Q- So can we tell, despite all the differing statistics, if poverty has been increasing or decreasing over the years?
A- Large trends can be recognized even if actual figures are disputed from time to time. Almost half our population was poor in the 1930s, using the poverty line deflated for 1930s dollars. By 1950 the poverty rate had fallen to thirty percent; to twenty percent by 1964 and to twelve percent by 1969. In the 1960s, under the spell of Camelot, we Americans believed anything and everything was possible. This country was considered rich enough to withstand any damage to the nation's productive or financial capacity that might result from a government directed redistribution of wealth. The elite in Washington counted on two things to keep the federal coffers full: steady, strong economic growth and inflation which would automatically push taxpayers into higher and higher brackets.
Q- I guess no one foresaw the tax revolts of the 1980s .
A- Nor slow economic growth. Unfortunately the decrease in revenue was not accompanied by a decrease in the zeal for a redistribution of wealth. Our elected officials tried to soften the impact of slow growth and its by-product, an increase in unemployment, by expanding the safety-net of social programs. As these entitlement programs grew, their true cost was masked by inflation.
Q- A few years ago California's Senator Cranston did some figuring. He claimed if we put the almost 17 million unemployed to work, based on a salary of $10,000/year, their taxes would equal approximately $1,343 per person or in the neighborhood of $22.5 billion dollars/year.(A t that time and according to then current tax law.) The Senator further stated that for each one million workers who returned to work, the nation would save $30 billion in assistance that would no longer be needed. He claimed a balanced budget could be achieved by just reducing unemployment from 10.5 to 5.5 percent.
A- The idea is sound. A lot of things, including a freeze---keeping government spending down to the rate of inflation---would have cured our deficit problem a few years ago. Our national debt and our spending habit have now gotten too far out of hand for any simple cure. Higher taxes, expanding government, more borrowing are all part of the problem. Any politician who is not all talk, but is serious about the unemployment problem, will cut, not expand government.
Q- I wish he or she would please step forward!
I've always wondered just when unemployment becomes a problem---I mean we always have some members of society unemployed.
A- Unemployment definitely becomes a problem when you are the one unemployed! But I know what you mean. Full employment has been defined as the level of unemployment that would exist when demand was adequate to keep the inflation rate stable. But there are other definitions. We could declare a state of full employment in the nation when all unemployment is voluntary, in the sense that anyone who wanted a job would be able to find one by reducing his nominal wage enough to make employing him profitable to someone.
Q- Not any more---since the Fair Labor Standards Act and mandatory minimum wage and so on and so forth individuals no longer have a right to make those kinds of decisions without breaking the law.
A- Don't get me started on that again. I just wanted to mention the natural rate of unemployment, a term used by economists to get away from the implication that full employment meant zero unemployment. The natural rate changes over time with changes in the age-sex composition of the labor force as well as for other reasons. In the 1940s and 1950s employment was full if no more than three or four percent of the labor force was out of work. By the 1970s the acceptable level was six or seven percent because the baby-boom generation was entering the labor market in droves along with an influx of women.
Q- That reminds me of New York's Governor Mario Cuomo and his 1986 address to the newspaper publishers who were meeting here in San Francisco.
"(The current prosperity) has been purchased at the expense of the well-being, the hopes and expectations of a large part of our nation, by the acceptance of such things as a level of unemployment that this nation would have considered a scandal only a decade ago."
George Will astutely pointed out that at the time of Governor Cuomo's speech, unemployment was 7.1 percent and a decade ago it was 7.7 percent.
A- And now, in the fall of 1991, it is 6.8 percent and congress is trying to shame the president into declaring an emergency and breaking the 1990 budget agreement.
Q- How break it? As I understand it, there is a provision written into the agreement for emergencies.
A- Absolutely right, but my point is, if Governor Cuomo has such fond memories of the days of 7.7 percent unemployment what makes 6.8 percent such an emergency? (Unless its you or someone you know that is unemployed, of course.) I'm trying to say, that if the President declares an emergency in this instance, what is to protect the budget from equally urgent "emergencies" which will sprout like weeds in a cabbage patch?
