Thursday, Jul 24, 2008
Apr 30, 1999 | The persistence of poverty throughout the nation's roaring economic recovery is "the great American paradox," Housing and Urban Development Secretary Andrew Cuomo said earlier this week. He was releasing a new HUD study that examines the Grand Canyon-sized gap between the stock-option rich and the urban poor.
Harvard anthropologist Katherine Newman studied that paradox up close in her new book, "No Shame in My Game," which draws a portrait of a group often hidden in our welfare-obsessed view of poverty: the working poor. Using poverty-strapped Harlem and the pseudonymous Burger Barn fast-food chain as her base, Newman and a team of Columbia University graduate student researchers studied the lives of minimum wage workers, who receive no benefits and often earn just enough money to disqualify themselves from government safety nets like food stamps and Medicaid.
Despite the common stereotype, Harlem's poor aren't all welfare cases -- 70 percent of the neighborhood's families have at least one worker. Newman and her researchers studied some of the neighborhood's "success stories" -- the people who beat the 14-1 odds of landing a job at Burger Barn. With the help of sympathetic restaurant managers, they also studied the dizzying number of applicants who didn't make the cut.
There are more working poor in America than welfare recipients, over 6 million nationwide. They are the people who work in the kinds of service jobs -- burger-flipping, housekeeping, childcare -- that most of us consider low-wage indignations. Most don't receive medical insurance of any kind, and something as simple as doctor visit can lead to financial catastrophe. Childcare is also a tremendous burden, with these families spending up to a third of their income on care. Safety nets are available to some, but they are seldom advertised and, in many cases, wrought with so many bureaucratic hurdles that only the most persistent are able to get access.
The benefits of one of the greatest periods of American prosperity ever -- with 18 million jobs created in the past six years and unemployment at a historic 40-year low -- are bypassing many urban neighborhoods, where demand for jobs often exceeds supply. Declining welfare rolls (caseloads have dropped 44 percent overall since 1993) will only exacerbate the problem. Indeed, a year-old HUD report on welfare caseloads and job-growth forecasts for 74 urban counties showed that during the next five years, as welfare recipients face time limits on their benefits, there will be a shortfall of 353,000 jobs. But HUD's latest report offers the kind of Cassandra-fueling detail conspicuously absent from the feel-good welfare-to-work success stories politicians are using to burnish their images these days.
While the national unemployment rate has fallen to 4.5 percent, it still hovers around 6 percent in the 50 largest urban centers. But rosier city-wide unemployment figures can often hide deeply impoverished neighborhoods, like New York's Harlem or San Francisco's Hunter's Point. New York City may have an overall unemployment rate of 7 percent, but that rate is often double in Harlem. A sixth of urban centers are strapped with unemployment rates 50 percent or more above the national rate. There has been a slight recovery in urban areas overall, but more than a third still had poverty rates of 20 percent or more (50 percent higher than the national average) in 1995.
Newman saw those statistics writ large in her Harlem study. A year after they applied, 75 percent of the 100 Burger Barn applicants Newman tracked were still unemployed -- not terribly surprising considering Harlem has a 15-percent unemployment rate. Just before the passage of the 1996 Welfare Reform Act, Newman's groundbreaking research was presented in Congress during hearings on the legislation. It was the first major evidence that illustrated the side effects that we could expect if welfare reform passed. President Clinton even cited Newman's work.
Rather than dwell on the hopeless statistics her research rendered and which other studies confirm, Newman offers some pragmatic solutions that could go a long way toward buoying the working poor. They include expanding existing tax credits and wage subsidies, providing government-subsidized childcare, improving health care access and creating Japanese-inspired public-private vocational education programs that would link students to jobs in the private sector and provide the skills needed for management-track employment.
Salon News recently spoke to Newman about the problems the working poor face and her policy prescriptions for them.
Why did you choose the fast-food industry and the pseudonymous Burger Barn as a window into the lives of the working poor?
The fast-food industry is the largest employer of first-time entry-level workers of any industry in the nation. It's really the canonical entry-level job. It may be even more important than the military as a gateway into the legitimate labor market. Also, I wanted to find an industry where it would be possible to find standardized work practices that are uniform from one shop to the next, so that that wouldn't be the explanation for why I found who I found on the work floor.
You state in your book that the largest group of Americans living below the poverty level is the working poor, not welfare recipients. Is there overlap?
There is overlap in the sense that most people who have been on welfare have had a work life at some point. It's actually a mistake for people to think of welfare recipients as people who have never been in the labor market. But my main interest was in people who had been consistently in the labor market. Some of these folks had experiences with welfare in the past, and many were living in households where someone else was receiving welfare.
I try to point out in this book that -- in comparison to other researchers who have argued that there are welfare recipients in one corner and "upstanding" workers in the other and they have nothing to do with each other -- they're intertwined in families and neighborhoods. And that's largely because you don't earn much more as a low-wage worker than you receive from AFDC if that's your first income. You can't make it on either one.
If you're in a household as a low-wage worker, you've got be attached either to other workers or to somebody who's getting state subsidies. Conversely, if you're a welfare recipient, you can't make it on that either. Chances are you're going to find either someone in your household who's working or someone related to you or a boyfriend or somebody who you can borrow money from.
Our service economy is creating lots of low-paying jobs, which seems to be spurring growth in the number of working poor.
Yes, they're increasing at a rapid rate because the service sector has almost-always paid lower than manufacturing. The service sector is very bifurcated, in fact it's probably a misnomer because it sometimes includes very high-wage computer programmers and it includes low-wage hospital attendants and everything in between. Part of the point of writing the book was not to condemn those jobs or even to condemn the economy for producing them, which is what some people would urge me to do. The problem isn't with the jobs; it's that for some people the jobs don't lead to a better job. That's what really differentiates the working poor from the rest of us.
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