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In America, The Poor Don't Work

Steven Malanga

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Declaring that it’s becoming “easier to fall into poverty” in America, Barack Obama has laid out an anti-poverty agenda that includes raising the minimum wage, increasing tax credits for low-income wage earners, and enacting legislation to make it easier for workers to start unions.

John McCain would attack poverty by cutting taxes to stimulate the economy and boost opportunity throughout the workforce.

Although their agendas are starkly different, both men make the same fundamental mistake. They declare that labor-force solutions, like higher wages or creating better jobs, will significantly reduce poverty America. But that won’t happen because the vast majority of the impoverished in America don’t work and wouldn’t even if we raised wages or created more jobs. They are in poverty because of social or physical problems or choices in life they’ve made which make it difficult or impossible for them to work. Some have simply chosen not to work. It’s not that our economy doesn’t work for most of the poor, but that most of the poor don’t work.


It’s especially revealing to see why the poor don’t work. In this latest study, Census asked non-working impoverished adults between the ages of 16 and 64 why they are out of the workforce. Only 6 percent said it was because they could not find work. By contrast, 26 percent said they didn’t work because of family commitments, 27 percent said they were in school, 32 percent said they were ill, and 9 percent said they had retired. Whatever their individual problems or circumstances, in other words, a shrinking economy, or wage levels that are too low, or the decline of unions have little to do with the poverty of most of these people.


Until we address the causes of poverty frankly instead of resorting to demagogy about the rich and the poor, we won’t begin to make serious reductions in poverty. Social scientists, for instance, have understood for years now that one of the greatest problems we face in reducing poverty is the rise of single-parent households. As a 2006 paper published by the National Bureau of Economic Research noted, “Changes in family structure--notably a doubling of the percent of families headed by a single woman--can account for … more than the entire rise in the poverty rate” from 1980 to today.


Finding solutions to these problems is far more complicated and politically risky than offering palliatives about minimum wage hikes or tax cuts. To address the issue of the more than 80 percent of poor families where no one works full time requires figuring out how to dissuade poor girls without a high school education from having children by a man who won’t marry and support them. It also requires doing a much better job helping make ex-convicts--the 700,000 or so mostly men who leave prison each year--more employable. And it requires finding more successful ways of helping alcoholics and drug addicts—who make up a sizeable portion of those who say they can’t work because they are ill—get straight and stay clean.

Read the entire article on the Real Clear Markets website (new window will open).


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