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POVERTY IN THE USA.
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Examines historical change.... More...
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Paper Abstract:
Examines historical change. Poverty rates. Workers living in poverty. Unemployment rates. Housing problems. Statistics. Focuses on the city of Boston, Massachusetts. Root causes of persistence of poverty; theories. Intergenerational poverty. Boston's "Living Wage Law." Problems related to poverty. Action for Boston Community Development plan. Mechanisms for the program. 1 Table.
Paper Introduction:
Poverty in America: The Case of Boston
Explaining Historical Change
Over the course of the past 20 years, poverty rates have fallen to include only 11.9 percent of the population. This is the lowest rate in a 20-year cycle, with median household income in the United States now at $40,816 (Michael, 2001). However, these data are deceptive. When only the poorest American are considered, in the period from about 1973 to 1998, the poorest 20 percent of Americans gained only 4 percent more income, while the wealthiest 5 percent gained 59 percent (Michael, 2001). In 1999, every racial group with the exception of Hispanics, showed the lowest poverty rates ever recorded.
At the same time, the total poverty rate declined more steeply in the 1960s than during the 1990s, falling to a low of 11.3 percent
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Cambridge, ma.: HarvardUniversity Press. A highly influential theory regarding the root causes of poverty hasbeen advanced by William Julius Wilson (1996), in a text titled When WorkDisappears. Available at www.detma.org/lmi/local/Boston.html. Business Week, March 12,32. (2 1). However, it is his thesis that as long as the poor are notable to obtain employment, or lack the needed skills, education, attitudesand support systems that make work possible, poverty will remain a fixturein the American polity.Action Project One of the steps taken in Boston to counter the problems of povertyin general and joblessness as well was subsumed within the 1995Consolidated Plan (U.S. In 1999, everyracial group with the exception of Hispanics, showed the lowest povertyrates ever recorded. The problem has worsened over time,despite the myriad social welfare programs of the Great Society and the Waron Poverty. (199 ). While the poorestpeople have benefited from the economic prosperity of the 199 s, overallincomes in the U.S. Change over time with respect to poverty, says Wilson (1996), is duein part to the fact that when AFDC was originally developed and through the196 s and into the mid-197 s, it provided the poor with a far betterstandard of living than it subsequently offered. Wilson, W. (2 1). (1994). U.S. U.S. Throughout the 199 s, unemployment fluctuated from a high of 8.6percent in 1991 to a low of 3.3 percent in 1999. Metropolitan Area Rankings. Boston. R. Available atwww.hud.gov/library/bookshelp18/plan/ma/bostonma.html. Wilson (1996) makes several keypoints in his analysis of how poverty cycles have been created and whycertain communities and groups appear to be firmly rooted in poverty andits surrounding culture. Winfield (199 ), for example has argued thatwhile the capitalist competitive market system provides a remarkable rangeof economic opportunities for most citizens, social and class divisionsendemic to such societies have the ultimate effect of fostering socialstratification. percent. Department of Housing and Urban Development(1995) stated that 36 percent of Boston's families as having incomes below5 percent of median family income and an additional 12 percent havingincomes between 51 percent and 8 percent of median family income. The Neighborhood partnerships Initiative andthe Urban Enhanced Enterprise Community were included in the program, whichthe intent of revitalizing neighborhoods, encouraging small business growthand re-employment or employment for the jobless, and renovating decayingresidential and commercial properties. (2 ). As of 199 , the rate increased to 1 .7 percent, but declined as of1999 to 9.3 percent. Thiscreates a substantial number of families living at the low to very low-income level. U.S. Virtually all of thedecline in poverty rates for full-time workers happened in the 196 s andearly 197 s; since the 196 s, both the number and proportion of full-timeworkers living in poverty have actually increased. This was thehourly pay rate yielding an annual income equal to the federal poverty linefor a family of four. According to Rauch (2 1), this problem is particularly acute inAfrican-American communities, where nearly 69 percent of all children bornin 1999 were born to single mothers, as compared to 33 percent for thenation as a whole. These are, in brief: - ghetto residents and the most poor face enormous obstacles that must be overcome to meet mainstream expectations involving work, family and the law; - social welfare interventions have assisted some individuals, but not nearly all or even most, in acquiring the skills and attitudes needed; - the flight of businesses and industry from the central cities has created a dearth of job openings and opportunities that further disadvantage the poor; - racial divisions are exacerbated by ethnic poverty and joblessness, which in turn fosters anger and hostility among