The Rising Tide of Poverty

The Rising Tide of Poverty

By Steve Suitts

Vol. 7, No. 1, 1985, pp. 5-8

“A rising tide lifts all boats,” President Reagan explained four years ago when asked how his administration’s policies would affect the poor. l hose were the days when Admini-

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stration officials declared poverty no longer existed in the United States. Today, Census Bureau data and independent reports tell that since 1980 the number of poor has increased by nine million in the nation and 2 1/2 million in the South. And, in February of this year, the Physician Task Force on Hunger concluded that hunger is now a national epidemic.

From their sinking perspective, the poor may rightfully conclude, as did the defeated Walter Mondale, that in the Reagan Administration a “rising tide lifts only yachts.”

Abandoning its attempt to abolish poverty by declaration, the Administration now argues that poverty is the result of past programs of big government which have maintained the poor in a state of dependency and wiped away their incentive to work. “We tried to provide more for the poor and produced more poor instead,” writes Charles Murray, the author of the Reaganites’ new bible on the subject, Losing Ground: American Social Policy, 1950-1980. “We tried to remove the barriers to escape from poverty and inadvertently build a trap.”

These curious words rely especially upon the fact that in the late 1970s budgets for poverty programs expanded, but the number of poor in the nation began to increase. Their analysis of this event does not look at developments since 1980, nor does it recognize that government assistance to the poor is only one of three major areas of policy which fundamentally change the status and numbers of poor. Poverty has been influenced largely in past decades by three factors: changes in government assistance, the rates and duration of unemployment, and underemployment (low wages and short work weeks).

No matter how much it tries to ignore the present, the Reagan Administration must share much of the responsibility for influencing each of these and should take the blame for the unparalleled rise in poverty and hunger since 1980. With the rise in the rate and number of poor have come unprecedented reductions of people from poverty programs in the South and the nation.

Reviewing, in 1981, President Reagan’s proposed changes in assistance to the poor, a report of the Southern Regional Council concluded that, if adopted, the policies would “transform the war on poverty to a war on the poor.” Our most recent report analyzing the actual developments of the last four years, Public Assistance and Poverty (March, 1985), documents this horrific conclusion. Since 1980 almost 1 1/2) million recipients of four major poverty programs have been removed in the eleven Southern states. The substantial majority of these recipients were cut from the food stamp program although reductions occurred in each of the three other programs, Medicaid, Aid to Families with Dependent Children (AFDC), and Supplemental Social Security (SSI).

The elimination of more than a million recipients from the food stamp program in the South probably has affected the working poor more than any other group. Yet, the study clearly indicates that a majority of the 1.4 million Southerners losing assistance in all four programs are children. It is those who are too young to work, to protect themselves, who may be denied food, clothing, or decent shelter due to these reductions.

The people–primarily the children–who’ve been denied further assistance are only part of those severely affected. In the last four years the levels of government benefits to those receiving aid have been reduced or have stagnated. For example, the level of AFDC assistance given to recipients in Arkansas decreased by eight percent from 1980 to 1984. In Louisiana, the increase in AFDC payments was a mere two percent. When compared with the increasing cost of purchasing non-food items, the real benefits of AFDC recipients were cut by almost one-third in the South. In other words, due to the flatened benefits and increasing costs of buying non-food items, “real” AFDC payments in 1984 were thirty percent less than in 1980.

The families and individuals who receive both AFDC and food stamps are primarily the poor who do not work. For these poor, the combined real value of AFDC payments and food stamps for food, clothing, and shelter has been cut more than twenty percent during the last four years. In Tennessee the combined benefits of food stamps and AFDC payments dropped by two dollars a year from 1980 to 1984. With an increase in the cost of living during the last four years, food stamps and AFDC benefits dropped thirty percent.

The decreased levels of assistance in the last four years have pushed families deeper into poverty and contributed to increased hunger. In North Carolina, a family of four depending upon AFDC with an income that was twenty-five percent below poverty in 1980, now find that their income has dropped to fifty percent below the poverty level.

The immediate effect of these changes in budgets and policies is tragic, but the consequences over time may come to be devastating. The past is ample evidence that government assistance has had an important role in reducing poverty. At times, however, such as in the late 1970s, increases in government assistance alone were not enough to override changes in unemployment and underemployment. Yet, at no time in the last twenty years have we had policies of the federal government in public assistance that pushed substantial numbers of people deeper into poverty. If public assistance has not always reduced poverty over time, the policies have at least maintained the general status quo of the poor. Today, and over the last four years, the Reagan Administration has pushed millions of Southerners and poor across the nation deeper into poverty.

