Economy
11:53 am
Tue January 14, 2014

Does The U.S. 'Make Poverty More Comfortable?'

Originally published on Wed January 15, 2014 3:15 pm

Transcript

MICHEL MARTIN, HOST:

This is TELL ME MORE from NPR News. I'm Michel Martin. This month, we, along with many of our colleagues, have been talking a lot about poverty. That's in large part because 50 years ago this month President Lyndon Johnson declared his war on poverty - an ambitious array of programs designed to ease suffering and offer opportunity. So we've been talking about how effective or not the war on poverty actually was and what remains to be done. We're also talking about wealth in other ways. Later this hour, for example, we'll talk about new information that describes why certain groups are better positioned than others for retirement. That's our money coach.

But first, we continue our conversation about why poverty persists in this wealthy nation, and what, if anything, this country should be doing now to address poverty. So we've called upon two scholars with very different perspectives about this. Stephen Pimpare is a professor of public policy at Columbia University and author of "A People's History of Poverty." He spoke with us last week and joins us again from our studios in New York City. Welcome back. Thanks so much for joining us once again.

STEPHEN PIMPARE: Thank you. Glad to be back.

MARTIN: And Michael Tanner is senior fellow at the Cato Institute. He is the author of "The Poverty of Welfare: Helping Others in Civil Society." He's also spoken with us before. And we welcome you back as well to our studios in Washington, D.C.

MICHAEL TANNER: It's always a pleasure to be with you.

MARTIN: So, Professor Pimpare, let me start with you because you joined us last week when we talked about poverty. We talked a little bit about the history of these kinds of programs. And I want to jump in to a point that you made right at the end of our conversation. You said, in some ways, if you want to make people less poor, give them money. So let me start there. Why don't we just alleviate poverty by making people less poor? Transfer enough income or wealth to them, or whatever you want to call it, so that people aren't poor.

PIMPARE: Well, you know, to some extent I think that we actually do do that and do a fair bit of that. In some ways, it might be helpful to step back just a little bit from talking about the war on poverty to go back earlier because in some ways the question that I think Michael and I and others have been discussing over the past week is can federal government efforts to reduce poverty actually reduce poverty? And if we look back at the very worst of the Great Depression in the early 1930s, we had a poverty rate that was probably somewhere in the neighborhood of 75 percent, give or take.

And that's part of what spurred the creation of Social Security, of unemployment insurance, of ADC, which would become the welfare program, of the right to unionize, importantly. Once we get to the 1950s, we, in fact, start to see poverty declining and declining fairly steadily right through to the 1960s and the war on poverty and great society programs.

MARTIN: So why is anybody still poor in this country?

PIMPARE: Well, because we do a fair bit to reduce poverty, but we don't do enough. We cut poverty about in half from where it otherwise would be if we don't count the effects of those federal programs. It still leaves us with a 16 percent poverty rate - at a much higher poverty rate than in other countries that do more.

MARTIN: OK, so, Michael Tanner, what about that? I mean, you heard Professor Pimpare's point. His point is that we actually do give people money to be less poor, but there's a certain level of poverty that we - at which we just stop.

TANNER: Well, I certainly think there's something to that. We give a great deal of money to the poor. Last year we spent, at the federal and state level, nearly $1 trillion on 126 separate federal anti-poverty programs without making a significant real dent in poverty. Most of the poverty reduction that we've seen since the war on poverty began is actually a result of the earned income tax credit and the reduction in the lowest tax rate - the 15 percent tax rate down to 10 percent that took place more recently. It is not largely a result of the transfer programs, many of which have very little impact at all.

MARTIN: Why isn't the earned income tax credit a transfer program by another name?

TANNER: It is. It's a wage supplement program, if you will. And it has a lot of success. But that's really a Reagan-era program. It's not part of the great - the war on the great society or the great society program.

MARTIN: OK, but - so what about the basic question? Why is anybody still poor in this country?

