Poverty: The Hot New Fashion?

Photo: Kim Scarborough.

All The Way With LBJ!

Way back in the 1960s when T-shirts were covered with trendy slogans, I remember one in particular: POVERTY SUCKS! Well that was then, and guess what is now? I am happy to report that the popularity of poverty is on the rise, and might even make the top 10 fashion trends for 2014.

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Poverty: Demise of the Middle Class. Photo: Kim Scarborough.

There is only one reason to be happy about poverty. It is finally getting attention after having long been ignored. There are a couple of reasons that the sun, moon and stars appear to be aligning in just the right manner. Let’s take a look.

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January 8 marks the 50th anniversary of the declaration of War on Poverty by President Lyndon B. Johnson in 1964. LBJ is perhaps better known for creating a false premise in declaring war on North Vietnam or sponsoring The Civil Rights Act of 1964. However little credit has ever been given to the man who helped lower poverty in America from 19% to 12% of the population.

But when it comes to modern day fashionistas, you got to hand it to Pope Francis for his recent 217-page APOSTOLIC EXHORTATION in which he called on believers to say “thou shalt not” to “an economy of exclusion and inequality,” because “such an economy kills.”

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As we have pointed out in our November installment of Econoclassicist, the poverty level in the United States stands at 15% presently and is among the highest in the developed world. The reason for the level’s rise has much to do with the demise of the middle class over the past 30 years. Thus when we plead for a solution to this embarrassing condition, we are really talking about roughly 60%-75% of the population who are spinning their financial wheels in a sea of mud with no pathway out.

The Pope’s message rang a long overdue bell with politicians, both Republicans and Democrats. It even appears to have appealed to Congressional members across religious lines as well. The New York Times reported recently that the Pope’s message was being heard across America.

Beware Of The Carpetbaggers

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But does the Pope’s message have real traction? We are deeply suspicious. To borrow from Shakespeare, “full of sound and fury, signifying nothing.” The poor don’t vote in the same numbers as other groups and obviously don’t carry the financial clout of folks like the NRA. But that doesn’t mean that politicians don’t want to pander to the poor.

The Pope criticizes “economy of exclusion.”

Case in point. During the anniversary week of the War on Poverty legislation, news writers and TV journalists were bombarding the news waves with stories on the historic event, along with highlights of the Pope’s pronouncements. Clever Republicans like Florida Senator Marco Rubio spoke about an opportunity to reshape the message, if not the mission, of the Republican Party, addressing issues of the poor. At almost the very same moment, Senator Kay Hagan, a North Carolina Democrat who is up for re-election, is admonishing Republicans back home as “irresponsible and cold-hearted” for slashing unemployment benefits. As Jeremy W. Peters of The New York Times noted on January 8, “Poverty is suddenly the subject of bipartisan embrace.”

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The Present Isn’t What It Used To Be

The nature of poverty has changed since the Great Society days of LBJ. At that time, one of the groups most enmeshed in poverty were the elderly. According to government data, slightly more than one third of elderly Americans fell below the poverty line in the early 1960s. But that number is less than 10% currently. In addition, the teenage birthrate has been cut in half over the same period. Both of these groups are in either good or very active voter participation groups.

One of the highest poverty groups today are either current or former members of the state and federal penitentiary system. Certainly this is not the only component of the poverty equation; but it’s an important one considering the record number of members in this group. The felony vote has never elected a US president.

Basically it’s the former members of the middle class that have slipped into poverty due to long-term unemployment, a point we have talked about repeatedly over the past year or more.

The problem: Lack of manufacturing jobs.

If one were to examine the types of programs of the Great Society that were successful, it would include things like the earned income tax credit, or other programs outlined by the book Legacies of the War on Poverty by Martha J. Bailey and Sheldon Danzinger. There may be honest debate as to how successful such programs were, but there is little doubt about one truth: Most of the success came at a time when the US economy was expanding at a moderate-rapid pace, and jobs were being created in the manufacturing sector. Today, the lack of jobs in the manufacturing sector is the problem.

Government job training programs aren’t the solution. Government has a poor record training the people for jobs within its own bureaucracy, and no better chance training workers for jobs in the private sector. Anyone who has applied for a skilled position in the private sector will attest to the sophistication needed and specialized training required to succeed in a highly competitive labor market.

Thus providing generous tax benefits or other subsidies to employers to encourage the private sector is the only obvious solution under current conditions.

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All Talk And More Talk

While there was much talk in the week of January 8 and even more editorializing, the only tangible result has been this: Congress’s unwillingness to extend long-term unemployment benefits as 2013 came to a close. The continued ineptness of Congress is resulting in 1.3 million Americans, who have been out of work 6 months of longer, losing benefits. Temporarily, at least, it adds about that many citizens to the poverty list.

A recent National Public Radio (NPR) job market report noted this: The odds of receiving a response to a job application was less than 25% if the applicant had been out of work for less than 6 months. However, for those less fortunate, the odds were less than 5%. So let the Pope pontificate and let the politicos spew out their canned speeches. Poverty in 2014 is nothing more than a fashion statement.