Advertisement

SKIP ADVERTISEMENT

What Makes People Poor?

Let’s imagine for a moment that there are no political pressures distorting our discussion of poverty and that we can look at it as a technical problem, not a moral one.

Maybe we would find that most explanations – left, right and center – are not mutually exclusive but mutually reinforcing.

Before we take this thought experiment further, we should consider the ramifications of new research that provides insight into urban social disorder, worklessness, the rising salience of education and the shortcomings of government policy.

David Autor, an economist at M.I.T. best known for exploring the costs to American workers of automation and trade with China, has recently expanded the scope of his research on unemployment to look at the consequences for men who grow up in a fatherless household.

In a paper published last year, Autor, working in collaboration with a fellow M.I.T. economist, Melanie Wasserman, found that “the labor market trajectory of males in the U.S. has turned downward along four dimensions: skills acquisition; employment rates; occupational stature; and real wage levels.” The trends have been much worse for men than women because “the absence of stable fathers from children’s lives has particularly significant adverse consequences for boys’ psychosocial development and educational achievement.”

Autor and Wasserman cite data showing that “after controlling for a host of individual and family characteristics, growing up in a single-parent home appears to significantly decrease the probability of college attendance for boys, yet has no similar effect for girls.” The authors add that when raised with a nonresidential father, “boys perform less well academically than girls.”

Andrew Cherlin, a sociologist at Johns Hopkins whose book “Labor’s Love Lost: The Rise and Fall of the Working-Class Family in America,” will be published later this year, looks at much the same problem as Autor, but from a different vantage point.

For the non-college educated, Cherlin wrote to me by email, “the majority of their births will occur outside of marriage, often in fragile cohabiting unions that have high break-up rates.” Conversely, the overwhelming majority of men and women with college degrees marry before they have children, have experienced a drop in their divorce rate and have seen their incomes rise as both husband and wife work.

The result, Cherlin points out, is that a “bachelor’s degree is the closest thing to a class boundary that exists today.”

Along a separate line of inquiry, the conservative Heritage Foundation continues to press the case that government itself undermines the work ethic. Heritage publishes an annual “Index of Dependence on Government,” which is designed to show that “America is increasingly moving away from a nation of self-reliant individuals, where civil society flourishes, toward a nation of individuals less inclined to practicing self-reliance and personal responsibility.” Heritage adds that “Americans are haunted by the specter of growing mountains of debt that sap the economic and social vitality of the country. The enormous growth in debt is largely driven by dependence-creating government programs.”

At the other end of the political spectrum, Dean Baker, co-director of the Center for Economic and Policy Research, makes a very different case: that our government’s policies have weakened the bargaining position of the working class while enriching the wealthy.

In a series of emails to me, Baker argues that the Federal Reserve’s determination to limit inflation has boosted unemployment, that policies that keep the value of the dollar high hurt employees who face foreign competition, and that trade agreements pit American labor against workers in low-wage developing countries.

Despite the conflicting nature of these left and right analyses, there is a strong case to be made that they are, in fact, complementary and that they reinforce each other. What if we put it together this way? Automation, foreign competition and outsourcing lead to a decline in well-paying manufacturing jobs, which, in turn, leads to higher levels of unemployment and diminished upward mobility, which then leads to fewer marriages, a rise in the proportion of nonmarital births, increased withdrawal from the labor force, impermanent cohabitation and a consequent increase in dependence on government support.

The major roadblock to synthesizing competing explanations has been — and continues to be — political polarization. Vested interests on the left and right have delayed, and in some cases prevented, recognition of the overlap between liberal and conservative hypotheses, and have pointedly ignored evidence that contradicts their preconceived partisan positions.

William Julius Wilson, a sociologist at Harvard and past president of the American Sociological Association, described the disastrous consequences of the hostile reaction on the left to the 1965 “Moynihan Report,” Daniel Patrick Moynihan’s study, “The Negro Family: The Case for National Action”:

“Scholars, particularly liberal scholars, tended to shy away from researching any behavior that could be construed as stigmatizing or unflattering to inner-city minority residents,” Wilson wrote in a 1993 essay. “This left the study of ghetto social dislocations to conservative analysts who, without the benefit of actual research in the inner city, put their own peculiar stamp on the problem, so much that the dominant image of the underclass became one of people with serious character flaws entrenched by a welfare subculture and who have only themselves to blame for their social position in society.”

