Saturday, June 23, 2007

Essay 4086

From The Chicago Sun-Times…


U.S. must be committed to ending poverty, injustice


How does society benefit from poverty, or from the social or economic injustices it generates? The short answer is, society doesn’t. Poverty and other injustices impose costs rather than confer benefits. Some are financial and can be measured in dollars and cents. Other costs are harder to quantify, but no less real. These include growing numbers of alienated youth, many of whom are unemployed and becoming increasingly unemployable, and an expanding income disparity driving huge wedges, economic and social, between the haves and have-nots.

So how does America, with a $13 trillion-plus annual economy, counter poverty and its concomitant injustices? The answer is simple: through a combination of public services that both give the disadvantaged access to economic opportunity that otherwise wouldn’t exist and create a social safety net. On the access to opportunity side, public funding of education, job training, transit and roads helps individuals become employable and helps communities develop. Safety net investments include Medicaid, which provides health insurance coverage to low-income Americans, and Social Security, the primary income source for most seniors. Without these investments, things could be bleak.

Consider access to opportunity. According to the Center for Labor Market Studies at Northwestern University, a significant portion of minority and low-income youth have been left out of the economic recovery that began in 2001. The only factor that has countered this is educational attainment. For black males, 86 percent who graduated college had jobs, compared to 57 percent of high school grads and only 33 percent of dropouts. As for income, census data reveal the average annual pay of a college grad is $51,554, compared to $28,645 for high school grads and $19,169 for dropouts. Inadequate public-sector investments in education mean no economic future for minorities and low-income folks.

Then there’s the burgeoning income gap, which last year hit historic highs. In 2006, the wealthiest 1 percent claimed nearly 20 percent of America’s income, while the bottom 20 percent of income earners got a paltry 3.4 percent. But this yawning income gap affects more than just top and bottom. Real median earnings for the 93 million non-farm workers in America haven’t grown since the economic recovery began six years ago. Meanwhile, corporate profits more than doubled during this period, and worker productivity jumped 18 percent. This stands in sharp contrast to the American economic boom that followed World War II, during which productivity gains were shared broadly across income classes, enhancing quality of life for most.

Given how the private sector is squeezing families, is it any wonder that today, almost one in six Americans receives public assistance? Which means safety-net programs such as Medicaid are more important than ever. If anything, Americans should be clamoring to ensure government is doing everything possible to counter disparities by making needed investments in services.

The data, however, indicate America is parsimonious when it comes to poverty. Adding total annual federal expenditures on programs that deal with poverty, everything from Medicaid to food stamps, housing and social services, produces the tidy sum of $390.8 billion. Which seems more tiny than tidy when you realize it’s only 15 percent of the total federal budget, and a minuscule 2.9 percent of the U.S. economy. These expenditures pale by comparison to federal discretionary spending on defense, $474 billion -- over half of all discretionary spending -- without even accounting for the Iraq war. That tacks on another $120 billion.

These spending priorities become galling when you consider unmet need. You’d think everyone fortunate enough to live in the planet’s wealthiest nation could afford to visit a doctor. Yet 47 million Americans are uninsured. Medicaid cost $189 billion this year, and covered 45 million people. Doubling that investment would cover all our uninsured, for the low, low cost of 1.4 percent of our economy. The United States could pay for this by leaving Iraq ($120 billion) and finding another $70 billion (just 2.6 percent of the budget) from other areas. Instead, over the next decade, the Congressional Budget Office estimates the wealthiest 1 percent in America will receive $1 trillion from tax breaks -- more than the bottom 80 percent of income earners, combined.

Poverty and injustice benefit no one and harm everyone. America already has the economic means not only to reduce poverty, but to come close to eliminating it. All it takes is an honest review of the data and a commitment to adjust priorities.

No comments: