Fighting Urban Poverty
July 7, 2008 11 Comments
A few weeks ago, our good friend Didionsmommy asked the following question:
Finally, I would like to hear some progressive republican plans for helping poor families remain intact and able to sustain themselves healthfully. I’ll make it easy: how about a relative rather than absolute assessment of the poverty level … how about subsidized child care … how about universal health care …
The only thing i’ve heard from republicans in the last eight years was a half-hearted push to establish a “let’s get married” education program.
I apologize for the slow response. I actually emailed the esteemed Joel Kotkin for some reference material (he replied to me the last time I emailed him) but I guess he has been too busy being a genius and all that. I’ll forgive him since he’s sort of my hero.
So, on to the question we have been charged with…
Didionsmommy suggest some ideas that might ‘[help] poor families remain intact and…sustain themselves healthfully’. I would agree with her that well-worn ideas like re-assessing the poverty level, subsidized childcare and universal healthcare are indeed a good way to ‘sustain’ poor families. So to answer her question, if our goal was to sustain things, I would do those things she mentioned and stop there. But what if we want to actually move forward i.e. progress? It’s going to take more than liberal social programs geared towards maintenance of poor urban population. Progress is going to depend on a radical shift in demographics and an exodus away from dense urban centers where poverty has its firmest grip.
First, let’s think for a minute about what is available to families in urban areas. In most mid to large cities so-called urban renewal has created new jobs, but as we have lamented before these jobs are primarily in the service sector and they do not provide any upward mobility. Secondly, in dense urban areas we have the greatest concentration of social welfare recipients. We also see there that the culture itself perpetuates a povery-level mentality.
For over a half a century, the urban centers of most American cities have served one primary purpose and that is to segregate our poor citizens from the rest of us. That is why housing projects are built there and not in the middle of suburbs. That is why suburban communities fight Section 8 or even rental properties in most neighborhoods. If we are ever going to see progress on the plight of our urban poor, we must help them break free from these geographic and socio-economic restraints.
The solution seems simple enough. How do we help poor families? We get them the hell out of our urban areas. How do we do that? That is a much harder question to answer.
In his latest piece Joel Kotkin explains that, “…during the past six years, roughly 90 percent of all growth in metropolitan areas has taken place in the suburbs.” This means both population growth as well as economic growth. And this growth has taken place despite rising gas prices and higher home prices than more rural areas. During the 80′s and 90′s companies that demanded skilled labor began to understand that the workers they needed resided in the suburbs and so many relocated to those areas. So there, my friends, is where most of the good jobs are. So now we know the destination, but we must wonder, how do we get the workers there?
First we must go back to the program we advocated in our union piece of a government supported, co-funded partnership between lower and higher-skilled unions to train workers for better jobs. Once trained, they will be ready to be competitive in the suburban job market. But we will need additional incentives to draw them out of urban areas.
Transportation is one obstacle. To overcome this we must provide additional funding to public transit companies to help them maintain or even increase services in the face of rising gas prices. Most suburban areas are arranged in a circular shape and transit companies should provide as many routes as possible to move workers within this periphery. We must also support research and funding for light-rail systems where applicable. I also advocate a significant increase of the tax credit on charitable donations of automobiles.
After transportation we must support additional funding for expansion of suburban schools. This is not for curriculum changes, not for new programs (that discussion is for another post). This money would simply be for more teachers, more classrooms and additional infrastructure to be able to support an influx of new families into these areas.
One large obstacle to drawing poor families out of cities is that they perceive us to be asking them to give up their cultural ties to that area as well. Their churches, their places of recreation, their relatives are all in those places and despite the negatives, it is enough to make many stay there. This obstacle may be the hardest to overcome and I honestly struggle for the answers. I think we could make some progress by creating more community recreation centers or by providing grants to the YMCA to lower membership costs or waive some fees all together. These are some institutions which have appeal to urban poor populations. I’m sure there are more, but this is one area where community input is vital.
The last major obstacle is the hardest and that is housing. Where do these people live once they leave urban areas? The reality is that the only way many can migrate into the suburbs is with government assistance of some kind initally.
