bosch2.jpgBarbara Ehrenreich, who has spent a lifetime championing working people and the decent-paying wages, affordable health care and secure pensions they deserve, made the following observation:

When the original welfare reform bill was proposed [in the mid-1990s], it contained $100 million for chastity training.

This addition to the welfare reform bill, Ehrenreich notes, reflected the ruling class’s preoccupation with the sexual and social habits of the poor. She also might have added, such a misplaced emphasis purposely ignores the structural economic conditions behind poverty.

The always-provocative Ehrenreich spoke this week at the Economic Policy Institute (EPI) as part of a forum, Alleviating Poverty, the latest in the progressive think tank’s “Agenda for Shared Prosperity” series. Ehrenreich, of course, knows firsthand about poverty. She spent months working at several low-wage jobs, such as an “associate” at Wal-Mart, experiences she documents in Nickel and Dimed: On (Not) Getting by in America.

Ehrenreich, EPI President Jared Bernstein and Nancy Cauthen, deputy director of Columbia University’s National Center for Children in Poverty, hashed out potential solutions to a problem this nation should not be having on such a large scale: People work full-time and can’t support themselves or their families.

Cauthen cites the example of a not-so-hypothetical single mother with two children living in Chicago working full-time at an $8-an-hour job. At the end of the year, after bills are paid, with nothing spent on extraneous items like savings, the family is $18,000 in debt. And yet this single mother’s salary actually is more than the new minimum wage, which by 2009 will be $5.75 an hour. The lesson here: Work doesn’t pay.

But it should. So Bernstein and Cauthen proposed a series of changes both in determining who really is below the poverty line and how the nation should address this crisis. And a crisis it is: 20 percent of America’s kids live in low-income families with at least one parent working full-time, according to Cauthen.

First, the official poverty level needs revising. Research shows families typically need an income that’s twice the official poverty level—roughly $41,000 for a family of four—to meet basic needs. In a high-cost area like New York City, the figure is closer to $60,000. Cauthen and Bernstein agree the nation’s poverty rate must be adjusted to 200 percent of the federal poverty line to accurately define what it takes to make ends meet. One reason is that the current measure of poverty has not been adjusted for changes in overall living standards, says Bernstein.

For example, in 1960, the poverty line for a family of four was about half the median income for a four-person family. Today, at about $20,000 for a family of four with two children, the threshold is around 30 percent of the four-person median. Clearly, the failure to update the thresholds [results in] people officially designated as poor…falling further behind the mainstream.

In the current debate over the State Children’s Health Insurance Program (SCHIP), Bernstein notes that Republican supporters of the bill already have tacitly acknowledged the current federal poverty measure is not sufficient, because the bill would provide health care for children living with parents whose incomes fall within 250 percent of the poverty line.

Next, solutions. In emphasizing expanding work supports such as child care and the successful Earned Income Tax Credit (EITC), Bernstein and Cauthen stress that such assistance is not in lieu of proposals to raise wages, ensure affordable health care or strengthen workers’ freedom to form unions. In fact, EPI and the Center for American Progress, in its report on poverty released earlier this year, strongly emphasize the need for creation of jobs that pay family-supporting wages. As William Spriggs, a Harvard economist, testified before Congress this spring, the “redistribution of corporate income, from wages to capital income,” has meant more money for the rich while working people and the poor have seen their standard of living stall or drop.

The latest data from the Bureau of Economic Analysis shows that the share of corporate-sector income going to wages is down to its lowest share in over 25 years….The latest CBO [Congressional Budget Office] figures show that almost 60 percent of capital income goes to the top 1 percent in the U.S. income distribution.

The Alleviating Poverty emphasis on work supports are part of the big picture economic restructuring package needed in this nation, one the Agenda for Shared Prosperity has been compiling over the past eight months in advance of the 2008 elections.

With three basic income supports—EITC, food stamps and public health care—that same single mother in Chicago would still be $7,000 in the hole at the end of a year. But add child care support and the family finally would break even. This examples illustrates the extent to which low-income working families are in dire need of multiple means of support.

In fact, says Cauthen, child care is one of the biggest expenses for low-income families, and one of the least emphasized in our current support system. Worse, only 7 percent of eligible families get child care subsidies. Part of the problem is funding—these programs simply aren’t funded sufficiently to meet the need. But the other snag is structural. Because such funding is part of state block grants, when the economy turns sour, states are least able to pay for support programs—at a time when low-income families most need such assistance.

Expanding and adequately funding existing programs, and enhancing these supports with those such as transportation assistance, which virtually are non-existent now, are crucial.

Q. What about cost?
A. What about the Bush administration spending $9 billion a month on the war in Iraq?

Bernstein, who has slogged through these torturous Bush years with the rest of us, expressed optimism that for the first time, with the 2008 elections, there is a possibility that some of these proposals might come to fruition. He may be right.

Just this week, The Wall Street Journal highlighted a recent Pew poll that revealed an amazing shift among Republican voters in favor of addressing issues like income inequality and against so-called moral issues as defined by social conservatives.

Pew found that between 1987 and this year, for example, support for “old-fashioned values about family and marriage” had dropped 11 percentage points. The percentage of those who said gay teachers should be fired dropped 23 points, Pew said. Support for U.S. global engagement and “peace through military strength” also shrank.

But the number of Americans who share some classic Democratic concerns has risen. Three-quarters of the population is worried about growing income inequality, Pew found, while two-thirds favor government-funded health care for all. Support for a government safety net for the poor is at its highest level since 1987, Pew said.

Ehrenreich points out that in advancing the argument for increased support for the working poor, we need to remember it is a moral crusade—if you can’t make a living working, something is seriously wrong. When they emphasized this point, campaigns for a living wage and for an increase in the minimum wage succeeded in gaining support and passing legislation in cities and states around the country.

Another point that needs emphasizing: These proposals don’t constitute a handout. If you work full-time, you’re fulfilling your end of the social contract. It’s long past time the other side of the contract gets fulfilled as well.

Tula Connell

Tula Connell