence on the U.S. social safety net? Marianne Bitler and Hilary Hoynes analyze the consequences of welfare reform, which limited eligibility for major cash assistance programs. Their analysis documents sizable declines in program participation for foreign-born families since the 1990s and suggests that the safety net has become less effective in lowering child poverty among immigrant households.
As the debate over immigration reform reemerges on the national agenda, Immigration, Poverty, and Socioeconomic Inequality provides a timely and authoritative review of the immigrant experience in the United States. With its wealth of data and intriguing hypotheses, the volume is an essential addition to the field of immigration studies.
DAVID CARD is Class of 1950 Professor of Economics at the University of California, Berkeley.
STEVEN RAPHAEL is professor of public policy at the Goldman School of Public Policy at the University of California, Berkeley.
CONTRIBUTORS: Marianne P. Bitler, Irene Bloemraad, Sarah Bohn, Chistian Dustmann, Mark Ellis, Cybelle Fox, Tomasso Frattini, Robert G. Gonzales, Hilary W. Hoynes, Christel Kelser, Jennifer Lee, Ethan Lewis, Magnus Lofstrom, Renee Reichl Luthra, Douglas S. Massey, Giovanni Peri, Michael A. Stoll, Matthew Townley, Roger Waldinger, Richard Wright, Min Zhou.
A Volume in the National Poverty Center Series on Poverty and Public Policy