The Working Poor (49 page)

This need not be. The priorities of the nation and the landscape of politics could change, subject to a few ifs
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If people with family incomes under $25,000 had cast ballots at the same rate as those above $75,000, more than 6.8 million additional voters would have gone to the polls in 2000, when Al Gore finished with a slight edge of 543,895 in the popular count over George W. Bush. An upsurge in low-income voters would have overcome even Florida’s biased registration and balloting system and (if only a slight majority of them had voted Democratic) would have reversed the results, electing Gore.

Even in landslides, most states’ electoral votes are won by margins of 5 percent or less, so the 6.8 million additional low-income voters (6.5 percent of the total electorate) could decide the outcome. In many races for Congress and state legislatures as well, those in or near poverty could hold the balance of power. If large numbers cast ballots according to their own needs, candidates might suddenly find them interesting. If Democrats were able to sharpen their social welfare positions without losing middle-class support … If they conducted intensive registration and get-out-the-vote drives among citizens who benefit from anti-poverty programs … If a strong low-income contingent in the electorate forced Republicans to adopt more generous platforms … If those working at the edge of poverty became visible …

In reality, however, most Americans do not vote in line with their class interests, and there is no guarantee that the poor would do so even in a large turnout. Balloting seems driven more by aspiration than complaint.
Time
magazine found in a 2000 survey that 19 percent of Americans thought they were in the top 1 percent of wage-earners, and another 20 percent expected to be in the future. “So right away you have 39 percent of Americans
who thought that when Mr. Gore savaged a plan that favored the top i percent, he was taking a direct shot at them,” wrote David Brooks, a senior editor at
The Weekly Standard.
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When self-delusion distorts behavior at the polls, it has damaging consequences for those of low income. Voting is the basic building block of democratic government, and government is the instrument best positioned to make a difference to the working poor. No key sector of this free-enterprise system, whether business or charity, escapes the pervasive influence wielded by government through tax policy, regulation, wage requirements, subsidies, grants, and the like.

The fact that government is the hub of the wheel puts the country’s doubts at the center of the most effective efforts to alleviate poverty. Deep ambivalence about governmental power has shaped the American endeavor since the Colonies wrested themselves from the British monarchy—an aversion defined caustically by Thomas Paine in his 1776 pamphlet
Common Sense:
“Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”

There is something still to be said for that suspicion. We have owed our freedom to our distrust of government from the beginning, when ingenious checks and balances, the separation of powers, were written into the Constitution. In a time of terrorism, that wariness of the imperious potential of the state has been blunted perilously, but it remains a force in today’s political debates over economic and welfare policy. Preaching against big government and applauding private enterprise, conservatives try to prevent state encroachment on the free flow of the market, often to the detriment of the environment, the worker, the consumer. In this view, most zealously expressed by the libertarian wing of the conservative movement, the purpose of government is exceedingly narrow: “The state exists to preserve freedom,” declares the Federalist Society, which has successfully promoted right-wingers into the judiciary.

It is a ringing truth, but a stingy statement. The state exists not just to preserve freedom. It exists also to protect the weak. It exists to strengthen the vulnerable, to empower the powerless, to promote justice. It exists to facilitate “the pursuit of happiness.” It can behave both as a remote force hostile to the people and as the embodiment of the broad community. It can overregulate and stifle, and it can foster exploration and invention. It should leave individuals alone in their private lives, and it should pool the society’s resources for the common good. Government has more than one
personality, and the trick for Americans—one we have been experimenting with since our inception—is how to manage the contradictions.

No system has resolved this quandary. Marxism failed because it misinterpreted history: It saw the stages of civilization leading inexorably to classlessness, a naive assessment of humankind’s capabilities. It also failed because its initial disciple, “the world’s first socialist state” as the Soviet Union called itself, mistook government for the citizenry. The welfare of the state was elevated above the welfare of the people, producing a bureaucracy of state ownership so vast and smothering that practically nothing existed outside of it—nothing except the humble kitchen tables around which the Russian people talked secretly to one another.

Americanism could fail, too. It is devoted to keeping government in its place, but the question of what place that should be is the centerpiece of our ongoing discussion. Without our keenest vigilance, government grows autocratic in a frightening age of terrorism, or loses humaneness in an age of damaging disparities among our people. We need to restrain and use government simultaneously.

The entire society needs governmental tools to help those working at the bottom of the economic hierarchy—both to lend them a hand in what they cannot do alone and to assist them in developing the capacity to do what they can ultimately do themselves. No dichotomy exists here between societal help and self-help. Government can be neither absent nor all-encompassing. It cannot fail to maintain a safety net, cannot avoid direct grants to the needy, cannot be blind to its role as the community’s resource. But it also has to blend its power in creative interaction with the profit and nonprofit worlds, with private industry and private charity.

The most evident point of attack is the wage structure. Business executives have the skill but certainly not the will to compress salary differentials by raising the bottom and making sacrifices at the top. Revised tax structures could induce such policy. Government has the skill to legislate a big boost in the minimum wage, but it lacks the political will, largely because most low-income Americans don’t vote their interests or don’t vote at all, and can’t compete with private industry’s sophisticated lobbying and campaign contributions.

Furthermore, the minimum wage is a blunt instrument, and the skill to use it is not perfected. Economists disagree over how much it could be
raised without harming entrepreneurial risk-taking, although it is reasonably argued that the federal minimum, which has declined in real dollars against inflation, could probably rise considerably before doing damage. Eighteen states and the District of Columbia have demonstrated as much by placing their own minimum wages at $7.40 to $9.04 an hour, above the 2009 federal rate of $7.25.
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One idea for making the tool more refined is to set different mini-mums for different parts of the country based on regional costs of living. Another approach is the “living wage” law. More than 100 counties and cities now require that private companies with government contracts pay $6.75 to $14.75 an hour, levels calculated to support a decent standard of living.
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Preliminary results show minimal budget increases for localities, reductions in government subsidies to workers’ families, and relief among contractors who no longer have to squeeze employees’ pay to compete for low bids. Some economists suspect that the living wage doesn’t target the right people, however, because those being hired into such jobs are workers of higher caliber, not those at the bottom who need a hand moving up from minimum wage positions.

