Commentary and Philosophy Non-Fiction posted July 23, 2016


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The truth about child poverty in America

A National Disgrace

by Bananafish308

Pragmatism.  The tendency to view the world as it really is, rather than how one would like it to be.  To paraphrase Merriam-Webster’s Dictionary, it involves dealing with situations in a logical and reasonable manner, instead of depending on ideas and theories.

I often point out that I am a pragmatist, and this tendency defines how I view the world and the countless issues that confront humanity on a daily basis.   While this is true, I don’t often qualify this assertion by explaining that buried deep within this pragmatist is an incorrigible idealist yearning to break free.  This might seem like contradictory impulses within the same person, and I must admit, when I was younger the two often came into conflict within my heart and mind.   As I have gotten older, though, I have come to realize that the two can be compatible and can serve to balance each other. 

To quote a Zen proverb: “The heart is only half a profit.”

There is no better illustration of this, then my taste in movies.  I love intense movies with ambiguous characters – characters who aren’t black and white, but reflect the realistic complexities and frailties of all humans.  Sometimes, however, I feel the need to feed that idealist in me with a feel good movie – a movie with clearly defined villains and heroes, in which good triumphs over evil in the end.

A movie in this mold that comes to mind is an underrated picture called, “Dave.”  [spoiler] Kevin Klein plays the title character, an idealistic man who runs an employment agency.  He also happens to be an exact lookalike of the President of the United States.  When the President suffers a debilitating stroke, his Chief of Staff and other close advisors decide to keep his condition hidden from the public, so they enlist Dave to impersonate the President.

Dave’s job is to pose as the President during closely controlled public appearances meant to reassure the public and the press that the President is fine and in control of the country.  At first, Dave just goes along for the ride and has great fun posing as the President.  He starts to grow into the role, however, when he realizes that the President is corrupt, and many of his policies, orchestrated by his Chief of Staff, are self-serving, to the detriment of many.

There is a great sequence in the movie, in which Dave, posing as the President, visits a homeless shelter.  He is touched by the children in the shelter, and later finds out that the Chief of Staff forged the President’s signature on a veto of a funding bill that included the shelter.  Dave confronts the Chief of Staff over this and is flippantly told, if he can slash $650 million from the federal budget, he can keep his shelter. 

Dave takes the Chief of Staff at his word and sneaks his accountant friend into the White House in the middle of the night to help him make the necessary budget cuts.  The next morning, at a staff meeting, Dave goes through the budget line by line, cutting unnecessary expenditures until they reach the $650 million goal [spoiler].

It is one of many great emotional payoffs in the movie.  As the late great film critic Roger Ebert stated:

“The subtext of "Dave" resembles the messages of many of the Capra movies: If people in power only behaved sensibly and with good will, a lot of our problems would solve themselves. Of course, it's not that simple. But watching "Dave," there were moments when I found myself asking, why isn't it?”

I think of this Ebert quote often, when I contemplate the dilemma of child poverty in America.  According to the National Center for Children in Poverty, and many other sources, as of 2015, 22% of all children in the Unites States were living in poverty.  This amounts to over 16,000,000 children who are food insecure.  It is one of the highest child poverty rates in the world among major countries, and an abomination for the richest country in the world. 

Child hunger is not limited to families living below the poverty line, though.  It gets even scarier when one considers that 45% of children live in low income families.  These are families that live above the official poverty line, but still have trouble putting food on the table, and are not eligible for SNAP benefits (food stamps), one of the most effective buffers against child hunger.  When one takes these children into account, some estimate that as many as 18,000,000 children go hungry on a daily basis.

Shouldn’t it be simple enough to believe that a country with the wealth of the United States should be able to feed all its children?  Don’t we have a humanitarian obligation to do so?  Many will say that it is not that simple, and I would ask: “Why isn’t it?”

We as Americans must decide what is more important, feeding hungry children, or feeding billionaires and corporate special interest groups.  It IS that simple and everything else is just rationalizations to justify the ever widening income inequality in this country.  It just comes down to compassion. 

The pragmatist in me understands that there is no one perfect solution to this problem, and that child poverty will never be completely alleviated.  It is one of the many unavoidable scourges of the human condition.  The idealist in me, however, knows that there are many things that can be done to greatly reduce it.  I might be so bold as to even suggest we can at least ensure every child has enough to eat, even if it doesn’t lift them out of poverty.

A big part of the problem is this country’s refusal to have an honest dialogue about some of the causes of this blight, and some of the government policies and common myths that serve to perpetuate the problem.  In order to formulate a comprehensive approach to fighting child poverty, I think it is first necessary for this country to have this long overdue dialogue. 

In 1973, the national child poverty rate stood at 14%.  This was the culmination of over twenty-five years of economic growth and prosperity in the post-World War II era.  It was a period that saw steadily rising family income, and dramatic declines in child poverty rates.

Beginning in 1973, however, the economy sputtered and wages began to stagnate.  By 1979, the child poverty rate had risen to 16.2%.  Over 10 million children were now living in poverty.  By 1993, the rate was 22.5% with approximately 15 million children living in poverty.  This precipitous rise in the child poverty rate coincided with a dramatic lowering of tax rates for the top income tax brackets, and an extended period of wage stagnation for the lower and middle class.  At the same time, corporate profits remained on a steady, upward trajectory. 

