A foundational belief of liberalism is that no one in this wealthy and wonderful nation of ours should go to sleep (or school) hungry, die for lack of basic health care or lack a place to sleep at night with a roof over their head. This is the social safety net, the bare minimum we, as a society, must provide. We’ve done this poorly, partially because problems move faster than solutions and partially because our conflicted bureaucratic demands make delivery of these minimal fixes overly expensive, burdensome and ripe for abuse.
But even if we could do this well, it would not mean that poverty would be eradicated. Can it be? Should it be? Could we survive without it? Ezra Klein, late of Vox, can’t break the ‘splainer habit.
The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages. On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response.
Of course the economy runs on poverty. Every economy does. Every economy always has, even the ones that pretend they don’t. We need people to do the shitty jobs that need to get done, and we need them to do them for low wages relative to other jobs.
This is how we have affordable clothing, food and iPhones. If McDonald’s paid its workers a living wage, and only bought its products from venders that paid their employees a living wage, then the Big Mac would cost $39, which means none of these workers could afford to buy one except on special occasions, and we would be in the same position of inflation and relative poverty as we started. Everyone, including the poor, relies on inexpensive goods and services.
But are people held down by the mean Republicans wielding the “whip of poverty”?
But it’s not just the right. The financial press, the cable news squawkers and even many on the center-left greet news of labor shortages and price increases with an alarm they rarely bring to the ongoing agonies of poverty or low-wage toil.
Is this the nature of the economy or the “capitalist class” keeping the proles in line?
As it happened, just as I was watching Republican governors try to immiserate low-wage workers who weren’t yet jumping at the chance to return to poorly ventilated kitchens for $9 an hour, I was sent “A Guaranteed Income for the 21st Century,” a plan that seeks to make poverty a thing of the past. The proposal, developed by Naomi Zewde, Kyle Strickland, Kelly Capatosto, Ari Glogower and Darrick Hamilton for the New School’s Institute on Race and Political Economy, would guarantee a $12,500 annual income for every adult and a $4,500 allowance for every child. It’s what wonks call a “negative income tax” plan — unlike a universal basic income, it phases out as households rise into the middle class.
Putting aside the obvious point that a $12,500 annual income isn’t sufficient to raise someone out of poverty, we’ve long had a variety of social services, from welfare to food stamps, to provide a bare minimum. Giving it a cool new name doesn’t change the concept or make it work this time when it didn’t last time.
“With poverty, to address it, you just eliminate it,” Hamilton told me. “You give people enough resources so they’re not poor.”
Wow. Who knew? Except poverty isn’t a specific income level, but an income level relative to the cost of goods and services. We could give everyone earning under, say $100,000 per year a transfer payment that would bring them to an income level that would be, ceteris paribus, middle class. Except then middle class wouldn’t be at that level, but at $250,000, leaving those getting their hundred grand checks in poverty again as inflation ran rampant to pay for the relative costs associated to cover the transfer payments, the increased wages and cost of goods and services, that allow this to happen.
The key words above are “ceteris paribus,” all things being equal, which is where almost all of our Utopian dreams crash and burn. It’s a fine theoretical construct, but it never works out that way in the real world. Change one thing and a million other things change in relation to it. This is true from motivations, people’s willingness to work, to crime, people gaming the system, to the realization that not every member of society can sit in a corner office and earn a great living with their elite university Ph.D. because the garbage cans will overflow when no one comes to empty them at night. Then again, there will be no offices since there will be no one building anymore, no way to get there and no food to eat before, during or after work.
Is this fair?
I suspect the real political problem for a guaranteed income isn’t the costs, but the benefits. A policy like this would give workers the power to make real choices. They could say no to a job they didn’t want, or quit one that exploited them. They could, and would, demand better wages, or take time off to attend school or simply to rest. When we spoke, Hamilton tried to sell it to me as a truer form of capitalism. “People can’t reap the returns of their effort without some baseline level of resources,” he said. “If you lack basic necessities with regards to economic well-being, you have no agency. You’re dictated to by others or live in a miserable state.”
He’s not wrong. It’s hard to claw one’s way out of poverty, out of a subsistence existence. Sure, universal education provides a route, but requires that a number of other things beyond our control fall into place as well. But the contention that poverty exists as a policy choice by the powerful over the powerless to keep them down so we have a constant supply of low wage workers to do the crappy but necessary jobs is facile cynicism. Yes, we survive off poverty, but we need no invisible hand to keep the poor in their place.
Hamilton, to his credit, was honest about these trade-offs. “Progressives don’t like to talk about this,” he told me. “They want this kumbaya moment. They want to say equity is great for everyone when it’s not. We need to shift our values. The capitalist class stands to lose from this policy, that’s unambiguous. They will have better resourced workers they can’t exploit through wages. Their consumer products and services would be more expensive.”
And we’ll be right back where we are now, where society has always been, because the best we can do is provide the opportunity for upward mobility for some, but there will always be economic losers, unfair thought it may be in many instances. If we focus instead on no one starving or dying from lack of basic care, we could at least provide the platform for the few to do better, but there will never be a society that doesn’t include the poor working shitty jobs for meager wages. And there will never be a society that could survive without them.
This isn’t to say we can’t achieve a more viable balance, the current day version of the myth that Henry Ford paid his assembly line workers more so they could afford to buy his cars. But even Ford still needed people working on the assembly line or there would be no cars to buy. To starve one’s workers is to kill off both one’s consumers and the very labor force we require to keep the economy going. But poverty can’t be eliminated, no matter how much we give the impoverished, as nothing stays the same once we try this one cool trick to eradicate this intransigent social reality.