There is already plenty of Section 8 housing in the suburbs. The problem is that this becomes a mini-representation of the urban areas because it tends to be concentrated. Why? Because existing homeowners fight the addition of Section 8 housing to new and exisiting housing areas for the same reasons they want poor populations contained in city cores. What the government must do again is regulate. In my plan I would seek to find the ideal blend of a percentage structure and tax credits until we reached a point where existing residents would cease fighting Section 8. Let’s say that point is 5% Section 8 housing and a $500 yearly tax credit for residents who allow it in their neighborhood. Then what? We must also require this housing to be properly spread out and those under Section 8 must have complete anonymity.
I firmly believe that it has been proven that when lower-income families are placed among those of a slightly higher income, they seek to rise up, not drag their neighbors down. Lower income families benefit from being around middle class families. It has also been proven that their children benefit from being in middle class schools, regardless of racial make-up.
I would also suggest that the government provide grant programs for apartment complexes willing to renovate their property and convert to a 95/5 split (or some other % structure). The above logic of this approach applies as well though it is slightly harder to maintain the proper distribution of subsidized housing in apartment complexes.
Lastly, we revisit a point we will continue to beat to death and that is a huge government investment in infrastructure. This will provide additional jobs and give lower income families a chance to break out of urban areas.
With smart, Progressive changes and regulation we can provide incentives for both lower income families to migrate and for middle class families to accept them. The tricky part if finding the right balanace that will not just move a welfare culture but instead will create breakout momentum for our impoverished citizens.
Hello, Progressive Conservative.
I disagree entirely. I disagree on the very premise.
I don’t believe that it is the legitimate role of the government to determine which families should remain intact and which ones should not.
I’m not opposed to the programs mentioned– child care, health care– only in delineating ‘the poor’ as to be their beneficiaries. The same programs should be available to working class and middle class people as well, if they are to be offered at all.
Which is really an expansion of the social contract.
Still, I remain opposed to the premise.
I’m not opposed to the programs mentioned– child care, health care– only in delineating ‘the poor’ as to be their beneficiaries. The same programs should be available to working class and middle class people as well, if they are to be offered at all.
Which is really an expansion of the social contract.
You and I are in agreement there. I think a child care to work or a child care to school program is a worthy investment of public dollars. Sort of like Pell Grants. One major difference between Progressivism and Liberalism is that while both movements are interested in helping people, one is about a hand-up and one is more concerned with maintaining the status quo. I believe liberalism has always been guilty of under-estimating human potential and that is perhaps my biggest criticism of it as an ideology.
this is very exciting! i haven’t yet had a chance to read your post thoroughly, but i did want to let you-know-that-i-know you have written it … hopefully, i can get a response to you in the next few days.
thanks so much for continuing this conversation! i think it’s great!
Poor people are not the problem. The structures that create poverty are the problem. Poor people are paying large shares of their income to be able to live in cities, where there is generally work available, and where work is accessible (at least in theory) via public transportation. Programs to encourage them to move to the suburbs are counterproductive.
The problem, I think, is that most of what they are paying their landlords for is not for apartments with lots of amenities, rather it is mostly the locational value, and they put up with not having many amenities. (Equally true of the rest of us. Those of us who are homeowners are paying off the previous owner of our property, and if we’re in a healthy metro area, the majority of that payoff is going not for the buildings or their amenities, but for the locational value.)
Paying more for a good location is not a bad thing in and of itself. The problem is that we are paying the wrong party! We’re paying the landlord, or the previous owner, neither of whom made that property valuable. They constructed the house, or bought it from the person who constructed it, or one in a long line of previous owners. No problem there. But houses and other buildings are depreciating assets — 1.5% per year, according to a Federal Reserve Board study (May, 2006). What appreciates is land value, and it appreciates for reasons that have nothing to do with its owner. Rather, it appreciates because of common investment in infrastructure and services; because of population increases, whether through increased fertility, decreased mortality, immigration, or people being drawn by a healthy economy, good jobs, cultural amenities, whatever; and because of improvements in technology (e.g., air conditioning made the sunbelt a desirable place to live, enriching those who owned land there).
