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>> THE FOLLOWING PROGRAM IS A SPECIAL PRESENTATION OF THE BIG 10 NETWORK, PRODUCED IN ASSOCIATION WITH
THE UNIVERSITY OF WISCONSIN.
>> AS WE EMERGE FROM THE WORST ECONOMIC CRISIS SINCE THE GREAT DEPRESSION, THE NUMBER OF POOR HAS HIT AN HISTORIC HIGH.
ONE IN SEVEN AMERICANS, OR ALMOST 44 MILLION PEOPLE, ARE LIVING IN LIMBO BENEATH THE POVERTY LINE,
THE MOST IN OVER 50 YEARS. WE'LL LOOK AT THE FUNDAMENTAL FACTORS DRIVING THESE STARTLING NUMBERS, NEXT ON "OFFICE HOURS."
HI, I'M KEN GOLDSTEIN, PROFESSOR OF POLITICAL SCIENCE AT THE UNIVERSITY OF WISCONSIN-MADISON.
IN THIS SEGMENT OF "OFFICE HOURS," WE'RE LOOKING BEHIND THE STATISTICS AT THE SOBERING REALITIES
OF POVERTY IN THE UNITED STATES. JOINING ME TO DISCUSS THIS IS TIM SMEEDING, DISTINGUISHED PROFESSOR AT THE LA FOLLETTE
SCHOOL OF PUBLIC AFFAIRS, AND DIRECTOR OF THE INSTITUTE FOR RESEARCH ON POVERTY. TIM, WELCOME TO "OFFICE HOURS."
WELCOME TO THE UNIVERSITY OF WISCONSIN, WHERE YOU'VE TAKEN OVER AT THE INSTITUTE, AND YOU WERE ACTUALLY A GRADUATE
STUDENT AT THE INSTITUTE A NUMBER OF YEARS AGO, AS WELL. >> THAT'S CORRECT. >> VERY GOOD TO HAVE YOU.
SO, ON THE ONE HAND, NOT A BIG SURPRISE THAT WE'VE SEEN THIS INCREASE IN POVERTY GIVEN THE SEVERE ECONOMIC
DOWNTURN THAT WE'VE ALL WITNESSED AND EXPERIENCED. TAKE US THROUGH THE NUMBERS. SET THE STAGE.
EXACTLY HOW BIG WAS THE INCREASE AND WHO WAS IT CONCENTRATED AMONG? >> THE INCREASE WAS PRETTY BIG
OVERALL, ALTHOUGH LESS THAN SOME PEOPLE THOUGHT. IT WAS PARTICULARLY LARGE FOR CHILDREN.
CHILDREN'S POVERTY WENT FROM 19% TO ALMOST 21%, THAT'S NATIONWIDE. HUGE.
ALSO, POVERTY FOR ADULTS ROSE, AND IT MAINLY ROSE FOR YOUNGER ADULTS. SO WHAT YOU SEE BENEATH
THE TEA LEAVES ARE YOUNGER, LESS-EDUCATED PEOPLE, AND THEIR CHILDREN WHO HAVE BEEN UNEMPLOYED, AND WHO MAY NOT BE
ABLE TO GET WORK AGAIN UNTIL THE ECONOMY REALLY PICKS UP, WHICH MEANS FOUR OR FIVE YEARS, AND EVEN THEN,
WILL HAVE A HARD TIME. >> A COUPLE THINGS THERE. SPEAK TO ME ABOUT THAT. SO, WE'VE ALL LEARNED THAT THE
UNEMPLOYMENT RATE OR EMPLOYMENT LAGS GDP GROWTH. BUT THEN ALSO, ONCE EMPLOYMENT COMES BACK, POVERTY IMPROVING
WILL LAG THAT A BIT, AS WELL. IS THAT WHAT YOU ARE SAYING? >> ABSOLUTELY. WE ARE IN SUCH A HOLE NOW,
WE'VE LOST MORE JOBS IN THIS RECESSION, THAN WE LOST IN THE LAST THREE RECESSIONS COMBINED. AND THOSE JOBS
ARE JUST SLOWLY COMING BACK. THEY'LL COME BACK MUCH FASTER FOR HIGHER EDUCATED PEOPLE. BUT IT'S ONLY WHEN THE ECONOMY
REALLY HEATS UP, WHEN WE GET DOWN TO POVERTY OR TO UNEMPLOYMENT RATES AROUND 5%, THAT THE PEOPLE WHO ARE AT THE
END OF THE EMPLOYMENT LINE, YOUNG PEOPLE WITH ONLY A HIGH SCHOOL DEGREE, LET'S SAY, FINALLY GET INTO A JOB,
MAYBE A DECENT JOB, BUT THAT'S FIVE OR SIX YEARS OFF. >> TALK TO ME A LITTLE BIT MORE ABOUT THE DISCONNECT
OR THE DISTINCTION BETWEEN THOSE WITH COLLEGE EDUCATIONS AND WITHOUT COLLEGE EDUCATIONS. IT'S BEEN TOUGH ON EVERYBODY,
BUT THOSE WITHOUT COLLEGE EDUCATIONS HAVE REALLY TAKEN A HIT. AND THEN, WHEN WE DO START
TO GET JOBS BACK, WE MIGHT GET PRODUCTION COMING UP, BUT IT'S NOT NECESSARILY GOING TO LEAD TO MORE JOBS, IF THOSE
PEOPLE WITH COLLEGE EDUCATIONS OR ENGINEERING DEGREES COULD BE MORE PRODUCTIVE. >> ABSOLUTELY.
