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Welfare System Designed to Keep the Poor Poorer http://therealnews.com/

Bio

Sanford Schram is Professor of Political Science and Faculty Associate at the Roosevelt House Institute of Public Policy at Hunter College, CUNY. His published books include Words of Welfare: The Poverty of Social Science and the Social Science of Poverty (1995) and Disciplining the Poor: Neoliberal Paternalism and the Persistent Power of Race (2011)--co-authored with Joe Soss and Richard Fording. Both books won the Michael Harrington Award from the American Political Science Association. (Schram is the only person to author more than one book that has won Harrington Award.) More recently he published Becoming a Footnote: An Activist-Scholar Finds His Voice, Learns to Write, and Survives Academia (2013). Soon to be published is The Return to Ordinary Capitalism: Neoliberalism, Precarity, Occupy (Oxford University Press). Schram is the 2012 recipient of the Charles McCoy Career Achievement Award from the Caucus for a New Political Science.

Transcript

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I'm Sharmini Peries coming to you from Baltimore.

Governor of Kansas Sam Brownback has signed a new bill into state law that places restrictions on what welfare recipients can purchase with cash assistance, including movie tickets, liquor, and tattoos. Advocates of the bill say it will provide more accountability for taxpayer money, but will it actually improve the conditions of the poor? Now joining us to discuss this from New York is Sanford Schram. Sanford is professor of political science at Hunter College, CUNY. He is an award-winning author of many books, including Disciplining the Poor: Neoliberal Paternalism.

Thank you so much for joining us.

SANFORD SCHRAM, PROFESSOR OF POLITICAL SCIENCE, HUNTER COLLEGE: My pleasure.

PERIES: Let's begin with what this bill will do, and how bills like this throughout the country is affecting the employment and well-being of welfare recipients.

SCHRAM: Yeah, the Kansas law is just one of another spate of laws that have been passed lately. The country seems to have a habit whenever things start to go bad or the economy's not doing well to fall into a pit of invoking stereotypes, often racist and sexist stereotypes about the poor as deviants who aren't adhering to white, middle-class rules of work and family. And amazingly, we've seen this happen again in the last few years post the great recession, and state after state has passed these kinds of restrictions which really don't make a lot of sense. A popular one is drug testing of recipients, though people on welfare are on average less likely to use illegal drugs than the population in general. And states lose money, they spend more on testing than they get back from dropping people from the rolls for that.

But we see these other kinds of restrictions coming in like the ones in Kansas, limiting how much money you can withdraw from your Electronic Benefit Transfer card each day, $25 in Kansas, and limiting what you can spend the money on. In many cases, about things that low-income people would never even contemplate buying or can afford to buy.

So it's really more about marking the poor as deviant, and sort of creating a kind of policy feedback that feeds back into the society. The policy sort of calls out the poor as deviant and manufacturers their otherness in order to reinforce or buttress anti-welfare antipathy.

PERIES: Now Sanford, what is there to be gained by marginalizing the poor more than they already are in our society? Particularly given that we are in economic crisis, it is well-established fact that unemployment and the economy is in a very slow growth period. What's the point in marginalizing the poor any more than they already are? What's in these heads of these people who passed this legislation in Kansas?

SCHRAM: Well I think there are multiple dimensions to it, but most concretely, materially, it's about not having to spend money, to avoid having to raise taxes. Since the welfare system was changed dramatically in 1996, where they instituted time limits, work requirements--

PERIES: This is important. This is not even under Reagan, this is under President Clinton, and at that time with the assistance of Hillary Clinton, who's now running for president.

SCHRAM: Yeah, there's been commentary lately that allegedly Hillary was very much in support of Bill's signing of the law. In many ways the Republicans, I think, backed Clinton into a corner and made him deliver on his promise when he had run for the presidency the first time, to end welfare as we know it. He ended up having to sign the law in part perhaps because he knew he was politically vulnerable with scandal hanging over him. He wasn't entirely happy with it, though in his autobiography he said he considered it his greatest achievement as president.

So it is bipartisan that we need to change the welfare system, make it more restrictive, to put more of the responsibility on the poor to be self-sufficient so they're not a burden on everyone else. And what's happened over time is so many people are not receiving public assistance that are eligible, we've gone back to the bad old days before the '60s and the welfare rights movement and the civil rights movement, when people were able to start to exercise their rights to assistance.

And now only about a third of all the people who are eligible for assistance are receiving it. So part of this is about keeping them at bay, and not having to meet our obligations as a society. So as the number of people who are extremely poor or live in deep poverty grows, and as the system doesn't respond, I think there's pressure to maintain the restrictions rather than confront the dire need that's rising all around us.

