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Home Publications Blogs CEPR Blog Paul Ryan’s Poverty Report Shows Extent of His Disconnect with the Working Class and Real-World Economic Issues

Paul Ryan’s Poverty Report Shows Extent of His Disconnect with the Working Class and Real-World Economic Issues

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Written by Shawn Fremstad   
Tuesday, 04 March 2014 15:32

Reading Paul Ryan’s new report, The War on Poverty: 50 Years Later, I was most struck by how disconnected it is from the real-world economic concerns of today’s diverse working class (a term I use to designate people in roughly the bottom third of income/wealth distribution). Here are just a few of the real issues of concern to working-class people, none of which receive any mention in Ryan’s report:

  • Stagnant and declining wages, particularly for men since the 1970s, but also for women over the last decade. And, as EPI’s Heidi Shierholz has noted, in the last decade, even male workers with a college degree haven’t seen any real wage growth. Declining and stagnant wages have nothing to do with the programs for low-and middle-income people that Ryan obsesses about in his report, and everything to do with bad policy decisions like those Shierholz details: prioritizing low inflation over full employment, weakening labor standards including the minimum wage, a high dollar (which costs manufacturing jobs), and the attack on workers’ ability to form unions.

  • Helping working- and middle-class mom, dads, and families balance work and parenting (and other caregiving responsibilities). While women’s increased labor force participation over the last several decades has helped families economically, our public policies haven’t really adjusted to the fact that both women and men are increasingly combining breadwinning and caregiving. Increasingly states and cities are doing something about it by creating policies that ensure workers are able to take paid family leave and have access to paid sick days, and to expand pre-K. Yet, there are absolutely zero mentions of family-friendly policies like these in Ryan’s report. Similarly, you wouldn’t hear anything about issues like the gender pay gap in Ryan’s report.

  • Although you wouldn’t know it from reading the papers or listening to politicians like Paul Ryan, today’s working class is incredibly diverse. As I’ve written, 56 percent of black women and 65 percent of Latinos self-identify as working class today, compared to 40 percent of white, non-Hispanics. Yet, Ryan’s report has basically nothing to say about racial and ethnic disparities in wages and other areas. And, although comprehensive immigration reform would remove barriers that are keeping hundreds of thousands of families impoverished, it’s not mentioned in Ryan’s report.

  • Strengthening retirement security by expanding Social Security and reforming the failed 401(k) system. Social Security is our single most important and effective poverty-reduction program. So, of course, it receives no mention in Ryan’s report, although it should be noted that Ryan does spend over a page discussing the $3 million Native Hawaiian Housing Block Grant.

Instead of talking about these issues, Ryan identifies family structure as “perhaps the most important determinant of poverty” while also pointing to declining labor-force participation among men, “the lack of affordable education”, and what he claims is a “poverty trap” created by programs conservatives don’t like. A few quick thoughts here:

  • Family Structure: While it is true (and not surprising) that single-parent families have considerably higher poverty rates than two-parent ones, there are plenty of married adults living below the poverty line in the United States. As I’ve written, there are more than 7 million married adults (below age 65) living below the poverty line in the United States. Among parents living below the poverty line, nearly half are … married! But you won’t learn this by reading Paul Ryan’s report, since it would suggest that getting everybody married up isn’t the number one solution to poverty. Another thing Ryan doesn’t mention: married parents with children are 56 percent more likely to live in poverty than married adults without kids. Yes, family structure does matter—married parents, if you want to avoid poverty, may I suggest marital abstinence may be in order?

  • Education: I’m pro-affordable and quality education, but think it’s also important to acknowledge that people living below the poverty line today are better educated than ever. In 1979, nearly 67 percent of middle-aged adults living below the poverty line had no high school diploma; today, 70 percent have a high diploma, and nearly half of this group also has some college or a bachelor’s degree.

  • “Poverty Trap”: Ryan claims federal programs have created a “poverty trap” and cites the work of Gene Steuerle of the Urban Institute. Ryan’s implication is that people are better off “on welfare” than in the workforce. But in Congressional testimony, Steurele has clearly said “the poverty trap [has] been largely removed.” Instead, Steurele points to what he calls a “twice-poverty” trap affecting full-time workers in the roughly $35,000-$50,000 range. Calling this a “trap” is somewhat unhelpful—the basic issue here is that programs like SNAP and child care phase out too quickly for full-time workers in poorly compensated jobs. This could be addressed by a combination of increasing the minimum wage (and other measures that would boost working class wages), expanding eligibility and funding for child care, and increasing the eligibility level for SNAP, but I’m guessing Paul Ryan isn’t interested in doing any of these things.

Also, worth noting, Ryan’s report is perhaps at its most convoluted when it comes to child care. Among other things, we’re told that child care “increases the likelihood of participation in the labor force”, but then a few paragraphs later that it has “insignificant effects on labor-force participation.” Similarly, we’re told that “child care subsidies have negative effects on child development” but then a few paragraphs later that they have “significant positive effects … on children’s academic performance ….” As this section suggests, too often Ryan’s report reads like a class project cut-and-pasted together by a group of Google-happy sophomores in a 200-level class at Bob Jones University.

Finally, I can’t help but mention the Washington Post’s unintentionally humorous puff piece on the Ryan report. The author, correspondent Robert Costa, whose previous job was blogging for the National Review, writes: “Ryan … consulted with a diverse group of conservative thinkers … Yuval Levin, a policy analyst, played an instrumental role, as did the American Enterprise Institute’s Arthur Brooks and the Brookings Institution’s Ron Haskins.” This leaves me looking forward to when the Washington Post calls Dean Baker, John Schmitt and me—who like Levin, Brooks, Haskins, are all 40-something-and-up white dudes inside the beltway sharing very similar policy orientations—a diverse group of progressive thinkers.

Tags: budget | minimum wage | poverty | social insurance | working class

Comments (1)Add Comment
You're too kind
written by Michael Epton, March 10, 2014 3:21
Describing Ryan's statements on child care as convoluted is being too kind. I would suggest: full bore incoherent.

Also, as a 60-something white dude educated in math at the erstwhile College of New Jersey, I can solve the unemployment problem in three beers. We simply need to adjust the full time employment week up and down the same way the Fed adjust the prime. A Federal Employment Board could handle this. Such an agency would be "owned" by the major labor organizations the same way that the Fed is "owned" by the banks.

Best to all at CEPR. I love you folks

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