The Betrayal of the Poor

For all the rhetoric of recent years about the war on poverty, the poor in America are almost as numerous as ever. Half of them are young, and unless the government makes immensely greater commitments of resources and planning, the country is doomed to a social explosion in the seventies that will make the turbulent sixties seem tranquil by comparison. So says the author of “The Other America” and “Toward a Democratic Left” in this disturbing analysis.

In the seventies the poor may become invisible again. And even if that tragedy does not occur, there will still be tens of millions living in the other America when the country celebrates its twohundredth anniversary in 1976.

This prediction should be improbable. Lyndon B. Johnson declared an “unconditional war” on poverty in 1964, Congress agreed, and for the next four years the White House recited awesome statistics on the billions which were being spent on social betterment. The sixties was a time of marches and militancy, of students and churches committing themselves to abolish want, and of documentary presentations of the nation’s domestic shame by all the mass media. Indeed, the impression of frenetic government activity was so widespread that Richard Nixon campaigned in 1968 with a promise to slow down the pace of innovation. So how, then, argue that poverty will persist in the seventies and perhaps once again drop out of the society’s conscience and consciousness?

The fact is that society has failed to redeem the pledges of the sixties and has taken to celebrating paper triumphs over poverty. Thus in August of 1969 the Department of Commerce announced that the number of the poverty-stricken had dropped from 39.5 million to 25.4 million in a matter of nine years (1959 to 1968). The only problem, as will be seen, is that the numbers prettied up the reality.

When Lyndon Johnson declared his social war in the State of the Union message of 1964, the Council of Economic Advisers defined poverty as a lamily income of less than $3000 a year. This was a rough measure, since it didn’t take into account family size or geographic location, yet it was extremely useful in identifying the groups which were particularly afflicted.

In the next few years the criteria were made much more sophisticated. In a brilliant attempt to define poverty objectively, the Social Security Administration took the Department of Agriculture’s Economy Food Plan as a base figure for the poverty level. This was about 80 percent of the Low Cost Plan which many welfare agencies had used to estimate budgets; it consisted in a temporary emergency diet. In 1964, the Economy Plan had provided $4.60 per person a week, or 22 cents a meal, and the poverty income “line" was $3100 a year. In 1969, it was S4.90 a week, and a four-member family was said to be poor if its income was below $3553 a year. .

These definitions were drawn up by concerned public servants, some of them with a deep personal commitment to abolish the outrage they were defining. But note an extraordinary fact. Between 1964 and 1969, the poverty level was raised by only $453 a year, or about 14 percent for the five years. Yet during this same period, union workers, with an average increase in wage settlements in 1968 of 6.6 percent, were not making am substantial gains in purchasing power. In other words, the statistics enormously underestimate the disastrous impact of inflation upon the poor. And this problem was not simply a matter of personal income, for some of the most dramatic inflationary increases took place in the area of medical services and thereby canceled out all of the increases in Medicare benefits and Forced some people out of Medicaid.

But there was another optimistic assumption in the official definition. When the Economy Food Plan was taken as the base figure, it was assumed that all other needs would cost twice the amount of the grocery bill. But, to keep up with changes in the economy and society since then, one should compute the other items at three times the price of food, not two. By using the erroneous assumptions of the Eisenhower fifties, the government abolished the poverty of 12 million Americans who were still poor.

If it seems extreme to suggest that honest, and even concerned, experts could thus overlook the anguish of 12 million of their fellow citizens, consider the famous Census undercount in i960: almost 6 million Americans, mainly black adults living in Northern cities, were not enumerated. Their lives were so marginal—no permanent address, no mail, no phone number, no regular job— that they did not even achieve the dignity of being a statistic. Again the extent of misery was underestimated.

In 1967 there were roughly 12 million citizens whom the Council of Economic Advisers called the “near poor” (with incomes between $3335 and $4345 for families of four). If these numbers were underestimated in the same way as were the poor, there are 16 million Americans who are but one illness, one accident, one recession away from being poor again. If, as now seems so possible, America in the seventies should reduce its social efforts, this group will lose almost as much as the poor.

