It takes mass struggle to end poverty
(from the Peoples Weekly World)
By Greg Godwin
A recent study entitled "Does a Rising Tide
Lift All Boats?" discredits the widely held belief that the highly celebrated economic
growth of the last decade has benefited working people as well as the rich.
Released at the end of June, this new report was commissioned by the Con-ference
Board, a group that "strives to be the leading global business membership organization
that enables senior executives from all industries to explore and exchange ideas that
impact on business policy and practices." Despite its avowed pro-corporate,
management-oriented bias, the Conference Board paper depicts an economic system that
miserably fails working people, even in what appears to be the best of economic times.
These results destroy the myths that buttressed the destruction of the welfare system.
Politicians contended that welfare recipients would be forced to find jobs and rise
out of poverty. Instead, more people are working and more workers are poor. The number
of full-time workers in poverty actually increased between 1997 and 1998.
The study estimates that nearly five million workers and their dependents are now poor
despite the fact that the percentage of full time workers in the work force has
increased from 61 to 66 since 1990. While unemployment has fallen and more people have
found jobs, more workers have been forced into jobs that fail to lift them from
poverty.
Critics have argued that the impact of poverty on low-income workers has been blunted
by Earned Income Tax Credits. Gene Sperling, the head of the White House National
Economic Council, is quoted by The Wall Street Journal (June 29) faulting the study
for ignoring the Earned Income Tax Credit. Sperling, maintains that the program "has
helped push a few million people above the poverty line."
The Conference Board research refutes this claim, however, citing the regressive
impact of changes in Federal Income and Social Security taxes on low-income workers.
The increasing tax burden on the poor has more than offset the benefits of the tax
credit. The Conference Board study cites a 1995 paper by the National Research Council
that found that balancing tax credits against higher taxes actually left more
low-income workers in poverty than the official government figures.
The author of the study, Linda Barrington, is one of the leading authorities on
poverty measurement, co-editing the poverty statistics for the millennium edition of
the Historical Statistics of the United States. These credentials make the results of
her examination of these trends over the last forty years even more striking. She
found that since the early '70s there has been little relief from the grinding poverty
afflicting low-income workers. In other words, the expansion or contraction of the
economy over the last 30 years has neither reduced nor increased the level of poverty
for low-income workers.
This is a startling result since it implies that the cherished belief of conservatives
and neoliberals, the belief that economic growth will dissolve poverty, is simply
false. Commenting on this study in The Wall Street Journal (June 29), University of
Michigan poverty expert, Sheldon Danzinger, added "the average wage for a full-time
worker without any college education was 8 percent less last year than it was in 1972."
On the other hand, Barrington notes that the degree of poverty among working people
dropped dramatically from the mid-1960s to the early 1970s. Paradoxically, she
attributes this sharp decline to the economic boom of the 1960s. She coolly notes that
"Subsequent expansions have not been strongly associated with a reduction in poverty
among full-time workers."
Perhaps because of shortsightedness, perhaps because of editorial pressure, Barrington
fails to mention the great mass movements of the '60s that provoked some of the
sharpest assaults upon poverty since the New Deal. In truth, it was not the war based
economic expansion that ameliorated poverty in this period, but the upsurge of popular
struggle for Civil Rights and against the Vietnam War that forced a "War on Poverty"
upon the U.S. ruling class.
The reason * and the only reason * that poverty declined during the '60s was the
powerful mass movements that forced U.S. elites to allocate federal funds to
improvements in social benefits directed to the poorest and neediest citizens. It is
these very programs that have been targeted by politicians in recent years.
Inadvertently, Barrington acknowledges their success in reducing poverty. As a result
of these programs, poverty among full-time, working families was reduced by more than
half from 1966 until 1973. No significant reduction has occurred since, and, indeed,
we now see poverty rising in spite of strong economic growth.
Barrington's study confirms that non-white full-time workers suffer greater poverty
than their white counterparts. Nonetheless, the anti-poverty policies of the '60s were
remarkably effective in reducing poverty among minority full-time workers, and
succeeded in reducing the 1973 poverty rate to less than one-fourth of what non-white
workers experienced in 1966. This gives the lie to the view that these programs are
ineffective. It also destroys the racist, demagogic charge that only chronically
unemployed, welfare recipients were benefited by the programs own in the 1960s.
But, minority workers have been "lifted" even less than their write counterparts by
the economic expansion of the 1990s. When Dr. Barrington looked at regional data, she
noted that poverty among full-time non-white workers has been rising sharply in the
Northeast, with over half of the gains made in the sixties wiped out by 1998.
The rise in non-white poverty is even sharper in the Midwest, doubling between 1994
and 1998. The South, too, shows a higher incidence of non-white poverty, with an
increase during this so-called economic boom. Oddly, the Conference Board study shows
a decline of non-white poverty in the West against the rising trend of poverty among
all full-time workers, both white and non-white.
In addition to the sharper growth in poverty, minority full-time workers experience
greater fluctuations in and out of poverty. Barrington claims that these changes *
what she calls "economic turbulence" * is at least two times greater for non-white
full time workers than workers taken as a whole. This means that it is even more
difficult for non-white workers to save and plan for education, retirement, and
familial support. This "turbulence" suggests that the legacy of employment
discrimination, of "last hired, first fired," remains for minority workers.
Why are people working full-time at greater risk of falling into poverty? The
Conference Board study reveals a clear and distinct answer: High and middle paying
jobs are disappearing in the U.S. only to be replaced with low paying jobs.
There is no great mystery here. In 1963, high and middle paying jobs accounted for 65
percent of all non-supervisory and production jobs. In 1998, that percentage had
fallen to 37 percent. Low paying jobs now (1998 figures) account for 63 percent of all
workers. Production workers have fallen from 30 percent in 1963 to 15 percent of all
non-supervisory and production workers in 1998.
This development has sometimes been described as "the export of high paying jobs to
other countries." While the work may shift to other areas, this characterization is
misleading. The "high pay" is not exported, but destroyed. And therein lies the
essence of the New Economy: an increase in profits at the expense of working people,
an increase in the rate of exploitation.
The erosion of the minimum wage only worsens the poverty experienced by low-income
workers. In a report on the Conference Board paper, The Wall Street Journal (June 29)
estimates that the federal minimum wage in 1969 was equivalent to about $7.00/hour in
today's dollars. This is nearly 36 percent above the minimum wage of $5.15 an hour. Is
it any surprise that low-wage, poverty level jobs are increasing?
The promise of prosperity held out by globalization rests on the faulty premise that
promoting economic growth will benefit everyone. Workers have been asked to accept
NAFTA and other free-market schemes because these policies are believed to stimulate
growth, and thus, raise everyone's standard of living. Nearly every bourgeois
political party in the developed countries now accepts this thinking as dogma *
economic growth is the surest road to economic justice.
But the Conference Board study demonstrates that growth does not deliver the goods to
poor and working people. Their examination of tends over the last 40 years affirms
that the working class only gets what it wins.
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