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A clear recognition of the failures of the Administration should not obscure the importance of government policies that affect unemployment and underemployment. Most people, ranging from bleeding heart liberals to heartless conservatives, carry around misconceptions about the poor and the role of poverty programs. These mistaken notions often limit our view of what causes poverty and what are remedies that reduce it.

In Patterns of Poverty, released in December of 1984, the Southern Regional Council found that most of the benefits of AFDC, Food Stamps, Medicaid, and other government assistance go to families headed by the elderly or by one female parent with children at home. On average, almost eight out of ten of all families receiving benefits in the South in 1982 were confined to households headed by someone sixty-five years or older or by single, female parents with children.

These statistics tell us that public assistance in the South is going largely to people who need it and who are least able to work. Under the circumstances, it is difficult to understand the criticism that government benefits are offering the poor an opportunity to evade work. In fact, the benefits are going largely to households headed by persons who cannot work, should not work, or are least able to work by circumstances.

Despite the myths, the fact is that a majority of the poor families are working. In 1982, almost two out of three of all poor families across the nation had at least one person who worked part-time or full-time. When families headed by females with children or persons sixty-four years or older are excluded, approximately three out of four of all poor families in the United States probably had someone working part-time or full-time in the 1980’s. The data suggests strongly that poor families in our society today, like most American families, are working families.

These facts tell us that the influences on poverty go beyond the level of public assistance and reach to government and private policies concerning wages and the workplace. Policies that shape peoples’ wages and the available jobs also determine whether the government is conducting a war on poverty or a war on the poor.

Although the Council has not finished its analysis of the recent effects of unemployment and underemployment on poverty in the South, the US Conference of Catholic Bishops is one important group who has come to understand the

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inextricable link between economic policies and levels of poverty. Last November, in a draft pastoral letter, the Catholic bishops stated that government has an obligation to its people to assure that its economy does not maintain high rates of unemployment and low earnings. The bishops raise the proper concern, especially as the economies of the South and the nation radically change the nature and duration of jobs. Yet, they have not-nor has anyone else–marshalled enough public debate on the economic policies that can attack poverty.

The war on poverty, begun twenty years ago, was not an unblemished success. In its best times, the poverty programs helped to reduce the number of people whose incomes and benefits did not offer a decent life. In its worst moments, until 1980, the programs usually offered the poor enough to sustain their economic status, if not their hope for better opportunities. Since 1980, policies governing public assistance have cut hundreds of thousands off and have deepened the poverty of millions who continue to receive aid. In a prosperous nation, a prosperous region, these policies have a bankrupt spirit.

Yet, until we realize that policies governing our economy also determine, in large part, our poverty rates, we will be unable to replace harsh criticism of the Reagan Administration with a working vision of how this prosperous country can undo poverty and how it can enfl the enlarging economic and spiritual separation between the poor and the non-poor. In the worst of times, we must begin to chart the course out of the rising tide of poverty to the best of times.

The Reagan Response

The head of the Reagan Administration’s food stamp program, Robert Leard, responded to the recent SRC report, Public Assistance and Poverty, by telling the Associated Press that the welfare rolls shortened during the last four years because employment increased. “The big reason for your change is quite frankly the unemployment rate going down,” Leard stated. No one has informed the unemployed or the US Department of Labor of this progress in reducing unemployment, however. In most Southern states, the unemployment rates in late 1984 continued to be higher than rates in 1980 or 1981. In Alabama the 11.5% rate of unemployment in November 1984 was considerably larger than the 8.8% unemployment rate in 1980. In Tennessee, where 186,000 food stamp recipients were removed as of late 1984, the rate of unemployment in 1980 was 7.2%. In November 1984 it was 8.7%. While unemployment rates did not decline in most Southern states, the number of recipients of public assistance fell by almost 1 1/2 million. Since there was no general decline in rates of unemployment in the South from 1980 to the end of 1984, this could hardly cause the reductions in public assistance to the poor. The Administration has not given up its old practice of proclaiming problems away.

Steve Suitts is executive director of the Southern Regional Council. He is the author of the two reports discussed in this essay. Both are available from the SRC: Patterns of Poverty (Dec. 1984. $5.00) and Public Assistance and Poverty (March 1985. $7.50). When ordering these reports, please add $2.OO for postage and handling. Minimum order$15. Quantity rates available.