And there is another, and even larger, segment of the population whose destiny is related to that of the other Americans. In late 1966, the Bureau of Labor Statistics figured that it would take $9191 for a “moderate standard of living”—you could buy a two-year-old used car and a new suit every four years. It should be remembered that raising the minimum wage for the lowest paid workers tends to help raise the take of those who are organized and much better off, but turning our back on the poor creates a political and social atmosphere in which the needs of an increasing number of people can be overlooked.

Perhaps the simplest way to get a summary view of the dangerous trends is to examine one generation of broken promises in the area of housing.

The government promised every citizen a decent dwelling in 1949. Under the leadership of a conservative Republican, Senator Robert A. Taft, the Congress agreed that the private housing market was not serving the needs of the poor. They therefore pledged to build 810,000 units of low-cost housing by 1955. In 1970, one generation later, that target has not yet been achieved. But the problem is not what the government did not do, but what it did instead. For while Washington was providing cheap money and princely tax deductions for more than 10 million affluent home builders in suburbia, it was taking housing away from the poor. As the President’s National Commission on Urban Problems, chaired by former Senator Paul Douglas, reported in January, 1969, “Government action through urban renewal, highway programs, demolition on public housing sites, code enforcement and other programs has destroyed more housing for the poor than government at all levels has built for them.” In 1968 a law was passed pledging the United States to do in the seventies what it had pledged to do in the fifties. Within a year it became clear that it was unlikely that the nation would redeem this second promise. To build 26 million new housing units in ten years, 6 million of them low-cost, would require speeding up the production of dwellings for the poor to twenty times the present rate. And as George Romney, the Secretary of Housing and Urban Development, admitted in 1969, it is quite possible that we will fall 10 million units behind the goal.

What this means for the seventies is the further decay of the central cities of America, an increase in the already massive level of housing poverty which afflicts a third of the people—and the emergence of ghost towns in the middle of metropolis.

For the plight of the cities is becoming so grievous that even slums are not as profitable as they used to be. As a result, the Real Estate Research Corporation told the Wall Street Journal in 1969, between ten and fifteen thousand buildings are being abandoned in the course of the year.

When Richard Nixon was elected President he told the people that the federal government had tried to do too much and that he would therefore decentralize social programs and set more modest goals. There was a half-truth and a dangerous falsehood in his analysis, which bodes ill for the poor in the seventies.

Under Lyndon Johnson the Administration talked as if it were undertaking and accomplishing prodigies. One of the reasons why a disturbing number of white workers turned to George Wallace in 1968 was that they were under the impression that Washington had done so much for the poor, and particularly the Negroes. They confused the bold rhetoric with action and did not understand that life in the ghettos had changed very little. Insofar as Nixon taxes Johnson for having talked too loudly, he is right. But the rest of his thesis—that the federal government was too activist, and that efforts must be cut back and turned over to the states—is wrong.

In order to destroy this myth of the favored, pampered poor, one need only consider official figures. In 1968 the National Advisory Commission on Civil Disorders—the “Riot” Commission—reported that in Detroit, New Haven, and Newark, the cities where the violence was the most destructive in 1967, the median percentage of those eligible who were actually covered by any one of the major social programs was 33 percent. In other words, in the United States, a majority of the poor are not on welfare at all. And, the Commission showed, the national average for welfare payments is “a little more than one half of need,” and in some cases one fourth of need. In January, 1969, a special Cabinet committee reported to Lyndon Johnson that the existing domestic programs were already underfunded by $6 billion and that a moderate expansion of civilian efforts along lines already suggested by various commissions and study groups would cost another $40 billion by 1972. So the government by its own standards is falling billions of dollars behind what should be done.

