Washington is full of well-meaning types who want to help the poor.
The list of prospective helpers includes not only the standard liberal
do-gooder types talking about programs like pre-K education, but also
conservatives like Paul Ryan who argue that taking away food stamps and
other benefits will give low-income people the motivation they need to
go out and get a job.
While sincere efforts to help the poor should be encouraged, we
should also realize that our current economic policies are doing much to
harm the poor. First and foremost we should realize that the decision
to maintain high rates of unemployment is having a devastating impact on
the well-being of millions of low and moderate income workers and their
children.
The reasons are straightforward. When the overall unemployment rate
goes up, the rate for the less-educated and minorities rises even more.
This has been a regular pattern in the data for many decades that has
been very visible in the current downturn.
Before the recession the overall unemployment rate was at 4.5
percent. It peaked at 10.0 percent in the fall of 2009 before gradually
falling back to its current 6.3 percent. By contrast, the unemployment
rate for workers without high school degrees rose from just over 7.0
percent in the months before the recession to a peak of more than 15.0
percent in peak months in 2009 and 2010. This is an increase of 8.0
percentage points. The unemployment rate for blacks rose from just over
8.0 percent before the recession to a peak of more than 16.0 percent,
also a rise of 8.0 percentage points.
High unemployment doesn't just hurt those at the bottom by denying
them jobs, they also work fewer hours than they would like. The analysis
in my book with Jared Bernstein, Getting Back to Full Employment,
found that hours worked for families in the bottom fifth of the income
distribution increased by 17 percent in the boom at the end of the
1990s. By contrast, hours worked barely increased at all for those in
the top fifth.
And a lower unemployment rate means higher wages for those at the
bottom. We found that a sustained one percentage point decline in the
unemployment rate is associated with a 9.4 percent rise in real wages.
To summarize, for the poor, lower unemployment translates into more
jobs, more hours, and higher pay.
While the data on these points may be clear, many people will
question that having high unemployment is a policy choice. That requires
a little bit of thought.
At this point we have solid evidence
that we can reduce the unemployment rate with increased government
spending or tax cuts targeted to those who would spend the money. We
have opted not to do so in order to reduce the deficit.
Some people may consider lower deficits to be a greater priority than
increasing growth and reducing the unemployment rate, but that doesn't
change the fact that this was a choice. Congress and President Obama
(more the former than the latter) pushed policies to quickly reduce the
deficit. This choice denied millions of low and moderate income people
the opportunity to work and tens of millions more the opportunity to
work more hours or to get higher wages.
In the same vein our trade policy has also been a major factor
depressing the income of those at the bottom. Our trade deficit exploded
in 1997 following the East Asian financial crisis. The policies imposed
on the crisis countries led to a sharp run-up in the value of the
dollar.
A higher priced dollar made our products much less competitive in the
world economy. As a result we are now running a trade deficit of more
than $500 billion a year. This is demand that is generated in the United
States but is creating jobs in Mexico, China, and other countries. The
trade deficit translates into a loss of more than 6 million jobs.
The point here should be clear. We can hugely boost employment and
create enormous opportunities for low and moderate income families by
having budget policies and trade policies that promoted high employment
instead of policies that lead to high unemployment.
The government is actively working to deny low and moderate income
families jobs and opportunities in a really big way. The people in
Washington involved in the decision-making process that leads to this
outcome may not think about the impact of these policies in this way,
but who cares?
The damage they do to the poor with their ignorant policies swamps by
several orders of magnitude any good they may hope to do with their
small bore anti-poverty agendas. And for which they think the poor
should be grateful.
from here
Why don't people get it - it's all about the money? The 'people in Washington involved in the decision-making process' aren't there to represent the people - they're there to represent the interests of capital, of mega corporations, of the wealthy minority. This is what 'the people' have to be woken up to, to the unchangeable realisation that they are being used as pawns in the capitalist game, to be disposed of as the game progresses, in the interest of the winner of the game.
There is no need for high unemployment, for high levels of poverty, for the great divide we have currently between sections of the population. We just need to use our imaginations and think a different way. Take money out of the equation completely and think again how it will impact on the problems noted above. There is more than enough work for everyone, doing the things that people deem important. There is more than enough food. There is plenty enough housing. What is lacking is the system to make it work in our interest.
What is required is the will of the majority to put in the work to achieve that new system - socialism.
JS
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