Wilson has been a key player in challenging liberal scholars to confront issues they had long viewed with trepidation. In his 1987 book, “The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy,” Wilson wrote: “If underclass blacks have limited aspirations or fail to plan for the future, it is not ultimately the product of different cultural norms but the consequence of restricted opportunities, a bleak future, and feelings of resignation from bitter personal experience. Accordingly, behavior described as socially pathological and associated with the ghetto underclass should be analyzed not as cultural aberration but as a symptom of class and racial inequality.”

Wilson freed an innovative generation of liberal academics to pursue highly productive research — sociologists like Cherlin, Sara McLanahan at Princeton, Kathryn Edin at Johns Hopkins, Alice Goffman at the University of Wisconsin-Madison, Matthew Desmond at Harvard, and, earlier, Elijah Anderson, now at Yale.

All of these sociologists have produced nuanced fieldwork that describes the pressures on the poor, their level of desperation, and the improvised adaptations that now characterize life in poverty.

Just as there has emerged a progressive movement into terrain once colonized by the right, there is now a nascent, if still modest, reform movement within conservatism and the Republican Party.

Two leading advocates of Republican reform, Michael Gerson, chief speechwriter for George W. Bush and a Washington Post columnist, and Peter Wehner, a senior fellow at the Ethics and Public Policy Center who served in the last three Republican administrations, wrote in the Winter 2014 edition of National Affairs that “many conservatives fail to see the extent to which equal opportunity, a central principle of our national self-understanding, is becoming harder to achieve. It is a well-documented fact that, in recent years, economic mobility has stalled for many poorer Americans, resulting in persistent intergenerational inequality. This phenomenon is more complex than an income gap. It involves wide disparities in parental time and investment, in religious and community involvement, and in academic accomplishment. These are traceable to a number of factors, including the collapse of working-class families, the flight of blue-collar jobs, and the decay of neighborhoods that once offered stronger networks of mentorship outside the home.”

Gerson and Wehner’s views are in close alignment with analyses found on the contemporary left and center.

Ideological convergence could produce a more empirically grounded understanding of the causes of poverty and of social and economic inequality as well.

Still, there are forces impossible for a single nation operating in a global economy to harness, let alone control: the continuing downward pressure on wages from both domestic and international competition, the offshoring and robotization of jobs, the reluctance of corporations to hire poorly educated and untrained employees, and the continuing improvement of overseas production in developing nations.

Globalization limits the ability of the United States to intervene effectively on behalf of its most needy. Action taken to shield domestic labor from foreign competition threatens to place constraints on economic growth; protectionist trade policies, in turn, drive up consumer costs.

The emergence of a rough ideological consensus on the causes of poverty and inequality would increase the likelihood of, but by no means guarantee, agreement on such initiatives as raising the minimum wage, increasing and expanding the scope of the earned-income tax credit, programs promoting marriage and paternal involvement, as well as stronger efforts to improve the quality of education, especially in poor neighborhoods.

Scientific and technological progress are likely to drive us toward a solution to the problem of poverty only if they take the form of innovations that have a deep impact on economic growth and employment opportunities. To really change things, this impact would have to be comparable to developments spurred by the Industrial Revolution or, more recently, the information revolution. Progress, if it comes, will inevitably bring its own distributive dilemmas.

At the current moment, breakthroughs in innovation – as well as breakthroughs in managing the human costs of innovation — are as likely to occur abroad as in the United States. When it comes to the persistence of poverty and of inequality, it will take all of our resources and capacity for cooperation, along with a more sophisticated, comprehensive understanding of human capital formation, to overcome our domestic squabbling and mount a concerted offensive.

Advertisement

SKIP ADVERTISEMENT