To many citizens, people who receive welfare are regarded as a burden upon the hardworking common man. But what is really happening is that many of the poor are being undercompensated for humiliations which the government and the economy, or both, have visited upon them. The most dramatic case in point is the rural poor who were driven into the cities in recent years. Billions of dollars in federal subsidies were paid to rich individuals and corporate farmers—including hundreds of thousands to Senator James O. Eastland, the impartial plantation owner who sits on the Senate Agriculture Committee and helps determine his own rewards. These handsome welfare payments to the wealthy allowed them to make a profit by reducing the land under cultivation and also provided them with funds for mechanization. Productivity in the fields increased twice as fast as in the factories, but millions of the rural poor became economically superfluous.

Between 1950 and 1966 federal monies helped to force 5.5 million black farm workers into the cities. They came from areas where education for Negroes was substandard, and these black migrants were required to relate to a bewildering, complex urban environment and compete in a sophisticated labor market. They brought with them, as Harold Fleming has said, “the largest accumulation of social deficits ever visited upon an identifiable group.”

In short, it is not that Washington has done too much but that it has so often done the wrong thing. And the central thesis of Mr. Nixon’s 1969 welfare message—“a third of a century of centralizing power in Washington has produced a bureaucratic monstrosity, cumbersome, unresponsive, ineffective”—is not an accurate description of what happened. Moreover, Mr. Nixon’s major welfare proposal to establish a minimum income for families contradicts his own analysis, for it proposes to federalize welfare benefits at a certain level. Mr. Nixon was quite rightly disturbed that Mississippi

pays an average of $39.35 a month to support an entire family while New York has much higher standards. He therefore wants to use the federal power to force Mississippi from abusing its states’ rights in such an inhumane way, which is hardly decentralization.

One of the most disturbing facts about the poor is that roughly half of them are young. They will be flooding the labor market so fast in 1975 that the Department of Labor expects 25 percent more sixteen-to-nineteen-year-olds looking for jobs than in 1965—and 50 percent more black youths. This will happen at a time when blue-collar positions for which they will be competing will be opening up at a rate of about 15 percent a year. In other words, there is a very real possibility that many, even most, of the children of the poor will become the fathers and mothers of the poor.

These dangerous trends did not explode in the sixties, but two of the reasons were Vietnam and inflation. The nation’s tragic commitment to the horror in Southeast Asia created 700,000 new “jobs” in the Armed Forces and a million new openings in defense industry. Since 80 percent of the draftees had high school diplomas, the Army did not actually take the poor in but removed some of their competition from the labor market. Then with inflation after 1965—which was triggered by a $10 billion “mistake” in federal spending based upon optimistic assumptions about a victory in the war in 1966—the labor market tightened up even more. But with peace in Vietnam, what are the acceptable substitutes for the employment generated by war and inflation?

In his message to Congress on population problems in the summer of 1969, President Nixon attacked a sweeping proposal made by the National Committee on Urban Growth Policy for not being sufficiently daring. The Committee, which included Democratic regulars like Hale Boggs and John Sparkman and even a Goldwater Republican, John Tower, had said that the nation must build ten new cities for one million citizens each and ten new towns tor 100,000 inhabitants. Alter noting that there will be 100 million additional Americans by the year 2000, three quarters of them living in urbanized areas, the President said of the Committee’s suggestion, “But the total number ol people who would be accommodated if even those hold plans were implemented is only 20 million—a mere one fifth of the expected thirty-year increase.” (Emphasis added.)

As the seventies open there is every indication that housing poverty will become even more acute, and that the children of the last decade’s poor will, as parents in an economy without enough decent jobs, increase the size of the other America. To avoid such tragedies, certain things must be done.

First of all there must be planning. There should be an Office of the Future attached to the presidency and a Joint Congressional Committee on the Future which would receive, debate, and adopt or modify annual reports from the White House.

Suburban home builders, automobile manufacturers, and trucking companies all pick up their huge federal subsidies without a thought of pollution. And now—not simply if poverty is to be abolished, but if the quality of life in America is to be kept from deteriorating—we must consider the “side effects" of new technologies even more scrupulously than we do those of new drugs. A year before his death, Dwight Eisenhower urged the building of new cities, racially and socially integrated and with new jobs. Mr. Nixon apparently agrees. But the enormously complex planning needed to accomplish such a task is not going to be done by the invisible hand of “Adam Smith.”

