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"Comments on CAP Report:,"

by William E. Spriggs July/August 2007 issue of Poverty & Race

The Center for American Progress put together a stellar team of experts on poverty. Their report is very comprehensive. A key component is to remind people that work must pay, and be able to lift people out of poverty. This truth ought to be self-evident; unfortunately, since the 1980s the discussion of fighting poverty has taken on the burden of fighting individual behavior.

The CAP recommendations on the minimum wage may appear to be silly to some, because of the degeneration in the debate. The report recommends raising the minimum wage and then indexing it to prevent the labor market from producing the oxymoron of working poor people.

People are poor because they do not make enough money. This limit could be because they cannot work. Laws prevent children from working, and not surprisingly, among Hispanics and African Americans huge shares of poor people are children. The elderly and the disabled, for the most part, also are unlikely to work, but are helped by Social Security. Children whose parents have died or are disabled are helped by Social Security, as well, and now outnumber those children who are helped by Temporary Assistance to Needy Families (TANF), the reform of the previous entitlement, Aid to Families with Dependent Children (AFDC).

Among working-age adults, however, the problem of poverty is primarily the problem of needing higher wages and more opportunities to work. Of course, working-age women household heads in poverty are heavily affected by the need to earn enough for them and to support their non-working dependent children (as opposed to their non-working dependent parents who are helped by Social Security). In the 1990s, women were helped by previous increases in their human capital—thanks to lowering discriminatory barriers to women in education and in the labor market—and a record- breaking increase in employment that helped pressure the easing of gender (and racial) discrimination in the labor market. The result was that the median earnings for women, for the first time, rose above the poverty threshold for a family of three. Childhood poverty dipped, accordingly. Similarly, in the 1960s, a then record labor market, and measures to decrease racial discrimination, pushed the median earnings of Black men above the poverty threshold for, first, a family of three, and then for a family of four. And, Black child poverty declined almost in half. Those are the only two periods of meaningful declines in American child poverty. And, both the 1960 and 1990 spurts were helped by increases in the federal minimum wage.

The hard reality of our economy is that it does generate bad jobs—those that pay low wages and lack benefits. And, in a competitive labor market, that means those who face the most hurdles—those created by society by discrimination and inequality, and those created by poor individual choice—end up losing the sprint for decent jobs. Clearly, poor individual choices alone cannot explain who ends up being poor—Scooter Libby, and his criminal record, Paris Hilton and Britney Spears, now a single Mom, are evidence enough that poor choices are not the real issue. So, while it is true that poor choices can lead to poverty, not all mistakes land all people in poverty; and the deeper truth is that society’s acceptance of low wages for the jobs we want done, and should value—child daycare worker, nursing home attendant—trap people below the poverty line, and because we need those jobs done, people who are virtuous, and people who have made mistakes, will end up in those jobs. The CAP report is important for putting that all in perspective.

William E. Spriggs is Professor and Chair of the Department of Economics at Howard University. wspriggs@howard.edu
 
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