Ending Poverty in America, a Discussion with Peter Edelman

I recently had the opportunity to talk with Georgetown Law professor, Peter Edelman, to discuss his decades of anti-poverty work and his new book, So Rich So Poor: Why It’s So Hard to End Poverty In America. Peter Edelman was legislative aide to Senator Robert F. Kennedy and accompanied Kennedy on his 1967 visits to the Deep South to understand hunger and poverty in this country and how to fix it. Edelman also served as Assistant Secretary of Health and Human Services years later under President Bill Clinton. He resigned this post in to protest Clinton’s signing of the welfare reform legislation that converted the federal anti-poverty cash-assistance entitlement into a state block grant program which severely restricted the availability of cash assistance to those in need.

Karen Dolan (KD): Peter, you tell us in your book that “extreme poverty” in the U.S. is increasing. Can you explain what this means with regard to things like shelter and food and whether it’s getting a lot harder to be poor than it was a few decades ago?

Peter Edelman (PE): Extreme poverty means having an income of less than half the poverty line. That’s less than $9,000 a year for a family of three. The stunning fact is that in 2010, there were 20.5 million people who had incomes that low. And perhaps even more disturbing – six million people have no income other than food stamps (SNAP). That means an income at 1/3 of the poverty line or less than $6,000 a year for a family of three. You can’t live on that. So, these are people who are really in extreme trouble. In fact, many of them will get out of extreme poverty fairly quickly, and that makes it even more inexcusable not to have a basic safety net for them when their income dips so low. How do they survive? We don’t really know. They obviously have to have the support in one way or another of family and friends– if they have such networks. They sleep on couches, they move around a lot. If they can find casual work to get a little extra money, they do. But they are in a very tough place. The percentage of people in extreme poverty has doubled since 1976, so it is getting worse. Public benefits, which are not counted in official poverty figures insofar as they’re not paid in cash, make the situation a little better, but not much. The fact there could be six million people who only have food stamps is because of another fact: that welfare –Temporary Assistance for Needy Families (TANF) — is basically unavailable in many states in the country. In Wyoming, for example, 4% of poor children in the entire state – that’s 644 people including the mothers – receive cash assistance. In 19 states, fewer than 20% of poor children are receiving cash assistance. So that’s how you can have six million people living only on food stamps. About seven million of those in extreme poverty are mothers and children. We can only imagine the damage that this does to the children. It really is a crisis, and very few people are aware of it.

KD: Would you say that it is harder to be poorer in 2012 than in recent decades?

PE: Insofar as there’s more deep poverty, clearly yes. Overall, I don’t know. The cost of shelter has certainly gone up. The shortage of affordable housing has grown quite significantly, so that is one factor that must mean that being in poverty is even tougher now than in the past. If people have work and are parents, the Earned Income Tax Credit (EITC) is a stronger form of assistance than what was available in the 1980s because it was increased significantly under President Clinton. For those who aren’t working –single mothers and children – it is harder because of the near disappearance of welfare, of cash assistance. I think overall it is probably harder to be poor.

KD: In your book, you focus attention on the problem of low-wage work in this country. You may have seen the recent piece by my colleague Barbara Ehrenreich, “Preying on the Poor,” in which she cites an estimation that wage theft nets employers- both private and public- at least $100 billion a year. Can you comment first on the causes of the proliferation of low-wage jobs in this country in recent decades as well on the realities of wage-theft?

PE: Wage theft is a huge problem, I talk about it in my book. There is just an astonishing amount going on, and much of it focuses on undocumented workers who can’t defend themselves.

But let’s start at the beginning. The economy changed in very significant ways starting in the 1970s – specifically, 1973. As we know, the manufacturing jobs – the good jobs that paid well and for which you didn’t need a higher education – disappeared. They went abroad, or moved to non-union states, or were replaced by technology of one kind or another. They were replaced, and it’s good that they were replaced, by an influx of low-wage jobs in various service sectors. People found that having only one worker in the household made it extremely difficult to make ends meet because the wage structure changed so markedly. And then the wages of everybody in the bottom half basically stagnated. The median job in this country pays now about $34,000 a year, if you have it full time and you have it all year. That’s half the jobs in the U.S. that pay less than $34,000. A quarter of the jobs pay less than the poverty line for a family of four, $22,000 a year. It’s amazing in this wealthy country that so many jobs pay so little. And, in real terms taking inflation into account, the wage for the median job only went up, according to the Economic Policy Institute, only 7% in 40 years, less than 1/5th of a percent a year.

I don’t think that people are broadly aware that wages are so low and that they have been stuck. The economy grew – the economy is twice the size it was 40 years ago, give or take. But all of that growth went to the top. So, the 1% and the 99% are much further apart than they were 40 years ago. The inequality is much worse now. And the people with the low-wage jobs are not just poor people; they are the bottom half. So, the conversations are about people who struggle to ends meet. They have to think twice about going to the doctor, even if they have health insurance, because they might not be able to pay the copay or deductibles . There are 103 million people who have incomes below twice the poverty line; that’s below $36,000 a year for a family of three. A third of the American people are in this low wage category. We have become, in significant ways, a low-wage country.

