The Tea Party wing of the new Republican Party wants to slash spending on food stamps. As justification, they point to the growth in food-stamp usage, ignoring that we remain in the deepest recession since the Depression.
Invariably the argument goes something like, “according to the government’s own statistics” (our government is an adversary in the Tea Party mind), “the number of people in poverty has not declined despite all the money spent on public assistance.”
The statement is true enough, but misleading, or in the case of the Tea Party, misled. Government poverty numbers are based only on earned income, not charity or public assistance. The point of the number is to indicate what portion of the population cannot, with earnings alone, maintain a minimum standard of living. Hence, money spent on public assistance cannot affect the poverty census.
Likewise, the goal of public assistance, such as food stamps, is not to reduce poverty, but rather to alleviate the worst consequences of it: hunger and homelessness. To the extent that people living in poverty are not hungry or homeless, these programs are effective.
But the Tea Party runs on folk wisdom and articles of faith sustained by well-nourished racial stereotypes and/or cherished political and economic dogma. In Alice’s Wonderland, it is an article of faith that poverty programs create poverty. Thus one can “repeal” poverty by repealing public assistance-no one will starve, they will just suddenly find a job paying a living wage.
No doubt, welfare risks dependency, but addressing that risk was the focus of welfare reform under Bill Clinton and the earned-income tax credit under Ronald Reagan. Today there is little evidence that a significant number of people choose welfare as a lifestyle; the incentive is just not there. Still the myth continues.
To be real, over 7 percent of the population is unemployed but seeking work, and a full quarter of those who are employed earn less than $10 an hour. These people are not choosing to be unemployed or underpaid. Cutting safety-net assistance to those who can’t earn a living wage, even when working, will not eliminate poverty; it will increase hunger, homelessness and crime, and help scar another generation of children born into poverty. Instead of repealing public assistance, how about focusing on reducing poverty and hence the need for public support in the first place?
For decades we had a living minimum wage in this country. Re-establishing it would instantly remove millions of working poor from the poverty rolls. Why would we not? Post-war wages in the early 20th Century matched productivity gains until the 1970s, meaning that standards of living rose in tandem with increased worker productivity, and at least kept pace with inflation. Since then, while productivity increased over 80 percent from 1972 to 2011, wages have risen only half that and working class wages an eighth of it. Adjusted for inflation, the 1968 minimum wage today would be $10.56, not $7.25. There is no rational foundation for this; it simply reflects a shift in the political power from labor to capital.
If we continue to allow people and corporations to command the labor of others at below living wages-a sort of free-market/slave-labor system-we have two choices: We can leave people to live on the street and starve or we augment their inadequate wages with public assistance. So far, the latter is what we have chosen to do. As wages have stagnated, the cost and participation in publicly funded programs have naturally increased; it is as certain as the movements of a seesaw. Though preferable to letting people starve, rationally viewed, middle-class taxpayers are facilitating cheap labor and providing a huge public subsidy for certain employers, artificially lowering the natural cost of basic labor.
Cutting the food-stamp program, currently designed to assure adequate diets to the poor, is an overt step toward the first option. Certainly it fits the Tea Party’s free-market ideology, as presumably inadequate diets and homelessness would eventually reduce the labor “surplus,” thereby in time raising wages to a living level. It’s Charles Dickens’ Scrooge solution (“Let them starve!”).
But, contrary to Tea Party folk wisdom, markets don’t reflect divine wisdom. Indeed, markets can be quite arbitrary; our policy about a living wage should not be. Re-establishing a livable minimum wage would not only dramatically reduce the numbers of people living in poverty, it would also bring much-needed new demand to the economy, the missing ingredient in our recovery.
This would bring more jobs, which would mean more tax revenue as well as less need for public assistance, leading to lower government deficits and more money for education and public investment. This is an obvious virtuous cycle.
The well-being of a nation depends on optimizing the potential for all people, not just the privileged at the top. Labor should be rewarded with a living wage so that fewer need to be on public assistance and all who can work have the dignity of self-sufficiency. Doing so is part of a constructive path to reducing public assistance of all types.
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Bruce McMath is an Arkansas native, attorney and proud Southern liberal with a degree in economics and finance.
Editorial, Pages 15 on 09/27/2013