Chronicles of a Broken System

Session 9: Historical and Current Policy Responses: Social Welfare and Tax Policies

Although, the United States is recognized worldwide for the wide range of laws that protect workers, the truth is that these laws did not always exist.  During the period of Industrialization, laborers were subject to exploitation because our government employed a laissez-faire policy towards large industries.  This hands-off government policy allowed wealthy business owners to sacrifice fair working conditions in order to maximize profits. Eventually lack of government regulation, over-expansion of industry, and banks giving out risky loans led our economy directly into the Great Depression. During the Great Depression, Americans witnessed a significant shift in the role of the federal government.  Three significant pieces of legislation emerged from President Franklin D. Roosevelt’s New Program.  The Federal Emergency relief act (1933) gave federal grants to the states for destitute workers. This act put money in the hands of the people.  The Fair Labor Standards Act (1938) established minimum wage, maximum working hours, and banned child labor. Finally, the Social Security Act (1935) provided unemployment insurance and retirement compensation. These laws provided the foundation for the current governmental initiatives to fight poverty.

•  How well you think poverty is being addressed currently in the United States and globally.  In the United States, poverty is being addressed through the implementation of several government programs that aid families whose salary falls under the poverty line.  For instance, the Personal Responsibility and Work Opportunity Reconciliation Act, also known as the 1996 Welfare Reform, was expected to break the cycle of poverty by proving jobs for welfare recipients.  This act was a reform because previously welfare recipients were not required to work in order to receive cash benefits. The bill also included a maximum of 60 months to receive cash assistance and states have the right to determine the length of assistance. Another prohibition is that only minor parents enrolled in school are eligible to receive help. POWRA created Temporary
  Assistance For Needy Families (TANF) which is responsible for assisting needy families so that children can be cared for in their own home, reducing dependency of needy parents, reduce out-of-wedlock pregnancies, and encourage the formation of two parent households. The effect of this legislation from 1994 to 2000 indicates that the program served to decrease poverty and child poverty rates and increased employment rates for single mothers.  However, the poverty rate for single mothers has increased by 26.4% in 2001, 26.5% in 2002, and 28% in 2003.  Simultaneously, the child poverty rate has increased every year since 2001-16.3%; 2002-16.7% and 2003-17.6%. Overall, we have not invented a piece of legislation that deals effectively with the poverty issue.

“You are not poor! You just can’t afford housing, childcare, transportation, healthcare, etc”

Session 7: Poverty & Wages

The federal government dictates the minimum hourly amount an employee’s wage should be. This amount is known as minimum wage which is currently $7.25 an hour. At a first glance, a wage of $7.25 an hour may appear to be a respectable salary, however, any further examination regarding the cost of living might lead you to the realization that minimum wage is not enough. In order to fight poverty it is imperative to have a minimum wage that takes into account the cost of living. Raising the minimum wage to meet the costs of living would allow families to cover their expenses without relying on governmental aid. In addition, putting money in the hands of low income individuals is a great economic stimulator because they are more likely to spend money on necessities rather than saving it. Even the minimum wage of $7.25 an hour fails to acknowledge tipped workers. Young mothers who do not have a college degree often find employment in restaurants because the qualifications are not extensive. However, the minimum wage of tipped workers in Georgia is $2.13 an hour. These are the workers who suffer the most during economic recessions because people abstain from eating out and if they do they are very likely to tip less. When the economy slows down restaurants start promoting meal deals that can range from $3.99-$6.99, which is good for the consumer but terrible for the waitress/waiter because that means their tip will suffer. I am currently a tipped worker, I work at a restaurant near my house, personally I have no bills to pay because my parents cover all of my expenses, and therefore, most of the money I make is to cover the expenses of commuting to Georgia State University and other small expenses. However, if I had to sustain a household I would soon become a poor individual because my salary is not even enough to cover the rent of a one bedroom apartment. A tipped job is not only underpaid, it can also be emotionally distressing because some individuals treat you as if you were less than them. In conclusion, fair wages encourage fair working ethics which is likely to result in business productivity which in terms benefits businesses.

·         How well you think poverty is being addressed currently in the United States? Poverty  is not being addressed correctly in the United States, I feel as if we are not putting enough effort to alleviate the needs of those who are already living in poverty and we are not doing anything to help those who are fighting the poverty threshold.

·         What you personally think should be done about poverty in United States? We can’t just increase the minimum wage because the reality is that most companies will not sacrifice their precious profits in order to pay fair wages, therefore, they will most likely pass on the cost to the customers, which raises the price of things and we will again be at square one. Therefore, in order to have a real change we must have a wage that reflects inflation without causing further inflation. 

Land of the rich, and home of the discriminated

Session 6: Causes of Poverty

Who are you?  Most individuals will answer this question by disclosing their nationality (I am American), religion (I am Christian), race (I am black), and/or in honor of the current global recession you might encounter an “I am a very broke individual” answer.  Infrequently, does one encounter an answer like “I am human” or “I am a citizen of the world”.  This phenomenon is known as identity.  Our identity is our perception of ourselves. It defines our place in the world by answering who we are and what we are.  Our nationality, ethnicity, race, and religion are among the aspects that contribute the formation of our reality, they are, in other words, the core of our essence.  If my identity in the eighteenth century were of a wealthy white man, then I would perceive everyone who was not like me to be inferior.  Many injustices, atrocities, and years later, we are all civilized and equal!  In reality, an immense amount of progress has been made and overall we conform an integrated society.  However, inequality thrives and its devastating effect is corroborated by high poverty rates.    

Why you believe people are poor in the United States and globally?  Social Stratification is a primary cause of poverty in the United States. This theory consists of two classifications: owners of production and  workers.  The owners are- important industrialists and massive corporations.  The workers are everyone else.  “Social Stratification across status groups occurs when social groups seek to maximize their rewards by restriction others’ access to resources and opportunities.”  Racial and ethnic stratification states that minorities in the United States are poorer than whites. On average, minorities have lower levels of education and employment, therefore, lower wages. Females, regardless of race, are also subject to inequality thus they usually receive lower wages. As a result, female-headed households are more likely to suffer from economic hardships. Racism and discrimination are prominent causes of poverty, which means that poverty also has a cultural dimension. In conclusion, social stratification of race and gender, level of education, and a significant increase in the number of female-headed households are the prime causes of poverty. 

[1] Poverty in America: a handbook

John Iceland - University of California Press - 2006