PERIES: What would you suggest or propose, since you study this area and must have solutions outlined. What are your recommendations in terms of short-term and long-term ways to address this kind of poverty?

SCHRAM: Yeah, it's really hard to overnight just overturn all of this. So I think we have to think more strategically and more incrementally, as taking steps along the way to get to a better place. And so we have a work-based system of social provision now. It's not just public assistance, cash assistance, or food stamps, and so on and so forth. But the earned income tax credit's actually our largest cash transfer program for the poor. And we subsidize people's wages. And in fact, it's getting to the point where states are worried that they're paying so much through cash assistance and food stamps to support low-wage employers, now post-great recession a lot of people are going back to work but they're still having to rely on food stamps and public assistance while they do that.

So one of the main things we could do is raise the minimum wage. And there is a lot of growing support for doing that, for more cities to try and follow Seattle and raise the minimum wage up so that one of the results of that will not only be lifting families out of poverty if we do that enough, but will be reducing their need to rely on public assistance, and it will reduce the extent to which the state will be paying to subsidize employers.

PERIES: Sanford, would that equalize--like at the moment, if your income doesn't reach a certain level, you have access to various tax credits and benefits. Especially if you're having a family. Now, if you raise the minimum wage, will some of those people become ineligible for some of those tax credits?

SCHRAM: Yeah. There are what are called notch effects. And so, and some people may be discouraged from working more because they're worried that their income would get too high and they lose their food stamps, and their earned income tax credit will be incrementally reduced as their earnings go up. But if we raise the minimum wage enough, that'll compensate for that.

When the earned income tax credit started to get expanded years ago, it was--there was a debate about whether it was going to discourage employers from raising wages because they would know that their wages that are being paid to their employees were going to be subsidized by the government. And I think there's more evidence of that now. And so there is a tension between the minimum wage law and the earned income tax credit, and we need to worry about their interaction. But I think the weight of the evidence now is that we should be massively raising the minimum wage, and there are instances where this is happening, now. Seattle being a precedent.

PERIES: And globally, the World Bank just recently declared that even worldwide, unions who were advocating on behalf of a higher wage for workers around the world was doing a good thing and should be included in some of the considerations for loans. So this is not just a U.S. phenomenon in terms of increasing the minimum wage, it appears to be a global trend.

SCHRAM: Right, and it's increasingly a global economy. And a lot of employers are concerned about global competitiveness. So I think it's important that we think about global responses.

PERIES: Thank you so much for joining us today, and giving us your insights into how this particular problem could be solved in our society.

SCHRAM: Thanks for talking to me. I appreciate it.

PERIES: And thank you for joining us on the Real News Network.

ON THE PHENOMENON OF BULLSHIT JOBS (STRIKE! is a bi-monthly newspaper – we deal in politics, philosophy, art, subversion and sedition.)

Ever had the feeling that your job might be made up? That the world would keep on turning if you weren’t doing that thing you do 9-5? Anthropology professor and best selling author David Graeber explored the phenomenon of bullshit jobs for our recent summer issue – everyone who’s employed should read carefully…

Illustration by John Riordan

On the Phenomenon of Bullshit Jobs by David Graeber.

In the year 1930, John Maynard Keynes predicted that technology would have advanced sufficiently by century’s end that countries like Great Britain or the United States would achieve a 15-hour work week. There’s every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn’t happen. Instead, technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.

Why did Keynes’ promised utopia – still being eagerly awaited in the ‘60s – never materialise? The standard line today is that he didn’t figure in the massive increase in consumerism. Given the choice between less hours and more toys and pleasures, we’ve collectively chosen the latter. This presents a nice morality tale, but even a moment’s reflection shows it can’t really be true. Yes, we have witnessed the creation of an endless variety of new jobs and industries since the ‘20s, but very few have anything to do with the production and distribution of sushi, iPhones, or fancy sneakers.

So what are these new jobs, precisely? A recent report comparing employment in the US between 1910 and 2000 gives us a clear picture (and I note, one pretty much exactly echoed in the UK). Over the course of the last century, the number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically. At the same time, “professional, managerial, clerical, sales, and service workers” tripled, growing “from one-quarter to three-quarters of total employment.” In other words, productive jobs have, just as predicted, been largely automated away (even if you count industrial workers globally, including the toiling masses in India and China, such workers are still not nearly so large a percentage of the world population as they used to be).

But rather than allowing a massive reduction of working hours to free the world’s population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning not even so much of the “service” sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations. And these numbers do not even reflect on all those people whose job is to provide administrative, technical, or security support for these industries, or for that matter the whole host of ancillary industries (dog-washers, all-night pizza deliverymen) that only exist because everyone else is spending so much of their time working in all the other ones.