THE REAL STRUCTURAL PROBLEM IN THE UNITED STATES IS THAT THE OCCUPATIONS WHICH TRADITIONALLY
PROVIDED UPWARD MOBILITY FOR HIGH SCHOOL GRADUATES, PARTICULARLY IN THIS STATE, WISCONSIN,
MANUFACTURING AND CONSTRUCTION, ARE DEAD IN THE WATER. THEY ARE IN REAL TROUBLE. AND MANUFACTURING OUTPUT
IS RISING, BUT IT'S BECAUSE MANUFACTURING IS BECOMING MUCH MORE PRODUCTIVE. SO, IF YOU START A NEW PLANT
THAT PRODUCES SOMETHING IN WISCONSIN, YOU'RE MUCH MORE LIKELY TO HIRE FIVE ENGINEERS WITH BACHELOR'S DEGREES, THAN
100 KIDS OUT OF HIGH SCHOOL. SIMPLY BECAUSE IT'S BECOME MECHANIZED, BECAUSE CAPITAL IS CHEAPER THAN LABOR,
AND SO ON. IN THE CONSTRUCTION INDUSTRY, WE'VE TREMENDOUSLY OVER-BUILT. PEOPLE ARE MOVING IN
WITH THEIR PARENTS, PEOPLE ARE IN HOUSES IN FORECLOSURE. THAT INDUSTRY IS NEVER REALLY GOING TO COME BACK.
SO, THAT'S WHERE THE TYPICAL ROADS OUT WERE. THE INDUSTRIES THAT ARE DOING GREAT: FINANCE, RESEARCH,
HIGH-END THINGS THAT REQUIRE AT LEAST A BACHELOR'S DEGREE, AND THE HEALTHCARE SECTOR, OF COURSE, WHETHER THAT'S GOOD
OR BAD, WITH HE DON'T KNOW, BUT THEY'RE GOING GANG BUSTERS. WHAT DOES THAT LEAVE FOR A KID WITH ONLY A HIGH SCHOOL DEGREE?
IT LEAVES A LOW-WAGE PERSONAL SERVICE JOB. >> SO WE HAVE THE SHORT-TERM IMPACTS.
IT'S BEEN OVER A COUPLE YEARS, BUT STILL A SHORT-TERM IMPACT OF THIS RECESSION ON THE POVERTY RATE.
WHAT YOU SEEM TO BE OUTLINING FOR ME IS ACTUALLY MUCH MORE DISTURBING THAN THAT, IS A PRETTY PERSISTENT TREND.
HOW DO WE WRAP OUR ARMS AROUND THAT? HOW DO YOU SOLVE THAT PROBLEM? >> IT IS A BIG PROBLEM.
THE EASIEST SOLUTION PEOPLE WILL TELL YOU IS, OH, THE KIDS SHOULD GO BACK TO SCHOOL. OKAY.
IF THEY'RE WELL PREPARED ENOUGH, IF THEY GRADUATED HIGH SCHOOL, THEY'RE TRYING TO SUPPORT THEMSELVES SOMEHOW,
BUT THEY CAN GO BACK TO A COMMUNITY COLLEGE OR TECHNICAL COLLEGE. BUT WILL THEY GET THE SKILLS
THERE TO MOVE THEM INTO A GOOD JOB? IT'S HARD TO SAY. SOME MORE THAN OTHERS,
IF YOU GO INTO MEDICAL TECHNOLOGY FOR INSTANCE, YOU'LL PROBABLY DO OKAY. BUT WHAT'S LEFT THEN ARE THE
PERSONAL SERVICE SECTOR JOBS. FOR INSTANCE, YOU CAN BECOME A CERTIFIED NURSING HOME ASSISTANT WITHOUT A HIGH SCHOOL DEGREE,
AND WITH 75 HOURS OF TRAINING. THAT MEANS YOU CAN CHANGE BED PANS IN A NURSING HOME, WHICH ARE OPEN 24/7,
FOR $8.75 AN HOUR. THAT'S NOT A LOT TO BUILD A FUTURE ON. OR, WORKING AT TARGET FOREVER.
