"The American dream has become a mirage for far too many."
These are early days in the upcoming run for the White House in 2016, but already, among would-be Republican candidates, we see evidence of a tentative willingness to explore a set of contemporary ills that normally only figure in the election rhetoric of their Democratic opponents. These ills are the current high levels of income inequality in the United States, the contemporary squeeze on middle-class living standards, and the persistence of widespread poverty at the base of the American income pyramid. The ills are different, but they are related, and it is intriguing to see leading Republican politicians beginning to explore, however tentatively, the causes and consequences of some or all of them.
- Ted Cruz, for example, reported in January as chuckling every time he hears "Barack Obama or Hillary Clinton talk about income inequality because it increased dramatically under their policies."
- Scott Walker, the same month, insisting that "under Obama, government assistance has become less of a safety net and more of a hammock," re-echoing Paul Ryan's often-quoted suggestion that the U.S. welfare safety net "is at risk of becoming a hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives."
- Rand Paul worrying that disability benefits were being wasted on people with anxiety and back pain.
- Jeb Bush, tentatively putting his toe in the policy water and promising more thoughts later, but at least conceding now that "tens of millions of Americans no longer see a clear path to rise above their challenges," and not because they lack ambition or hope or are lazy or see themselves as victims.
Then there is Marco Rubio, who to date is by far the most impressive of the group on these issues. Indeed, his American Dreams: Restoring Economic Opportunity for Everyone ought to be compulsory reading for the rest, if only to raise the quality bar in the discussion to come. Rubio -- like Paul Ryan in the last presidential round -- is well aware that poverty has complex causes that are worthy of study and is even prepared to concede that the problem of poverty can be partially alleviated by intelligently designed public policy (in his case, by -- among other things -- a reformed Earned Income Tax Credit). But then again, just like Paul Ryan before him, once the complexity of the causes of poverty has been conceded, Rubio quickly cherry-picks just some of those causes for privileged treatment. One is the general failure of public policy taken as a whole: As he puts it, "The failure of government-centered command-and-control liberalism to lift the poor and sustain the middle class is apparent as never before." The other is the inability/unwillingness of far too many American families to teach their children proper values. "To succeed in life," according to Rubio, "you don't just need skills and a good job. You need to have values like hard work, discipline and self-control. No one is born with these values. They have to be taught by family and faith. But today we face a serious erosion of family life in America. Millions of children are growing up in unstable homes in which they are not taught the values necessary for personal and economic success."
In consequence, the result of the Rubio ruminations on the declining availability of the American dream to more and more people is, at most, a tantalizing political dance of the kind we might legitimately expect later from the others. It is a dance that takes readers off into the center of American politics when discussing the consequences of contemporary poverty, only then to sweep them quickly back to safe and familiar conservative ground as soon as the argument shifts from description to prescription. For although there is no overarching unity of thought and policy in any of these Republican rumblings yet -- just a shared willingness to comment and, in Rubio's case, to analyze -- nonetheless predictable and longer-standing conservative understandings of the causes of poverty and income inequality already ghost the conversation between the presidential hopefuls. That is true even of the Rubio volume.
- One such understanding is that poverty is something that people largely bring upon themselves. This is the often-heard "poverty is voluntary" thesis: the insistence that people inadvertently choose poverty both by the things they do (drop out of school, get pregnant early and so on) and by the things they don't do (like work hard, or get ahead by education and effort). As I have argued in these columns before, Republicans tend to hold an "agency" view of poverty rather than a "structure" one. Poverty is not something that happens to you regardless of your best efforts. It is something you bring upon yourself by lack of that effort. Such an agency theory of poverty then puts ultimate responsibility for the existence of poverty back onto the shoulders of the poor themselves. It is the result, in Rubio's words, of their failure to recognize and implement what he terms "'the success sequence.' First get an education, then get a job, and don't have children until you are married."
- Another understanding common in current Republican conversations about poverty and its causes is that if any external structural barriers do get in the way of people lifting themselves out of poverty -- barriers pulling incomes down and creating welfare traps that block the move from dependency to self-reliance -- those barriers are invariably constructed by the government itself. This is the old Reagan refrain that government is a big part of the problem rather than a big part of the solution, and that in the war on poverty, poverty won. It did so in no small measure, so the argument runs, because of Washington's propensity for the excessive taxation of incomes and the burdensome regulation of enterprise. In the Republican litany, market forces do not create the poor. It is those who interfere with markets who do. Or, as Rubio has it, discussing one frustrated would-be entrepreneur, "big government's complicated rules are stopping him from going back into business for himself. Its tax and regulatory policies are crushing innovation and investment."