Q- I've heard that unemployment statistics are not reliable regarding gains and losses. The Department of Labor conducts a survey based on households which double counts people who have more than one job. No wonder non-farm job gains were less than half those reported in a payroll survey. Sometimes a job training graduate need merely obtain an interview to be listed by the government as successfully employed. Roughly sixty percent of the 11.6 million unemployed Americans live in a household where someone else is working.
A- Approximately four million people reach age 18 every year in this country and many become statistical have-nots even though their minimum or low wage jobs are temporary and for pin-money. Many so-called dead-end employers such as fast-food restaurants are luring young workers with scholarship programs. Many of the teenage girls who work in the mall are still living at home while they attend local community colleges and their wages go to pay for school clothes and books.
Q- Professor Frank Levy of the University of Maryland, did a great deal of research into income distribution for his book Dollars and Dreams. He found that wages increased at an annual rate of 2.5 to 3 percent from the end of the second world war until 1973. Figuring everything in 1985 dollars an average forty year old made $15,300 in 1947, $28,300 in 1973 and $24,000 in 1985. The decrease was due to a variety of circumstances, many going back to 1973.
A- During the 1973-74 oil crisis, purchasing power was transferred overseas which hurt this nation's productivity record as measured by the Commerce Department. According to the Bureau of Labor Statistics, between 1965-85 union wages outpaced cumulative inflation by 1.4 percent. Those in auto assembly lines were paid more and thanks to union pressures, $30,000 was not an unheard of wage for sweeping floors!
It wasn't until 1984 that union pay hikes fell below the CPI (consumer price index) for the first time. Growth in the labor force was a little over two percent during those years and during the seventies alone, approximately twenty million net new jobs were created.
The projection for labor-force growth from now to 1990 was 1.6 percent annually and only one percent a year between 1990-95, with fewer teenagers included before 1992. Between 1972-78 real after-tax income per capita was flat but since then it has risen dramatically.
However it's true that many new jobs don't pay as well as old ones did, but it varies from industry to industry. In 1983 the average employee in domestic industries made $16,000---in export industries he made $19,000. the new high-tech industries seem to pay either minimum wage for assembly line skills or high salaries for technical knowledge and training---no middle ground.
Q- So what we've got on the one hand is the loss of $28,000 /year jobs and the increase of jobs paying under $7,000, or so Professor Levy claimed. He said that more adult males than females were unemployed for the first time in history in 1987. According to the good professor the middle class is decreasing and the wealth-poverty pockets are shifting.
During the 1970s the Census Bureau used a consumer price index which overstated inflation and included high interest mortgages, all effectively exaggerat- ing the poverty rate. If food, housing and medicaid benefits and the vagaries of the consumer price index had been taken into consideration, the number of poor Americans would have been millions less than the official count.
Due to mistakes made in computing social security benefits back in 1972 (tying benefits to CPI at a time when wages were about to decline) the elderly are no longer at the bottom of the poverty heap, but women and children have taken their place.
A- As we keep noting, statistics can be skewed to show anything youÕd like. For example, zero was the median income of individual Americans not long ago (half above and half below) simply because housewives and children didnÕt show any income at all. In the 1970s the GNP supposedly rose, but if one looks closely at the rapidly increasing income one can see that its cause is nothing to celebrate. What is hidden beneath the healthy looking GNP is the disruption of American families. Unfortunate happenings in society translated to praiseworthy events statistically. More housing, more fast food sales, more use of day-care centers and domestic help, psychiatric and social services of every kind and more job holders are due to divorce and staying single longer.
Q- The example of the man who marries his housekeeper is often used to show how GNP can be diminished. In marriage, the money that was previously paid to the housekeeper is now voluntarily shared but is not reportable income and does not show up in GNP statistics as before.
A- It is generally believed that there has been an increase in the birth rates of young black unmarried women since 1970. Misunderstood statistics again! Instead of a rise in the birth rates of illegitimate black babies, such births have actually declined by thirteen percent since 1970.