minorities; - educational inequities further disadvantage the already disadvantaged, while federal assistance to municipal governments has been reduced, leading to further reductions in opportunity for the poor (Wilson, 1996).This combination of factors, along with other ills such as the persistenceand prevalence of crime, formal and informal racism, the digital ortechnology divide, and the welfare system restructuring all contribute tothe problem (Wilson, 1996). Poverty in America: The Case of BostonExplaining Historical Change Over the course of the past 2 years, poverty rates have fallen toinclude only 11.9 percent of the population. Boston addressed its poverty problems in 1997 by creating a "LivingWage Law." Kuttner (1997) reported that this new law required any privatecompany doing business with the city to pay its workers at least $7.49 perhour, an increase of $2. USNewswire, February 27, 2733, 1. A Theory of Justice. above the federal minimum wage. (2 1). New York:Alfred A. Rauch (2 1) also maintains that intergenerational poverty amongmembers of minority groups or among individuals in the lower socioeconomicstrata of Anglo America directly correlates with the presence or absence oftwo parents in the home. poverty thresholds and related statistics. As of 1985, some 278, 15 of a possible 291,267workers were employed, leading to an unemployment rate of 4.5 percent thatwas higher than the statewide rate of 3.9 percent. Kuttner, R. Wilson (1996) takes the position that the disappearance ofviable work in urban settings has created an environment in which poverty,crime, family dissolution, welfare and low levels of social organizationare apparently deeply entrenched. (2 1). Nevertheless, these data do not capture thetrue extent or impact of poverty or the polarization of income andsocioeconomic resources and status that continues to trouble the UnitedStates (Whitman, 1994). Poverty among America's poorest citizens worsens. Rawls (1971) also calls for redistributive strategiesin the form of increased subsidies and transfer payments to the poor as theprimary strategy for reducing poverty. The "Other America" revisited.Dollars & Sense, January, 42 - 43. The poor aren't poorer. Consumption andincome among low-income families went in opposite directions during the198 s. John Rawls (1971) takes the position that poverty is caused by theinappropriate and inadequate distribution of the resources of societyand/or the fruits of production. Wilson (1996) does not denythat many African-American and other minorities as well as poor Whitesbenefited enormously from theWar on Poverty. In 199 , some 287,365of 3 4,669 potential workers were employed, leading to an unemployment rateof 5.7 percent, which was slightly lower than the statewide rate of 6. When Work Disappears. Cultural plays a role, butsocial psychological variables should be included in any analysis of whatcauses poverty or leads to its maintenance. When income only is examined as a criteria for determining whether ornot a family is living "in poverty," what results is an increase in thisnumber. In the same period, labor forcefluctuations also occurred. Available atwww.prospect.org/columns/kuttner/bk97 818.html. (2 1). In that period, wages increased onaverage from $22,721 to $57,749. Rauch, J. The mechanisms for such a program exist in Boston at the present time(U.S. The figures depicting the extent of poverty in theU.S. As of 2 , the officialunemployment rate in Boston was an all time low of 2.9 percent(Commonwealth of Massachusetts Division of Employment and Training, 2 1). Commonwealth of Massachusetts, Division of Employment and Training.(2 1). Under the aegis of Action for BostonCommunity Development, which is the area's major anti-poverty agency, anexpanded JTPA could be implemented that includes specific transition andsupport services as: 1) day care assistance for single mothers and others who have limited access to safe child care, covering both working parents and parents participating in a JTPA certified vocational or educational program; 2) transportation assistance for JTPA participants; 3) financial assistance and/or discounted tuition for participation in JTPA certified vocational and/or educational programs, with such programs funded in part through business contributions and existing school district/community college/business partnerships; 4) structured tax credits and other incentives to businesses and industries that participate in JTPA by offering jobs and/or training and subsequent job placement to JTPA enrollees; 5) housing subsidies to families in transition from welfare dependency to independence, along with maintenance of existing Medicaid insurance programs. However, the number of persons living in poverty in Bostondeclined during the 198 s by nearly 4,7 people. It is important to recognize that even the most poorreceive certain kinds of transfer payments that significantly enhance theirquality of life but not necessarily to the level enjoyed by working classor other Americans (And the home of the poor, 2 1). Table 1 Income Shifts by Income Class (% change)Socioeconomic Class 1973-1988 198 -1998Poor -4. In 198 , 1 .3 percent of all families regardless ofrace or ethnicity or household composition lived at or below the povertyline. What is recommended at this juncture is an expanded JPTA effort thatinvolves members of