“What we’ve done in America is design a system that rewards people for not working and locks them into poverty. It’s a tragedy of the first order …”
There are two factors, but one is a statistical phenomenon: The federal government does not count non-cash benefits. And so for example, food stamps, although they contribute substantially to low-income people’s income, aren’t counted. Section 8 housing is not counted. Medicaid is not counted and so on. The fact that the comparisons show a drop doesn’t mean they have less disposable income. It means they have less earned income.The second factor is of major importance and is really why much of this is occurring. There was a study put out by the Brookings Institution here a few years ago which pointed out there were three keys toward staying out of poverty. It was almost a complete correlation. If you got a job, if you did not have children out of wedlock and if you at some point in your life got married, you avoided poverty. The phenomenon that you’re seeing is a huge explosion of children born out of wedlock particularly in the big cities. It correlates exactly to the start of AFDC (Aid for Families with Dependent Children) where we begin making cash payments to people who had children out of wedlock. Most states operate that in a way so that the more children you have out of wedlock, the more money you get. If you chart it, I know this is painful to hear, but if you look at the statistics on it, it correlates exactly with the start of AFDC payments.
What we’ve done in America is design a system that rewards people for not working and locks them into poverty. It’s a tragedy of the first order because the vast majority of people who are in poverty don’t want to be on welfare. They want jobs.
It’s a critical element for the child to have a father identified and at least know who he is and have the father feel some responsibility for the child. That makes a huge difference in raising a child.
The challenge here is how to help people. The vast majority of people caught in the welfare trap don’t want to be there. I think you redesign the programs so they help people build job skills and they help people build self-confidence, rather than demeaning them. That means they do something for their check. It means that they get training or they take a job, at least a part time job. You have them do something productive for their check, rather than simply cash the check.
I think you’re right when you think about the civil rights programs. They opened up a lot of jobs and you had some very positive forces at work during that period. And it wasn’t just the legislation. I think you had a change in the heart of America. Obviously those of us in the West and from the North, we weren’t aware of how much others changed during that period.
Affirmative action obviously was a factor. I think even more was the change in the culture in America, where people became more aware of it. My mother was an attorney, put herself through law school and when she went to get a job, she was the first woman lawyer that Standard Oil ever hired. When she went to work at Standard Oil in 1951 I believe she was paid the same as the stenographer and half as much as the male attorneys. Now, she was grateful for the job and she was the first woman attorney they ever hired, but that was the way people thought then.
It is different now, of course. I don’t mean it’s perfect now; it’s not. But what changed along with affirmative action was the way people thought. The market changed. As women performed in a wide variety of areas, or other minorities, they proved themselves. They became in demand.
The expression is a dead man walking. First of all there’s no question that interest rates have to go back up at some point, have to normalize at some point. And this isn’t going back to interest rates like Jimmy Carter had, or at the start of the Reagan administration. This is just normalizing them at two and a half percent higher. There’s no question that the interest cost has to go up, and up dramatically. There’s no way when it begins to go that we can make the payments. So we’re in for a huge adjustment and the adjustment will impact the availability of jobs and it will impact the availability of government benefits.
I think it will make us all poorer.
The extent of the gap in Colorado reflects the nature of our employers. The federal government, higher educational institutions and high tech industry from medical research to defense contractors require an unusually high proportion of well educated workers. The tourism industry and seasonal agricultural workers on the other hand do not require the highly educated workers. Thus Colorado with a proportionately high share of tourism workers and large portion of high tech industry has a larger gap than other states.