Benefits Street, or the Road to Poverty

I got wet last Thursday, very wet.  I was standing on a picket line at my university outside the central administration protesting yet another below inflation wage offer. A one per cent pay raise will mean that my colleagues and I have lost between 10 and 15 per cent of the value of our salary through inflation since the financial crisis hit in 2008. Meanwhile the top pay in the university sector has been rising steadily.  My own Vice Chancellor has been awarded a 1.8% raise this year, but that borders on the hair-shirt compared to her peers where double digit increments are not uncommon.

While comparative pay rates in higher education are obviously important to those of us who work in the sector, the question of pay both at the top and bottom of society more generally has come to the fore in the UK over the last few months. What matters about this debate is how it is rolled up in a whole series of other factors central to the contemporary working-class experience – the link between work, welfare, wealth, and poverty.

In their recent report, The Joseph Rowntree Foundation (JRF) highlighted the fact that for the first time on record the majority of those in poverty were in working families, not registered as unemployed or retirees. This trend began to increase in 2003, and the increase in poverty within these working families halted the more general progressive trends to reduce poverty over all. As a result there are more people in poverty in working families than in workless and retired families combined, and that undermines government ministers’ claims that work itself is some kind of silver bullet cure-all for the poor. The problem isn’t simply a lack of work; it’s also about low pay. In 2012, there were around 4.6 million low-paid jobs in the UK, and 39 per cent of these workers were under 30. This means roughly one in six workers in the UK economy lives in poverty.

Low wages contribute to poverty, but so does the structure of contemporary employment, and the JRF report highlights the growth of insecure work and underemployment.  In 2012, an estimated 250,000 people were employed on zero-hours contracts (where workers are not guaranteed a fixed number of hours).  This figure has varied over the years, with a low of 110,000 people on such contracts in 2004.  Drill down into these figures and we find that the average hours worked has declined from 28 hours per week in 2000 to 21 hours in 2012.  Of course, these are averages, with the actual hours worked oscillating one week to another. In addition, 620,000 people who desired permanent contracts are on temporary ones.  They want and need permanent status rather than ‘choosing’ the flexibly of temporary work as a convenient economic lifestyle. These features of the labour market — low pay, in-work poverty, zero-hours, and temporary contracts — are all working-class issues.  All corrode the elements of settled living that gave some semblance of stability to working-class communities in the past.

Some social scientists in the UK have interpreted these features as evidence of what Guy Standing has labelled the ‘precariat’ (see John’s Russo’s blog about the book here). More recently, UK sociologists Mike Savage and Fiona Devine have developed a widened class schema with a group at the bottom that they also call the ‘precariat.’ In both instances, what unites this new group of disparate people is their common experience of various forms of labor market instability. Their existence has a powerful disciplinary role on others in more secure work. Knowledge that firms might outsource roles to contractors, or off-shore it altogether, leads individual workers and their collective representatives to temper demands for higher wages and better conditions of service.

These findings start to puncture some big holes in the popular political and press accounts of the causes and consequences of the recession. Worklessness (people without work regardless of whether or not they are officially unemployed and drawing benefits) is not the great cause of poverty politicians would have us believe, and intergenerational worklessness – where two or more generations of family members are out of work – is a more marginal issue still. When asked about welfare, most survey respondents think that benefit fraud is a massive problem accounting for large chunks of the welfare bill.  In fact, it represents less than 1% of the total. Surveys also show that most people believe that unemployment benefit makes up the largest share of the benefits budget, when in fact pensions are the greatest cost. The real problem is with the real level of wages and how employment is structured.

Unfortunately, the political and press rhetoric around welfare in the UK is if anything ramping up, with a pernicious demonization of those on benefits. The UK based Channel 4, for example, has come in for a great deal of criticism for its TV documentary Benefits Street, which is based on what the producers describe as one of the most welfare dependant addresses in the UK. They have been attacked by residents of the street, including one couple who had been extensively filmed and who alleged that their in-work status meant they didn’t fit the dependence narrative of the series and were subsequently left out of the program. Listening to a recent BBC radio piece reflecting on Benefits Street, I was struck by the different ways of talking about the people there. While politicians and journalists used the phrases ‘welfare cheats’ and ‘benefit dependent,’ the residents themselves used the term ‘poverty’ to describe conditions in their area.

This rhetorical distinction perhaps holds the key for a more informed and progressive debate about the lives of working people, one where we shift the vernacular from ‘welfare queens’ and ‘benefits cheats’ on to the terrain of poverty. Reading Jack Metzgar’spiece a couple of weeks ago about SNAP recipients in the US, I am struck by the similarity in debates about the ‘deserving’ and especially the ‘undeserving’ poor. On both sides of the Atlantic, politicians’ reluctance to talk about poverty, its causes and amelioration, creates a vacuum that more reactionary commentators are happy to fill. As the lead character in the HBO show The Newsroom laments, in the past, “We waged wars on poverty, not poor people.” Fifty years after Lyndon Johnson launched the War on Poverty, we need to shift the vernacular more than ever.  There’s an idea worth getting wet for!

