Economy
12:47 pm
Fri January 10, 2014

Why Getting A Job Doesn't Mean Getting Out Of Poverty

Transcript

MICHEL MARTIN, HOST:

I'm Michel Martin and this is TELL ME MORE from NPR News. This week, we, like many of our colleagues, have been talking about poverty because this week marks 50 years after President Lyndon Johnson declared a war on poverty. Later this hour, we'll speak with a minister who now preaches from the same pulpit where the Reverend Martin Luther King Jr. once stood in Atlanta - Ebenezer Baptist Church. And he's asking whether the black church is still a force for addressing issues like poverty. That's later.

But first, more on the politics and policy around poverty. Now one of the pillars of LBJ's attack on poverty was promoting employment. The idea that a good job is the best way out of poverty. Well, today's job report shows it's not that simple. The economy only added 74,000 jobs last month, which was below expectations. And most of the jobs that were added in 2013 were in low-wage industries like restaurants and retail. And that means that millions of Americans are still struggling to make ends meet even though they are working full-time. So we wanted to talk more about this. So we're joined by NPR's senior business editor Marilyn Geewax and Stephen Pimpare. He's the author of the book "A People's History of Poverty in America." And they're both with us now. Welcome to you both. Thank you for joining us.

MARILYN GEEWAX, BYLINE: Hi, Michel.

STEPHEN PIMPARE: Happy to be here.

MARTIN: Marilyn, let me start with you just on today's numbers. Today's labor report showed that the unemployment rate has fallen to 6.7 percent. How are economists interpreting this?

GEEWAX: It's a confusing report because of that. On the one hand, it was pretty bad news - only 74,000 new jobs. That's about a third of what economists had been expecting. So that's pretty darn disappointing - well, below what was typical for the past year. But on the other hand, the unemployment rate fell so that means what? Seems like a lot of people dropped out of the labor force. Now some of that is just baby boomers retiring.

Maybe they're retiring a little bit early, but they just decide I'm out, I'm done. But a lot of people are also just discouraged. They're just dropping out of the labor force and just deciding to maybe go back to school or just focus on being a homemaker or whatever. But they're leaving the workforce, and that's not good for the economy. You'd like to see a lot of people out there looking for work and participating.

MARTIN: What about wage levels, Marilyn? You know, in December, according to the Bureau of Labor Statistics, average hourly earnings for all employees and private non-foreign pay rolls edged up by 2 cents to $24.17. And over the year, average hourly earnings have risen by 42 cents or 1.8 percent. Is that a good number?

GEEWAX: No. That's a bad number.

MARTIN: No.

GEEWAX: That's...

MARTIN: In short, no.

GEEWAX: No. Forty-two cents is not great. It was a tough year for wage earners. People who do have jobs, aren't really seeing much of an improvement. If wages have risen, they're only up 1.8 percent for the year. That's just barely a little bit above inflation. So really we've seen this job market coming back for, you know, several years now. I mean, unemployment was 10 percent back in the fall of 2009. So it is better, but it's not strong enough to drive employers to offer more wages.

So most workers are pretty well-stuck, and then of course, for the really low-wage workers, the federal minimum wage has been stuck at $7.25 an hour since July of 2009. Now President Obama has been pushing, saying Congress should raise that wage, but it hasn't happened yet. So low-wage workers are not really getting that push-up from Congress. And employers don't feel compelled to offer more money so wages are really compressed.

MARTIN: So Professor Pimpare, could you kind of give us the bigger picture here? Who exactly are the working poor? How many people - how many Americans are we talking about that would fit into this category?

PIMPARE: Well, I mean, as with poverty numbers that we've seen some reporting on this week and as with the unemployment data, it depends on which date set you're looking at and how you do the math, right. These are - we do a shockingly bad job of getting a really good handle on these sorts of important social factors. That having been said, if we think about - of all the people who are working, how many of them are earning what are called poverty-level wages? So that means that - look at the hourly wage and assume that you're working 35 hours a week, 50 to 52 weeks a year, whether you are or not, will that wage bring you to the poverty line or above? That's, remember, about $23,500 for a family of four. We're at a moment where somewhere in the neighborhood of 28 percent of all Americans are working in poverty-level jobs.

That's 32 percent of all women working in poverty-level jobs, right. So it's not just that - we've got a real problem with insufficient number of jobs available for people who want to work. And that problem is, in many ways, much worse than those official since - those official DLS data show us. But even among those people who are working, they're not earning enough money to meet their basic needs. And looking a little bit at the longer kind of pattern, what we see, in a lot of ways, is not just problems with unemployment, not just problems with poverty, but real problems with insecurity. Meaning that even if you have a job today that is more or less meeting your basic expenses, there's no guarantee that that job is still going to be there for you a month from now or six months from now or a year from now or that it will continue to keep pace with your expenses. One of the things we're seeing over the last 40 years...

MARTIN: Professor Pimpare, I need to interrupt here.

PIMPARE: Sure. Of course, I'm sorry.

MARTIN: I need to get some other ideas in this conversation. So - and if you're just joining us, we're talking about low-wage workers - so-called working poor. We're talking with Stephen Pimpare. He's author of " A People's History of Poverty in America." And NPR senior business editor Marilyn Geewax. Marilyn, just on the whole question of the buying power of the minimum wage. The minimum wage back in 1964 was about $1.25 per hour. So how does that compare in today's dollars?

GEEWAX: Well, if you plug that into an inflation calculator, it would be about $9.40 an hour today. So the buying power was much greater back then. And another factor is that if you look at the era that Lyndon Johnson was the president, from '64 to '69, the minimum wage went from a $1.25 to $1.60. That's a 28 percent increase. During President Obama's five years in office, the minimum wage hasn't gone up at all. So, you know, there's really quite a difference between what was happening in the '60s and now.

MARTIN: So let's talk, also, about one of the president's - his latest initiative, which he announced yesterday was something called new Promise Zones. These are areas of the country that will get concentrated focus. And I just want to play a short clip of his announcement. This is President Obama yesterday.

(SOUNDBITE OF SPEECH)

PRESIDENT BARACK OBAMA: If you can demonstrate the ability and the will to launch an all-encompassing, all-hands-on-deck approach to reducing poverty and expanding opportunity, we'll help you get the resources to do it.

MARTIN: So, professor, what he's saying here is this isn't really new money, but what he's saying is we're going to give sort of concentrated attention to addressing and putting a lot of focus in these areas, and kind of coordinating, you know, getting the focused attention, and trying to coordinate and create efficiencies in the programs that already exist. And I just wanted to sort of ask you, you know, about that, you know, approach. And what do you think that means?

PIMPARE: Well, I don't think it ultimately winds up meaning too much at all. We've tried these before. We've got decades worth of experiments. We called them Enterprise Zones when Jack Kemp proposed them, and we implemented them in the '80s. We tried it again in 1990s under Clinton. There's a fairly robust literature that looks at the effect of these. Notice, by the way, that the president has noted that there's not any additional money going into these poor communities. He's saying, we're going to do a slightly better job of coordinating services in some small handful of areas. And over the long-term, evidence tells us that if we do see improvements, it's going to be around the margins. And they are going to disappear as soon as that concentrated attention goes away.

MARTIN: Well, let me ask Marilyn about it...

PIMPARE: Yeah.

MARTIN: ...For another perspective on this. So what about looking at the bigger picture of all the programs that are kind of in the basket now like food assistance, housing assistance, things of that sort? Is there an argument to be made that these programs over time have kind of buffered the effects of poverty or not?

GEEWAX: Yes, you can really see that when you look at consumption measures. That is, in 1964, you were lucky in a lot of ways. You had more buying power as a low-wage worker, and the job market was much stronger. You had an opportunity to move up. If you could be a low-wage worker in 1964, in a lot of ways, you'd like that because the future looked pretty bright then. But on the other hand, you didn't have much.

If you look at like, how big were people's houses, did they have air conditioning, did they have a car, did they have enough food to eat, it was tough being poor in 1964. But then these programs came in - like food stamps, Medicaid, Medicare, Headstart - all of these kinds of programs really put a floor under being poor. So when you look at statistics today for what is life like for a poor person, it's not as bad as it was 50 years ago. There...

MARTIN: But you're saying the mobility, the opportunity for mobility seems to be...

GEEWAX: Right.

MARTIN: ...Less or at least frozen, not improved at all.

GEEWAX: Well, let's just say that in the late 1960s, the jobless rate was 3.4 percent. We would love to see that again.

MARTIN: OK.

GEEWAX: Union jobs were plentiful. Manufacturing jobs were plentiful. But if you didn't get to participate in that and you were a poor person, today the government gives you a lot more help to make sure that you're not actually hungry because you can get these supplemental nutritional help, you can get food stamps in effect. So, you know, we've helped people get a little bit less poor because of the legacy of these programs, but the economy is not great. If you're a low-wage worker, your prospects are bad.

MARTIN: Professor Pimpare, we have about a minute and a half left, so I want to give you the final word here. And I feel it's OK to ask you your opinion, which is, what's your better idea? What would be a better way to handle these issues in your view?

PIMPARE: Well, you know, I think in some ways that we mystify poverty. We talk about how complicated it is, how difficult it is, right? The poor you shall always have with you - those sorts of things. When all is said and done, it's actually not that complicated. And almost every other rich democracy on the planet has done a better job of reducing poverty, of reducing child poverty, of reducing elderly poverty than the United States has. And they do that in part because they have much stronger unions. They have much better representation of workers in their political systems. They got political systems that do a much better job of representing the large public rather than sets of narrow interests.

But they also do much more by way of distributing cash money to people. I mean, in some ways, you want to make people less poor, give them money. And we should be talking about raising and expanding Social Security, not cutting it back. We should be talking, especially in periods of record long-term unemployment, expanding the unemployment insurance program, making more people eligible for it, expanding the food stamp program. Those will make people less poor in immediate direct kinds of ways as opposed to the kind of enterprise zone proposals, which Bruce Bartlett this morning compared it to sort of putting together a blue ribbon commission. It's the way to make it look as if you are addressing a problem without actually making the commitment to do what we know will work to reduce suffering and to improve the well-being...

MARTIN: OK.

PIMPARE: ...Of Americans.

MARTIN: We need to end it there for now. We're going to be talking about this throughout the month, and in fact, as I mentioned, throughout the year on this and other NPR programs. So we hope you'll stay with us for that and, perhaps, participate in future conversations. Stephen Pimpare is the author of "A People's History of Poverty in America," with us from our bureau in New York. With us once again in Washington, D.C. Marilyn Geewax, NPR senior business editor. Thank you both so much for joining us.

GEEWAX: You're welcome.

PIMPARE: Thank you, Michel. Transcript provided by NPR, Copyright NPR.