Barbara Ehrenreich covered wage theft in her recent piece that you mentioned, “Preying on the Poor,” so I would only underline what she said. On top of how awful the wages are for so many jobs, wage theft adds up to an astonishing number of dollars because employers take brutal advantage of workers and either don’t pay overtime or the minimum wage or just don’t pay the worker at all for day labor. It’s just remarkable, in a terrible way, what a huge problem this is.

KD: Has the Occupy Movement helped to move the nation forward with regard to recognizing the structural nature of inequality in the U.S.? Does this help anti-poverty efforts in a significant way?

PE: It’s too early to say. The initial burst of media coverage of the 1% and the 99% and of the question of inequality was very encouraging. Occupy itself, about which I feel positively on balance, did not have a particular strategy towards changing policy. And certainly people – SEIU, some faith-based organizations, and others – made efforts to walk through the door that Occupy opened. But at the moment, I have to say that we haven’t seen a momentum that continues and in fact a number of cities have passed a new wave of ordinances that prevent people from camping out – which negatively affects homeless people. But I am hopeful that there is a new awareness of the depth of inequality, and it’s up to us who care to get other people who care to mobilize significant efforts to push back and to push elected officials to address these questions. So, I say thank you to Occupy, and we have to take it from there.

KD: You identify certain demographic groups as most at risk for poverty and deep poverty. Can you say more about who these populations are and why they are more at risk? Do you think things would be better for them now if “welfare reform” had not passed?

PE: Single mothers and children are unquestionably worse off than they would be had we not passed TANF. I believe strongly that the welfare system we had was deeply flawed and that we had to do far more than we were doing to help people to get jobs and keep them. But the proper reform was to help them, not just to push them off and order them to find a job and place an arbitrary time limit on how long they could receive cash assistance. It’s quite clear that the level of extreme poverty that we have now is so much larger – it was 12.6 million people in the year 2000 and it’s 20.5 million in the year 2010 – than it would be otherwise. It wouldn’t be that high if cash assistance for mothers and children hadn’t been dismantled in many states in the country. So, single mothers and children are a group that is clearly much more at risk and constitute a disproportionate percentage of the poor.

Beyond that, I suspect that poverty in rural areas – in Appalachia, in the Mississippi Delta, on Indian reservations, in South Texas – is worse now. If you go down to Mississippi and drive down through the Delta, it is very troubling to see the severe poverty. Extreme poverty is disproportionately high in the South. Like “regular” poverty, it is disproportionately people of color. The other group who we should be aware of among the extremely poor are single individuals. That is closely connected to the performance of the labor market; it’s just tougher and tougher to get work.

KD: How do the impoverished conditions in the Mississippi Delta today compare to what you saw in 1967 when you accompanied Senator Bobby Kennedy there? Is it different?

PE: Yes, it’s different. Let’s start earlier in time. If you read Isabel Wilkerson’s wonderful book, The Warmth of Other Suns: The Epic Story of America’s Great Migration, you understand the background. If you lived in the south in 1950, you did have steady work. It was back breaking and it kept you stuck in poverty; the plantation owner made sure that you could never earn enough to get out of owing him money. It was a system of virtual slavery. So, people did survive – they had work, that’s how the plantation system worked. But it was totally exploitive, and there was the terror that you would be murdered if you acted out of line in one way or another. It was horrible — the economic exploitation and the atmosphere of lurking terror.

By the time we went to Mississippi in 1967, the power structure was dismantling that system. They didn’t need the labor anymore. They had mechanical pickers of the cotton, and they had herbicides to thin out the boll weevils. The minimum wage had come in for big farms, so comparatively the workers had become more expensive for them. And it was a time when they wanted to push as many African-Americans out of the state as they could because they foresaw that a black majority could politically take over the state.

That’s what we walked into in 1967. There were all of these two parent families pushed off of the land and had no livelihood at all. That was the new status quo. They couldn’t get welfare because welfare was only available for single-parent households. And they couldn’t get food stamps, which were only a demonstration program at that time, unless they had money. Even if they had no income, they had to pay $2 per person in the family each month for food stamps, which they couldn’t afford. The result was that these families that were utterly without recourse. So we saw children who had swollen bellies and sores that would not heal.

That was the situation in Mississippi. It turned out there were comparable problems elsewhere – in Appalachia, South Carolina, Texas, and more, cutting across racial lines as well. Over a period of years after that, food stamps became a national program, following on strong advocacy and public concern that there should be hunger of that magnitude in the United States. And they are an enormous public policy success today.

So, things are better nationally compared to the severe malnutrition we found in 1967. But given that there was reason to hope for more improvement in Mississippi because of the increase in black political power and the end of overt terror-backed discrimination, the degree of poverty that one sees in the Mississippi delta today is deeply troubling. The agricultural economies of the south have deteriorated, and those who stayed behind are in just really bad shape.

KD: Given the deep political disenfranchisement of the populations disproportionately affected by poverty–single mothers, blacks, latinos, youth–can it be expected that impoverished people can achieve any political voice or power? How?

