Poverty and Inequality: Understanding the Link and Taking Action

1. MODULE IV POVERTY/INEQUALITY READINGS: PART III 13, 16, 20, 21, 23 6/13 – 19

2. SESSION#4: POVERTY AND INEQUALITY

3. MODULE TOPICS • Why are inequality and poverty of central importance to social workers? • Who are the poor? • What are the varying explanations for poverty? • What can be done to help bring the poor into the social/economic mainstream? • What is the relationship between poverty and inequality, on the one hand, and political power, on the other?

4. WHY ARE THE STUDY OF POVERTY OF POVERTY AND INEQUALITY OF CENTRAL IMPORTANCE TO SOCIAL WORKERS AND THE STUDY OF SOCIAL WELFARE POLICY? • As mentioned in the first module, there are four levels in the study of social welfare policy: theoretical, political, and institutional, and applied. In their everyday tasks, social workers are likely to be focused on the fourth: the application rather than the formulation of policies. But as also noted, given its historic commitment to social justice, the profession has also always taken a keen interest in the political (if not theoretical) dimensions of policy. • The point is that, as we have also seen in earlier modules, it is political power, especially but not exclusively as mediated through financial power, that is often of decisive importance in accounting for policy outcomes.. • It follows that the distribution of economic resources---in other words, the extent of economic inequality---must engage our attention if we are to grasp why and what type of social welfare policies are enacted or not enacted and the why struggle for social justice actually seems to have become more difficult in recent years. Thus, social workers must be concerned about the distribution of economic resources, since this factor is crucial in ultimately determining the social policy landscape

5. BANANA REPUBLICS • HELLO, • GRINGO • RACIST US TERM FOR CENTRAL AMERICAN COUNTRIES IN WHICH DEMOCRATIC INSTITUTIONS ARE WEAK OR NON-EXISTENT AND WEALTH-PRODUCING PROPERTY (“CAPITAL”) IS THE VIRTUAL MONOPOLY OF A SMALL RULING CLASS.

6. Who are the Poor? • Most are white • Most are working • Most are women and children • Most are “in and out” of poverty

7. 13.3% OF THE AMERICAN PEOPLE ARE “POOR,” AS DEFINED BY THE GOVERNMENT. THIS TOTALED 35.6 MILLION PEOPLE IN 1997. 7.3 MILLION FAMILIES ARE POOR 1 IN 4 BLACK CHILDREN ARE POOR 3 IN 4 ARE WHITE 1 IN 5 CHILDREN ARE POOR 1 IN 4 BLACKS ARE POOR FACTS ABOUT THE POOR

10. THE “SO-CALLED” TRICKLE DOWN” OR “SUPPLY • SIDE” EFFECTS HAVE HAD LITTLE PRACTICAL • MEANING FOR THE POOR • POVERTY CANNOT BE EFFECTIVELY ADDESSED • THROUGH THE MARKET SYSTEM ALONE. (IF IT • COULD, THEN THE NUMBER OF POOR WOULD • HAVE FALLEN PRECIPTIOUSLY DURING THE • CURRENT “BOOM.”) • POLITICAL INTERVENTION IS REQUIRED IF THERE IS TO BE GREATER ECONONOMIC EQUALITY. • THE POOR MUST ORGANIZE (OR BE ORGANIZED) POLITICALLY TO INFLUENCE ECONOMIC OUTCOMES IF THEY ARETO ACHIEVE A GREATER DEGREE OF EQUALITY • OVER THE SHORT TO MIDDLE TERM • THE CONDITION OF THE POOR WILL PROBABLY • CONTINUE TO STAGNANT. • THE VERY POOR ESSENTIALLY EXIST OUTSIDE THE MAINSTREAM OF AMERICAN SOCIETY. THEY ARE WHAT THE FRENCH CALL “LES EXCLUS,” I.E., THE “EXCLUDED ONES.”

