Commentators who are not poor themselves often suggest that the best remedy for poverty is personal responsibility and hard work. But calls for a renewal of low-income people’s values – call it “grit” – have never made much of a dent in poverty in the United States. What made a difference are smart public policies and that still holds true today.
Why isn’t grit the answer? First of all, research on how poor people actually live, such as Kathryn Edin and Luke Shaefer’s excellent “$2.00 a Day: Living on Almost Nothing in America,” shows that low-income people already demonstrate quite a bit of grit in their daily lives. They have to in order to survive, especially in expensive cities such as Los Angeles.
But grit will only get you so far. It can’t change the fact that African-Americans and Latinos continue to face discrimination – not only from police officers, as Black Lives Matter has forcefully reminded us, but also from prospective employers, landlords, lenders, and others. Study after study confirms this, and also shows employment discrimination against women, a particular problem in low-income communities because so many children grow up with a single mother.
Nor can grit improve an underfunded, overstretched school system that falls short on building skills. It can’t change the wildly unequal distribution of inherited wealth, which strongly conditions young people’s access to a good education and other life opportunities. And it can’t reduce L.A.’s unemployment rate of 5 percent – much improved from the Great Recession, but still high by historical standards – which means there are not enough jobs to go around.
It’s true that poor people often make unwise decisions. But before concluding that grit could fix this, consider two things. For one thing, all of us sometimes make unwise decisions, but for the poorest, even small slip-ups can have devastating consequences. Matthew Desmond’s harrowing book “Evicted” shows how even something as simple as a teenage son lobbing a snowball at a passing car can trigger a downward spiral of eviction and ever-more unstable housing arrangements. But what’s more, research by behavioral economists and psychologists such as Harvard’s Sendhil Mullainathan finds that the stress and uncertainty of insufficient resources actually undermine people’s ability to think through solutions to problems, and giving people more money actually helps them make better decisions.
But if grit won’t do much to reduce poverty, we do know some other things that work. For those able to be employed, a higher minimum wage gives a broadly shared boost concentrated among the working poor. Though opponents claim raising the minimum will be a job killer, studies of minimum-wage changes over the last 20-odd years point to no statistically significant job losses, indicating there is room for the base wage to grow. L.A. and California laws raising the minimum to $15 an hour over time are a step in the right direction.
Expanding tax credit
Strengthening and expanding access to the federal and state Earned Income Tax Credit, a refundable credit (payable even to those who owe no taxes in the first place) to low-paid workers, will help work pay. And making added investments in our crumbling infrastructure would create jobs while enhancing the economy’s long-term efficiency.
For those unable to hold a job, whether because of age, disability, care responsibilities, or just lacking the skills employers seek, the answer is painfully simple: give them money. Countries much poorer than us, including Mexico and Brazil, have been running successful cash subsidy programs for the poorest for decades. Even arch-conservative Charles Murray of the American Enterprise Institute is calling for a universal basic income.
We Americans have enough of a Puritan streak that many oppose giving checks to those they see as “undeserving,” but given research showing that putting money in people’s pockets helps them make better choices, it’s time to get comfortable with a guaranteed minimum income.
Taking a serious bite out of poverty will also take longer-term policy initiatives, such as turning around failing schools, finding win-win solutions for public safety in poor neighborhoods, and building affordable housing. And, yes, we need to reform taxes to pay for this policy wish list.
Is this socialism? If so, it’s a pretty mild version, considerably tamer than the Scandinavian variety. But in any case, decades of growing inequality in the United States have shown that capitalism as we currently know it does not serve those at the bottom, least of all in low-income communities of color. Calling for those communities to lift themselves by their bootstraps will not work. The policies suggested here can, have, and will.
Chris Tilly, economist and professor of urban planning at UCLA, is the author of “Glass Ceilings and Bottomless Pits: Women’s Work, Women’s Poverty,” “Are Bad Jobs Inevitable?,” and other books about work and inequality.
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