by Joel Bleifuss
In These Times magazine, November 1999
The presidential candidates have recently put the issue of
poverty back on the national agenda, and that is a very welcome
George W. Bush rebukes his fellow Republicans for "trying
to balance the budget on the backs of the poor." But talk
is cheap. Al Gore and Bill Bradley have both put forth similar
plans-expanding the Earned Income Tax Credit, devoting more resources
to child-care and early education programs, and raising the minimum
wage to $6.15 per hour. Gore says holding deadbeat dads accountable
is "one of the most important things we can do to reduce
child poverty." While Bradley, who offers the more far-reaching
proposal, is committed to "lifting" 7 million of the
13.5 million poor children "out of poverty" by 2008.
Why should we help "the poor"? One can say that
helping the less fortunate is the moral thing to do, but ideals
of Christian charity have a tendency to turn paternalistic. Or,
one can make the case that "the poor" put a costly and
unnecessary strain on the nation's social fabric that negatively
impacts everyone's quality of life. While this is true, viewing
poverty as a societal plague takes in only part of the picture.
The argument that best holds water acknowledges that the majority
of the "the poor" are poor not because they don't work,
but because society has failed to create an economy that employs
all people at a living wage. Consequently, we as a society are
collectively responsible for people living in poverty.
So what's the solution? A good place to start would be to
stop talking about the "the poor" and use the more accurate
term "working class." After all, most poor people work,
a fact Bradley acknowledges, observing that "very large numbers
of children who live below the poverty line come from hardworking
families with parents whose wages simply are not adequate to support
Raising the minimum wage to $6.15 per hour is a step in the
right direction. Adjusting for inflation, the current $5.15 per
hour rate is worth 19 percent less then it was in 1979. According
to the Economic Policy Institute, if the minimum wage were raised
to $6.15 per hour, 11.8 million American workers would receive
a pay increase. Fifty-eight percent of those receiving a raise
would be women. (We are not talking teenage girls; three quarters
of these women are 20 or older.) And 50 percent of those receiving
a raise live in households with annual incomes under $25,000 a
But does increasing the minimum wage by $1 really address
the problems of working people?
Increasing the minimum wage to $6.15 an hour would translate
into an annual wage of $12,792, a figure well short of the government
poverty level of $16,600 for a family of four, itself a woefully
inadequate measure. To set things right, the Census Bureau has
been considering a proposal to raise the poverty level for a family
of four to $19,500. Were this to happen, 17 percent of Americans
would be officially defined as poor as opposed to the current
12.7 percent. These figures make a mockery of October's front-page
headlines, which proclaimed that the booming new economy had lifted
1.1 million Americans out of poverty. In response to this news,
President Clinton crowed, "Finally we have stemmed the tide
of rising inequality and this new report documents the strong
income growth among all groups of people."
Well, not quite. A recent analysis by the Center on Budget
and Policy Priorities found that in 1999 the gap between the rich
and the poor will be as great as anytime since the Great Depression.
This year, the richest 2.7 million Americans (1 percent of the
population) are expected to have as much after-tax income as the
poorest 100 million (38 percent of the population).
While the booming economy has made the rich richer, their
good fortune has been helped along by Congress, which since 1977
has rewritten the tax codes to benefit the wealthy. These changes
in tax policy will provide the richest 1 percent of households
with an average tax cut of $40,000 this year. This trend will
accelerate next year, when Congress' new tax cuts go into effect.
According to the Treasury Department, the richest 20 percent of
households will reap 78.5 percent of the tax cuts and the poorest
60 percent will receive 7.5 percent of the tax cuts. These statistics
demonstrate two things. First, Congress, as an agent of wealthy
special interests, is hellbent on transforming our democracy into
a plutocracy. Second, Congress has the power to make policy that
If it wanted to, Congress could up the minimum wage to a living
wage of $9.37 per hour. This 82 percent increase would be enough
to raise the income of a single parent with three children to
$19,500, the new poverty level currently under consideration.
Sure, that would put inflationary pressures on the economy, but
those could be balanced by a sharp increase in the tax rate for
those 5 percent of families with incomes of more than $145,000.
Maybe that sounds silly. But so does applauding a modest proposal
to raise the minimum wage to $6.15 as an adequate solution to
the problem of working class poverty.