11. BUT! • KEEP IN MIND THAT THE WAY THE GOVERNMENT CALCULATES NUMBERS OF POOR IS HIGHLY CONTROVERSIAL. • THUS, A FAMILY OF FOUR IS SAID TO BE POOR IF ITS TOTAL INCOME FALLS BELOW THE SO-CALLED “POVERTY THRESHOLD” OF $16.655 PER YEAR. • THE COMPARABLE FIGURE FOR AN INDIVIDUAL IS APPROXIMATELY $8,500. • THESE “THRESHOLDS” ARE CLEARLY “IDEOLOGICAL,” IN THE SENSE THAT THEY DO NOT REFLECT THE REALITIES OF EVERYDAY LIFE AND INSTEAD, FOR POLITICAL PURPOSES, MINIMIZE THE EXTENT OF POVERTY.

12. Behold, an (Almost) New Threshold! • In July, 1999, the Census Bureau announced that it had calculated (but not adopted) a revised poverty threshold; one that was said to more realistically reflect household expenses. (The current formula---based on a crude tripling of estimated food expenses---was first fixed in the 1960s, as a yardstick for the War on Poverty.) • The new standard would add approximately three thousand dollars to the current yearly budget of a family of four, which would now be considered poor if its total income were less than $19,500 per year. Even at that level, however, no allowance would be made for emergencies or health insurance. • Even so, if the experimental measure were adopted, the current poverty rate would climb from 12.7% to 17%, with some 46m more Americans suddenly declared “poor.” • The Clinton Administration was less than enthusiastic about the plan.It announced that “at least a couple more years of work” would be required before any adoption decision were made. According to the New York Times (10/18/99), neither Republicans nor Democrats evinced much enthusiasm for the Bureau’s new calculations, since the new threshold would require that food stamps and the Head Start program would have to be made available to many more people. • Meanwhile, independent experts have done their own calculations. They conclude that the new Census threshold should actually be set anywhere from two to ten thousand dollars higher. The chances of that happening are, however, virtually nil.

13. WHY ARE THEY POOR?IMMEDIATE REASONS • Low wage service sector jobs • Erratic employment w/ few benefits • Poor education • Sterile and/or degraded social • environment • Non-unionized • Discrimination on basis of race, ethnicity, or gender • Little help from government special or general programs

14. WHY ARE THEY POOR?THE IDEALIST VIEW (EXEMPLIFIED BY MOST CONTRIBUTORS TO THE NEW INEQUALITY) • THE POOR ARE IN FUNDAMENTAL WAYS DISTINCT FROM THE REST OF THE POPULATION. • BASICALLY, THEY HAVE FAILED TO ACQUIRE THE ATTITUDES AND SKILLS NEEDED TO PROSPER IN THE “NEW ECONOMY,” IN WHICH EDUCATION IS THE INDISPENSABLE KEY TO SUCCESS. • POVERTY IS SOCIETY’S PROBLEM INSOFAR AS WAYS MUST BE FOUND, WITHIN THE EXISTING SYSTEM, TO FACILITATE THE POOR’S INTEGRATION INTO MAINSTREAM AMERICAN SOCIETY. • MOST IDEALIST SUGGESTIONS FOR “CURING” POVERTY THUS FOCUS ON THE NEED TO RAISE THE MINIMUM WAGE, PROVIDE THE POOR WITH EDUCATIONAL OPPORTUNITIES, OR ENACT SIMILAR REFORMS SPECIFICALLY DIRECTED AT “RAISING UP THE BOTTOM LAYER.” • NOTE, HOWEVER, THAT SOME ESSENTIALLY IDEALIST ACADEMICS (E.G., FREEMAN) HAVE SUGGESTED THAT ASSET REDISTRIBUTION MIGHT ALSO PLAY A ROLE IN REDUCING INEQUALITY, AND THAT SUCH REFORM MIGHT BE GENERALLY ACCEPTABLE SINCE IT WOULD PROMOTE PROSPERITY THROUGHOUT SOCIETY.