Q- That's contrary to anything I've read or seen.
A- The misconception occurs because married black women's childbearing rates have dropped sharply, (over 38%) so the statistics show an increase in the proportion of total births to unwed mothers.
Examples like these should put us on guard and make us aware of the illusions that surround us.
Q- A lot of people have been using statistics to prove a widening gap between rich and poor and that the middle class, so essential to America as we know it, is fast disappearing. How do you know what to believe?
Let me give you some examples:
A report released by the Census Bureau in 1986 claimed the top twelve percent, defined as white, well-educated, owning their own business or employed in a white-collar job with an income of over $48,000 a year and with a median net-worth of $123,474 controlled forty percent of household wealth. Forty-eight of these people had college degrees and twenty-one percent had some college.
The typical American family supposedly had a net-worth of $32,667 in 1984 with forty-one percent of it accounted for by equity in a home. Two-thirds of all Americans owned their own homes, with the typical equity being $40,600. The typical white family had a median net-worth of $39,135 in 1984, but married couples had a median net worth even higher---$50,120---whereas the median net-worth of a female headed household was a mere $13,890.
A- That is mountain of numbers to throw at anybody. Remember that definitions are the key! You might ask questions like these:
The Ways & Means committee study released July 1989 blamed the Reagan administration for the increase in poverty rates. It counted 1979 and 1980 as Reagan's years (really Carter's) that's how poverty increased between 1979 and 1987.
The Republicans fought back. They showed between 1982-1987 real income for the poorest fifth of the nation increased 4.1 percent and that during the Carter years the poor got poorer.
Q- A Wall Street Journal editorial (7-27-89) argued against using statistics to explain poverty. They advised concentrating on behavior. The way they put it, after the second world war poverty declined until about 1973--then leveled and didn't really start getting better until 1984.
A- Did they mention any reason for the increase in poverty after 1973?
Q- Actually a variety of reasons were offered including the Great Society programs and the cultural revolution of the 1960s. Since it started way before Ronald Reagan took office there was no rational way the increase in poverty could be blamed on Reaganomics.
A- The idea that the "rich get richer and the poor get poorer" has always appealed to envy, but not common sense. Even if true, it doesn't necessarily follow that the first is the cause of second! But there are those that always jump at any opportunity to interject the class struggle of Marxism.
Q- Well, my point about the editorial was the finding that it is no longer acceptable to define poverty by picking an income level and lumping everybody that falls under that level as "the poor". For instance, in 1989, using that tactic, 41 percent of the poor owned their own homes, 11 percent had college degrees, 40 percent of poor families had two parents in the home. On the behavioral side of the statistics we find that many home owners lived on the street, many college graduates had no marketable skills and were drug and alcohol abusers.
A- Just as poverty can be described by statistics and behavior so can wealth. I've heard wealth described as an incident of life cycles. The young accumulate debt, the middle-aged accumulate houses and cars and the older people have assets without mortgages and loans while accumulating medical expenses. In 1987 this translated to a median net-worth of $5,760 for those under age 35, $73,660 for those age 55 to 64 and $55,180 for those over age 75 as they begin to sell off some assets in order to meet expenses and maintain their standard of living.
Statistics concerning wealth are tricky as it is not always clear what is and is not included. Therefore most researchers feel it is more accurate to talk about income. As I mentioned earlier, that is inaccurate for those who get income in lump sums irregularly.
There is little evidence of any substantial change in the concentration of income over the past twenty-five years. According to the Census Bureau, the range has remained forty to forty-three percent for the top twenty percent of earners; in the 15 to 16 percent range for those in the top five percent and those in the bottom twenty percent have shared in 4.5 to 5.5 percent consistently over those same years. All Americans have seen their real (after inflation) income double since 1950 and despite constant rhetoric to the contrary, citizens have benefited with amazing consistency.
Q- Why?
A- Some economists explain the phenomenon by pointing to the theory of the decreasing marginal utility of money. When a certain degree of wealth is reached, each additional dollar becomes increasingly less important; some people find they would prefer more leisure time. Of course this so called saturation point varies from society to society but it is certain that low tax rates tend to encourage people in all societies and in all income classes to earn more than they might otherwise for the simple reason that they will be able to keep more.
