The Nevada Progressive nails it in Marco’s Masquerade. We should have seen this coming, the Republican answer to poverty in America is (drum roll please) Marriage. Not necessarily marriage for members of the LBGT community, but that good old fashioned march to the altar for the right people.
The Numbers Don’t Add Up
First, if we buy into the Republican stereotypical person in poverty the individual in question would be a single mother and member of an ethnic minority community, which goes absolutely nowhere toward explaining that of the 20% of Nevadan adults who have earnings below the poverty line the gender categories are almost identical. [Kaiser FF] There’s 1% difference.
Secondly, 22% of Nevada citizens living in poverty do not have children, while 17% do. There is something to the ethnic minority figures. Of the people in Nevada living with below poverty line earnings 15% are white, 34% are African American, and 29% are Hispanic. [KFF] However, a better correlation might be established if we were to consider educational attainment levels. The unemployment rate for those with less than a high school diploma stands at 12.4%, High School diploma 8.5%, and a professional degree at 2.1%. [BLS]
And the unwed mother mythology? In 1990, unmarried white women accounted for 57.5% of the births to unmarried women, and unmarried African American women accounted for 39.1%. By 2008 the numbers had changed with the rate for white women increasing to 67.7% and the number for African American women dropping to 27.9%. [Census pdf]
Finally, when we look at the numbers, a hard cold fact sets in. “There are more married parents with incomes below the poverty line than there are never-married ones, and more food-insecure adults live in households with children headed by married couples than in ones headed by just a man or woman.” [CPER]
In short it is more common for adults caring for children on incomes below the poverty line to be married (43% married, 6% separated) than in the homes of 40% of adults earning poverty level wages who have never been married.
Yes, young people do tend to be well represented among those paid minimum wages. Those under 25 years of age make up about 20% of our workforce, but constitute about 50% of those earning minimum wages. However, that information is only 50% of the story.
49.4% of our hourly wage earners over the age of 25 are working for minimum wages. [BLS] 15% of men over 25 years of age are working for minimum wages, compared to 30% of women in the same age group. [BLS Table 1]
The cherished myth is that people who start out earning minimum wages in their teens go on by dint of Horatio Alger-like effort (remembering, of course, that he married the boss’s daughter) to Do Great Things. This is such a good story one hates to diminish it, however reality kicks in all too quickly. The Council of Economic Advisers (pdf) cautions:
“While the United States is often seen as the land of economic opportunity, only about half of low- income Americans make it out of the lowest income distribution quintile over a 20-year period. About 40 percent of the differences in parents’ income are reflected in children’s income as they become adults, pointing to strong lingering effects from growing up in poverty.”
Capitalism Works, and We Should Let It
The corporate think tanks and their media cohorts are fond of repeating the mantra that raising the minimum wage would be a Disaster, A Disaster I Say, for American capitalism. Employment will decline! [Forbes] Except for one nitpicky litte detail — there’s no hard evidence this happens. The Forbes article cited above goes to great length to offer gloom and doom predicated on the assumption that the corporation must recoup any and all losses to its bottom line (read profitability) by adjustments in productivity. Interestingly enough nowhere in the article does its author mention the bloated executive compensation packages which somehow do not need to be adjusted to improve corporate profitability.
Forbes opines: ” The Law of Demand always works: the higher the price of anything, the less that will be taken, and this includes labor.” Yes, it does. However, a person should be careful here to differentiate between micro and macro economics. If our hypothetical worker, and that seems to be the main form workers take in financialist-land, works for the Acme Widget Company, and the “cost of her labor increases,” Acme may have to adjust, but Acme isn’t where she shops for groceries. Or, where she purchases her car. Or, where she buys clothing and furniture. The increased wages (or, increased labor costs) become part of our old friend Aggregate Demand.
“Firms cannot pay a worker more than the value the worker brings to the firm. Raising the minimum denies more low skilled workers the opportunity to get a job and receive “on the job” training.” [Forbes] Yes they can, and they do. One of the prime reasons employers are anxious NOT to have high levels of employee turnover is that training is relatively expensive. No worker, from the bottom to the top, is worth on day 365 what he was worth on day 1. If the firm is managed rationally, then it is assumed that experienced personnel are more valuable than the rookies, and therefore more valuable — and they all started out as rookies. Interesting, this “worker value” argument never seems to emerge when Wall Streeters speak of executive retention bonuses?
If it did, we might hear some business pundit say the unimaginable, “We can’t give more executive retention bonuses because this will deny less experienced or skilled people the opportunity to receive on the job training.” I’m not holding my breath waiting to hear that one on some business cable channel.
Capitalism could work very nicely. If we’d let it.