the Boston metropolitan area business and industrialsectors, city and federal government, and the educational and socialservices systems of the community. (1996). The erosion of AFDCpayments after about 199 , and a decrease in other forms of social welfarespending (in areas such as education, health, vocational/job training,delinquency prevention, and support services for poor families), bothcombined with the flight of many jobs to create in the urban ghettoes aculture of poverty that ahs worsened over time. Poverty. Whitman, D. At the same time, the U.S. (2 1). A free market tends to reward the most motivated,educated, and advantaged in a national population. The Just Economy. National Journal, 33 (2 ), 1471 - 1472. Living wage legislation was seen as having thecapacity to significantly improve both the income level and the quality oflife enjoyed by many poor Boston residents. What is needed isan infusion of financial and other resources that are targeted to meet theneeds of a well-identified target population of the most poor or,simultaneously or alternatively, the working poor for whom additionalassistance of these types could promote greater economic self-sufficiency.The challenge, as Wilson (1996) commented, is not to determine what isneeded to reduce poverty and its ill effects, but to find the public willand wherewithal to take the right steps. However, these data are deceptive. Wilson (1996) argues forcefully that jobopportunities, while mandatory, are not in and of themselves sufficient toeliminate poverty; people must be trained to work, motivated to work, andsupported as they acquire the skills and attitudes and behaviors needed tosucceed in the mainstream workplace. This suggests that while poverty rates maynot be increasing in the United States, they cannot be understood asgenuinely declining over the period from 198 to the present. In a truly just society, Rawls (1971)argues that the economic position of the poor would be improved by aredistribution of wealth. (1997). At the same time, the total poverty rate declined more steeply in the196 s than during the 199 s, falling to a low of 11.3 percent in 1972.After that low point, the decrease in the poverty rate slowed dramatically. Boston in the mid-199 s recorded a need foradditional financial aid in the form of public and subsidized housing,community development activities, anti-poverty efforts through the Actionfor Boston Community Development, and the improvement of educational,training, and job placement activities targeting low-income residents (U.S.Department of Housing and Urban Development, 1995). When these data wereexamined in the context of families with children aged five to seventeenliving in poverty, this same area reported that in 1993, 15.7 percent ofall families met this criteria, ranking the region a 194 overall(Metropolitan area rankings, 2 1). The question of how Boston, Massachusetts is affected by poverty is ofsignificance herein. Fair equal opportunity in contrast to formalequal opportunity would engender social mobility and economic improvementsamong the most poor. The mean income of the poorest 1 percent of households withchildren fell by 4 percent in real terms, from $4,935 in 1979 to $4,745 in1989. J. Department of Housing and Urban Development. Other factors impacting on poverty include wageinequality and a lower level of social spending in the United States thanis typical in many other industrialized nations (And the home of the poor,2 1). Boston, Ma.:Consolidated plan for 1995. New York:Routledge. Winfield, B. The following table, prepared by Michael (2 1), compares the incomeof poor, middle-class, and rich households from 1973 to 1998. Department of Housing and Urban Development, 1995). (1971). References ...And the home of the poor. Theproblems of poverty have clearly not diminished and represent a majorsocial concern that is particularly prevalent in urban settings where thepoor tend to concentrate.Interpretation and Argument Numerous theories attempting to identify the causes of poverty andthe reasons for its persistence in certain communities and among certaingroups have been offered. Wilson (1996) departs from the liberal and the conservative positionsand argues that while social structural factors help to account forjoblessness (and it is joblessness that ultimately leads to poverty), thereis much these factors cannot and do not explain. While the out-of-wedlock birth rates for Black childrenstopped rising in the 199 s, it stabilized at more than triple the ratiofor 196 . Problems related to poverty in the 199 s included major job losses inthe Boston metropolitan area. Rawls, J. News and World Report (Whitman, 2 1),drawing upon data generated by researchers at the University of Chicago,argued that social welfare payments and transfers (in the form ofMedicaid/Medicare, food stamps, other nutrition programs, and subsidizedhousing) actually increase the economic viability of the most poor. Boston's living wage law highlights newgrassroots effort to fight poverty. Millions of such householdshave left welfare with the termination of the Aid to Families withDependent Children (AFDC) program and the transition to limited eligibilityand benefit strategies designed to foster the welfare-to-work transition.Rauch (2 1) addressed this issue and commented that fewer than one-fourthof American households