But we’re paying the wrong party! Our tradition, our tax structure, permits that locational value to lodge in the pockets of the landholders, large and small, and then turns around and taxes our sales and our wages to support the services and infrastructure that support land value! So some of us pay twice — rent and dumb taxes — and landlords get rich; landholders get rich.
Work doesn’t pay nearly as well as landholding does. And part of why wages are so low, jobs so scarce, is that an entrepreneur must first pay off the previous or current landholder, before he can spend a dollar on inventory, wages or other things which will enhance his business. No wonder housing is scarce and expensive; no wonder jobs are scarce and we chase wages downward.
The alternative? Shift our taxes off productive effort: houses, buildings, wages, sales. Shift our taxes onto land value. The vacant and underused land in our cities and first-ring suburbs will blossom with buildings which provide housing for people of all ages and stages, all income levels; which will create venues for entrepreneurs to have the opportunity to work out their business plans. Jobs will be chasing workers, driving wages upward — and the landlord will no longer be the recipient of the free lunch we’ve been funneling his way. Those who work will reap.
The only losers will be land speculators, and those who expect the young and the poor to pay them for access to something just as essential as air and water: land, particularly urban land!
THAT is how we fight urban poverty. And suburban poverty. And rural poverty. Programs are temporary measures and can only be funded enough to help a few of us. We must get at the root of the problem if we’re serious about ending poverty.
Check out TR’s platform at http://www.wealthandwant.com/themes/Roosevelt_T.html.
He got it!
also: http://www.wealthandwant.com/docs/TR_and_lvt.htm
LVTfan,
I agree that we have a backward tax system that taxes improvements on a property verses the property itself. You are right that it equates to a double-tax. It’s actually more of a triple tax when you also consider sales tax on the goods purchased to make the improvements.
While this would help us develop dead zones in various areas and reduce sprawl, I do not agree that this is the only solution to fighting urban poverty. It ignores the reality of demographic changes that have already put the majority of skilled workers in the suburbs. THAT is where the jobs are and if your plan is inacted uniformly, what incentive is there for companies to leave those workers and build in the cities, when they could enjoy the same benefits where they are (also with presumably more space to keep building)?
The beauty of a city for most employers is that they have access to a 360 degree pool of workers, as well as to a similar pool of customers (assuming there is some foot-traffic, face-to-face aspect to their business).
A company located in the NYC suburbs draws employees from a smaller pool than does a company located in Manhattan. Depending on the nature of their business, that may work very well for them. (They may love it, since they compete with fewer potential employers to keep their employees, and therefore need to pay them less. The inconvenience of moving or the threat of a long commute helps keep them there.)
My sense is that for people with school-age children and some disposable income — say, the top 1/3 or so of us, within any particular region — that much of what draws people from city to suburbs relates to the children: being able to afford a home with a bedroom for each child, AND being able to be reasonably assured of schools where teachers get to teach instead of first needing to be social workers for children whose families simply lack sufficient income to meet their most simply defined needs.
If we could assure people that their children could receive a good public education in the city, and set things up so that housing was more affordable, up and down the income spectrum, many more people with young children would not desert the city for the ‘burbs. Would some still want the house with a half-acre lawn and a picket fence for some portion of their lives, even if it came with a 60- or 90-minute one-way commute? Absolutely. But if they knew they could find affordable, technologically modern, comfortable, appealing housing in the city, in a school district in which they were comfortable that their children could receive a good education, I’m betting that many would happily take the tradeoff.
And that is the only way we’re going to solve some of our most pressing problems, including sprawl; long commutes which use fuel, time, money and produce pollution we can’t afford; large shares of income going to pay for housing, for expensive fuel for old-technology homes — and then dumb taxes on top of that (paying twice/thrice); low wages; riches to be made on speculation in land.
Non-radical solutions haven’t paid off. Or rather, they haven’t paid off for the bottom 95% of us. We’ve got to see the root, and devote our focus to eradicating it!
I offer this as something of a recap.
Maybe I’ll make some suggestions or observations at the end of it if it doesn’t run too long.
Basic Economics:
Five factors of production: land, labor, human capital, physical capital, and entepreneurship.
