Low-Wage Nation: Poverty and Inequality Are Threatening Our Democracy

by Peter Edelman

With its catchy “We are the 99 Percent” slogan, the Occupy movement focused millions of Americans on our nation’s chronic inequality. As that movement regains momentum, it must pay more attention to the whole 99 percent. (palmspringsdude/Flickr)

We certainly should worry about how the wealthiest 1 percent of Americans isn’t paying its fair share of the cost of running the country. But we should be just as worried about how people at the other end are doing.

It’s not just about the continuing wave of foreclosures. Millions of people are stuck in low-wage jobs that don’t pay enough to make ends meet. And millions more live on incomes so low that it’s hard to imagine how they survive.

Low-wage work is a pandemic. A third of our population ekes by on less than $36,000 for a family of three. That’s 103 million people living on less than twice the poverty line, but most of them technically aren’t poor or don’t consider themselves poor. Yet they struggle every month to make ends meet and are one medical emergency or protracted illness away from bankruptcy.

Why so much low-wage work? Because over the past 40 years, well-paying industrial jobs disappeared, unions lost much of their clout, the minimum wage stagnated, and the field of competition in many areas became globalized.

The result: half of U.S. jobs now pay $34,000 or less a year. A quarter of U.S. jobs pay less than $22,000, the poverty line for a family of four. And the wages for those jobs have been stuck for four decades. Today, they pay only 7 percent more than they did in 1973.

Most families cope by having both parents work, but the rising number of single moms means that millions of households have just one possible worker. It’s no wonder that 42 percent of single-mother families with children under 18 are poor.

Meanwhile, our safety net is in tatters at a time when 20.5 million people have incomes that amount to less than $9,500 a year. That’s half the poverty line, which is currently pegged at $19,090 for a family of three. This number grew by almost 8 million between 2000 and 2010. Why? Cash assistance for the mothers and children who need it in many states has been scratched.

Many politicians still crow about the supposed “success” of Temporary Assistance for Needy Families (TANF), the threadbare national welfare program that replaced Aid to Families with Dependent Children during the Clinton administration.

At last count, Wyoming has a total of 617 people enrolled in its TANF program. The kids it covers comprise just 4 percent of the children in the state’s poor families. Twenty-five states now provide less than 20 percent of their poor children with this kind of support.

Nationwide, the percentage of kids covered by these benefits has declined to 27 percent from 68 percent before President Bill Clinton and the GOP-controlled Congress “reformed” the welfare system. As a result, we have 6 million people whose only income is from food stamps. Food stamps provide an income of a third of the poverty line — about $6,000 for a family of three. This is the most urgent problem we face.

Rep. Paul Ryan and his House Republican colleagues want to make matters worse. They’re touting a budget that would slash virtually every program that helps low-income people. Their rationale: we’re helping too much.

But the House Republicans evidently think we’re not helping the rich enough — their budget proposes massive new tax cuts for the wealthy. Robin Hood would turn over in this grave.

Seeing that work produces a decent income and that our people are prepared for the jobs of the future is cost-effective and will benefit corporate bottom lines. But there’s an even more fundamental reason to act. The concentration of power and wealth at the top and the sense of political exclusion and impossibility at the bottom threaten a new order that’s antithetical to the animating ideals of our country. Poverty and inequality are threatening our democracy.

This work is licensed under a Creative Commons License


Peter Edelman teaches at Georgetown University Law Center and co-directs the Georgetown Center on Poverty, Inequality, and Public Policy.


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