We have learned other ways to address the discrepancy between what people can earn in the market and what they need for comfortable living. One method, the Earned Income Tax Credit, rewards work. While the payment looks like a subsidy of the employee, it acts as much to subsidize the employer, who can pay low wages without causing the worker quite as much pain. Indeed, the program indirectly benefits many large corporations, from Wal-Mart to McDonald’s, and helps make them more profitable. Having cleverly invented this tool, however, we haven’t mustered the will to give it sufficient impact; aside from year-to-year growth with the cost of living, the program has seen no increases since 1996. In 2003, President Bush asked Congress for $100 million, not to augment the payments, but to hire 650 new auditors to check for fraudulent claims.
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Employers are also heavily subsidized by states, counties, and cities competing to attract new industry, and by the creation of federally funded enterprise zones with tax credits to draw manufacturers into poor areas. As a case in point, Alabama has awarded foreign auto companies hundreds of millions of dollars through property tax abatements, suspensions of income taxes, and payments to boost workers’ wages—plus a virtually union-free environment.

In exchange for such handouts, private industry could be asked for a
great deal more than its mere presence, but that rarely happens. The creation of jobs is considered sufficient repayment. Here, federalism and local control can interfere with national economic interests, for when localities compete savagely to undercut one another in granting tax relief, they undercut their own tax bases and distort the geographical distribution of work. In Alabama and the rest of the South, which are practically devoid of organized labor, the incentives raise earnings among residents of some of the country’s poorest regions, but by diverting jobs, they also undermine unions elsewhere. The proportion of America’s workers in labor unions has gradually declined, from 35 to 12.1 percent nationwide between 1950 and 2007; in government, 36 percent are unionized, but in the private sector the figure is only 7.5 percent.
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Broader union membership would be beneficial, but even some union jobs yield only low-wage stagnation, as in parking garages and janitorial services. The country’s prosperity relies on badly paid workers—that’s a fact that is not going to disappear. So the best way to improve a worker’s wage is through promotion and upward mobility; new laborers will flow in beneath to take the low-wage positions, and ideally, most of them will eventually climb into decent pay scales.

We know at least two effective methods to help someone starting in the $5- to $8-an-hour range move to $15 or more: One is through sophisticated job training of the kind that rescued Peaches and Leary Brock from the ravages of low skills and disbelief in themselves; the skill is there, now the will has to be mustered to fund such efforts adequately. The second is through a revival of vocational education in high school and a network of apprenticeships for those who don’t go to college. There, too, the issue is not one of skill but of will.

Wage differences between high school and college graduates have increased sharply since 1980 as many young people fall through a hole in the economy. Because secondary schools feel growing pressure toward a “college-for-all” curriculum, they send higher percentages to college (nearly 60 percent, up from 30 percent in 1970) but leave many of those who don’t attend or don’t graduate without the abilities required at well-paid levels of industry. “Doing well in the workplace involves a far more heterogeneous set of skills than doing well in high schools and universities,” writes Robert Lerman, an economist at the Urban Institute and American University. Unlike most industrialized countries, he notes, the United States has allowed vocational training to lag, leading to a “weakness in the
middle-skill area” that has been cited by foreign manufacturers as reason to avoid investing here. Sweden, Norway, France, England, Japan, Australia, and Germany have spliced technical secondary-school courses into industry-sponsored apprenticeships, producing highly qualified personnel. But when industries come to the United States from abroad, they often invoke dramatic measures to address the American failings; Lerman reports that BMW, the German automaker, has flown American workers to Germany for instruction.

The notion of funneling certain teenagers into vocational school rubs against the American ethic of egalitarianism, which touts the ideal of equal opportunity without actually providing it. Many parents, believing fervently in the dream, oppose vocational tracking for their children, seeing college as the only reliable pathway upward. The trouble is, if you’re like Christie the day-care worker in Ohio, your failure to graduate from college may leave you without the technical skills to make you valuable in the hard-nosed labor market. Christie would have done better on a vocational track than by starting college and dropping out.

Here and there, vocational programs operate successfully under the aegis of certain industries, labor unions, and state governments. “In America, there’s everything,” Lerman says. “Somebody’s always doing something well somewhere.” State agencies in Wisconsin, for example, have collaborated with private companies to train young people in printing, finance, biotech, and a score of other areas. He believes that Head Start, the federally funded preschool program for poor children, could be a vehicle for creating youth apprenticeships among high school students, which would then provide credentials in the field of child development.
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But on a nationwide scale, we have not chosen to repair this breach in training our young people for well-paying work.

In broader educational matters, the intersection of skill and will is more complex and controversial. Volumes have been written about improving public schools, but insufficient attention has been given to the unfair way they’re financed. The fundamental structure is so flawed that even the efforts of a few generous states to equalize funding between rich and poor communities have made too little difference. Most school districts depend largely on local property taxes, and since most Americans live in areas segregated by class as well as race, the disparities are acute. In New York State’s districts, for example, the tax base, the value of all taxable real estate, ranges from $2,395,304 to $184,647 per pupil, producing a per-student
annual expenditure whose average ranges from $13,681 in the wealthiest school systems to $7,100 in the poorest—and this in a state that tries to reduce the gap by funneling more aid to poorer districts.
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