- A third understanding, invariably visible in Republican discourse on poverty and its discontents, is that the best way to raise incomes for those at the bottom of the income ladder is to raise the level of incomes for everyone, including those at the top. The premise here being that a rising tide raises all boats and not just big ones. You don't help people at the bottom of the income ladder, so the argument runs, by discouraging those at the top of that ladder from enjoying the product of their entrepreneurial success. As Rubio has it, "Government can help -- and government can certainly hinder -- but it's the entrepreneurs, the strivers and the risk takers who create jobs. ... If we lose sight of that fact, we will have driven the final nail in the coffin of the American dream."
In general Republican thought, poverty is not something caused by society into which some people are unfortunate enough to fall. Rather, poverty is something people fall into by their own failures, and it is also something that they can leave behind by climbing the ladder of success. If poverty persists, the argument goes, it is not because that ladder is somehow absent but because poverty persists whenever political and social conditions conspire to prevent a sufficient number of people from climbing the ladder of success with all the levels of skill and vigor necessary to the task. And the big criminal here, for Marco Rubio as for many other Republicans, is invariably the federal government itself: "Government," as he put it, "has succeeded in trapping far too many people in poverty as a way of life, and it has not done nearly enough to help Americans escape poverty."
To which it is worth responding by observing at least the following.
The way in which you solve poverty partly turns on how you define it. Poverty can be understood in absolute terms, as a certain level of income, or it can be understood in relational terms, as a form of exclusion from the mainstream of modern life. The European Union defines poverty in these latter terms, as occurring to those earning less than 60 percent of median income, on the argument that those with less-than-average incomes are systematically excluded from styles of life taken as normal by the rest of their fellow citizens. Here in the U.S., though there is now a robust debate on how to measure poverty more accurately/adequately, for the moment poverty is still defined in absolute terms: as a certain sum of money income (depending on your size of family) that fails to provide its recipients with a basic basket of essential goods. The EU poverty number goes up as incomes go up. The American poverty level goes up only as prices go up. (It is inflation-indexed.) The American figure is also extremely low -- currently $24,028 a year for a family of four. As the president said in his State of the Union address in January, "if you truly believe you could work full-time and support a family on less than $15,000 a year, try it." Then see if you like it. Not many of those surviving on so little presumably do.
Defined in that absolute fashion, however, poverty is the United States is both extensive and entrenched. Its causes are also multifaceted. Broadly one third of those officially poor in the United States are poor because of the low wages they earn as full-time/part-time workers. A third are poor because they are involuntarily unemployed in an economy in which they are still more people seeking work than jobs available for them to fill. And a final third are poor because they rely entirely on modest levels of welfare payment (from Social Security to food stamps). The total numbers here continue to be striking -- not least the large numbers of Americans dependent on food stamps and the low number of dollars that food stamps currently make available to them. Some 46.2 million (as of November 2014) for the first number, and $133.07 per month on average for the second. Walmart may be earning PR points right now for raising its minimum wage to $9 an hour, but as recently as 2013 the economy's largest private employer was reportedly paying the majority of its full-time employees less than $25,000 a year. And job growth in the economy may at last be recovering, but that can be of little comfort to the still nearly one in three unemployed workers trapped in long-term unemployment, or to the more than 2 million children living with them.
Yet the vast majority of the currently 48 million Americans living at or below the poverty level -- certainly those working full-time for inadequate wages, those seeking employment in the midst of recession, and many of those forced back onto welfare dependency -- still possess the very values of hard work and self-reliance to which Marco Rubio attaches such importance. They hold these values but still remain trapped in poverty, so it can hardly be an "absence of values" fault.
Linking the delivery of the American dream to the metaphor of the ladder is ultimately misleading. It is one of the ironies of contemporary American politics that the notion of "the American dream" now so beloved on the right was first deployed in the 1930s by a Communist Party keen to emphasize the dream's non-availability to Americans trapped in the Great Depression. But before the 1930s, regardless of what the Communist Party claimed, it was not unreasonable to think of America as a fluid society in which social mobility was easier than in Europe -- for white males, at least -- precisely because 19th-century America lacked a rigid class structure anchored in a feudal past of the old European kind. But that rags-to-riches route to the American dream is now increasingly denied to modern Americans by the massive inequalities of income and wealth built up by the American form of late capitalism itself. Social mobility is currently higher in Tory Canada than it is here. Republicans often point to the Bill Gateses of this world to reinforce their claim for American superiority and exceptionalism. But in doing so, they fail to recognize that exceptions very rarely prove the rule, and they certainly don't for most socially aspiring Americans right now, for whom the "start an industry in your garage" route to wealth and power is increasingly closed.
