Dr. Myers-Lipton's lecture at the Dean's Symposium, "Poverty: Problems and Solutions," San José State University, October 6, 2010

How to Solve the Unemployment Crisis and End Poverty

Dean Hegstrom, distinguished colleagues, students.

It is an honor to speak at this symposium, and to address one of the pressing social issues facing our nation, which is our extremely high rate of poverty, and how it is possible to end this scourge.

Without much notice, our already high rate poverty has been inching up to record levels at the rate of 1 million people each year for the past decade, so today, we now have 39.8 million people living in poverty. What this means to our families is that 19% of our children are growing up in poverty, which to me, and I hope you, is a moral outrage.

In addition to this increase in poverty, inequality has also increased to record levels, as the gap between rich and poor has increased.

And more recently, unemployment has increased to 15.1 million people. There are more people unemployed today than during the Great Depression. Clearly, America is in crisis.

We don’t have time today to discuss the reasons for this poverty and inequality crisis….suffice it to say that it has a great deal to do with:

• globalization and the outsourcing of jobs;
• a dual economy that produces both high-end jobs, as well as low-end jobs;
• a conservative philosophy that has dominated U.S. politics for the past 30 years, with its goal of keeping minimum wage low and limiting social programs;
• and a relentless attack on labor unions.

Now, we are living in a unique time, as the nation recently suffered through Hurricane Katrina, one of the great disasters of our history—killing 1,874 people—the majority of which were over 65, destroying 250,000 homes and 320 million trees. In addition to the destruction that Hurricane Katrina brought, it exposed to nation and world our poverty crisis.

For a brief moment in time, all the world had a chance to see that the USA was not paved in gold, but rather, it showed how America is in fact the leader in industrialized world when it comes to poverty rates.

Yet, poverty has NOT just plagued this generation, but rather has been a defining issue, from the founding right up to today. Unquestionably, we pay a price for our high rate of poverty, as it damages the individual and the larger society.

Our poverty has led to:

• high rates of infant mortality, crime, violence, divorce, and lead poisoning,
• it has also led to lower test scores in school and lower life expectancy.

So what to do about reducing, or even ending poverty?? I would like to highlight two of the ideas that have been the most successful in our nation’s history. Both of them are based in work. The first idea creates living wage jobs, while the 2nd idea makes sure that work is rewarded.

The first recommendation to reduce poverty is public works. During the New Deal, the USA reduced poverty for millions during the Great Depression by providing them with jobs. The New Deal public works of the CWA, PWA, WPA, and CCC—this alphabet soup of programs--injected $336 billion in 2008 dollars into the economy, hired over 10 million people, and in combination with other New Deal initiatives cut unemployment from almost 24% in 1933 to 10% by 1940.

This 13.6% decrease was the single greatest drop in the unemployment rate in U.S. history. In addition, reducing unemployment and poverty, New Deal public works built or repaired over:

• 2,500 hospitals
• 9,000 parks
• 43,000 schools
• 125,000 bridges
• almost 1 million miles of highways & roads,
• they stocked 1 billion fish
• and planted 3 billion trees.

Public workers literally built the infrastructure that we still utilize.

Today, with our unemployment and poverty rates at record levels, public works can once again help to solve our social problems. Here at San José State University, I have been working with my students for the past 3 years on this idea of public works.

In the wake of Hurricane Katrina, my students and I proposed a modern-day civic works projects for the Gulf Coast. We renamed public works “civic works,” since the body politic didn’t seem to be working for the people of Louisiana and Mississippi.

Today, 35 Congress members and over 250 regional and national organizations are advocating for the Gulf Coast Civic Works Act (HR 2269), HR 2269 would create 100,000 green and living-wage jobs and training opportunities for Gulf Coast residents and displaced citizens to rebuild public infrastructure damaged by Hurricanes Katrina and Rita, and restore the wetlands.

In addition to creating living wage jobs, Civic Works is a powerful tool for poverty reduction as it:

• 1st: Allows for citizen participation in Local Advisory Boards so that regular people are involved in the decisions about what gets built in their community
• 2nd: Supports equitable economic development (first source hiring, 20% apprenticeable jobs, and the protection of people of color, women, and immigrants)
• 3rd: Provides job training and hiring of local contractors and non-profits for long-term development
• 4th: Focuses on environmentally sustainable, green construction jobs, and expands public works to include child and elderly care, teaching, and public health projects
• 5th: Provides a dynamic, hybrid model of federal oversight and local control

Importantly, we see the GCCW Act as a model for the rest of the nation about how to reduce poverty and rebuild infrastructure by using a bottom-up model of community development. Plans are already in the works for a California Civic Works Act based on HR 2269.

The 2nd idea I want to recommend to decrease poverty are income transfer payments in the form of Earned Income Tax Credits. Income transfers were used successfully during the War on Poverty, as they played a major role in decreasing poverty from 36 million or 19% of the total population in 1964 to 24 million people or 12% in 1969.

This 7% cut in poverty, which came as a result of income transfers through Social Security and welfare, was one of the greatest decreases in poverty in the history of the nation. More recently, President Clinton expanded the Earned Income Tax Credit, so it now provides $36 billon a year to low-wage workers, and it reduces poverty by 5 million people a year.

To make work pay, I would advocate that the EITC would be expanded again, but instead of the average payment being $1,050, I recommend that it is targeted at the middle class, so it truly lifts people out of poverty. The idea is that if you work, you should not make a poverty wage, but rather a living wage, and the government would in essence provide a tax rebate to reward work.

You might ask, where would we get the money for Civic Works and the Earned Income Tax Credit? I would argue that if we, the American tax payer, can bail out banks and mega-firms to the tune of $2 trillion dollars, we can surely spend much less to end poverty in America.

For me, reducing, and someday ending poverty, is not just a sociological exercise, but it is a moral imperative! It is immoral to have 40 million people in poverty in the richest country in the world…and it is immoral that the US has 1 in 5 children living in poverty.

It must be stopped, and Civic Works and the Earned Income Tax Credit targeted at the middle class can help to end this scourge of poverty.