Wednesday, January 8, 2014

Reflections on the war on America’s poor

I was deeply moved by a visit to the Lyndon B. Johnson Presidential Library and Museum in Austin, TX, which shows the stunning legislative accomplishments of this remarkable president. Today, on the 50th anniversary of Johnson’s declaration of a War on Poverty, I am re-posting excerpts from a commentary I wrote two years ago:

In his first State of the Union speech in 1964, President Lyndon B. Johnson declared a 'War on Poverty' and launched an extraordinary range of welfare programs. He had the moral foresight to challenge the country to be its best.  Read the Speech 

Today America seems to have declared war on the poor. The US is now the most unequal society among developed countries.

In 2012, more than 46 million Americans live in poverty. Twenty-two percent are children. The gap in test scores between affluent and low-income school students has grown by 40 percent since the 1960s and is now double the testing gap between blacks and whites. The minimum wage is half the amount considered necessary to cover basic living expenses and save for retirement and emergencies.

Americans are extraordinarily hardworking and some of the lowest paid give the most gracious service. Yet those at or below the poverty line are often depicted by politicians and others as undeserving shirkers. Welfare programs are depicted as benefiting minorities. But Lyndon Johnson’s major focus initially was to alleviate poverty among poor whites in Appalachia. Nation-wide, there are far more poor whites than poor blacks…

Even critics of the so-called “safety net” increasingly depend on it. In fact, poor households no longer receive a majority of government benefits. Middle class Americans, many of whom decry government overspending and “'handouts,” count on Social Security, Medicare, student grants, as well as numerous other benefits.

Why does America have such difficulty in getting to grips with poverty? In Jeffrey Sach’s 2008 book, Common Wealth, Economics for a Crowded Planet, he cites Alberto Alesina and other economists whose work shows that social spending trends tend to be highest where social and racial cleavages are the smallest. Alesina writes: “Racial discord plays a critical role in determining beliefs about the poor… Across countries, racial fragmentation is a powerful predictor of redistribution. With the US, race is the single most important predictor of support for welfare.”

Sachs adds: “In the end, the social-welfare model relies on a form of trust. It seems that people are more willing to withstand high rates of taxation if they know that their taxes are paying for programs that help people like them.” It is important, he says, that citizens identify with beneficiaries of government programs. “They are less likely to do so if socioeconomic divisions coincide with racial or ethnic divisions. This is the central point. The costs of racism are great.”

Another factor is that the US has developed an increasingly low-wage economy. One commentator writes that “our whole economic system depends on paying people less than what they are worth.” Consumer demand for inexpensive products, the obsession with short-term profits by corporations, and the predatory behavior of the financial community has devastated America’s manufacturing sector, once the source of solid blue collar jobs. The relentless pressure caused by outsourcing means that the median male American worker earns less today, adjusting for inflation, than he did thirty years ago.

Yet, even with the current high level of unemployment, many companies are having difficulty finding skilled labor. America urgently needs to restructure education to teach technical skills needed in the 21st century…

Each of us must do our part. Are we willing to pay a few cents more for our hamburger so that the person who serves us can earn a living wage? Are those of us (like me) nearing retirement age ready to contribute more for our benefits so that future generations can enjoy them? Will affluent suburbanites welcome mixed-income housing and support public transportation so that inner city residents can reach the new jobs? Will all of us, including the wealthiest, support the needed investment in our schools and vital national infrastructure?

I firmly believe that our political leaders underestimate Americans’ capacity for unselfish choices. Pandering to the baser instincts of fear or resentment does an injustice to the generosity and good sense of this country.

In Fresno, California, a city with extremes of wealth and poverty and where schools face painful budget choices, the school superintendent reduced his annual salary from $250,000 to $31,000. He said, “My wife and I thought, what can we do that might help change the dynamic in my particular area?”

Initiatives of Change has a long history of inspiring people of all backgrounds to live selflessly. “If everyone cares enough and everyone shares enough, everyone will have enough,” has been its philosophy. In 1935, my dad, who experienced poverty and unemployment, was inspired by an industrialist who chose to downsize his home rather than downsize his workforce during the Depression…

America moved towards racial desegregation in part because it was seen as a national security issue. We could not offer credible leadership to a world moving out of colonialism while continuing to discriminate at home. Today, America’s greatest security threat is not terrorism. It is the growing economic inequality and the mistrust caused by the collapse of the social contract of a fair day’s work for a fair day’s wage, along with a sense of shared sacrifice for our national community. Initiatives of Change must work to encourage a new sense of shared responsibility and to restore this trust.

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