OR, DOING PEOPLE'S LAWNS. OR, PROVIDING, YOU KNOW, SERVING FOOD AT RESTAURANTS. THESE SORTS OF THINGS, PERSONAL
SERVICES CAN'T BE EXPORTED, PRODUCTIVITY FINDS A HARD TIME, HAS A HARD TIME DRIVING THESE JOBS DOWN.
AND THAT'S WHERE WE THINK, THAT MANY ECONOMISTS THINK, MOST OF THE LOW SKILLED PEOPLE ARE GOING TO END UP UNTIL
THE ECONOMY REALLY PICKS UP. TIM, THANK YOU. PLEASE STAY WITH US. WE'RE GOING TO CONTINUE
OUR DISCUSSION ON POVERTY IN AMERICA, HERE ON "OFFICE HOURS."
>> THIS PROGRAM IS A PRODUCTION OF THE UNIVERSITY OF WISCONSIN-MADISON. IF YOU HAVE COMMENTS
ABOUT THIS BROADCAST, PLEASE EMAIL THEM TO: PROGRAMMING@UC.WISC.EDU
>> WHERE OTHERS SAW LUMBER, WE RECOGNIZED A TREASURE. WHERE OTHERS SAW THE NIGHT, WE CHOSE THE STARS.
WHERE OTHERS SAW PIECES, WE UNLOCKED THE PUZZLE THAT COULD BRING THE END TO PARALYSIS AND CANCER.
SINCE 1848, THINKERS AND ACHIEVERS AT WISCONSIN HAVE FEARLESSLY SOUGHT IDEAS THAT TRANSFORMED THE WORLD.
KEEP ON, WISCONSIN, KEEP ON.
>> WELCOME BACK TO "OFFICE HOURS." WE'RE HERE WITH TIM SMEEDING TALKING ABOUT POVERTY.
TIM, AT THE VERY TOP OF THE SHOW, YOU MENTIONED THAT THERE WAS A BIG INCREASE IN POVERTY, BUT THERE WAS ALSO A DIFFERENCE
IN THE AGE COMPOSITION OF POVERTY. WE HAVE A GRAPHIC. LET'S LOOK AT THAT.
AND YOU REALLY DO SEE THE CHANGE HERE. WE HAVE IT AMONG UNDER 18 YEARS OLD,
65 YEARS AND OLDER, AND 18 TO 64 YEARS. WHERE YOU REALLY SEE THAT BIG INCREASE IS IN THE UNDER 18.
>> THERE'S A BIG INCREASE IN THE UNDER 18s, BUT ALSO IN THEIR PARENTS, WHO ARE IN THE SECOND LINE,
THE ADULTS. ACTUALLY, IF YOU LOOK AT THAT ADULT LINE, IT'S HIGHER THAN IT'S BEEN SINCE THE EARLY 1960s.
CHILDREN ARE HIGHER THAN THEY'VE BEEN SINCE-- >> BEFORE THE GREAT SOCIETY, BEFORE ALL THAT.
>> BEFORE ANYTHING. >> BEFORE ANY, BASICALLY POVERTY PROBLEMS. >> THAT'S THE RECESSION.
THE ADULTS CAN'T FIND WORK. WE LIVE IN A WORK-BASED WORLD AND A WORK-BASED ECONOMY. ALL OF US BELIEVE THAT WORK
IS THE MOST IMPORTANT THING. WORK IS THE WAY OUT. A JOB IS THE WAY OUT. SPENDING--
THE PROGRAMS THAT HELP ALLEVIATE POVERTY LIKE FOOD STAMPS, AND THE EARNED INCOME TAX CREDIT, ARE GREAT IN THE SHORT RUN.
BUT THE REAL WAY OUT IS A JOB WHERE YOU CAN EARN A DECENT LIVING. >> THE INCREASE IN KIDS
IS SIMPLY A FUNCTION OF THE INCREASE OF ADULTS OF CHILD-PARENTING AGE IN POVERTY? >> THERE ARE TWO KINDS OF PEOPLE
WHO BECOME PARENTS. THERE ARE THOSE WHO FINISH THEIR DEGREES. THEY GET A CAREER.
THEY MEET A PARTNER. THEY MAKE A PLAN, AND THEY HAVE A CHILD. THOSE PEOPLE ARE HIGH SCHOOL--
EXCUSE ME, ARE COLLEGE GRADUATES WHO HAVE THEIR FIRST CHILD WHEN THEY ARE 28 OR 30, SOMETHING LIKE THAT.
ON THE OTHER END ARE KIDS, WHO, THE FIRST THING THEY DO IS TO HAVE A CHILD. THEY HAVEN'T FINISHED
THEIR EDUCATION. THEY HAVEN'T FOUND A JOB. THEY DON'T HAVE A PARTNER, AND SURELY NEVER HAD A PLAN.
