President Barack Obama was slammed last week after giving a speech Wednesday about the economy. Critics said he offered little new and accused him of yet again “pivoting” to the economy.
But Obama was simply returning to his intended course after being repeatedly buffeted and blown off course by events, as all presidents are. Survey data from the Associated Press published Sunday in the Herald show why he is right to do so.
The AP study found that four out of five American adults “struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives.” Moreover, for many the degree of that “economic insecurity” is growing.
The study also found that racial disparities in the poverty rates were decreasing. That would be great news if it meant that blacks and other minorities were doing better, but what it found was that whites were doing worse.
The findings show economic insecurity among whites “is more pervasive than is shown in government data,” with more than 19 million whites falling below the poverty line of $23,021 for a family of four. Nonwhites still face a higher risk of being economically insecure, but the biggest increase is among whites. Poor whites now outnumber poor blacks by almost 2 to 1.
But the concern is not the absolute number of people in poverty or their racial makeup. What is worrisome is the trend and what that might say about the nation.
What it says is we have some real problems. A growing number of children are living in high-poverty areas and in single-mother households. And in a chicken-and-egg spiral, the question as to whether the growing number of out-of-wedlock births (particularly among whites) causes poverty or poverty leads to unmarried mothers, the answer is “yes” to both.
As to causes of the economy’s worsening effects, the AP points to some familiar complaints: “an increasingly globalized economy, the widening gap between rich and poor and the loss of good-paying manufacturing jobs.” Less clear is what can be done about it.
To start, we can recognize the situation and pay attention to it. And we can begin that with understanding that a large and growing degree of economic inequality is not only bad for poor people, it is bad for the economy.
Poor people need government services – from school lunches, to police and fire protection, to food stamps and emergency rooms. But folks without money or jobs pay little in taxes — and buy little from their middle-class neighbors.
A 2011 study by the International Monetary Fund and reported by Bloomberg Businessweek also found that countries with smaller degrees of income inequality have longer expansions and greater political stability. No country will ever have complete economic equality for all, nor should it. But at some point growing inequality threatens the health of the economy and the fabric of society.
The president seems to get that; he has said as much. And he gets it that the answer is a “middle-out” approach that emphasizes growing the middle class. A safety net for the poor is not a growth measure. Nor are tax breaks for the wealthiest among us in the hope that something will trickle down.
The details of what Obama would do will unfold as he delivers a planned series of talks about the economy. But the broad strokes should be clear: Invest in infrastructure and education, focus on programs that bolster the middle class, work to reduce the degree of inequality.
And if we have heard all this before, perhaps that is because those are the right things to do.