TANNER: Well, a lot of behavioral issues affect poverty. The fact is we have a pretty good idea of how to get out of poverty and how to stay out of poverty. Number one is, finish school. If you drop out of school, you're likely to be poor. If you graduate college, you're not. Number two is, if you're a woman and you're not married, don't have a baby. You're about five times more likely to be in poverty if you give birth out of wedlock than if you wait 'til you've married.

That's not a moral judgment, simply an economic one. And number three is jobs. If you - only about 3 percent of full-time workers are living below the poverty level in this country. So what we really need to do is focus on those things and not simply on giving people enough money to make their poverty more comfortable.

MARTIN: In fact, you write a lot about that. And I presume you mean by that that it gives people incentives to stay poor. Is that a fair way to characterize your views?

TANNER: Well, that's part of it, but it's also not enough work on getting people out of poverty in the long run. We tend to measure by inputs or by the fact that we've done away with, say, malnutrition in this country to a large extent. But what we're not doing is allowing people to be fully actualized human beings. To do that means more than simply surviving on a government check. It means having a job and supporting your family and rising in society, which is what we don't allow people to do today.

MARTIN: If you're just joining us, we're talking about solutions to poverty with two scholars with very different perspectives. We're speaking with Michael Tanner of the Cato Institute - that's who was speaking just now - and also Professor Stephen Pimpare of Columbia University. Well, so, Professor Pimpare, what about that? I mean, you heard Mr. Tanner's argument, which is an argument that you hear a lot of conservatives make, that really it's the behavioral issues at this point that are the main driver of the consistency of poverty. Your thoughts?

PIMPARE: Sure. It's an argument we've been hearing since the Middle Ages. It's an argument that was predominant in the United States in the first Gilded Age in the late-19th century. The problem with it is that it portrays a failure to understand the actual constraints of low-income individuals, low-income families and low-income communities. I mean, to point to the fact that people with college degrees have lower poverty rates than others - that's absolutely true.

But then you need to take a look at what are the obstacles to greater numbers of people moving into college. And if you look at a kid born in the south Bronx in one of the poorest districts and look at the quality of the public schools, already that child has a much harder hill to climb in order to be competitive. There are real life barriers to that sort of simplistic, get an education, get married, don't have children and get a job sort of equation.

MARTIN: Can I ask a question about that, Michael Tanner? Which is that the federal minimum wage, which is something being discussed very actively at the moment as kind of a policy question, is $7.25 an hour. If you work full-time at that wage, it is really not enough, particularly to support a family. So if some people argue, you know, what message does it send to have so many people working and still be unable to support themselves? Or support themselves well, particularly in neighborhoods where legal jobs are scarce, but illegal drugs, the black market, sort of, in general, offer what seems to be a more attractive lifestyle?

TANNER: Well, I think you raise a very good point there. But only about 5 percent of minimum-wage earners are adults with children as the sole breadwinner in their family. In fact, studies have shown that if you raise the minimum wage to, let's say, $9.50 an hour, you'd only reduce the poverty rate by about 10 percent. So what you've really got to do is try and find how you can create more prosperity within a community, how you can create more good jobs within a community because you also have to deal with the fact that raising the minimum wage is, of course, going to eliminate some of those jobs at the bottom rung of the scale altogether.

MARTIN: Stephen Pimpare, what about you? I mean, what about his argument about the moral hazard? You know, what message it sends to people if you can live without or at least survive...

PIMPARE: Well, the implication - yeah.

MARTIN: ...Without really making an effort, without working and without sort of meeting some of these other behavioral standards?

PIMPARE: Right.

MARTIN: What message does that send?

PIMPARE: I mean, the implication is that there are - through the things that government does - there are means by which large numbers of people can live and live well without having to work. And that's simply not supported by either the scholarly research or, again, by actual encounters with poor people and with poor communities.