15. WHY ARE THEY POOR?THE MATERIALIST VIEW (1) • BECAUSE THEY LACK POWER OVER THEIR LIVES AND COMMUNITIES. • BECAUSE THAT POWER IS HELD BY THOSE LITTLE CONCERNED ABOUT THE POOR. • BECAUSE POWER ULTIMATELY DERIVES FROM OWNERSHIP OF PRODUCTIVE RESOURCES, AND THE POOR LACK SUCH WEALTH. • BECAUSE THE POOR HAVE FEW ALLIES OR SUPPORTERS AMONG MAINSTREAM POLITICIANS OR AMERICANS IN GENERAL, WHO INSTEAD SEEK TO DISASSOCIATE THEMSELVES FROM THE POOR. • BECAUSE THE POOR ARE FRAGMENTED INTO VARIOUS RACIAL, GENDER, VOCATIONAL, AND ETHNIC CATEGORIES, MAKING IT DIFFICULT FOR THEM TO RECOGNIZE THEMSELVES TO ACT IN A CONCERTED WAY ON THEIR OWN BEHALF.

16. THE MATERIALIST VIEW (2)THE CLASS SYSTEM CONCEPTUALIZING THE POOR AS A SEPARATE GROUP IS MISLEADING: • 1. ALTHOUGH THERE IS A “HARD CORE” GROUP OF POOR PEOPLE, WHOSE STATUS REMAINS CONSTANT, MOST OF THE POOR ROTATE IN AND OUT OF POVERTY. THE POOR AND NEAR POOR ARE THUS ESSENTIALLY MEMBERS OF THE AMERICAN WORKING CLASS. • 2. AS SUCH THEY ARE COMPONENTS OF A WELL-DEVELOPED SOCIAL CLASS SYSTEM WHICH DISPROPORTIONATELY REWARDS THOSE WHO OWN OR MANAGE THE CORPORATIONS. COLLECTIVELY, THESE INDIVIDUALS AND FAMILIES CONSTITUTE A LARGELY SELF-PERPETUATING RULING CLASS. • 3. THE “MIDDLE CLASS” OF RELATIVELY BETTER PAID WORKERS IS INCREASINGLY SQUEEZED AS ITS SHARE OF NATIONAL WEALTH/INCOME CONTINUES TO DECLINE AS THE RESULT OF THIS RAPID AND ADVERSE (I.E., TO IT)SHIFTWHICH IN TURN REFLECTS RAPID TECHNOLOGICAL CHANGE AND THE GLOBALIZATION PROCESS. • 4. MATERIALISTS THUS DIFFER FROM IDEALISTS IN VIEWING POVERTY AND, MORE GENERALLY, INEQUALITY AS DERIVING FROM THE VERY LOGIC AND NATURE OF THE CAPITALIST SYSTEM, RATHER THAN FROM CULTURAL TRAITS DISTINCTIVE TO THE POOR. MATERIALISTS ARE ALSO SKEPTICAL OF IDEALIST REFORM PROPOSALS BECAUSE THESE DO NOT ACKNOWLEDGE THE ABILITY AND DETERMINATION OF THE POWERFUL TO USE THEIR CONTROL OVER INSTITUTIONS TO RESIST CHANGES POTENTIALLY AT ODDS WITH THEIR POITICAL AND ECONOMIC INTERESTS.

17. THE MATERIALIST VIEW: THE CLASS SYSTEM (3) • POOR PEOPLE ARE AN INTEGRAL PART OF THE ENTIRE CLASS SYSTEM: TRENDS AFFECTING THEM ALSO AFFECT ALL OTHER AMERICANS, ALBEIT IN VARYING WAYS---POSITIVE OR NEGATIVE---DEPENDING ON THEIR OWN PARTICULAR CLASS POSITIONS. THE TREND TOWARDS GROWING INEQUALITY IS “STRUCTURAL” IN EXACTLY THIS SENSE: IT RESULTS FROM UNDERLYING (“STRUCTURAL”) CHARACTERISTICSAFFECTING THE ENTIRE SOCIETY, NOT MERELY ITS POOREST MEMBERS. • FOREMOST AMONG THESE CHARACTERISTICS IS THE GROWING POLITICAL AND ECONOMIC POWER OF THE CORPORATE-BASED MINORITY (SEE PREVIOUS TWO SLIDES), WHOSE DOMINANT POSITION IS CONFIRMED AND STRENGTHEND THROUGH ITS VASTLY DISPROPORTIONATE AND EVER INCREASING SHARE OF TOTAL NATIONAL INCOME AND WEALTH. • AT THE OTHER END OF THE CLASS SYSTEM THE UNEMPLOYED AND WORKING POOR ARE VIRTUALLY EXCLUDED FROM POLITICAL AND ECONOMIC PARTICIPATION. • THE SAME TRENDS AND CHARACTERISITICS ALSO EXPLAIN THE SO-CALLED “MIDDLE CLASS CRISIS,” AS MORE PEOPLE ARE FORCED TO WORK LONGER HOURS EACH YEAR SIMPLY TO MAINTAIN THE SAME STANDARD OF LIVING. (N.B.MOST COLLEGE STUDENTS COME FROM THIS SEGMENT OF THE POPULATION, ALTHOUGH STUDENTS AT ELITE COLLEGES ARE MORE LIKELY TO BE FROM RULING CLASS FAMILIES.)

