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Disappearing poverty

Toym Imao, “Desaparecidos (Memorializing Absence, Remembering the Disappeared)” (2015)*

In international human rights law, a “forced disappearance” occurs when a person is secretly abducted or imprisoned by a state or political organization (or by a third party with the authorization, support, or acquiescence of a state or political organization), followed by a refusal to acknowledge the person’s fate and whereabouts, with the intent of placing the victim outside the protection of the law.

The most infamous forced disappearances have occurred in Spain (during and after the Civil War), Chile (after the coup by General Pinochet in 1973), Argentina (during the so-called Dirty War from 1976 to 1983), and the United States (as part of the so-called War on Terror).

Now, Donald Trump’s Council of Economic Advisers (pdf) is attempting to carry out a forced disappearance of poverty.**

The aim of the Council’s report is to make the case for “expanding work requirements among non-disabled working-age adults in social welfare programs.”*** In order to do so, the authors of the report attempt to show that (1) there is a large pool of non-disabled  working-age adults who are currently beneficiaries of the three major non-cash welfare programs (Medicaid, food stamps or the Supplemental Nutrition Assistance Program, and housing assistance) who can and should be put to work, (2) independence or self-sufficiency is undermined by participation in government anti-poverty programs, and (3) government assistance to the poor has become outmoded because poverty itself has virtually disappeared in the United States.

We’ve seen all these moves before. As Jim Tankersley and Margot Sanger-Katz explain, the numbers of adults who are beneficiaries of welfare programs but not working are likely exaggerated. For example:

The Center on Budget and Policy Priorities calculated this year that three-quarters of food stamp recipients work within a year of participating in the program. That report suggests that Americans often use assistance programs as bridges to a new job, after they have lost previous employment.

The administration’s numbers may be particularly exaggerated for Medicaid. Under the Affordable Care Act, many states expanded their Medicaid program in 2014 to include more childless adults whose incomes bring them close to the poverty line. But the report examines adults who were enrolled in Medicaid in 2013, before the expansion, when most adults who were signed up were either pregnant women, the parents of young children or adults with extremely low incomes.

According to the council, about 53 percent of adult, non-disabled Medicaid beneficiaries worked less than 20 hours a week. Using a different set of government data from 2017, the Kaiser Family Foundation estimated that 62 percent of such people had full- or part-time jobs. Another 18 percent lived in a household with another working adult. Council officials say the data set they drew upon, while older, is a better measure than the one Kaiser used.

Then there’s the argument about the extent of poverty in the United States. While the government itself reports that poverty is still a large and persistent problem within the United States (since according to the official definition the poverty rate in 2016 was 12.7 percent, and the rate according to the Supplemental measure was 14 percent), the Council chooses to redefine poverty in terms of consumption (based on the work of, among others, Bruce D. Meyer and James X. Sullivan).

And, voilà, poverty is disappeared!****

Finally, they invoke the shibboleth that expanded work requirements respect and reinforce “independence” and the “dignity of work.”

Back in 2012, I suggested we need to contest the meaning of dependence:

In particular, why is selling one’s ability to work for a wage or salary any less a form of dependence than receiving some form of government assistance? It certainly is a different kind of dependence—on employers rather than on one’s fellow citizens—and probably a form of dependence that is more arbitrary and capricious—since employers have the freedom to hire people when and where they want, while government assistance is governed by clear rules.

We can also deconstruct the term by turning it around: why is receiving non-cash benefits from the government a form of dependence but cash distributions of the surplus—to large corporations and wealthy individuals—supported by a wide variety of government programs, is not?

As for the so-called dignity of work, I can only repeat what I wrote just a couple of years ago: what advocates of getting people back to work

choose to overlook or ignore is that, in a world in which the majority of people are forced to have the freedom to sell their ability to work to someone else—in which, in short, labor power is a commodity—there’s no necessary honor or dignity in work. It’s a necessity, born of the fact that people need to earn an income to purchase commodities to sustain themselves and to pay off their debts. And the most likely way to earn that income is to sell their ability to work to a small number of other people, their employers, who in turn get to appropriate and do what they will with the profits.

As I see it, the attempt to disappear poverty is actually a thinly disguised effort to discipline and punish the poor and to convert everyone—poor and non-poor workers alike—into a giant machine for producing surplus for the benefit of a tiny group of employers and wealthy individuals.

Perhaps we need to follow the example of the mothers of Argentina’s “desaparecidos,” who 40 years later are challenging the government’s attempt to erase the memory of those terrible years and put the brakes on the continuation of trials. In the case of the poor working-class today in the United States, we need to make sure they and their deteriorating conditions of life are not disappeared and that a real anti-poverty program—a radical change in economic institutions—is enacted.

 

*The forty-three figures in the art installation by Toym Imao represent those left behind by victims of forced disappearance. Empty and hollow, each figure represents a year since Martial Law was declared in the Philippines. Instead of portraits and picture frames, the figures hold empty niches, signifying death, the lack of closure, the emptiness, the hollow feeling, and the gut-wrenching pain those left behind must deal with.

Absence remains an open wound. But despite it, the desaparecidos remain present in our hearts and minds. Despite efforts to eradicate their existence, they will never be forgotten.

**Kevin Hassett (Chair, from the American Enterprise Institute, who was appointed by Trump and approved by the Senate in a 81–16 vote on 12 September 2017), as well as Tomas Philipson and Richard Burkhauser (both appointed by Trump), are the members of the current Council of Economic Advisers.