Q- One of the most blatant distortions of the statistics regarding poverty, is the fact that so many unmarried teenagers intentionally have children they cannot support. It may well be true that in 1988 twenty-five percent of all births were to unmarried teens, but to blame those kinds of statistics on the economy is ridiculous.
A- You must admit teenage promiscuity is a real problem. Those particular statistics translate to one million illegitimate babies born that year. Even more troubling is that the rise in the birth rate of unmarried teens correlates with higher rates of sexual activity at younger ages, fertility at younger ages and declining marriage rates. Children as young as ten years old are sexually active in New York City, and one has even been on record as giving birth.
Q- But this is not necessarily a sign of the times.
A- I agree. If we're going to drag out statistics, here is an interesting one: Back in 1959 when I was in college, 97 of every 1,000 girls aged 15 to 19 gave birth, compared to 52 of every 1,000 in 1983. It wasn't so much that teenagers in my day said "no'', they just got married. Today early marriage is less viable and the same activities mean more single mothers.
Q- I've got a good example of skewed statistics. Consumer advocate Ralph Nader held a press conference on October 19, 1986 on the eve of the 1986 elections in which he presented a lot of questionable information including a map showing twenty-seven states in recession and three on the borderline. The Sindlinger poll surveyed thirty-two persons ( out of five million) in order to call Missouri in "deep recession". It sampled eleven of Utah's 1.6 million citizens, seventeen Oregonians and twenty-eight citizens of the great northwestern state of Washington. It only took the responses of three people to plunge Wyoming into "deep recession".
Mr. Nader talked about the widening gap between the rich and the poor, declaring a healthy debate was needed and the President's words should not simply be accepted per se. He said we now have distortion, deception and fantasy spewed to us regarding the economy.
A- I'll second that last statement!
Q- Mr. Nader spoke of a decline in family income, real hourly wages of workers, higher insurance premiums, higher rents, higher unemployment, increasing hunger and an overall general decline in the standard of living.
A- Did he ever mention the cause of and the cure for these ills or was it just another litany of complaints?
Q- Ronald Reagan was the cause and replacing him was the cure. In a burst of pre-election zeal Mr. Nader quipped, "Happy talk and Miller time politics along with money to televise it, is a winning Republican tactic."
A- Just as if ideas, philosophical outlooks and programs had nothing to do with it. I get so angry at elitists, who while knowing better themselves, assume the rest of us are idiots that can be duped by smiles, jingles and one minute sound bytes.
You know, I was thinking maybe in Mr. Nader's case the tables were turned. What if Ralph Nader was influenced by an article in the August 15, 1986 Wall Street Journal featuring a study reportedly showing that the share of national family net-worth held by the top one-half of one percent of the nation's wealthiest families had gone from 25.4 percent to 35.1 percent over a twenty year period (1963-1983)?
On August 21, 1986 the Joint Economic Committee press office admitted the Federal Reserve Board had made an error in its data. The corrected data showed that over the twenty years mentioned, the wealthiest one half of one percent had increased its share of the wealth only 1.5 percent which is an amount considered within normal statistical sampling error and therefore was statistically no change at all.
The error was caught by the Assistant Secretary of the Treasury for economic policy, Michael Darby. A similar study a little later by the Federal Reserve, found that the top ten percent (income over $50,000/year) controlled 34 percent of total assets in the country. Those aged 35-44 in this high-earner group had median net-worths of $122,000, those over age 65 in this group had median net-worths of $866,000 and the average or mean for the older families in this group was $2.5 million.
Q- You're not attempting to deny that there is a widening gap in 1991 between incomes in this country, are you?
A- That is not my intention nor is it my concern. I look for trends and if the trends are foreboding I look to reverse the policy responsible and to work to institute policy that will take the country in the direction of my vision for America. But that is beside the point here. The country is being run on inaccurate numbers. I'm taking a good deal of time to point this out, precisely because I believe it is so important to understand.