18. THE IMPORTANCE OF GLOBALIZATION THE MATERIALIST VIEW • THOSE ADHERING TO A MATERIALIST PERSPECTIVE EMPHASIZE GLOBALIZATION AS THE PRINCIPAL DYNAMIC FACTOR BEHIND THE RAPID GROWTH IN ECONOMIC INEQUALITY AND THE FAILURE TO MAKE HEADWAY AGAINST POVERTY. • THEIR PARTICULAR FOCUS HAS BEEN ON THE FOLLOWING GLOBALIZATION-RELATED DEVELOPMENTS, ALL OF WHICH ARE SEEN AS HAVING CONTRIBUTED TO GROWING CLASS POLARIZATION: • DISAPPEARANCE OF MILLIONS OF HIGH-WAGE ( “MIDDLE CLASS”) BLUE COLLAR JOBS • DESTRUCTION/NEUTRALIZATION OF LARGE SECTIONS OF THE TRADE UNION MOVEMENT • INCREASE IN LOW-PAYING, FEMALE-DOMINATED SERVICE & “CONTINGENT” JOBS. • DIMINISHED PROSPECTS FOR “PROGRESSIVE” POLITICAL CHANGE • WIDENING GAP BETWEEN WORKERS & OWNERS/MANAGERS, AS ILLUSTRATED IN THE FOLLOWING THREE SLIDES…. • N.B. THE FOLLOWING FIVE SLIDES (17-21) PROVIDE EMPIRICAL EVIDENCE + COMPLEMENTARY TEXT PANELS DOCUMENTING THE CHANGING AMERICAN CLASS STRUCTURE AND THE EXTENT OF CLASS POLARIZATION.

19. THE NEW • CLASS • STRUCTURE • AND • SEGMENTS • SOURCE: • R. PERRUCCI • AND • E. WYSONG • (1999), • THE NEW • CLASS • SOCIETY • (see next slide for • details) • 1.SUPER CLASS OF • OWNERS/EMPLOYERS • 2.CREDENTIALED • CLASS: MANAGERS • AND • PROFESSIONALS • 1 + 2 = • Privileged Class • 20% OF POP. • 3.COMFORT • CLASS • 4.CONTINGENT CLASS: • WAGE EARNERS & • SELF-EMPLOYED • 3 + 4 + 5= • NEW WORKING • CLASS • 80% OF POP. • 5. POOR AND • DESTITUTE

20. I. PRIVILEGED CLASS OWNERS AND EMPLOYERS: INCOMES @ 6 & 7 FIGURES - 1-2% OF TOTAL POPULATION. TOGETHER W/ CLASS MANAGERS, OWNERS OF FINANCE CAPITAL (SEE NEXT SLIDE.) CREDENTIALED CLASS MANAGERS: MID/UPPER LEVEL MANAGERS-CEOS W/ INCOMES @ 6-7 RANGE -13-15% OF POPULATION. PROFESSIONALS: HIGHLY EDUCATED AND SKILLED - WIDE RANGE OF INCOMES: $75k AND ABOVE - 4 -5% OF POPULATION. II. NEW WORKING CLASS COMFORT CLASS: NURSES/SOCIAL WORKERS/TEACHERS/SKILLED WORKERS, SMALL BUSINESS OWNERS. $35-50K INCOME RANGE BUT LITTLE INVESTMENT CAPITAL. 10% OF POPULATION. CONTINGENT CLASS - COMPOSED OF THREE MAIN GROUPS: (1) WAGE EARNERS: CLERICAL/SALES/MANUAL WORKERS - $30K AND LOWER - 50% OF POPULATION. (2) SELF-EMPLOYED: MODEST INCOMES/HIGH FAILURE POTENTIAL - 3-4% OF POPULATION (3) POOR AND DESTITUTE: ROTATES IN/OUT OF LABOR FORCE IN VARIOUS UNSKILLED, TEMPORARY JOBS - 10 - 15% OF POPULATION. THE NEW CLASS STRUCTURE: AN EXPLANATORY SUMMARY