AND IN THE WORLD WE LIVE IN, THE HIGH SCHOOL DROPOUT, A WOMAN WHO'S A HIGH SCHOOL DROPOUT THROUGH HER TOTAL
FERTILITY, THROUGH THE PERIOD BETWEEN THEN TO AGE 44, IS GOING TO HAVE ALMOST THREE KIDS.
AND THE COLLEGE GRADUATE ON THE OTHER END, IS GOING TO HAVE ONE OR TWO KIDS. SO, YOU HAVE AN AWFUL LOT
OF KIDS WHO ARE GROWING UP IN VERY DISADVANTAGED CIRCUMSTANCES, TO UNDER-EDUCATED PEOPLE,
WHO PROBABLY AREN'T MARRIED TO THE FATHERS OF THOSE CHILDREN. AND THEY'RE STRUGGLING TO GET ALONG.
THEY'RE LOOKING FOR JOBS, JUST LIKE EVERYBODY ELSE. THIS IS W-2, WELCOME TO WISCONSIN.
WE'RE NOT GOING BACK TO THE WELFARE. WE'LL PROVIDE CHILD CARE FOR YOU.
WE'LL PROVIDE HEALTHCARE FOR YOU. ALL REALLY GOOD, BUT YOU NEED A JOB.
>> ONE OF THE THINGS THAT MITIGATED, WE SAW A HUGE INCREASE IN POVERTY RATES, BUT PERHAPS
MITIGATED THE INCREASE IN POVERTY RATES, WAS SOMETHING YOU TOUCHED ON A BIT BEFORE, THAT'S BEEN BAD
FOR THE CONSTRUCTION INDUSTRY, THAT YOU HAVE FAMILIES COMING TOGETHER, LIVING TOGETHER, MULTIPLE GENERATIONS,
COLLEGE STUDENTS COMING BACK TO LIVE AT HOME. TALK TO ME A LITTLE BIT ABOUT THAT.
THAT'S BEEN A REALLY SIGNIFICANT THING THE LAST COUPLE YEARS. >> WE DON'T KNOW ENOUGH ABOUT IT, BUT WE'RE STARTING TO LEARN.
AND THIS YEAR, THE CENSUS BUREAU SHOWED THAT MULTI-GENERATIONAL HOUSEHOLDS INCREASED BY 11.4%.
THAT MEANS, A MULTI-GENERATIONAL HOUSEHOLD, IS SOMEBODY LIVING WITH THEIR PARENTS. PEOPLE ALSO MOVED IN
WITH THEIR SISTERS AND BROTHERS. >> THAT WOULD NOT GET COUNTED IN THE 11.4%. >> NO, NOT IN
THE MULTI-GENERATIONAL. BUT IF YOU TALK ABOUT A MULTI-FAMILY HOUSEHOLD, THAT WENT UP EVEN MORE,
IF YOU ADD THOSE TWO TOGETHER. BUT IN BOTH CASES, THE REASON YOU HAVE THIS MOVE IS BECAUSE THE PERSON WHO IS
MOVING IN WITH SOMEBODY ELSE WOULD OTHERWISE BE POOR. SO THAT REDUCES POVERTY. IF YOU HAD TO COUNT THE INCOMES,
DETERMINE POVERTY ONLY BY THE INCOMES OF PEOPLE, LET'S SAY, A SINGLE PARENT OR A YOUNG MAN OR WOMAN
WHO LOST THEIR JOB, IF YOU COUNTED POVERTY ONLY ACCORDING TO THEIR INCOMES, IT WOULD'VE BEEN ABOUT 40%
FOR ALL OF THEM, FOR THAT GROUP. 40%, INSTEAD IT'S 8% OR 9%, BECAUSE THEY MOVE IN WITH THEIR PARENTS, OR WITH THEIR BROTHER
OR SISTER WHO AREN'T ALWAYS ESPECIALLY RICH, BUT THEY'RE NOT POOR EITHER. >> SO IF WE SAY THAT
1 IN 7 AMERICANS ARE IN POVERTY, IT WOULD BE MORE LIKE 1 IN 6, OR 1 IN 5? >> PROBABLY MORE LIKE 1 IN 6.
AND IF THE ECONOMY GROWS AGAIN, AND AS PEOPLE GET JOBS, THEY'LL MOVE BACK OUT. BUT FOR RIGHT NOW,
THERE'S A BIG CONTRACTION. IT'S NOT EXACTLY THE WAY THE PARENTS WANT IT. IT'S NOT THE WAY THAT
THE ADULTS WANT IT, OR THE KIDS, BUT IT'S BETTER THAN BEING ON THE STREET. >> NOW, THE OTHER THING
THAT MITIGATED THE EFFECTS OF THE GREAT RECESSION, THE ECONOMIC DOWNTURN WAS THE STIMULUS PACKAGE
AND OTHER FEDERAL MONIES SPENT. HOW DID THOSE DIRECTLY HAVE AN INFLUENCE ON ALLOWING PEOPLE TO JUST BE ABOVE THE POVERTY LINE?