Q- I'm convinced that statistics are tricky---and boring!
A- Bear with me, please. In May 1987, the Harvard Institute for Learning and Retirement had members of an illustrious panel voice their opinion concerning The Disappearing Middle Class. Alan Reynolds of Polyconomics in Morristown New Jersey told the audience that the Federal Reserve study in March 1987, that I just referred to, had found that 54 percent of the family heads earning over $150,000/year had graduate school educations compared to ten percent of the population as a whole. Only one percent of the high income families were headed by someone younger than age 35 compared to 31 percent of the entire population. In fact 31 percent of all family heads didn't work at all, whereas in the high income group 56 percent had two spouses working.
Q- Give me a break!
A- Mr. Reynolds concluded that the educated older families with two earners are likely to earn more than the uneducated younger families with one worker or less. If this is shocking or unfair, he joked, one might consider passing out a Harvard MBA to everyone in order to equalize things.
Mr. Reynolds went on to needle the other members of the panel, all in good humor. He expressed amazement that Professor Barry Bluestone of the University of Massachusetts was concerned that manufacturing's decline had forced people into mediocre service jobs on Wall Street and Madison Avenue. He claimed not to share Professor Frank Levy's (University of Maryland) dismay that young people are not doing as well as their parents when due to computer skills and new technology, thirty year olds are constantly making more than forty year olds in today's market place. He quipped that Lester Thurow (MIT) thought that there weren't enough high paying jobs, but too many people are getting high pay and regarding the venerable John Kenneth Galbraith (Harvard) Mr. Reynolds reminded the audience that even in 1948 Professor Galbraith thought everyone was too affluent! As for himself, Mr. Reynolds had to admit that he had twice disappeared from the middle class---once in his struggling youth (dropped below) and now in his high-earning middle years (too high).
Q- That's amazing! He can really scout his way around figures.
A- Mr. Reynolds cautioned the audience about being mislead and offered the following as examples of distortion:
Measuring incomes of households may be appropriate where everyone owns their own home, or at least sets up housekeeping on their own, but when things get tough households merge; younger or older people move in with either parents or children. Statistics would show a smaller number of households with higher incomes thereby making a bad situation look like an improvement.
Q- You said something like that earlier.
A- If I did, I learned it from Alan Reynolds.
He took on Professor Levy's charts which showed the top twenty percent of the population controlled forty-three percent of total income---but there was no accounting for taxes. In Sweden, for instance, the top twenty percent control 41.7 percent but with their high tax rates the top actually receive a lot less. An intelligent analysis of these statistics shows that the situation of the highest income group in this capitalist country is not that different than in socialist Sweden and the two-fifths is lowered when taxes are taken into the equation in both countries. What is often overlooked, or simply not mentioned, is that one-fifth of the population is responsible for producing a lot more than their income share. In fact the top one percent of the population is responsible for the production of wealth vastly disproportionate to their income share. That is because capital produces more than labor in today's society. Included in that one percent are entrepreneurs who provide plants and equipment which support thousands of jobs which directly and indirectly contribute to the productivity of millions of citizens.
Then Mr. Reynolds directed his attention to Lester Thurow's paper which compared 1969, the ninth year of a boom with 1982, the trough of a three year recession. Mr. Reynolds confided to his Harvard audience that 1969, 1973 and 1979 are favorite years for those who wish to skew the facts as all three years "were inflationary blow-offs followed by immediate declines."
Q- I've heard that. 1973 was the year of price controls and so it is often chosen as a base year whereas 1984 is favored by those who can make use of the high unemployment which occurred as the nation emerged from a recession.
A- There are many things to be aware of when comparing the United States with other countries. Other countries pay more cash but the United States pays more "in-kind" which is often not included in statistics. Between 1984-1988 industrial production grew 5.8 percent a year in this country---faster than in Germany or Japan, with manufacturing productivity up more than thirty percent from the 1981-82 recession and twenty percent from the previous peak. Since seventy-five percent of our productivity comes from services, if such activity could be measured properly, American productivity would probably be higher than the numbers indicate.
