Jobs and Poverty
Yesterday after I finished playing tennis as a guest at a country club in Wilmington, I noticed a license plate in the parking lot that read: AJOB=$. I assume that the car’s owner is trying to convey a none-too-subtle message that people should provide for their own needs and those of their children by having a job. If they are employed, they won’t have to depend on government welfare or private charities. In principle, this is the best strategy for alleviating poverty. The problem is that many poor people cannot find a job or that they do have a job, maybe even two or three part-time jobs, but the pay is so low that they remained mired in poverty.
Consider the case of the Nailors who live in Evart, Michigan, the kind of place Norman Rockwell often featured in his paintings. Although they reside in a house in a small town in Middle America, they struggle. John Nailor, who operates a computer repair business, earns less than the poverty level for a family of four. His two young daughters wear hand-me-down clothes and play with used toys. By the end of every month, the family has only a few coins left. They do not have cable television and rarely go out. Without food stamps and income tax credit, Nailor declares, “We would be lost.”
Those who work in the fast-food industry especially struggle. This industry has long enjoyed high profit margins while paying their employees the national or state minimum wage. Most fast-food workers are not teenagers who are pocketing discretionary spending money. In reality, 70 percent of them are over the age of twenty, and more than two-thirds of them are women with children who are their family’s primary breadwinner. More than half of fast-food employees, a rate that is higher than in any other industry, have one or more family member(s) who is receiving welfare.
Unfortunately, many financially well-off Americans know little about the conditions and impact of poverty. Middle and upper-class Americans typically view poverty as an austere, but sustainable, condition rather than as the acute distress it is. Not having enough money to eat lunch or being compelled to work while one is ill or injured because she cannot afford to miss a day’s pay is an emergency situation, not a viable lifestyle. The financially secure rarely recognize that those living in low-income communities have less access to grocery stores, discount retailers, and affordable housing. The documentary A Place at the Table vividly depicts the challenges of finding nutritious, inexpensive food in inner cities and rural areas. Shopping trips to buy goods at lower prices often take several hours for low-income individuals who must use public transportation.
Having a meager income often creates a vicious cycle. The poor frequently borrow money or postpone regular payments to cover emergency expenses. They procure high-interest payday loans, use installment plans to purchase products, and pay high credit-card fees and interest rates. Often low-income individuals make only minimal payments on their credit cards, thereby accumulating large interest fees. Because they fall behind, the indigent also frequently pay their bills after they are due, which costs them late fees. Many simply do not have the funds to pay all their bills on time.
Being raised by low-income parents often adversely affects children. Many of them experience great stress when their families cannot cover their basic expenses. These children frequently eat poorly, wear inferior clothing, and move repeatedly. Some live in substandard housing or are homeless. Many low-income parents suffer from low self-esteem, lack of respect, depression, and even a sense of hopelessness, which reduces their ability to lovingly nurture their children. The poor often have low expectations, adopt a fatalistic outlook, and believe they cannot change their circumstances.
Not surprisingly, numerous poor people eventually become apathetic. Their lack of social contacts, a meaningful job, and education leads many of them to feel powerless to improve their lives. When people fail to keep their promises to them, their plans repeatedly fail, and their needs outstrip their resources, many low-income individuals understandably become resigned to their fate.
Making it easier for the poor to establish bank accounts, furnishing more options to automatically pay bills, and providing opportunities for financial counseling and borrowing are critical. The poor have trouble getting a bank account and, therefore, spend a lot of time figuring out where to cash a check and get money orders to pay bills. One organization is trying to help. Single Stop operates 113 sites across the country where the poor can apply for benefits, receive help to complete their taxes, and obtain legal and financial advice.
Several other factors, including the lack of paid parental leave, the erratic scheduling of part-time work, and the meager paychecks many jobs provide, limit the time parents can bond with their newborn, compel them to scramble to find quality childcare, and force them to work more than one job. Contentious relationships, unpredictable work schedules, and long hours on the job inhibit parents from spending time with their children and engaging in activities that further their cognitive development.
Finally, raising the minimum wage to at least $10.10 an hour and indexing it to future cost of living increases is a sensible and just policy. It would make the minimum wage about half the median pay for full-time workers, which would be close to the standard of other high-income nations and to the American norm during the 1960s and 1970s. It would also improve the physical and psychological well being of low-income workers and help reduce our nation’s glaring wage inequality.