In truth, for most of them, it always was, for it is worth remembering that for the first post-war generations of Americans as a whole, rising living standards were less the product of individual social mobility than the result of strong trade union action successfully linking wage growth to rising productivity. It was that linkage between productivity and wages that was then deliberately broken by Ronald Reagan's anti-union policies and by conservative right-to-work legislation, both of which so many contemporary Republicans, including Marco Rubio, continue to celebrate and advocate. Our main problem now is that, in consequence, general economic growth is only weakly linked to wage growth, because most of any income growth currently underway is monopolized by an over-privileged and selfish elite of top earners. Our problem now is that the rich have pulled up the ladder of social mobility and taken away the rights of American workers to bargain collectively in ways that might pull it down again.
In any case, the "ladder image" in relation to poverty was always a highly problematic one. Even if there is a ladder route out of poverty, it is a ladder that enables just some people to escape low wages, unemployment or welfare dependency while leaving the poverty rungs at the bottom of the ladder firmly in place to be filled by others less able to climb. Moreover, to suggest that people should simply climb out of poverty by their own efforts ignores the fact that the skills required for climbing are precisely those missing for many people at the bottom of the ladder -- and particularly for their children: good education, good food, good clothing, and strong supportive social capital. And the implication that by climbing the ladder of social mobility, a better level of wages and income security can be found assumes that -- in the economic building against which the ladder is currently resting -- a number of higher floors exist, just out of reach from the poor, where wages are both better and plentiful. But these days, as you climb, there are fewer and fewer good jobs to climb to. All you meet instead is an increasingly squeezed middle class.
Wages for most Americans are rising only very slowly right now and have been stagnant in real terms for most of the last four decades -- not least because most of the better floors in the U.S. economic building are currently being gutted by deindustrialization. You can't get everyone out of poverty while simultaneously outsourcing to Asia the well-paying jobs on which the general prosperity of middle-class America still depends. And you do not solve poverty -- for the society as a whole -- by focusing policy on routes out of poverty by a hard-working few. You solve poverty by raising the base of the ladder for everyone. No matter what Republicans claim, you cannot make the American dream a reality for the mass and generality of Americans by simply creating more ladders that reach up to the privileged few. You can only make the American dream a reality for the mass and generality of Americans by raising the floor on which the ladders are actually set. Poverty is not something to be escaped from. Poverty is something to end.
If the Republican presidential hopefuls are genuinely concerned with the plight of the least well-off among us, they will need to consult more widely than simply economists drawn from libertarian and conservative think-tanks, as apparently they are currently doing, and they will have to do more than talk -- in the manner of Paul Ryan's earlier report on poverty and its causes -- about how government policy makes the plight of the poor worse.
- They will have to recognize, much more than even Ryan and Rubio were and are prepared to do, the extent to which existing welfare policies -- the ones they often seek to curb -- actually ease the plight of the very poor in America, such that cutting welfare spending back will only make poverty worse. Social Security alone keeps an additional 27 million Americans out of poverty right now, and refundable tax credits at least 9 million more.
- They will have to recognize too that -- to the degree that growing income inequality and poverty retention have been features of the Obama years -- those features are far more the product of their own opposition to administration policies than they are a product of those policies themselves. Obama has tried, and they have blocked. It is the blocking, not the trying, that has made the plight of the poor worse.
- They will also have to recognize that it is simply not the case that you exhaust the causes of poverty by pointing to family breakdown, the incidence of under-aged pregnancy, and the lack of high-school diplomas by the American poor. Factors like that help to explain who is poor, but they do not explain why the poverty slots exist into which people then fall. It is not all agency in play here. Structural factors are at work too. For low wages to cause anyone to be poor, there have to be low wages. For unemployment to rob people of the ability to survive without public assistance, there has to be an economy running at less-than-full employment. And for welfare payments to keep people poor, the payments themselves have to be disproportionately low.
- And they will have to admit that the Republican fantasy of a society freed from poverty by an explosion of small business start-ups by an entrepreneurial underclass is just that -- a fantasy. The small business sector has an important role to play in the creation of jobs and affluence, but in an economy dominated by large companies and scarred by massive income inequalities, poverty will only end when people working for large corporations are paid good wages again. And it will only end when a 1950s-style level of income tax effectively redistributes the surplus income of the very rich down: down to fund the schools, houses and welfare networks that are so vital to breaking the cycle of deprivation into which the children of the poor now find themselves so illegitimately locked.
First posted, with full academic sourcing (including to Marco Rubio's book), at davidcoates.net.
This essay is one of a series on poverty in contemporary America posted on The Huffington Post. Among the others, posted earlier, are:
- "Responding to David Brooks: The Question of Poverty and Character"
- "Paul Ryan as Prince of the Paupers"
- "The Poverty of Policy on Poverty"
- "America's War on Poverty, America's War on the Poor"
- "Half-forgotten or Totally Forgotten -- Poverty in America"
- "The Unfinished Business of the Obama Administration: Poverty and Unemployment"