By 2000, as a result of the economic boom during the Clinton administration, the child poverty rate had dropped to 16%.  Under Clinton, wages saw a temporary and modest rebound, and the top marginal income tax rate was increased to 39.6%.

During this period, from 1979 to 2000, when the child poverty rate fluctuated based on economic conditions, social conditions also had an impact on the rate.  Perhaps most significant was the rise of mother-only households.  These families are much more susceptible to poverty.  While this, and other social factors play a definite role in child poverty rates, it is clear to me that economic conditions and the manner in which they affect families, have a profound impact on these rates.

This brief respite from high child poverty rates in the latter half of the 1990s was short-lived.  In 2001, the Bush tax cuts went into effect.  By 2008, the rate was back up to 19%.  The job growth that Bush promised, as a result of the tax cuts for those Bush euphemistically called the “job creators” (aka the wealthy) never materialized.  On the contrary, job growth during the Bush Administration was the most anemic of any President in recent history.  The average annual increase in jobs was .01% in his first term and .23% in his second term.  These were the lowest rates of job growth for any president going back to 1920.  Contrast these rates with the job growth rates under Clinton: 2.64% in his first term and 2.33% in his second term.  Is there any wonder that child poverty rates were lower during the Clinton Administration?

As the Great Recession (December 2007 – June 2009) took hold and the negative impacts began to be felt, the child poverty rate continued to rise, reaching 22% in 2009, under President Obama.  The rate has fluctuated between 20% - 22% since then, and was at 22% as of 2015.

Even though the recession officially ended in June 2009, the deleterious effects continued to be felt by lower and middle class Americans in the ensuing years, right up to the present.  Corporate America, on the other hand, barely skipped a beat.  In 2009 they raked in record profits, and continued to set new records for corporate profits on an annual basis.  At the same time, working Americans continued to flounder.

According to Think Progress, a study done by economists at Northeastern University shows that, from the second quarter of 2009, to the fourth quarter of 2010, “corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income.”  The study goes on to state: “…The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”
 
In the same article, The New York Times is quoted as stating, “According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.”
 
This wasn’t a temporary trend, as corporate profits continued to break new records through 2014, while wages continued to stagnate.  It is clear that corporations and the wealthy are the only ones who benefited from the economic recovery.  Last year was the first year since the recession that corporate profits declined.  It stands to reason that this incredible pace could not be maintained.   Profits were down 3.1%, which means that profits were still at near record levels compared to pre-recession years.
 
I should mention that this trend didn’t just start after the recession; it has simply accelerated in recent years.  Corporate profits have been on a steady upward trajectory since the 1970s, as have executive salaries, while wages for working Americans have stagnated during this same period.  In short, wages for ordinary workers have not kept up with this unprecedented period of corporate prosperity. 
 
According to The New York Times, as of 2014, corporate profits as a percentage of GDP (9.3%) were higher than at any time since before the Hoover administration.  At the same time, wages as a percentage of GDP (53.2%) were at the lowest level since the Hoover administration.  It is also interesting to note that the effective corporate tax rate in 2014 (20.5%) was the lowest it has been since Hoover was in office, belying the false narrative that corporate taxes are too high and stifling economic growth.
 
While it is important to reiterate that there are a myriad of economic and social factors that affect child poverty rates, it is clear from the statistics above, that extreme income inequality has a profound impact on it.  Government policies have greatly contributed to this inequality, and government policies can help to alleviate some of this inequality.

The first order of business should be to maintain and protect the SNAP program (Supplemental Nutrition Assistance Program, formerly known as food stamps) from the benefit cuts that many Republicans have proposed.  This food assistance program is one of the most effective anti-poverty programs ever initiated.  As successful as the program has been, though, one can make the argument that the benefits need to be expanded.  The average monthly benefit for a family of three in 2015 was $374.00, which is insufficient to meet the food needs of many low income families. 

At this point, I must debunk, once and for all, the myth of rampant SNAP abuse and fraud that is perpetuated by unscrupulous politicians.  Both the USDA, which administers the program, and the GAO (Government Accountability Office), which audits and evaluates government programs, have concluded that SNAP fraud and abuse is quite low, especially compared to other government programs.  While the error rate for SNAP is approximately 3%, according to The New York Times, the GAO estimated that Medicare and Medicaid lose nearly 10% to fraud.  Many other studies have corroborated the findings of the USDA and GAO.

Oversight of SNAP is much more extensive than that of many other government programs.  The USDA has a vigorous system in place to monitor and fight fraud and waste, and this system has been quite successful in reducing the level of waste and fraud to an all-time low of 3%.

SNAP is our first line of defense in fighting the war on poverty.  Before we can lift people out of poverty, we must first ensure that they are adequately fed.  As Maslow’s Hierarchy of Needs postulates, the most basic human needs for survival must first be met, before one can move on to the next level of needs, which includes financial security.