>> THE BIGGEST THING, I THINK, FOR WISCONSIN IN TERMS OF THE OFFICIAL POVERTY FIGURES IS EXTENDED UNEMPLOYMENT INSURANCE.
THIS IS A MANUFACTURING STATE. MOST OF THOSE LAY-OFFS IN MANUFACTURING WERE PEOPLE WHO'VE HAD 10, 20 YEARS EXPERIENCE,
AND HAVE EARNED THE RIGHT TO RECEIVE UNEMPLOYMENT COMPENSATION. AND WE KEPT EXTENDING IT,
AND EXTENDING IT, AND EXTENDING IT, ALL THE WAY TO 99 WEEKS. NO ONE REALLY LIKES THAT
AS A SOLUTION. BUT IT REALLY HELPED REDUCE PEOPLE IN, LET'S SAY, ROCK COUNTY
FROM FALLING INTO POVERTY. NOW THAT THAT'S OVER, THOSE 99 WEEKS ARE PASSED, AND THEY'VE ALLOWED--
WORKERS ARE LOSING THEIR UNEMPLOYMENT COMPENSATION, POVERTY IS GOING UP LIKE A ROCKET IN ROCK COUNTY,
AND RACINE, AND OLDER MANUFACTURING CENTERS. >> COME BACK, WE'LL CONTINUE OUR DISCUSSION OF POVERTY
IN THE UNITED STATES WITH TIM SMEEDING. PLEASE, STAY WITH US.
>> GREAT PEOPLE IS OUR CAMPAIGN FOR NEED-BASED SCHOLARSHIP AID. IT'S THE KEY TO THE LONG-TERM WELL-BEING OF THE UNIVERSITY
AS A WHOLE. >> IN 1970, TUITION COST ABOUT $500. >> TODAY, IT'S ABOUT $9,000.
>> WE DON'T WANT UW-MADISON TO BE A UNIVERSITY THAT IS DEEMED TO BE OUT OF REACH.
>> THE GREAT PEOPLE SCHOLARSHIP GIVES STUDENTS A CHANCE TO SUCCEED IN LIFE. >> SUPPORT THE GREAT PEOPLE
SCHOLARSHIP. VISIT: UWGREATPEOPLE.ORG
>> WELCOME BACK TO "OFFICE HOURS." WE'RE TALKING WITH TIM SMEEDING ABOUT POVERTY
IN THE UNITED STATES. TIM, ONE OF THE ADVANTAGES OF BEING "OFFICE HOURS" IS WE CAN GET A LITTLE MORE GEEKY
THAN YOUR NORMAL INTERVIEW SHOW. I WANT TO TALK A LITTLE BIT ABOUT HOW POVERTY IS MEASURED. I KNOW YOU'VE DONE A LOT OF WORK
ON THIS, AND THE INSTITUTE HAS DONE A LOT OF WORK ON THIS. FIRST OF ALL, WE TALK ABOUT WHAT THE POVERTY LINE IS
IN THE UNITED STATES. WHAT IS THAT, HOW IS IT CALCULATED? >> IN 1955 AND THE EARLY 1960s,
BASED ON 1955 DATA, A GOVERNMENT STATISTICIAN NAMED MOLLY ORSHANSKY INVENTED A POVERTY LINE,
WHICH WAS THREE TIMES PEOPLE'S EMERGENCY FOOD BUDGET. WHEN WE STARTED WITH THAT POVERTY LINE IN THE EARLY 1960s,
IT WAS HALF OF THE MIDDLE FAMILY'S INCOME. NOW IT'S FALLEN TO LESS THAN 30% OF THE MIDDLE FAMILY'S INCOME,
AND POVERTY IS STILL RISING. IN OTHER WORDS, THE POVERTY LINE HAS BEEN GETTING FURTHER AWAY FROM WHERE THE REST OF PEOPLE
ARE, AND EVEN WITH THAT, WE'RE NOT DOING VERY WELL AT REDUCING POVERTY. >> WHAT ARE SOME OF THE PROBLEMS
WITH THAT MEASURE? SO, I GUESS ONE STRENGTH OF IT IS WE CAN LOOK AT GRAPHICS LIKE WE JUST SAW,
AND SEE CHANGES OVER TIME, AND WE CAN COMPARE DIFFERENT PARTS OF THE COUNTRY. BUT THERE'S ALSO
SOME SIGNIFICANT WEAKNESSES TO HAVING SUCH A SIMPLE MEASURE. >> IT TURNS OUT THAT OUR MAIN TOOLS FOR FIGHTING POVERTY NOW
ARE THE EARNED INCOME TAX CREDIT, REFUNDABLE TAX CREDITS AND FOOD STAMPS, OR "SNAP," OR FOOD SHARE IN WISCONSIN.