These are what I propose to call “bullshit jobs.”

It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working. And here, precisely, lies the mystery. In capitalism, this is exactly what is not supposed to happen. Sure, in the old inefficient socialist states like the Soviet Union, where employment was considered both a right and a sacred duty, the system made up as many jobs as they had to (this is why in Soviet department stores it took three clerks to sell a piece of meat). But, of course, this is the very sort of problem market competition is supposed to fix. According to economic theory, at least, the last thing a profit-seeking firm is going to do is shell out money to workers they don’t really need to employ. Still, somehow, it happens.

While corporations may engage in ruthless downsizing, the layoffs and speed-ups invariably fall on that class of people who are actually making, moving, fixing and maintaining things; through some strange alchemy no one can quite explain, the number of salaried paper-pushers ultimately seems to expand, and more and more employees find themselves, not unlike Soviet workers actually, working 40 or even 50 hour weeks on paper, but effectively working 15 hours just as Keynes predicted, since the rest of their time is spent organising or attending motivational seminars, updating their facebook profiles or downloading TV box-sets.

The answer clearly isn’t economic: it’s moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the ‘60s). And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them.

Once, when contemplating the apparently endless growth of administrative responsibilities in British academic departments, I came up with one possible vision of hell. Hell is a collection of individuals who are spending the bulk of their time working on a task they don’t like and are not especially good at. Say they were hired because they were excellent cabinet-makers, and then discover they are expected to spend a great deal of their time frying fish. Neither does the task really need to be done – at least, there’s only a very limited number of fish that need to be fried. Yet somehow, they all become so obsessed with resentment at the thought that some of their co-workers might be spending more time making cabinets, and not doing their fair share of the fish-frying responsibilities, that before long there’s endless piles of useless badly cooked fish piling up all over the workshop and it’s all that anyone really does.

I think this is actually a pretty accurate description of the moral dynamics of our own economy.

*

Now, I realise any such argument is going to run into immediate objections: “who are you to say what jobs are really ‘necessary’? What’s necessary anyway? You’re an anthropology professor, what’s the ‘need’ for that?” (And indeed a lot of tabloid readers would take the existence of my job as the very definition of wasteful social expenditure.) And on one level, this is obviously true. There can be no objective measure of social value.

I would not presume to tell someone who is convinced they are making a meaningful contribution to the world that, really, they are not. But what about those people who are themselves convinced their jobs are meaningless? Not long ago I got back in touch with a school friend who I hadn’t seen since I was 12. I was amazed to discover that in the interim, he had become first a poet, then the front man in an indie rock band. I’d heard some of his songs on the radio having no idea the singer was someone I actually knew. He was obviously brilliant, innovative, and his work had unquestionably brightened and improved the lives of people all over the world. Yet, after a couple of unsuccessful albums, he’d lost his contract, and plagued with debts and a newborn daughter, ended up, as he put it, “taking the default choice of so many directionless folk: law school.” Now he’s a corporate lawyer working in a prominent New York firm. He was the first to admit that his job was utterly meaningless, contributed nothing to the world, and, in his own estimation, should not really exist.

There’s a lot of questions one could ask here, starting with, what does it say about our society that it seems to generate an extremely limited demand for talented poet-musicians, but an apparently infinite demand for specialists in corporate law? (Answer: if 1% of the population controls most of the disposable wealth, what we call “the market” reflects what they think is useful or important, not anybody else.) But even more, it shows that most people in these jobs are ultimately aware of it. In fact, I’m not sure I’ve ever met a corporate lawyer who didn’t think their job was bullshit. The same goes for almost all the new industries outlined above. There is a whole class of salaried professionals that, should you meet them at parties and admit that you do something that might be considered interesting (an anthropologist, for example), will want to avoid even discussing their line of work entirely. Give them a few drinks, and they will launch into tirades about how pointless and stupid their job really is.

This is a profound psychological violence here. How can one even begin to speak of dignity in labour when one secretly feels one’s job should not exist? How can it not create a sense of deep rage and resentment. Yet it is the peculiar genius of our society that its rulers have figured out a way, as in the case of the fish-fryers, to ensure that rage is directed precisely against those who actually do get to do meaningful work. For instance: in our society, there seems a general rule that, the more obviously one’s work benefits other people, the less one is likely to be paid for it.  Again, an objective measure is hard to find, but one easy way to get a sense is to ask: what would happen were this entire class of people to simply disappear? Say what you like about nurses, garbage collectors, or mechanics, it’s obvious that were they to vanish in a puff of smoke, the results would be immediate and catastrophic. A world without teachers or dock-workers would soon be in trouble, and even one without science fiction writers or ska musicians would clearly be a lesser place. It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.) Yet apart from a handful of well-touted exceptions (doctors), the rule holds surprisingly well.