PE: I think that a major challenge is to reach people who are economically living one notch above poverty and are struggling with low wage jobs to get them to see that they are being taken advantage of. Right now, they are either apathetic and can’t see how things can change. They seem to see their situation as their own fault, or they believe – contrary to the evidence – that their children will have better conditions, and therefore don’t question the way things are. Over the past four decades African American children who were born into middle-income families have ended up slipping in big numbers down to the bottom fifth. So, it is really important to convince voters whose income is between the poverty line and twice the poverty line that they should vote for candidates who would do something about this. And the discourse should be about everybody in the bottom half. I think in short that we need to get more of the people who are affected by the overall structure of the economy to see that it is in their interest to vote for candidates who would do something to narrow inequality. That, in turn, is our best hope to create a new politics.

There is a second point here. I think that it really isn’t in the interest of people of the top to leave such a large part of the country in such a difficult position. In the longer run, it endangers our democracy. It’s in the self-interests of business to have people as consumers with more income. There is a question of sheer morality to all of this, but the people at the top should also see that maintaining the disparities as they are is not in their self-interest. But the largest point is to change the mindset of people who vote against their own self-interests for people who are dead set against tax increases and narrowing inequality.

KD: Why do you think that is? Can’t those with top incomes and big businesses see that such inequality is bad for the country, or at the very least, bad for business? Do they not see that this is bad for their own self-interest?

PE: The corporate world is extremely short-term minded. It’s about the annual report. It’s about the quarterly report. They just don’t think in terms of how they would be better off five and ten years down the road if they calculated things differently. And their unwillingness to pay more in taxes means that they are against any spending that would cause them to have to pay more taxes.

KD: Do you think that there are people who supported the welfare reform legislation in the 90′s who now have a different view, given how unresponsive, for instance, TANF has been during the recession?

PE: I don’t see a lot of people like that. The Democrats who voted for the 1996 bill because Clinton’s position had left them out on a limb – in particular, some of the suburban Democrats who were scared of the alleged anger against welfare – acquired a stake in pronouncing the program a success regardless of the facts. They and their successors inherited this attitude, and it seems to be very hard for them to move away from their position. They cite old numbers. They continue to argue that women who used to be on welfare are working when that it is increasingly not true. In 1996, 49% of single women with children were working. That went up to 64% by 2000, which is undeniably good, although many of those who left welfare couldn’t find work and only some of those who found jobs got out of poverty. But the number who are working is now back down to 54% after the Bush years. That fact isn’t in the discourse. They have a fictional view that the “successes” are still what they were in 2000 and they just aren’t.

KD: And finally, we worked together on a 2009 study, Battered By The Storm, examining the responsiveness of the safety net to growing poverty. In that, you had a chapter “Principles for a More Effective Approach to End Poverty.” Would you say that your new book still embraces these approaches? Is there any hope of achieving some of these goals in the upcoming decade?

PE: I think that we didn’t say anything about wage theft in that list of principles. Wage theft is enough of a problem that even in a short summary agenda, it should be mentioned. But, the basics of the income side are basically what we said there. They haven’t changed. Perhaps we should said even more about reforming the criminal justice system. It is such a big factor in causing and perpetuating poverty. The vicious interaction between awful schools in poor neighborhoods and the readiness of the criminal justice system to pounce on young people who stray is making it impossible for young men and women who spend time in prison to ever get out of poverty because they have such problems that come from being labelled as an ex-offender.

Overall, the best antipoverty weapon is a strong economy and the best recipe for people is a job that along with work supports and wage supplementation yields an income one can live on.

And, beyond income from work, the basic remedy for people who slip into poverty is an effective safety net. Most people who are poor slip in and out. They fall into poverty, for example, when they lose a job and their unemployment compensation runs out or they don’t qualify in the first place. Or a wife who hasn’t been working outside the home falls into poverty when her husband leaves her, or when she needs to flee a situation of domestic violence. We need to have a much more effective safety net.

There’s a paradox here. We need to see poverty in both non-racial terms and racial terms at the same time. Whites are the largest group in poverty. Remedies about jobs and income help more whites than people of color. Getting that point across is important politically. But it’s still true that blacks, Latinos, and Native Americans are disproportionately poor. We need to lift that up and confront it.

We face a particular challenge about concentrated poverty, whether in inner cities or rural areas. Here we get into multiplied problems — the schools, the criminal justice system, the need for a mental health system to deal with depression, the need to deal with drugs and alcohol, the need for strong interventions against domestic violence to make children and women safer, and the need for legal services to confront threatened evictions and many other problems. We need to deal with all of those issues, and well as issues of personal responsibility.

Do I see the possibility of progress in the coming decade? The task now is to hold on to what we have. The Paul Ryans of this world continue their attack, and with rhetoric that just stands the problem on its head. Their argument continues to be that we have hurt people by helping them. It’s mind-boggling. Let’s remember and remind people that the programs and policies we have are keeping something like 40 million people out of poverty. The 46 million people who are poor now is shocking enough. It would be far worse if we hadn’t done what we’ve done.