IT TURNS OUT WE DON'T COUNT ANY OF THOSE PROGRAMS, BECAUSE THE LONG-TERM POVERTY DEFINITION THAT WE WERE DISCUSSING
A MINUTE AGO, IS ONLY MONEY INCOME. IT DOESN'T COUNT TAXES. IT DOESN'T COUNT
NEAR-CASH BENEFITS, LIKE DEBIT CARDS FOR FOOD, OR EVEN REFUNDABLE TAX CREDITS. TO THE EXTENT THAT THE AMERICAN
RECOVERY AND RELIEF ACT, AND OUR EFFORTS HAVE BEEN POINTED TOWARDS THAT AND THOSE PROGRAMS, WE'RE NOT SEEING THEM
AND THAT'S VERY FRUSTRATING. >> SO, I COULD BE IN A PLACE THAT'S VERY EXPENSIVE TO LIVE, OR A PLACE THAT'S CHEAPER
TO LIVE. THE POVERTY LINE IS STILL THE POVERTY LINE. >> THE POVERTY LINE
IS THE SAME IN THIS COUNTRY. AND ONE OF THE THINGS THAT WOULD HAPPEN UNDER AN IMPROVED MEASURE OF POVERTY--
ACTUALLY, WE'VE BEEN WORKING ON THIS, AND SO HAS THE DEPARTMENT OF COMMERCE AND THE CENSUS BUREAU--
IS IT WOULD REFLECT DIFFERENCES IN COST OF LIVING ACROSS THE COUNTRY. WISCONSIN IS ABOUT 9% CHEAPER
THAN THE NATION'S AVERAGE TO LIVE, BUT SOUTH DAKOTA AND NORTH DAKOTA, AND A LOT OF THE RURAL STATES
ARE EVEN CHEAPER. THE BIG CITIES ON THE COASTS ARE MORE EXPENSIVE. AND IF WE INCLUDE THOSE IN THE
CALCULUS OF MEASURING POVERTY, THAT WOULD AFFECT WHO'S POOR AND WHERE. >> SO, WHAT DOES THAT MEAN
WHEN WE LOOK AT A STATE LIKE WISCONSIN, FOR INSTANCE, THAT HAS A PARTICULAR MIX OF BENEFITS, AND ALSO, LIKE YOU
SAID, IS 9% OR 10% CHEAPER THAN THE REST OF THE COUNTRY. WOULD IT MAKE US HAVE FEWER PEOPLE IN POVERTY,
MORE PEOPLE IN POVERTY? >> WELL, YOU HAVE TO THINK ABOUT A COUPLE OF THINGS. FIRST THING IS, THE POVERTY LINE
NEEDS TO GET A LITTLE MORE REALISTIC. LIKE I SAID, IT'S FALLEN. IF YOU TAKE THE POVERTY LINE,
WHAT THEY'RE RECOMMENDING NOW IS ABOUT THE 33% OF CONSUMERS, THE BOTTOM THIRD. THE LINE IS, CONSUMER OR FAMILY,
THE LINE THAT SEPARATES THE BOTTOM THIRD FROM THE REST. AND IF YOU LOOK AT THAT,
THE POVERTY LINE IS A LITTLE BIT HIGHER THAN WHERE IT IS NOW. FOR INSTANCE, INSTEAD OF $21,000
OR $22,000 FOR THE FAMILY OF FOUR, IT'S 24,000. BUT IF THEN YOU START COUNTING THESE OTHER PROGRAMS
AGAINST IT, FOOD STAMPS, EARNED INCOME TAX CREDIT, HEY WAIT A MINUTE, HOW DO YOU GET YOUR
EARNED INCOME TAX CREDIT? YOU WORK. WHAT DO YOU HAVE TO DO TO GO TO WORK?
OH, YOU HAVE WORK-RELATED COSTS, TRANSPORTATION, CHILD CARE FOR A LOT OF PEOPLE. ANOTHER THING THAT'S TOTALLY OUT
OF THE CURRENT POVERTY CALCULUS, IS OUT-OF-POCKET HEALTHCARE EXPENDITURES, WHICH PARTICULARLY FOR THE AGED, ARE VERY BIG.
ANOTHER THING THAT WE DON'T ACCOUNT FOR, IS THAT SOME PEOPLE OWN THEIR HOMES OUTRIGHT, LIKE THE ELDERLY.