Q- In 1981 Canada, the United States and Europe all had the same rate of unemployment; 7.5 percent to 8 percent, but Canada's rate climbed to 9 percent in 1988, Europe's to 11 percent and ours dropped to 6.5 percent. From 1981-88, allowing for compounding, GNP in this country increased four percent a year, interest rates were cut in half and the stock market tripled.
A- Not to mention our soaring federal debt! But I just want to point out that taxes and the regional cost of living must be considered when evaluating compensation per hour over a period of time and people should realize that single entry bookkeeping often makes things look bad because liabilities are highlighted and assets ignored.
Q- I guess it's safe to say when it comes to something as arbitrarily defined as poverty, you choose whomever you prefer to believe. Columnist Carl Rowan on May 27, 1986 quoted heavily from the questionable Physician's Task Force On Hunger In America which purportedly found that "the problem of hunger in the United States is now more widespread and serious than at any time in the last ten to fifteen years."
And here is James J. Kilpatrick's offering a few days later (6/2/86) "There is not a scintilla of valid evidence to prove that serious malnutrition is a widespread problem in the United States today."
A- Americans have been led into dependency on and by government over the last fifty years. it would be irresponsible to call for the nation to go cold turkey and regain its independence and integrity in one fell swoop. But it can be done gradually over time by educating the younger generation. The San Francisco based National Center for Financial Education (non-profit---though why that should be a virtue and a selling point I will never understand) has courses for use in secondary education as do numerous other organizations.
Q- In March 1987 the Phil Donahue show featured a discussion concerning the need for financial education and the audience expressed a desire to see it required in public schools to ensure the country's economic viability in the competitive future.
A- Meanwhile we must target our programs more carefully so that the truly needy receive the help they have been taught to depend upon.
It may be significant that states which offer the lowest benefits to welfare recipients have made the most progress in eliminating poverty. Or, on the other hand, it may simply mean the poor are not stupid and have moved to states which offer better benefits!
Q- In February 1986, the National Center for Policy Analysis in Dallas presented a report that attempted to show the more we pay people to be poor the more poor people we get. The report said that at least 5.7 million people are living in poverty by choice as a result of the generosity of public welfare. Each additional $1 billion in welfare spending increases the poverty population by 250,000.
A- In the July 26, 1989 issue of the Wall Street Journal, economists Barry Bluestone of the University of Massachusetts, Frank Levy, of the University of Maryland, Fabian Linden, Executive Director of the Consumer Research Center of the Conference Board and Richard Vedder of Ohio University, discussed whether the USA was becoming more unequal. They agreed that the average earnings per hour did not improve during the eighties, earnings inequality among men had increased, there were fewer elderly and working-poor among the poor and poverty had increased among female-headed families. They agreed that the inequality of male earnings was more dramatic than the inequality of family income. They could not agree whether this was due to the age structure of the population or the changing nature of the American economy's demand for labor.
Q- Did they attempt explanations?
A- That was the purpose of the article. They figured that family incomes grew moderately more equal after the second world war into the mid-sixties; it was during the eighties that the inequalities increased. From 1947-1967 economic growth reduced poverty, but there was little decline in poverty between 1967-1987. Per-capita disposable income rose by a total of 82 percent between 1960-1987, but growth in earnings from work slowed down in the mid-1970s. Looking at the statistics over a shorter and more recent time period ,1980-1987 we see that per-capita disposable income rose only about 13 percent or at an annual rate of 1.8 percent between 1980 and 1987.
Q- Yeah, but everyone's income increased during the eighties so I would think any inequality would have less meaning.
A- Exactly. When the poor are getting richer they don't seem to resent the rich getting richer even faster, as long as everybody's better off.
Q- Even today workers expect to do better than parents. On average today's young workers have incomes in real terms 50 percent higher than their parents' at the same age.
A- As these economists pointed out, that's because we now have two-income families with one child, instead of one-income families with three children. Without two incomes, we'd have more, not less, inequality.