A lot of time has been given here discussing the taxing of land and improvements. I’ve looked at recent listings where the asking price for a house is around $130,000 and the value of the land is listed as $5700.
So, of course the improvements are going to be taxed.
Taxing unimproved land at a lower rate assists in development.
It also assists farmers and ranchers.
Other than that, the one is land and the other is physical capital. These are two separate factors of production.
The issue of stagnant wages is an old one, being primarily consequent to the economic policies of JFK and his group of neo-Keynesians, who set the precedent for the use (and over-use) of the monetary trickery of ‘sticky wages’ to drive up the stats for economic growth. This same policy has been used by every administration following.
And yes, we need to do away with that.
One of the basics of economics is that labor is always in the process of becoming human capital.
I suppose the question is properly one of how we might assist labor in the process of evolving into human capital.
Transportation is necessary, yes, because this is the demarcation line of the circle of opportunity.
Efficiency of transportation is properly a measure of opportunity costs that depresses overall compensation.
Now, labor most often evolves into human capital through training, whether on-the-job training or formal classroom experience.
I would say that a certain measure of each is far more effective.
It would seem then that the key would be in providing enough classroom experience to where a person might procure employment to gain additional training. It looks like the most effective way, and the most cost efficient method.
Still, we have programs in place to do such things.
The problem then is one of the people that need to take advantage of those programs simply aren’t doing it.
I think a lot of this is due to the deterioration of employment conditions more than anything else.
The two types of jobs most plentifully available are those that have few hours and barely enough to scrape by and those that have 60 to 70 hour weeks and enough to get ahead.
It’s that time/money continuum.
No concrete solutions.
If we could assure people that their children could receive a good public education in the city, and set things up so that housing was more affordable, up and down the income spectrum, many more people with young children would not desert the city for the ‘burbs.
LVT Fan,
I don’t know if you’re familiar with Richard Florida, but you make some of the same points.
I see two flaws in the above statement.
1) People aren’t ‘desert[ing] the cities for the suburbs’. They were never there to begin with.
2) Your entire premise ignores over 50 years of trend in American lifestyle patterns.
The suburbs are here to stay and they are going to continue to be the place where the majority of Americans prefer to live for a variety of reasons. You are right that kids drive some people’s desire for more elbow room in the suburbs, but this is also the dream of plenty of people without children. Americans just prefer that lifestyle.
I have no problem with urban renewal in theory, but it’s not being done intelligently and it’s just creating a playground for the upper middle class, not a true community where average Americans can live and function. Even if that changes, I just don’t see a shift in American preferences to favor cities.
I want to reiterate I think this is an awesome discussion. (I also want to thank you, P.C., for considering me a “good friend.” I like that!)
***
P.C., you use one phrase of mine to characterize my position and subsequently to launch your own. You quote “sustain [poor families] healthfully,” and then you seem to equate the phrase with my meaning “maintain the status quo.” That, certainly, is not what I mean. (I will accept responsibility for “sustain.” It likely was not the best word choice; “live” is better.) The solutions I mentioned cannot be construed as merely maintaining the status quo or the stereotypical liberal throwing-money-at-the-problem. Rather the suggestions I made call for a complete revolution in American social and economic values. (Incidentally, I do not consider these “well worn ideas” for addressing poverty in the U.S. because, in fact, they have never been instituted in a national setting.)
First, let’s get some statistics together so we know who is poor …
According to the 2000 census (http://www.census.gov) …
Total population: 281,421,906
Individuals living below poverty line (1999): 33,899,812 (12.40% total pop.)