Tim Strangleman

On Poverty, Policy, and Real People

When the latest report was released last September, the poverty rate in the U.S. stood at 13.2 percent, the highest rate in 11 years.  Given the recession, the increase shouldn’t surprise us, and we’ll probably see higher numbers when the next report is issued in August.  I was surprised that the increase wasn’t more dramatic, but in fact the national poverty rate has hovered between about 10 and 13 percent for most of the past four decades.  While a few percentage points represent a whole lot of people, I was struck by the relative stability of the figures.  Clearly, today’s higher rate of poverty illustrates the effects of the recession.  But if we almost always have more than 10 percent of Americans living in poverty, then it’s clearly a persistent and troublingly-policy-resistant problem.

A conversation with a tour guide and another American tourist on a van in Argentina a few weeks ago got me started thinking about all this.  The tour guide was explaining that her government provides subsidies to families with children, and she was lamenting that some families choose to subsist on those government payments instead of entering the workforce.  The American tourist agreed that this was a problem.  She suggested that the right answer would be to “incentivize” poor people, so they would choose work over idleness.

Underlying the conversation were several assumptions about poverty and the role of government.  The first is that most people are poor because they choose not to work.  I suppose this is true for some, but I’m skeptical that laziness explains most instances of poverty.   According to a 2007 report from the U.S. Census, only 21.5 percent of people in poverty don’t work.  Today, the percentage may be higher, but given the unemployment rate, that’s not surprising, and we can’t read it as evidence of laziness.  Indeed, the New York Times has been running a terrific series on “The New Poor,” presenting stories and analysis of how a complex mix of accident and policies are driving people from the middle and working classes into poverty.  For a good example, read a recent report in the New York Times about how state cuts to child care subsidies are making it impossible for some low-income women to hold on to their jobs.  The women profiled in the story are far from lazy.  They want to work, but they can’t leave their children at home alone and have few options.

Second, we assume that if people are poor, it’s entirely their own fault.  Common wisdom suggests that poor people would be comfortably middle class if only they were smart enough or worked hard enough to take advantage of the opportunities this country offers.  Great myth, but in fact, upward mobility is less common in the U.S. than we’d like to think.  Most Americans remain in the social class in which they grew up.  Poverty is often situational and temporary.  Equally important, as we have noted here previously, the U.S. can expect to see the most job growth over the next few decades in low-income jobs, meaning that increasing numbers of hard-working Americans will also be poor.

A third assumption in that tour van conversation is that government’s role should be to push people to work hard, not support those in need.  Social welfare, the assumption goes, teaches people to depend on the government and thus increases, or at least perpetuates, poverty.  While tracing this correlation can be tricky, a study by Lane Kenworthy, Professor of Sociology and Political Science at the University of Arizona (who also writes for the conservative Cato Institute), found that Germany and Sweden, two European countries with the most generous state welfare programs, experienced lower levels of poverty than other nations.  Such programs don’t eliminate poverty, and the results are uneven across Europe and elsewhere, but they do seem to help more than hurt.  Based on his comparative study of the effects of social welfare programs, Kenworthy concludes that “relatively modest increases in benefit levels for programs that assist nonworking individuals and low-income workers might well be sufficient to bring the U.S. into line with at least a few of the other affluent nations in reducing poverty.”

Of course, we don’t address poverty only through direct supports.  Improvements in education, worker rights, and health care would create better opportunities for people in poverty to achieve economic stability and move toward prosperity, and many people and organizations are working on these issues, here in the U.S. and globally.  Yet such improvements are not only slow to develop, they are also – like most public policy – matters of intense debate.  What does “better education” look like?  What rights should workers have?  Is access to good health care a human right, and if so, how should we pay for it?  As the seemingly endless Congressional and media battles over health care demonstrated, solving the social problems that contribute to poverty is a cumbersome and frustrating process.

Much of the debate comes down to two big questions.  First, does the free market generate good social practices?  In other words, when corporations and business leaders pursue their interests, does that generate sufficient prosperity and opportunity to help the poor and working class?   Second, do we believe that society as a whole has an interest, either moral or economic, in supporting those who are living in poverty? Or do we view economic inequality as either a “natural” condition or a self-inflicted problem that should be left alone, either because we believe we can’t do anything about it or because we believe that those who are poor don’t deserve assistance?

Clearly, neither the American people nor our leaders agree on how to answer these questions, and because those on both sides are passionate and committed to their views, we may never reach consensus.  That means that policy debates will continue to be contested, and most likely, especially given the U.S. system of government (see James Fallows on this), the policies we develop will usually take moderate, often muddled and cautious approaches.

Policy solutions seem elusive, but we should nonetheless think carefully about how we characterize people in poverty.  When we treat them with disdain and suspicion, the result is the sort of demeaning, even dehumanizing legal and bureaucratic practices that Barbara Ehrenreich has been documenting.  Or we can view them as equal human beings, people worthy of not just our sympathy but our assistance and respect.  We can check our judgments and question our assumptions.  And perhaps most important, we can listen to their stories so that we can understand their experiences and perspectives.  When we listen to others, they become human.  They become part of “us,” members of our society whom we cannot so easily brush aside or condemn.

Sherry Linkon, Center for Working-Class Studies