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Sat, 27 Dec 2008
How much does it cost to live in Rhode Island? That's a hard question to answer, so here's another: how much do you have to earn so that you're not poor in Rhode Island?
Since it was first developed (by Mollie Orshansky, a researcher at the Social Security Administration, in 1963), the federal poverty level has been controversial, subject to misinterpretation and manipulation. Originally based on typical food budgets, the poverty level has crept up with food prices over the years, but not with the changes in the way we spend money, leaving it a poor measure of being poor.
If you're old enough, you'll remember a time in the 1970's when food prices were a political issue. Inflation, but especially food prices, defined economic concerns for many during that time. Spending about a third of your income on food was not unusual, and the poverty level was based on that.
Agriculture subsidies and policies to promote highly-efficient giant farms have driven down food prices ever since then, and so now food prices are not a political issue. (Except that these policies are the source of terrible environmental, labor and health consequences, but I'll save those for another time.) No one spends as much as a third of their monthly budget on food any more, but the poverty level -- officially about $1,460 per month for a family of three -- is still calculated off the food budget as if we did.
A more realistic measure is provided by the Poverty Institute, who has for several years compiled a state "standard of need." Essentially they have redone Orshansky's work, but using more realistic assumptions, and incorporating into the standard the various programs -- Medicaid, food stamps, and child care subsidies -- available to people who are poor.
And so they've found that if you're a single parent with two kids, you probably need to be earning more like $50,000 each year to be out of debt and have enough for the basic needs for you and your children. By "basic", I don't mean cable, either. We're talking about having enough to buy clothes and keep the fridge full, but no more. People who earn less are in trouble. For example, say you have a job paying $14.81 per hour. You're earning 175% of the poverty level, and about twice the minimum wage. Say you've found a real bargain of an apartment to live in, and have nothing but routine medical needs. Congratulations, with the subsidies for child care and Medicaid for which you qualify, you're probably only short about $50 every month.
Here's the catch: should you pick up some extra work, or be lucky enough to get an 84 cent per hour raise, you'll lose the child care and health care subsidies, and be about $1,100 in the hole every month. What luck. So someone who does everything right, and tries to get off public assistance, finds herself worse off than before. What this says is that our system is really nuts -- created as a response to the fantasies of politicians and talk show callers rather than to the real world. Motivated by the fear that someone, somewhere, might maybe get some aid he or she doesn't deserve, federal and state legislators have over the years created such an incredible mess of programs and eligibility regulations that irrationalities like this are the rule, not the exception.
I have on my desk a fascinating little book, called "Why Welfare States Persist" by Clem Brooks and Jeff Manza, sociologists at Indiana University and New York University respectively (University of Chicago Press, 2007). Their work asks why, in the face of budget cuts and right-wing backlashes in democracies all over the world, the components of the welfare state seem to survive. A common explanation they discuss is something you hear in Rhode Island all the time: powerful actors (such as unions) have seized control of programs in such a way to prevent the popular will from ending them. But given the decline in labor's political strength in many countries, and the persistence of labor-backed policies in those countries, it's a challenging case to make in a rigorous way. That is, it's easy to say, "It's all the unions' fault," but far harder to prove it in a world where pension givebacks and wage concessions are so common.
Brooks and Manza counter that you simply can't discount public opinion as a source of support for welfare state programs. Put simply, many of these programs are popular, and so they persist because this is a democracy, or at least something vaguely like one.
Popular? How can that be when you hear so much complaint about welfare, child care, Medicaid and the rest? But notice this: no one ever runs for office on eliminating these programs. I spent a fair amount of time reading Assembly campaign literature this fall, and I can't think of a single candidate who ran on *eliminating* a government program. Or at least none who would say so in public. Instead they'll say "we must do more with less" or something equally inane, or insist the programs are good, but need to be limited to those who deserve it. Depending on the candidate (and the audience) this might mean the white ones, the non-immigrant ones, or the ones who can find a job within two years while raising three children alone. This is an essentially dishonest approach, which is why I think it's worth looking at what politicians do instead of what they say.
People make mistakes, and bad things happen to good people, too. They deserve a system that can actually help them, not just one that allows us to pretend to help. You may say they shouldn't be "entitled" to that help, but many of us say we owe it to them. Enjoy your holidays this week, and please be generous, when you can.
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