consist of married couples with children, and thenumber of single-mothers with children grew nearly five times faster in the199 s than the number of married couples with children. The U.S. They directly involve key actors from the business,governmental, and educational communities and provide a multifaceted, multi-pronged approach to engaging the poor in activities that can make thetransition to work less difficult. But the mean amount consumed by these households during the Reagan-Bush years rose 13 percent, from $12, 22 in 198 to $13,558 in 1988-1989(Whitman, 2 1). FamilyEconomics and Nutrition Review, 13 (1), 125 - 126. The Commonwealth of Massachusetts Division of Employment and Training(2 1) identified a steady increase in the average annual wage earned byBoston workers from 1985 to 2 . Knopf. Today, about two-thirds of all African-American families areheaded by a single parent, usually the mother, and a majority of allAfrican-American children live in fatherless households. Wilson (1996) notes that liberals tend to emphasize socialstructural factors (including race) in "explaining" poverty, whileconservatives stress the roles played by values, attitudes, habits andstyles in fostering poverty. Michael, M. When these transfer payments and subsidies are factored in, asomewhat different picture emerges. Part of the problem with the persistence of poverty is related to theincrease in the number of single-parent, female-headed households withdependent children who are too young to attend school and those who are atschool age (Poverty among America's..., 2 1). (1995). The Nation, 27 (12), 8. The United States is currently the only one of 19 wealthy nations witha double-digit poverty rate. Determiningwhat truly constitutes poverty requires the examination of a number ofdisparate data sets. The federal Job Training PartnershipAct (JPTA) was a key element in the strategy and was designed to providejob seekers with the education, training and other services needed to moveinto productive work roles. The American Prospect. These strategies, according to Wilson (1996), are integral tocreating the kind of institutional and structural response to problems ofpoverty that is needed. As Michael (2 1) reported, after 1979 the poverty rate never fell below12 percent, and continued to rise until 1995 when a modest decrease began.The problem also impacts the poor who work full-time. On the whole, the University of Chicagoresearchers made the case that the material well being of poor familieswith children has not deteriorated in the past 2 years. The Boston-Worcester-Lawrence-Lowell-Brockton,Massachusetts-New Hampshire metropolitan area had a poverty rate of 1 .6percent and a national ranking as 236 in terms of overall poverty levels asof 1993 (Metropolitan area rankings, 2 1). The widening marriage gap: America's new classdivide. The centralstrategies of the plan focused on increasing home ownership among lower-income residents via low-cost, low-interest purchase and renovation loans,housing subsidies for specific groups of the poor, and programs targetingeducation, youth services, child care center development, social services,employment and public safety. have become more polarized, as income inequalitycontinues to rise (Michael, 2 1). are still home to asubstantial number of single-parent households in which child povertyappears to be endemic (Poverty, 2 ). The U.S. Department of Housing and Urban Development, 1995).Under this plan, a massive financial and resource investment in addressinghousing and other community development needs was made. News & World Report,117 (4), 33 - 35. This is the lowest rate in a2 -year cycle, with median household income in the United States now at$4 ,816 (Michael, 2 1). - and the groups upon whom poverty exerts its most devastating impact- can be misleading. When only thepoorest American are considered, in the period from about 1973 to 1998, thepoorest 2 percent of Americans gained only 4 percent more income, whilethe wealthiest 5 percent gained 59 percent (Michael, 2 1). Nearly one in five Americanchildren lived in officially defined poverty as of 1998, a figure somewhatlower than 1989, yet somewhat higher than the figure for 1979. While overallpoverty rates have declined and the absolute number of individuals andfamilies living at or below the poverty line has decreased, Boston and manyother metropolitan areas throughout the U.S. Census Bureau recently reported that over the course of thepast two decades, poverty rates for families have declined (U.S.poverty..., 2 1). Individuals who aredisadvantaged from birth tend to experience subsequent disadvantages in theform of unequal educational opportunities and fewer opportunities forsocial mobility. Available atwww.census.gov/Press-Release/metro2 .prn. Given that povertycorrelates more directly with family composition and the presence orabsence of two parents than it does with race or ethnicity, what emerges isthe realization that poverty in the African-American community is very muchan artifact of family composition. % - .1%Middle +8.5% +2.5%Rich -59.3% +22.4%These data indicate that there are meaningful decreases in the povertylevels of the most poor - or, at any rate, declines in income differentialsexperienced by this group. Boston is in no sense unique in terms of poverty.
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