White population: 211,460,626 (75.14%)
White indiv. below poverty: 18,847,674 (55.60% indiv. below poverty)
Black population: 34,658,190 (12.32%)
Black indiv. below poverty: 8,146,146 (24.03%)
Hispanic population: 35,305,818 (12.55%)
Hispanic indiv. below poverty: 7,797,874 (23.00%)
Asian population: 10,242,998 (3.64%)
Asian indiv. below poverty: 1,257,237 (3.71%)
While proportionately, blacks are the most impoverished ethnic group (followed closely by Hispanics), whites represent, by far, the largest number of poor individuals in the nation (55.60%), outnumbering both blacks and Hispanics. I wanted to know if poor whites lived in urban centers, and I thought, if they did, we would find representation in the two largest cities in the country: New York City (which includes all five boroughs) and Los Angeles. (Because Los Angeles city residents account for less than one-half of densely populated Los Angeles County, I also looked at county-level statistics.) Here is what I found:
New York City
Total population: 8,008,278 (2.85% national total)
Indiv. below poverty: 1,668,938 (4.92% national total; 20.84% nyc)
White population: 3,576,385 (44.66% nyc)
White indiv. below poverty line: 523,487 (2.78% national; 31.37% nyc)
Los Angeles (city)
Total population: 3,694,820 (1.31% national total)
Indiv. below poverty: 801,050 (2.36% national total; 21.68% l.a. city)
White population: 1,734,036 (46.93% l.a. city)
White indiv. below poverty line: 281,133 (1.49% national; 35.10% l.a. city)
Los Angeles (county)
Total population: 9,519,338 (3.38% national total)
Indiv. below poverty: 1,674,599 (4.94% national total, 17.59% l.a. county)
White population: 4,637,062 (48.71% l.a. county)
White indiv. below poverty line: 607,313 (3.22% national; 36.27% l.a. county)
The two largest cities in the u.s. account for only 4.27% of poor whites in this country. (New York and Los Angeles County account for 6% of same.) Remember, whites make up 56% of individuals living below the poverty line. Where are the majority of American poor living? I suspect poor whites are spread fairly evenly across the country, kind of like cake frosting: There will be peaks in areas, but the whole cake is covered. Thus, to minimize the effects of poverty, we need programs that look beyond only the largest cities in the country.
To test my hypothesis, I decided to pick three states to look at more closely: Kansas, Kentucky, and New Mexico. All three states can be described as “middle American” sorts of places; none has a city with a population larger than 500,000, and P.C. is familiar with Kentucky, while I am familiar with both Kansas and New Mexico. (I grew up in Roswell: enter U.F.O. joke here.) In addition to looking at the states, I looked at the two largest cities in each.
Kentucky
The state has 1.44% of the nation’s population and 1.83% of the nation’s poor. Kentucky is 90.08% white, and whites make up 83.88% of the state’s poor. the two largest cities are Louisville and Lexington. Louisville has 6.34% of the state’s population and 8.66% of the state’s poor. It is 62.94% white, and whites make up 38.97% of Louisville’s poor. Lexington has 6.45% of Kentucky’s population and 5.15% of its poor. The city is 81.04% white, and 65.44% of its poor are white. Kentucky’s two largest cities account for 13.81% of the population and 12.79% of the state’s poor, but only 8.03% of poor whites.
Kansas
The state is small, accounting for less than one percent each of the nation’s population and poor. it is 86.07% white, and whites comprise 71.67% of the state’s poor. Wichita is the largest city in Kansas, by more than double, with 12.81% of the state’s population and 20.57% of the state’s poor. Wichita is 75.20% white, and 49.70% of its poor are white. The next largest city in Kansas is Overland Park, which is a relatively affluent suburb of Kansas City (and is a few thousand people larger than Kansas City, Kansas). Overland Park has 5.55% of the state’s population and 2.56% of the state’s poor. it is 90.65% white, and whites make up 72.26% of overland park’s poor. Yet, while Wichita and overland park comprise 18.35% of Kansans, they account for only 12.08% of poor whites.
New Mexico
Like Kansas, New Mexico accounts for less than one percent each of the nation’s population and poor. the state is 66.75% white, and whites make up 50.77% of its poor. Albuquerque is the largest city, by a factor of six. it has 36.95% of the state’s population and 18.13% of the state’s poor. The city is 71.59% white, and whites make up 57.93% of its poor. The next largest city is Las Cruces, with 6.12% of the state’s population and 5.11% of its poor. Las Cruces is 69.01% white, and whites make up 57.49% of the city’s poor. The two cities comprise 43.06% of New Mexico’s population, but only 23.24% of the state’s poor (13.44% of poor whites).