OTHERS ARE PAYING MORTGAGES OR PAYING RENT. SO, IF YOU PUT ALL OF THIS TOGETHER, IT TURNS OUT
IN A REPORT THAT WE DID CALLED "THE WISCONSIN POVERTY REPORT." IT WAS RELEASED IN SEPTEMBER. YOU CAN FIND IT ON OUR WEB SITE,
"INSTITUTE FOR RESEARCH ON POVERTY," YOU'LL FIND US, WHAT WE FOUND THERE IS THERE WERE BIG POVERTY REDUCTION
EFFECTS FROM ABOUT 2% IN WISCONSIN, TWO PERCENTAGE POINTS, FROM ALL OF THESE NON-CASH PROGRAMS,
INCLUDING PUBLIC HOUSING, LOW-INCOME ENERGY ASSISTANCE, AND OTHER THINGS WE DON'T COUNT. BUT THEN THERE WAS A PUSH UP
OF ABOUT 2%, BECAUSE OF HIGHER OUT-OF-POCKET HEALTHCARE EXPENSES, AND BECAUSE OF CHILDCARE.
IN THE END, POVERTY RATE INCREASED JUST SLIGHTLY. BUT THE NEW WAY OF MEASURING, AT LEAST REFLECTS WHAT'S
GOING ON IN THE STATE, AND WHAT PEOPLE CARE ABOUT IN THE STATE, ABOUT THE EARNED INCOME TAX CREDIT, ABOUT
THE HOMESTEAD RELIEF CREDIT, AND SO FORTH. >> GREAT, THANKS. PLEASE, STAY WITH US.
WE'RE GOING TO CONTINUE OUR DISCUSSION OF POVERTY IN THE UNITED STATES WITH TIM SMEEDING FROM THE LA FOLLETTE SCHOOL
OF PUBLIC AFFAIRS.
>> THIS PROGRAM IS A PRODUCTION OF THE UNIVERSITY OF WISCONSIN-MADISON. IF YOU HAVE COMMENTS
ABOUT THIS BROADCAST, PLEASE EMAIL THEM TO: PROGRAMMING@UC.WISC.EDU
>> WELCOME BACK TO "OFFICE HOURS." WE'RE TALKING POVERTY IN AMERICA WITH TIM SMEEDING
OF THE LA FOLLETTE SCHOOL OF PUBLIC AFFAIRS. SO TIM, YOU WERE TALKING ABOUT BASICALLY THE DIFFERENCES
BETWEEN AN ABSOLUTE LEVEL OF POVERTY AND A MORE RELATIVE NOTION OF WHERE THE POVERTY LINE IS.
YOU CAN ACTUALLY SEE, LET'S TALK ABOUT THIS A LITTLE BIT MORE, SOME STRENGTHS AND WEAKNESSES TO EACH.
BECAUSE, IF IT'S RELATIVE, THEN HOW DO I KNOW WHETHER I'M DOING BETTER OR NOT IF I'M INCLUDING THE THINGS
THAT I'M DOING TO TRY AND COMBAT POVERTY? >> THE ABSOLUTE POVERTY LINE IS WHAT WE'VE HAD.
AND THE MEASURE WE DISCUSSED EARLIER THAT WAS SET IN 1963, HAS ONLY BEEN ADJUSTED FOR PRICES.
SO, IT'S LESS, AND LESS, AND LESS REFLECTIVE OF THE STANDARD OF LIVING OF EVEN LOW INCOME PEOPLE.
NOW, IF YOU REPLACE THAT-- >> WE DIDN'T HAVE INTERNET CONNECTION, ALL SORTS OF OTHER EXPENSES YOU WOULD'VE HAD NOW
THAT YOU DIDN'T HAVE 40 YEARS AGO. >> YOU GET THE EXPENSES. YOU LIVE IN A BIGGER HOUSE,
PROBABLY. YOU ARE MORE LIKELY TO HAVE AIR-CONDITIONING. PEOPLE SAY, WELL, YOU KNOW,
YOU'VE GOT A DVD PLAYER, BUT THEY FAIL TO MENTION THAT YOU SPENT MORE ON LUNCH TODAY THAN IT COST FOR THE DVD PLAYER,
AND SO ON. SO THERE'S BEEN SOME CHANGES LIKE THAT. HEALTHCARE IS MORE EXPENSIVE.
CHILD CARE IS MORE EXPENSIVE, AND SO FORTH. >> IN ABSOLUTE DOLLARS, RELATIVE DOLLAR VALUES.