***Kentucky Governor Matt Bevin offered up his state to approve work requirements for Medicaid benefits. Once Federal Judge James E. Boasberg rejected the Department of Health and Human Services’ approval of Kentucky’s plan, Bevin announced that he would deprive Medicaid patients of dental and vision benefits, effective immediately. The Trump administration has just revived its efforts to let et Kentucky compel hundreds of thousands of poor residents to work or prepare for jobs to qualify for Medicaid.

****This comes just after the United Nations Human Rights Council published the report by Philip Alston, its Special Rapporteur on extreme poverty and human rights, according to whom

The United States is a land of stark contrasts. It is one of the world’s wealthiest societies, a global leader in many areas, and a land of unsurpassed technological and other forms of innovation. Its corporations are global trendsetters, its civil society is vibrant and sophisticated and its higher education system leads the world. But its immense wealth and expertise stand in shocking contrast with the conditions in which vast numbers of its citizens live.

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Poverty of anti-poverty

The majority of government expenditures in the United States go towards social insurance and means-tested transfers.* And the good news is, they work.

According to recent report by Bruce D. Meyer and Derek Wu, Social Security cuts the poverty rate by a third—more than twice the combined effect of the five means-tested transfers. Among those transfers, the Earned-Income Tax Credit and food stamps (officially, the Supplemental Food Assistance Program) are most effective. All programs except for the tax credit sharply reduce deep poverty (below 50 percent of the poverty line), while the impact of the tax credit is more pronounced at 150 percent of the poverty line. For the elderly, Social Security single-handedly slashes poverty by 75 percent, more than 20 times the combined effect of the means-tested transfers.** Supplemental Security Income, Public Assistance, and housing assistance have the highest share of benefits going to the pre-transfer poor, while the tax credit has the lowest.***

And the bad news?

Even after all those expenditures, more than one tenth of Americans are still struggling to survive at or below the poverty line—12.7 percent according to the official poverty measure, 14 percent according to the Supplemental Poverty Measure.****

U.S. capitalism leaves such a large portion of the population in destitute circumstances that even massive public spending has not been able to solve the problem. In other words, anti-poverty programs work—but the mountain of poverty created by the American economy is simply too large to overcome.

But wait, it gets worse.

Every year, the federal government doles out billions in “tax expenditures” to corporations (especially those that allow multinational companies to delay paying U.S. taxes on their foreign profits and “accelerated depreciation,” effectively a tax subsidy for spending on machinery and equipment) and individuals (through deductions for retirement savings, employer-sponsored health plans, mortgage-interest payments and, sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow). According to the Center on Budget and Policy Priorities, the total of all federal income tax expenditures in 2017 was higher than Social Security, the combined cost of Medicare and Medicaid, or the combined cost of defense and non-defense discretionary spending.

The bulk of each year’s spending on individual tax expenditures is delivered in the form of deductions, exemptions, or exclusions.  The value of these tax breaks increases as household income rises: the higher one’s tax bracket, the greater the tax benefit for each dollar that is deducted, exempted, or excluded. As a result, these tax expenditures provide their largest subsidies to high-income people (27.5 percent to the top 1 percent in 2015), even though they are the individuals least likely to need financial incentives to engage in the activities that tax expenditures are generally designed to promote, such as buying a home, sending a child to college, or saving for retirement.  Meanwhile, moderate- and low-income families receive considerably smaller tax-expenditure benefits for engaging in these activities (only 22.3 percent for the bottom 60 percent of American taxpayers).

Eliminating those welfare programs for the rich would go a long way toward improving and expanding the anti-poverty programs for the nation’s poor.

Alternatively, the American economy could be reorganized so that it doesn’t generate such obscene levels of poverty in the first place, thereby eliminating the need for the endless debates about the size and nature of government programs to help the poor.

 

*Social insurance programs are available to all individuals who have experienced unfortunate circumstances or are aged. These programs include Social Security retirement and disability insurance, unemployment insurance, and Medicare. Means-tested transfers provide cash or in-kind assistance to only those with the lowest incomes. These programs include the Supplementary Nutrition Assistance Program (formerly, food stamps), Supplemental Security Income, and Public Assistance, as well as certain tax credits, housing assistance, and Medicaid. All told, according to my calculations (based on the historical tables from the White House Office on Management and Budget), these programs constituted 60 percent of all federal outlays in 2015, in addition to a large share of state and local spending.

**Another consequence of Social Security, as noted by Christina Gibson-Davis and Christine Percheski, is that the net wealth across the range of elderly households grew from 1989 to 2013 since “With stable income, fewer older people dipped into savings to pay their bills, and they had more money to invest”—in contrast to households with children most of whose wealth declined during that same period.

***The Supplemental Security Income program is a federal cash-assistance program specifically targeting individuals with low incomes and who are also aged (65 or over), blind, or disabled. Public Assistance broadly refers to benefits (often in the form of cash welfare) offered by state and local governments to needy families and individuals. An especially prominent program is the Temporary Assistance for Needy Families program, which is federally funded but run by states and targeted to low-income families with children. The Earned-Income Tax Credit is given to individuals and couples with positive earnings, especially those with qualifying children. Federal agencies as well as states and localities offer a wide variety of housing assistance programs, including rental houses or apartments that are managed by local housing agencies and funded by the Department of Housing and Urban Development and vouchers to tenants who are free to choose any housing that meets minimum health and safety standards.

****The supplemental measure extends the official poverty measure by taking account of many of the government programs designed to assist low-income families and individuals that are not included in the official poverty measure.

 

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