Even more perverse, there seems to be a broad sense that this is the way things should be. This is one of the secret strengths of right-wing populism. You can see it when tabloids whip up resentment against tube workers for paralysing London during contract disputes: the very fact that tube workers can paralyse London shows that their work is actually necessary, but this seems to be precisely what annoys people. It’s even clearer in the US, where Republicans have had remarkable success mobilizing resentment against school teachers, or auto workers (and not, significantly, against the school administrators or auto industry managers who actually cause the problems) for their supposedly bloated wages and benefits. It’s as if they are being told “but you get to teach children! Or make cars! You get to have real jobs! And on top of that you have the nerve to also expect middle-class pensions and health care?”

If someone had designed a work regime perfectly suited to maintaining the power of finance capital, it’s hard to see how they could have done a better job. Real, productive workers are relentlessly squeezed and exploited. The remainder are divided between a terrorised stratum of the – universally reviled – unemployed and a larger stratum who are basically paid to do nothing, in positions designed to make them identify with the perspectives and sensibilities of the ruling class (managers, administrators, etc) – and particularly its financial avatars – but, at the same time, foster a simmering resentment against anyone whose work has clear and undeniable social value. Clearly, the system was never consciously designed. It emerged from almost a century of trial and error. But it is the only explanation for why, despite our technological capacities, we are not all working 3-4 hour days.

David Graeber is a Professor of Anthropology at the London School of Economics. His most recent book, The Democracy Project: A History, a Crisis, a Movement, is published by Spiegel & Grau.

Debt is the necessary devil that keeps capitalism going (from http://betonmarkets.info/)

Debt is the necessary devil that keeps capitalism going

Debt is the necessary devil that keeps capitalism going < News < Bet On Markets

While it’s not wrong to pile advice upon advice on to consumers to avoid debt, sometimes the advice is chokingly too routine and unnecessary.

Economic literacy is key in this instance, and individuals are well aware at all times of the consequences of debt servicing.

In fact, it’s debt that drives the economies of most countries. Individual or private spending accounts for over 60 percent of total spending in our economy.

Most spending no doubt comes in the form of debt. Take it further. Each borrowed rand is used in the production process, which ultimately maintains a job or two. And to retire that debt also maintains a job or two. Responsible borrowing to a very large extent is what drives the economy.

Countries borrow for various purposes, mostly to provide goods and services to the people. Companies borrow for various reasons, and basic economic theory attests to the fact that companies prefer a regime of low borrowing costs so that they can expand productive capacity.

Debt is the main form of finance used worldwide. In a capitalist society debt has been greatly normalised, with financial institutions being in the business of marketing debt.

Goods and services provided by various industries are also produced at the back of inventories that have to be at a certain level. And it is this attraction that indirectly coerces individuals to have an appetite for debt.

It is therefore not wrong to have an appetite for debt.

The contention that buying food on credit is a worse form of debt appetite, while correct, almost invariably apportions the blame to individuals, as though the institutions that are encouraging the debt are not to blame.

Banks are in the business of lending money and without an appetite for debt they might as well close down. And if that’s the case, then we might as well have no interest rates because there won’t be any opportunity costs.

Such a scenario would defeat the existence of economic theory, and even more so monetary economics. How will we calculate inflation in an environment that has no need to borrow money?

While this is an extreme position, it becomes clear that nations have developed an affinity for debt as the necessary lubricant to oil their economies.

Financial institutions have in-built risk management programmes to monitor defaulting clients. These early-warning signs continue to be used to balance the borrowing environment.

Yes, it is correct to warn individuals that debt and the accumulation thereof is the determinant, significantly so, of the interest rate environment. And therefore any irresponsible debt accumulation has the potential to fuel prices and consequentially force interest rates up.

But what is not coming out in the wash is the importance of responsible borrowing, which to a very large extent drives the economy.

So when we encourage individuals to retire their debt, we should also inform them of the intricate but important aspect of debt in the economy. Some of us have studied, using debt as the only form of finance. And thereafter debt was and is still used effectively to accumulate assets.

So while debt may sound like an evil thing, we are a capitalist society which has bestowed some sanity on the appetite for debt.

By Mandla Maleka

Mandla Maleka is the chief economist at Eskom Treasury. The views expressed are solely those of the author and not necessarily those of Eskom Treasury.