One of the things that strikes me about what Michael just said is he sort of - I mean, I would disagree with his interpretation - but he sort of pooh-poohs the notion that a raise in the minimum wage would decrease poverty by 10 percent. Well, 10 percent is not nothing. And, you know, 10 percent here, 10 percent there and suddenly you're looking at large-scale effects on reducing poverty and increasing the well-being of people. So it's - I mean, I'm having a hard time sort of seeing where sort of the coherent claim lines up in those sorts of...

TANNER: Well, the coherence...

PIMPARE: ...Critiques of intervention.

MARTIN: Go-ahead, Michael Tanner.

TANNER: The coherence is that it's an inefficient way of trying dealing with poverty. A wage supplement, like the earned income tax credit, does a much better job and is much more efficient. What you're actually doing by raising the minimum wage is raising wages for a lot of people who aren't in poverty. About 43 percent of the people who would benefit from...

PIMPARE: And that would be a bad thing?

TANNER: ...Minimum wage have three times - well, if you're raising the wages primarily of people who are second and third earners, of teenagers getting their first job, things like that. And at the same time, you're doing away with a lot of those jobs that the first rung on the ladder out of poverty. You're helping the wrong group of people.

MARTIN: Can I ask you, Michael Tanner, about Stephen Pimpare's kind of first argument, which is that we are - we in this country have simply become comfortable with accepting a level of poverty that other countries do not. Do you think that that's true?

TANNER: Yeah, I think that's true. I think that we - we think - on the right, I think they don't care, you know, much about the poor. They don't think much about the poor. And on the left, I think they're content if they give enough money to the poor to solve their conscience. The real goal should be how many people don't need help in our society, how many people we lift out of poverty.

MARTIN: Stephen Pimpare, what about - Michael Tanner's argument is that he agrees with you that, yes, we have come to accept a level of poverty in this country that other nations, wealthy nations, do not. But he says it's a pox on both our houses, on both philosophical houses. Do you think that that's true?

PIMPARE: I mean, I'm certainly happy to launch complaints against Democrats and Republicans in not quite equal measure. But I think there's been a really sort of profound failure. Fine, if we want to recognize that the first option is employment, then we need to recognize a reality the moment that we inhabit. We have record-high employment rates. We've got somewhere in the neighborhood of three people looking for a job for every job that is available. What then do we do about that? If the answer is, don't offer people cash assistance programs but require work, then it would seem to me that the moral obligation is to then guarantee that job at a decent wage as a right of citizenship.

MARTIN: That leads me to where I wanted to go next to conclude this conversation. I mean, you both alluded to the fact that some of the conversations we're having about poverty, we've been having for very a long time. So where would you like the conversation to go next? And so since you started us off, Professor Pimpare, I'm going to ask you that. Where would you wish this conversation would go next?

PIMPARE: You know, I wonder if it wouldn't be productive for us to think instead of poverty, per se, but to talk about well-being, to talk about what would it mean to create a society in which Americans have the ability to live the kinds of lives they value. And what can we do collectively through our elected representatives in the institutions that we have built to ensure that? And one of the lessons that other countries tell us is that there does not need to be a trade-off in improving well-being and economic growth at large.

MARTIN: Michael Tanner, final thought from you.

TANNER: Well, I'd agree with the first part of that. I think we should be having a conversation about well-being and prosperity and how to create a society in which everybody can achieve their goals. I think the problem is that government really can't do that. I think that there's very little evidence to suggest that government is good at creating prosperity. I think there's a lot of evidence to suggest that government is a great barrier to prosperity. And I think - so what we really need to be thinking in terms of is not poverty, which is sort of the natural state of man, but how do we create prosperity.

MARTIN: Michael Tanner is a senior fellow at the Cato Institute. He joined us in our studios here in Washington, D.C. Stephen Pimpare is a professor of public policy at Columbia University. He joined us from our studios in New York City. Thank you both so much for speaking with us.

PIMPARE: Thank you, Michel.

TANNER: It's a pleasure. Transcript provided by NPR, Copyright NPR.