Q- You mean the most wealthy families don't rely on two incomes?
A- Let me put it this way: in 1970 half of the families in the top 20 percent of the population had working wives and in 1987 that number had climbed to 66 percent of those families. At the upper end when the marginal tax rate went from 70 percent to 28 percent there was an incentive to work ---people would get to keep so much more of what they earned---and therefore workforce participation increased for this generally hard working group.
Q- What about the lower end of the population?
A- From about 1967 to about 1974, the number of cases on the welfare rolls doubled. As Professor Levy put it:
You'd be a fool not to attribute a good part of that doubling to the raising of benefits and the attachment of food stamps and Medicaid to welfare. . . In real terms, payments to individuals by the United States government went up from $152 billion 1982 dollars in 1970 to $405 billion in 1988.
It was suggested that the increase in unemployment among black males related to a large degree to family structure and things that affect work effort, like public assistance. Inequality for whites has actually fallen, but for blacks it has risen. There is a greater disparity among blacks today.
Q- It seems to me the fact that an increased number of blacks earned college degrees during those years and were set further apart from the large number of black high school drop outs would explain the disparity. After all, de-industrialization--- the shift from goods to services---puts a premium on advanced education.
A- That's true to an extent. No one can deny manufacturing grew weaker. That segment of our economy is sensitive to recessions. It was also hit hard by the high dollar and the decline of unions. At one time as much as forty-five percent of the labor force belonged to unions. Their decline led to a freer market in wages and therefore greater disparities.
Anyway the economists pretty much agreed that public policy distorted the market and added its own incentives and disincentives. Medicaid, food stamps, WIC benefits and so forth had an adverse impact on the participation of low-income Americans in the work force. Most figured inequality would probably reverse itself in the absence of public policy.
A- There has been a disturbing trend in the country in recent years. It is almost considered heresy to be out of the mainstream thought.
Q- Political correctness!
A- We begin to think as the polls say we should think. It is dangerous when to question or criticize social programs, ideas and laws which permeate every aspect of our lives is considered the wrong thing to do. It is a precursor of thought police when responsible respected members of society are not expected to analyze existent social policy to determine its worth, even though there may be abundant evidence that the policies may be doing the intended beneficiaries more harm than good.
Q- I have been told never to use the term "poor" or "poverty"---such a condition is to be referred to as "economically disadvantaged." A wealthy white male who has lost his health or his family may well be poor.
A- Those things don't bother me---in fact I am willing to stipulate to their merit in some instances.
Q- I call a lot of this correct terminology doublespeak and I find it very objectionable. I resent being forced to refer to "bums" as non-goal oriented members of society or to poor people as fiscal underachievers.
A- I find those things relatively harmless. During the great depression hobos were the equivalent of today's migratory workers; they didn't mind work but they didn't want to be tied down to one place for long. Tramps would work for food but only when necessary and bums wouldn't consider work under any circumstances.
Q- I guess every era has its own "politically correct" vocabulary.
A- That's right; it's no big deal! I wasn't objecting to changing terminology---I was objecting to something much more insidious.
For instance, the bishops spoke as if to claim welfare mothers don't work would show prejudice---the holier than thou kind. So what if statistics show welfare mothers in fact, work about half as much as their counterparts who are not on welfare? And you must understand what is meant by unemployment. It is not simply the inability to find a job, it is the inability to land a good job! Lesser paying and unattractive jobs are plentiful but they wouldn't keep a family out of poverty, as the government defines poverty, so let the taxpayers have some pain until the right jobs comes along.
Q- I read that in 1940 FDR was surprised to learn that a neighbor's daughter, a Vassar graduate, was counted among the unemployed because she was after a very special job---she wanted to be an editor of Vogue magazine. As Herbert Stein once said, "We not only do not consider it wrong for her to behave in this way or wrong to count her as unemployed, we are also willing to pay her unemployment compensation if she has been previously employed and now rejects all jobs other than editing Vogue.