Second, there must be billions of dollars in social investments. President Nixon, like President Johnson before him, hopes that private enterprise can do the job. His first version of this philosophy was called “black capitalism,” and he ordered the concept extended to all the impoverished minorities when he took office. But the blunt economic facts of life are that costs in the slums are twice as high as in the suburbs, congestion much more serious, the labor market relatively untrained, and the neighborhoods unprofitable for big business. Minority enterprises can, of course, make a contribution to their areas and should be helped generously, but for the vast majority they offer no real hope.

As the sixties were ending, there did seem to be one area in which the cooperation of the public and private sector worked: employment. The National Association of Businessmen, with strong federal help, is trying to put poverty-stricken and minority workers into good jobs, and the measurable gains have been highly publicized. However, a 1969 analysis by the Wall Street Journal was not so sanguine. The main reason for the hirings, Alan Otten wrote, was the tight labor market, and any increase in unemployment—which is inevitable given the Nixon strategy against inflation—would turn these people back out on the streets. Yet when the Automobile Workers Union proposed to the Ford Corporation that its older members he permitted to take a voluntary layoff so that the new men could stay on, the company refused. The reason was simple: the supplementary unemployment compensation for a veteran is costlier than for a new worker. The profit motive was stronger than social conscience.

Early in the seventies the gross national product of the United States will pass the $1 trillion mark. As an article in Fortune calculated this trend, there would be a fiscal “dividend”—the automatic increase in government income without any rise in taxes which takes place when the GNP becomes larger—of $38 billion in 1974 and around $80 billion by 1980. The problem under these circumstances is not finding the resources but being intelligent enough to use them democratically and creatively.

In his 1969 welfare message, President Nixon made a sharp-attack on the unevenness of the present states’ rights welfare system. But in his proposals he urged Congress to delegate even more power to the very local administrations which had previously abused it, and he came out for a federal minimum which would leave people well below the poverty line. In the Nixon program, Washington would provide the funds to bring family payments up to $1600 a year, and the twenty states which now pay less than that would be required to contribute only half of their present welfare spending up to the total.

Instead of thus institutionalizing a federal minimum which is less than 50 percent of the way to the poverty line, the United States should adopt the principle that all of its citizens are legally entitled to a decent income. Lyndon Johnson’s outgoing Cabinet computed that one version of such a social involvement, a negative income tax, would cost between $15 and $20 billion a year. Given the Fortune prediction of an $80 billion dividend by 1980, that amount is clearly within the country’s means.

Such a program should have a work incentive. Instead of the typical American practice of taxing the earnings of the welfare recipient 100 percent (by reducing his benefits by the amount of his wages), the individual should be allowed to keep a decreasing proportion of his income supplement as his pay goes up. But this also means that there must be a vast increase in the number of decent jobs. In New York City, where Aid to Dependent Children payments approximate the level of menial jobs in the economy, there is no motive for the mothers to look for work, and they haven’t. So a guaranteed income with a work incentive means a commitment to genuine full employment.

And that is where the notion of a guaranteed income ties in with the right to work. It was Franklin Roosevelt who first urged, in the campaign of 1944, that if the private economy does not provide jobs for the people, then the public economy must. If the promises of the Housing Acts of 1949 and 1968 were carried out, there would be a labor shortage and the country would discover that it really needs the unused work potential of the poor and the near poor. The effect of such a program would not be inflationary because workers would be producing valuable goods and services for their wages.

As the seventies begin, the nation needs planned long-range social investments to provide a decent home for every citizen and to guarantee either a living income or a good job for all. If the cities continue to sprawl and technology revolutionizes the land in a casual, thoughtless way, polluting our natural resources, it is the poor who will be the most cruelly used, but the entire nation will suffer as well. □