The Future of Work: Why Wage Work Can't Solve the Poverty Problem - Pacific Standard

The Future of Work: Why Wage Work Can't Solve the Poverty Problem

The latest entry in a special project in which business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace.
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Low-income residents select fresh bread and produce at the Community Food Bank of New Jersey on August 28, 2015. (Photo: John Moore/Getty Images)

Low-income residents select fresh bread and produce at the Community Food Bank of New Jersey on August 28, 2015. (Photo: John Moore/Getty Images)

For a very long time, the left and the right have converged on the belief that the preferred cure for poverty is wage work. The left calls for full employment, and for economic growth because it will create full employment. The right calls for scaling back social assistance programs because they presumably allow the poor to avoid wage work and the climb out of poverty that work would ensure. These dual but complementary convictions have crippled our approach to anti-poverty initiatives. Moreover, whatever plausibility that employment as a solution to poverty has had in the past, in the contemporary economy it no longer makes sense.

Frances Fox Piven is a professor of political science and sociology at the Graduate Center, City University of New York.

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We can see the consequences of the convergence of left and right views on work in the politics that surrounded the elimination of the Aid to Families With Dependent Children program and its replacement with Temporary Assistance to Needy Families in 1996. In 1992, Bill Clinton, no doubt swayed by the Republican war on blacks, the poor, and American social programs, campaigned “to end welfare as we know it” with a policy of “two years and off to work.” When the Republicans gained control of the House in 1994, they passed a succession of bills to eliminate AFDC, then the largest cash assistance program to poor families, in favor of a block grant program that gave the states wide discretion to deny benefits, and also gave them an incentive to do so since the states could re-purpose the money they did not spend. Clinton vetoed the first two Republican bills as too harsh, but with an election looming, signed the third.

For a short time in the booming late 1990s, many welfare mothers did enter the labor market and, with the additional aid provided by the Earned Income Tax Credit, some even lived above the poverty line. But the low unemployment levels did not last. Even today, with unemployment at five percent, mainstream economists worry that any tightening of the labor market will lead to dangerous inflation.

As unemployment rates rose in the 2000s, wages at the bottom stagnated or fell, and the EITC was not raised. Meanwhile, the restrictive policies and practices of TANF did their work. Welfare caseloads plummeted from about 14 million people in 1995 to 4.2 million today. While 68 percent of families with poor children received cash benefits under AFDC, only 26 percent received aid in 2013, and that assistance was meager.

Not only does belief in wage work cripple support for direct assistance to the poor, but current labor market conditions argue that full employment is something of a chimera. Not only is American manufacturing employment shrinking, while the conditions of service sector work become ever more precarious, but many millions of people from the Southern Hemisphere, displaced by war and climate change, are seeking refuge and employment here and in other northern nations, and this is not likely to change soon.

Perhaps even more important, the employment solution to poverty, especially employment at decent wages, has always been yoked to the imperative of economic growth. In principle, of course, it is possible to achieve full employment without the resource-intensive growth that is threatening to destroy the planet. We could direct all investment to the construction of low-carbon transit and housing, to renewable energy, education, the arts, health care, day care, and so on. But an emphasis on full employment and its corollary of growth is likely to distract us from the urgency of halting growth based on carbon fuels.

Meanwhile, the poverty problem worsens. The Census reports that 45.3 million people are officially poor, and extreme poverty, defined as households living on less than half the poverty line, has been increasing rapidly. But there is not much discussion of poverty, or policies to reduce it. We need that discussion.

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For the Future of Work, a special project from the Center for Advanced Study in the Behavioral Sciences at Stanford University, business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace, and what anxieties and possibilities they might produce.

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