>> WHAT YOU REALLY NEED TO DO IS REFLECT THAT SOMEHOW IN THE MEASURE. NOW, IN EUROPE, THE POVERTY LINE
IS COMPLETELY RELATIVE. SO, IT'S HALF OF THE MEDIAN INCOME, ALL THE TIME. >> IT'S ALWAYS THE SAME
POVERTY LEVEL. >> THE POVERTY LEVEL GROWS WITH THE MEDIAN INCOME. THE ONLY WAY YOU REDUCE POVERTY,
IS HAVE POOR ECONOMIC GROWTH. IN OTHER WORDS, AS WE HAD IN THE 1950s AND 1960s IN OUR COUNTRY, THE INCOMES AT THE BOTTOM GO UP
FASTER THAN THE TOP. THAT'S NOT GOING TO HAPPEN. BUT THE IDEA OF LOOKING AT A CONSUMER, ON HOW MUCH IS SPENT
ON A BASIC BUNDLE OF FOOD, CLOTHING, SHELTER, HEALTHCARE, AT THE 33% OF CONSUMPTION DISTRIBUTION,
IS SOMEWHAT RELATIVE BUT NOT TOTALLY RELATIVE. SO, THAT LINE HAS GONE UP, LET'S SAY, FASTER
THAN THE ABSOLUTE LINE, WHICH IS NO CHANGE WITH INCOME, THE RELATIVE LINE, WHICH CHANGES 100% WITH INCOME,
IT'S CHANGED MAYBE 20%, 25%. >> ALL OF DATA THAT HAVE COME OUT RECENTLY, AND WE HAVE BEEN TALKING ABOUT
ARE 2008 AND 2009 DATA. OBVIOUSLY IN THE MIDDLE OF 2010, THE ECONOMY STILL HAS NOT HAD A SIGNIFICANT UPTURN.
WE'RE OUT OF THE RECESSION TECHNICALLY, BUT WE STILL HAVE NOT SEEN SIGNIFICANT JOB GROWTH. PERHAPS EVEN
AN OBVIOUS QUESTION. IF YOU'RE BACK HERE IN 2010, TALKING ABOUT ANOTHER UPTICK IN POVERTY?
>> YES. ACTUALLY, THE LEADERSHIP IN THE STATE WANTED TO LAUNCH A WAR ON POVERTY,
LIKE 18 OTHER STATES HAVE DONE TWO YEARS AGO. AND I HAD TO TELL THE LEADERS THAT YOU'RE NOT GOING TO DO IT.
THIS IS A BAD TIME TO LAUNCH A WAR, BECAUSE YOU'RE GOING TO LOSE THAT WAR. WE KNOW THAT POVERTY IS HIGHER
THAN 2009 AND 2008, AND EVERYONE THINKS IT WILL BE HIGHER IN 2010. WE WON'T HAVE EXTENDED
UNEMPLOYMENT COMPENSATION ANYMORE, THE JOB MARKET HASN'T PICKED UP, PARTICULARLY FOR THE LOW SKILLED.
AND IF PEOPLE HAD SAVINGS OR OTHER SOURCES, THEY'RE PRETTY WELL TAPPED OUT NOW. SO WE ARE IN THE MIDST
OF YET HIGHER POVERTY IN 2010. THE QUESTION IS, WHAT ARE WE GOING TO DO ABOUT IT? WHAT CAN WE DO ABOUT IT?
>> 30 SECONDS LEFT. IF YOU'RE IN PRESIDENT OBAMA'S EAR, WHAT DO YOU DO ABOUT IT? OR THE NEW GOVERNOR
OF WISCONSIN'S EAR. >> THE NEW GOVERNOR OF WISCONSIN, GOOD LUCK. THE PRESIDENT'S EAR, WHAT YOU
NEED TO DO IS FIND A WAY TO STIMULATE EMPLOYMENT FOR THE LESS SKILLED. ONE WAY, POSSIBLY, OF DOING THIS
IS SAYING OKAY, IF YOU HIRE A NEW PERSON, THE FIRST $25,000 THAT YOU PAY THEM, YOU WILL PAY NO PAYROLL TAXES ON,
NOR WILL THE EMPLOYER. NOW, I UNDERSTAND WE'VE GOT A PROBLEM WITH SOCIAL SECURITY. >> GOT TO INTERRUPT YOU THERE.
PAYROLL TAX VACATION IS THE ONE THOUGHT WE'RE GOING TO GIVE OBAMA. >> MAINTAINING THOSE
TAX PROVISIONS. >> HAVE YOU BACK SOON TO TALK ABOUT MORE. THANKS FOR JOINING TODAY.
DON'T FORGET, "OFFICE HOURS" IS ON THE WEB, VIA OUR UNIVERSITY WEB SITE, FACEBOOK OR TWITTER.
TAKE A LOOK AND LET US KNOW YOUR THOUGHTS. FROM THE UNIVERSITY OF WISCONSIN-MADISON,
THIS HAS BEEN "OFFICE HOURS." THAT'S FOR STOPPING BY.
>> THE PRECEDING PROGRAM WAS PRODUCED BY THE UNIVERSITY OF WISCONSIN, IN ASSOCIATION WITH THE BIG TEN NETWORK.