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Wednesday, April 16, 2014
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Published: 1/5/2014

EDITORIALS

Fighting poverty

Changes in the U.S. economy and policies that shift wealth to the top make poverty nearly inevitable for millions

Gifts for central Toledo children pile up during a charity basketball game last month. Gifts for central Toledo children pile up during a charity basketball game last month.
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Poverty remains a long-standing and seemingly intractable problem in Ohio and the rest of the country, afflicting nearly 50 million Americans. That’s more than 16 percent of the population and almost 20 percent of U.S. children.

Toledo ranks a shameful fifth in the nation for child poverty rates among major cities. A staggering 46 percent of this city’s children are considered poor.

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Nationwide, the gap between rich and poor has risen sharply. It is 10 times greater between the nation’s CEOs and average workers than it was a generation ago.

As a recent series by Blade staff writer Federico Martinez shows, some people can break the cycle of generational poverty, with hard work and education. The idea that Americans can pull themselves up by their bootstraps has informed popular culture since author Horatio Alger popularized that ethos in the 19th century. It continues today, with sports stars and hip-hop moguls among the most spectacular, if exceptional, examples of rags-to-riches stories.

Without question, hard work, perseverance, education, and talent increase anyone’s chances of success. Even so, the idea, however appealing, that the nation can eliminate poverty if poor people just work harder and behave themselves ignores structural changes in the U.S. economy and policies — including tax cuts that shift wealth to those at the top — that have made poverty practically inevitable for millions of Americans.

Despite the American idea of class mobility, several studies in recent years have found that Americans enjoy less economic mobility than their peers in Canada and much of Western Europe. Among the possible reasons: concentrated poverty that leaves some children starting far behind and the rising cost of college.

Moving from a manufacturing-based economy to one dominated by low-wage service jobs has reduced the purchasing power of tens of millions of workers. Meanwhile, U.S. companies have exploited their ability to outsource jobs to cheap labor markets offshore — even receiving tax breaks for doing so.

Some large U.S. retailers have shown how corporate behemoths can drive down wages in their retail supply chains by outsourcing jobs in U.S. warehouses to subcontractors, including firms offering temporary work that provides few benefits and almost no job security.

Consumers, of course, benefit from the low-cost products that such retailers provide. But low wages and outsourcing have also undermined the nation’s historically strong middle class that fueled broader economic growth by bolstering purchasing power.

Perhaps America’s work ethic isn’t what it used to be. But tens of millions of Americans are working harder for less than at any other time in the past 60 years.

Increases in the federal minimum wage — now $7.25 an hour — have lagged far behind inflation. If the federal minimum wage had merely risen with the cost of living over the past four decades, it would be about $10.55 today.

Not only has overall poverty increased in recent years, but so has concentrated poverty — generally defined as neighborhoods or census tracts with more than 40 percent of its residents poor.

Those areas, bereft of jobs and good schools, foster chronic unemployment that afflicts generations, engendering a culture of hopelessness, anger, and despair. Concentrated poverty hinders economic development and exacts enormous public costs in crime, health care, incarceration, and public assistance.

Making matters worse, Congress has shredded the safety net, with cuts in food stamps and a failure to extend federal unemployment benefits to 1.3 million Americans, including 39,000 long-term jobless workers in Ohio and more than 3,200 in metropolitan Toledo.

Given the state’s high unemployment rate, the administration of Gov. John Kasich has imposed unreasonable work requirements on 134,000 Ohioans who receive food stamps, and has shrunk the state’s welfare rolls with more stringent welfare-to-work rules.

Reducing poverty will take more than a mass attitude adjustment. It will require policies at the federal, state, and local levels to retain and create good-paying jobs, develop a fair tax structure, and enact a minimum wage that reflects cost-of-living increases. Expanded federal and state earned income tax credits also would help, enabling poor families to keep more of what little they earn.

Poverty is a multidimensional problem. It is affected by, among other things, local transportation, education, health care, job training, affordable housing, and financial literacy.

The federal government can’t effectively deliver these services. But it can, with economic incentives, encourage cities such as Toledo to coordinate local resources to get poor people training, transportation, and jobs. Requiring cities to develop collaborative plans to get federal anti-poverty grants would push local public and private agencies to cooperate rather than work in virtual silos.

Mass poverty and urban ghettos, segregated by class and race, have helped create a so-called underclass that undercuts the nation’s economic progress and tears at its social fabric. One in four African-Americans lives in poverty.

Bringing poor and disfranchised people into the economic mainstream is the right, and smart, thing to do.



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