A- Anyway, in Professor Mead's opinion, the bishops didn't put obligations on the poor, just the non-poor. There is, he said, such a thing as Christian duty, just as there is parental duty. Jesus didn't treat the poor as victims; he held them accountable even though there was far less opportunity in Judea 2000 years ago. An indulgent society which insists on taking care of its poor leaves them helpless like an over-indulgent parent who neglects his duty.
Q- There's a bit of Fun With Dick and Jane philosophy for Mr. Burtless to ridicule (see previous file for a discussion of Gary Burtless of the Brookings Institute).
A- Professor Mead maintained that Americans are not against welfare; only against welfare abuse. The Professor believes the public is not seeking relief from responsibility to the poor, but that they want to see the poor reciprocate with responsibility to themselves, their families and society.
Q- That reminds me of Ravendale, Michigan on the east-side of Detroit, a violent drug-soaked ghetto by all accounts, a local minister, Eddie Edwards, is trying self-help. In 1986 he told a neighborhood group they had been operating under a welfare mentality too long and that it was time to help themselves.
He got citizens to organize to fight crime, find jobs for the unemployed and clean up the neighborhood. Volunteers surveyed the 4,000 residents and discovered most wanted more good jobs, less crime and somewhere to shop. A used bus was purchased and used to drive the elderly to stores.
Little League and block neighborhood watches were formed, a regular community newsletter went out and volunteers announced Saturday meetings through a bullhorn.
The city responded to the efforts of the citizens by tearing down abandoned houses, towing wrecked cars, and raiding crack-houses. The neighbors cleared alleyways, planted shrubs and sold security lighting. Habitat for Humanity, renovated three homes in the area. Volunteers painted 32 houses with donated paint, trained the unemployed for interviews and found jobs for 150 of them. A health clinic began providing medical services on a payment plan and the police built a mini-station in the neighborhood.
A- That sounds like a real success story.
Q- Wait, I'm not through. There wasn't the ground swell of support Reverend Edwards had anticipated. There just isn't much initiative in third-generation welfare families. People would come for the freebies and when the project started they would head on home. Churches and local businesses gave little or no support and there were few contributions from outside the community. Volunteers already had a hard time surviving, caring for their own families under very tough circumstances. In the end there was more talk than anything else and most of the dozen enthusiasts fell away.
A- Nothing was accomplished in the end?
Q- I wouldn't go that far, but the attitudes weren't right. For instance the volunteers managed to get a job for a 20 year old who said "I'm not going to get my hair cut for any job. I'll get my hair cut when I want to." He's still unemployed. In another case a welfare mother remains in her run-down home, lacking the skills and confidence to find a job. She says, "I don't want to scrub floors or do any domestic work. I don't want that." Volunteers agreed to paint her run down house but their morale sank when they found three men--two sons and a nephew---on the couch watching TV and ignoring the workers outside!
A- That's exactly what Professor Mead was talking about.
Q- Some people believe that comfort and aid to one's fellow man should come voluntarily from the community so that both the giver and the recipient can be nourished by the humaneness of the act. They view charity as a moral obligation which should not be legislated by a handful of men but rather something all men should do voluntarily of their own free will and on a personal level.
A- No one wants to face the fact that mandated altruism and capitalism are mutually exclusive. It should be apparent that since economic life does not exist in a moral vacuum, what is done of man's free will is of higher consequences than what is done through coercion. As far as 'm concerned, higher ethical values are a natural by-product of capitalism.
Going back one last time to the Harvard Institute symposium we were discussing earlier, Professor Galbraith got a round of applause when he professed his belief that "a broad movement to greater equality in income distribution is something which the good society should still value". Admittedly it was the good professor's personal judgment that "equality in income distribution" is an attribute of the "good society", but a judgment which was apparently appreciated and shared by his audience. It was strange, however, that Professor Galbraith, who in 1958 defined poverty as an income of $1,000, the equivalent of $3,800 today, failed to mention that we have come a long way and raised our sights many times in the process.
It is hard to commend when one has made a long career of denigrating, but Professor Galbraith is wise enough to know no matter what the productive elements of society do for the non-productive, it will never be enough!