22. Share of stock market gains, 1989 – 1997, by wealth class

24. Additional Information on Income Distribution • Let ‘em • eat • oats • In 1977 the richest 1% of Americans (2.7m) had as many after tax dollars as the bottom 49m • In 1999 the richest 1% had as many after tax dollars as the bottom 100m. • In 1999 the richest 1% will have the same amount of disposable income as the bottom 100m---that is, each will have $620 billion to spend. • Chew • on • this!

25. WHAT SHOULD WE DO ABOUT POVERTY AND INEQUALITY? • THERE HAS NEVER BEEN A POLITICAL OR ACADEMIC CONSENSUS ABOUT THE CAUSES OF AND POTENTIAL SOLUTIONS TO POVERTY AND INEQUALITY. • HOWEVER, AMERICAN INDIVIDUALISM TENDS TO BE A CONSISTENT INFLUENCE ON OPINION RIGHT ACROSS THE SOCIAL SPECTRUM. THUS, INEQUALITY IS GENERALLY ACCEPTED AS A FACT OF SOCIAL LIFE. MOST PEOPLE SEEM TO THINK THAT THERE IS INDEED MUCH UNFAIRNESS BUT THAT THERE IS ALSO AMPLE OPPORTUNITY TO “MAKE IT” IF YOU ARE SMART, AMBITIOUS, AND INDUSTRIOUS. • THIS SAME ATTITUDE COLORS OPIONIONS ABOUT POVERTY, WHICH MOST AMERICANS SEEM TO VIEW AS A PERSONAL FAILING, EVEN WHEN THEY THEMSELVES ARE POOR. • THIS “PURITANICAL” ATTITUDE, OFTEN ENCOURAGED BY THE MEDIA, DIMINISHES ONLY WHEN LARGE NUMBERS OF PEOPLE SUDDENLY EXPERIENCE ECONOMIC DISTRESS FOR REASONS OBVIOUSLY BEYOND THEIR PERSONAL CONTROL OR RESPONSIBILITY. THE GREAT DEPRESSION (1929-41) WAS THE LAST TIME THIS WAS THE CASE. • POLITICAL DISCUSSION OF POVERTY HAS FADED IN THE WAKE OF WELFARE REFORM: MANY MIDDLE CLASS SUBURBAN WHITES INDEED TEND TO SEE POVERTY IN SIMPLISTIC RACIAL TERMS (E.G.,“WELFARE QUEENS”), AND (MIS)PERCEIVES THE PROSPERITY OF RECENT YEARS AS HAVING (1) CREATED GREATLY EXPANDED ECONOMIC OPPORTUNITY AND (2) “LIFTED ALL BOATS,” INCLUDING THOSE OF POOR PEOPLE. • IT IS A MEASURE OF CONSERVATIVE POLITICAL SUCCESS THAT LIBERALS AND RADICALS FIND IT INCREASINGLY DIFFICULT TO CHALLENGE THIS DOMINANT CONSERVATIVE POSITION. THUS….