Granted these data are eight years old, but I suspect today’s population picture is not much different, proportionally speaking. At the risk of belaboring the point, I’m trying to emphasize, with data, that the poor are everywhere. They are most visible in our large urban centers, but they are also already in our suburbs, our towns, our rural areas. Of course, I will never argue against plans that provide incentives to developers and employers to house, train, or hire the urban poor. I passionately advocate for programs that substantively address inequities in education quality. Also, I am a huge proponent of clean, efficient public transportation.
But if we, as a country, truly want to address poverty, we need programs that provide support in areas that cost individuals the most: physically, emotionally, and financially.
I return to my original suggestions: The United States ought to provide its citizens with universal healthcare, subsidized childcare, and a relative rather than absolute measure of poverty.
Relative poverty measure
In 1999, an individual was considered below the poverty line if he or she earned $8,240 (gross). (http://aspe.hhs.gov/poverty/99poverty.htm) If an individual received $8,300 in gross income, he or she would NOT be considered below the poverty line and, therefore, ineligible to receive the breadth of benefits available to individuals reporting $60 less in income. I challenge any reasonable person to prove a person earning $8,300 is operationally less poor than someone earning $8,240, but this is exactly what an absolute measure of poverty implies. While we’re at it, does $8,240 have the same purchasing power in Los Angeles as in Wichita? The federal poverty guidelines say yes.
A relative poverty measure will take into consideration such variables as region-specific costs of living, what expenses (outside of the consumer-price index’s “bread basket”) the individual has, and for families, what childcare expenses exist. Below is an excellent resource for more information on absolute vs. relative poverty measures:
http://www.nap.edu/html/poverty/
In lieu of reading the book, here is the executive summary of same:
http://www.nap.edu/html/poverty/summary.html
Subsidized childcare
Related to the need for a relative measure of poverty is the need for subsidized childcare. Our post-industrial economy has made it almost imperative for families to have two incomes. One-income middle-class families are possible, but (at least in my current personal experience) such an arrangement requires frugality and careful budgeting. In two-income families, childcare is a substantial expense; in single-parent families, childcare is a nightmare. Most single-parent families are female-headed. The 2000 census reports 26.5% of female-headed families lived below the poverty level; 46.4% of female-headed families with children under age five lived below the poverty level. In order to secure the necessary education and training to further secure a job that pays enough to live healthfully, poor, single mothers need dependable, affordable childcare.
Guess who else needs dependable, affordable childcare? Middle-class families. Anecdotally, I cannot find a job in the area in which I live that would provide adequate salary to offset childcare expenses enough to warrant my returning to work.
Universal health care
I suspect no one will argue that it is a dangerous proposition to be without health insurance in today’s society. No one can argue, too, that the poor are disproportionately unhealthy: the physical and emotional stress of being poor, dismal nutrition, lower educational attainment, lack of financial resources to secure necessary treatment when ill … all of these variable (and myriad more) compound the sickliness of the poor.
And I’ll ask the same rhetorical question …
Guess who else needs dependable, affordable health care? Middle-class families. Again, anecdotally, every year, my husband and I review his employer’s ever-tightening health care plans and calculate our out-of-pocket expenses, and every year, the benefits shrink, and our costs increase. I know we are not alone when we feel chest-tightening anxiety over health care costs.
Also, because universal health care means healthcare for all citizens, underserved and under-identified groups (like poor whites) would have access to the care they need.
Why are these three suggestions revolutionary?
Because implementing them requires a commitment to an expanded socialism. We, as a country, are easily willing to provide subsidies and welfare to corporations and industry sectors, but we are conversely unwilling to provide the same level of support to our citizens. Implementing my suggestions would require such an investment (perhaps at the expense of existing “corporate welfare”). Specifically with respect to universal health care, the revolution requires our society avow that while we participate in a capitalist economy, there are areas in which rampant billion-dollar profit-taking is not acceptable, namely in the health care sector.
Thanks again, P.C. for continuing this discussion. I really appreciate, too, the opportunity to participate!
you should check out the book Place Matters: metropolitics for the twenty-first century by Peter Dreier, John H. Mollenkopf, Todd Swanstrom.
Amanda
http://amandadavenport.wordpress.com