Another very effective tool for fighting poverty is the Earned Income Tax Credit (EITC).  EITC is a refundable tax credit for low- and moderate-income working people.  According to The Center on Budget and Policy Priorities, in 2013, EITC lifted about 3.2 million children out of poverty, and “reduced the severity of poverty for another...7.8 million children.”  EITC has broad bi-partisan support, and a number of prominent Republican leaders have proposed expanding it, which begs the question, “Why hasn’t it been expanded?”  EITC should clearly be expanded without further delay, as well as the Child Tax Credit and the Child and Dependent Care Tax Credit.          

The Children’s Defense Fund estimates that expanding these four programs: SNAP, EITC, Child Tax Credit and Child and Dependent Care Tax Credit would reduce child poverty by 40%, at an annual cost of $30.7 billion.   This can easily be paid for by eliminating some of the many corporate tax subsidies now in place, and insisting that multi-billion dollar corporations and billionaires pay their fair share of taxes.

Housing subsidies for poor families with children would reduce child poverty by a further 10.7%, at an additional cost of $22.9 billion.  This would bring the total tab for these initiatives to $52 billion, a sum that is still very affordable if we dip into the money we spend on corporate welfare.  Think about it, we can cut child poverty in half at a cost of $52 billion!  Why on earth wouldn’t we do it?

It is estimated that we spend over $100 billion a year on corporate welfare.  In 2015, twenty-seven S&P 500 companies paid zero income taxes, such as: Level 3, United Continental, General Motors, American Airlines and Hewlett-Packard, to name just a few.  It is time that we, as a country, stopped stigmatizing those in need of assistance, and started directing this misplaced outrage where it belongs – at the feet of the corporate freeloaders in our country. 

I should mention that the benefits of the programs mentioned above go beyond lifting many families out of poverty and have a broader effect.  Those who receive these benefits spend the money at once, which helps to stimulate the economy.  Corporate welfare, on the other hand, benefits only a select few, such as corporate executives and stockholders.

While these programs would take a huge bite out of child poverty, they are just a starting point.  Long term food security can only be achieved when hard-working Americans once again earn a living wage.  To this end, we need to raise the minimum wage to $10.10 an hour, as soon as possible.  Given the controversy surrounding the popular proposal for a $15 minimum wage, $10.10 is an eminently fair compromise.

We also need to undo government policies that have reduced the influence of labor unions in recent years.  Yes, I did it.  I said the curse word: UNIONS.  Unions have been demonized to such an extent in recent years that many have forgotten the profound and positive impact unions had on our economy, wages and employee benefits.  When unions were still influential, we had a thriving middle class and a booming economy.  It is no coincidence that the demise of the middle class has paralleled the decline of unions. 

As with anything, there are positive and negative aspects to unions, but the worst that can be said is that they are a necessary evil.  Anyone over forty, at one time or another, owed their employee compensation and benefits packages either directly or indirectly to unions.  Unions don’t just benefit those employees who belong to unions, they benefit the entire labor force, because non-union jobs must compete with union jobs for labor resources.

I don’t believe real change is possible until Americans change their mindset.  It is time for  Americans to change their mindset from one of maligning the victims, to one of compassion for the most helpless of victims – our children.  It is time for Americans to stand up to the corporate and billionaire interests that are running our country.  It is time for Americans to send a resounding message to our leaders that we will no longer buy their mindless rhetoric.

I, for one, am sick and tired of hearing politicians talk about “freedom” and “making America great again.”  I am sick and tired of hearing them invoke God and patriotism, while quoting the Pledge of Allegiance and The Declaration of Independence.  These are empty words that have no effect on me.  I don’t get teary eyed and nostalgic on cue.   Instead, I want to scream: “Freedom does not mean letting children go hungry!”  Making America great again should mean feeding these children, not giving obscene tax breaks to billionaires.   

The recitation of: “One nation, under God, indivisible, with liberty and justice for all,” shouldn’t be a shameless exploitation of “The Pledge of Allegiance,” used by politicians to manipulate a gullible public into supporting rhetoric designed to perpetuate policies that go against the interests of most Americans.  It should be a rallying cry for compassionate Americans to put their collective foot down and scream: “A country that believes in God and liberty does not allow 16 million of its children to go hungry!”
 


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Sources:

http://www.nccp.org/topics/childpoverty.html
http://www.nccp.org/publications/pdf/text_385.pdf
http://www.cbsnews.com/news/the-shocking-reach-of-us-child-poverty/
http://www.heritage.org/research/reports/2013/02/bush-tax-cuts-explained-facts-costs-tax-rates-charts
http://www.statista.com/statistics/200474/us-poverty-rate-among-children-under-18-since-1990/
http://www.truthfulpolitics.com/http:/truthfulpolitics.com/comments/u-s-job-creation-by-president-political-party/
http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-grow-ever-larger-as-slice-of-economy-as-wages-slide.html?_r=0
http://thinkprogress.org/economy/2011/06/30/258388/corporate-profits-recovery/
http://www.nytimes.com/2013/12/19/us/food-stamp-fraud-in-the-underground-economy.html
http://www.childrensdefense.org/library/PovertyReport/EndingChildPovertyNow.html?referrer=https://www.google.com/
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