26. POLITICAL PRESCRIPTIONS • I PROPOSE • REALLY RADICAL • SURGERY---LET’S • CUT OUT THE BULLSHIT! • POVERTY WAS THE MAJOR TOPIC OF POLITICAL DISCUSSION UP UNTIL THE EARLY 1970S, WHEN THE COUNTRY BEGAN TO MOVE RIGHTWARDS. • THE VIEWS PRESENTED IN THE FOLLOWING PANELS ROUGHLY SUMMARIZE POSITIONS TAKEN IN THOSE DAYS BUT MORE RARELY VOICED TODAY. • WE THUS FACE A REMARKABLE PARADOX: ON THE ONE HAND, GROWING INEQUALITY AND INTRACTABLE POVERTY; ON THE OTHER, DISAPPEARANCE OF THESE AS POLITICAL ISSUES. . • THE TASK OF SOCIAL POLICY ANALYSTS HAS ACCORDINGLY ALSO BEEN RENDERED PARADOXICAL: NAMELY, NOT SO MUCH TO DISCUSS POLICY ALTERNATIVES AS TO UNDERSTAND WHY SUCH ALTERNATIVES ARE NOT BEING DISCUSSED..

27. The Conservative PrescriptionThe Poor: • are culturally and perhaps personally ill-adapted to the demands of a competitive society. It is their responsibility, as individuals, to remedy their deficiencies through cultivation of appropriate talents and characteristics • in particular lack motivation, discipline, self-reliance, and ambition---that is why the are unable to escape the so-called “poverty trap,” which in reality is essentially of their own making • disproportionately derive from certain ethnic and racial groups, but adequate steps have already been taken to secure their legal equality and equality of opportunity. • best assisted by private charities (“thousand points of light”) rather than public agencies. The former understand the indispensability of providing a handup rather than a handout. • Supporting information and examples • How it relates to your audience • The market dispenses • a rough justice, • not mercy or • compassion. • For the latter, look • to religion, not • government • or business.

28. An Addendum:The Proposed Republican Tax Cut • Republicans propose a $792 billion tax cut over 10 years • Most of this would benefit those making over $100k a year • Once phased in, the cuts would save $32.000 a year for the richest 1% • This savings would be almost 4Xs more than the total income of the bottom 20% of the population. • Fair shares • for • ALL • (the rich)

29. The Liberal PrescriptionThe Poor Are: • I STILL HAVE • THE ANSWERS, • IF ONLY • PEOPLE • WOULD LISTEN! • essentially but not exclusively victims of oppressive social conditions. • both individuals and members of a social class or racial group: some are “stronger” and more intelligent than others, some have been discriminated against more than others, but all deserve a chance to compete for the “good life,” as Americans understand that term. • needn’t be “with us” forever. We can and should (re)create a social safety net adequate to protect every American. While there will always be social and economic differences, these must be kept within bounds compatible with a democratic society. • entitled to greater attention than they currently receive. Indeed, this is true for most Americans outside the “golden circle” of the corporate elite. • . • Supporting information and examples • How it relates to your audience • THESE DEMOCRATICS • JUST NEED A GOOD • SWIFT KICK IN THE • PANTS!

30. The Radical PrescriptionThe Poor are: • best understood as victims of class oppression. Poverty is a structural problem, inherent in the capitalist political/economic system, in which: (a) the few own and control most of the productive wealth (“capital”) for their own benefit and regardless of social consequences (e.g., the impact of globalization), even though (b) everyone else is dependent upon access to these same resources for their economic survival. • thus no different than the so-called “middle class,” in that virtually all workers, blue and white collar alike, are victimized in capitalist society. • able to improve their condition through action---specifically, collaboration with other oppressed groups, who together must unite to reestablish democratic government and create a humane social order. • . • Supporting information and examples • How it relates to your audience • THE CORPORATE • RICH • CONROL • THE COUNTRY • .

31. Summary and Social Work • Conservatives: Horatio Alger • Liberals: Culture of Poverty • Radicals: Class Oppression • SOCIAL WORK: • “PERSON IN ENVIRONMENT” IS A CLASSIC SOCIAL WORK CONCEPT. • WHAT DOES IT MEAN IN THE PRESENT CONTEXT? WHICH VIEWPOINT DISCUSSED ABOVE COMES CLOSEST TO EXPRESSING SOCIAL WORK VALUES? WHAT SHOULD SOCIAL WORKERS DO TO COMBAT POVERTY/INEQUALITY?