Let Katrina revive the war on poverty

Some 40 years ago, President Lyndon Johnson declared the War on Poverty. He urged Americans to come to the rescue of those who lived "on the outskirts of hope."

If it was a war, it was one the nation in large part lost. Last year, 12.7 percent of Americans fell below the official poverty line. That's up slightly from the year before and about the same as in 1968.

Today, many progressives and liberals hope the Katrina disaster will revive Johnson's poverty war. Many Americans were shocked and embarrassed by the horrific pictures of those - many of them African-American - unable to leave New Orleans because of their poverty, while the more prosperous - many of them white - fled in their cars.

"We may be at something of a tipping point here. It could be a teachable moment," says Michael Zweig, director of the Center for Study of Working Class Life at the State University of New York, Stony Brook.

"People thought they were secure," says John Russo, a professor at Youngstown State University's Center for Working-Class Studies in Ohio. But the redistribution of income and wealth from the middle class to the rich in recent decades, along with the shrinkage of health-insurance coverage and corporate pensions, has sharpened an awareness among many Americans that they "are one job away from poverty," Professor Russo says." If laid off, fired, or ill, they may quickly become destitute.

That risk applies to whites as well as to people of color. About 70 percent of New Orleans' inhabitants were African-American. In the nation as a whole, two-thirds of the poor are white.

What can be done to shrink poverty?

Job-creating economic growth is a necessity, conservatives and liberals agree.

"We have to reconnect overall economic growth to overall benefits for the people," says Lawrence Mishel, president of the Economic Policy Institute, a Washington think tank.

But history indicates that growth alone is inadequate to reach many poor.

"America has never been wealthier," says Sheldon Danziger, an expert at the University of Michigan, Ann Arbor. Real per capita income today is about twice what it was in the early 1970s, he notes. Yet America's 37 million poor "still have difficulty earning enough to support their families," Professor Danziger says.

Danziger figures the most effective weapon in the War on Poverty was a set of changes in the Social Security program. Benefits were indexed to inflation. The Supplemental Security Income program was created to help those ineligible for adequate standard Social Security benefits. Medicare and Medicaid were established in 1965.

As a result, the poverty rate in the US declined sharply for a while, especially among the elderly. In the late 1950s, two-thirds of the elderly had annual incomes of less than $1,000. In 1964, 19 percent of the population were poor. With the War on Poverty, the overall poverty rate dropped to 12.8 percent in 1968 and 11.1 percent in 1973.

The rate has never been that low again, despite a host of social welfare programs such as Head Start, Food Stamps, Basic Educational Opportunity Grants, Low Income Energy Assistance Program, Earned Income Tax Credit (EITC), and so on.

Politicians and the public lost faith in the ability of government to take on new initiatives. Welfare reform became the hot issue. Poverty fell from the top of the social agenda to the periphery.

Yet many experts say poverty can be reduced. It is "very doable," says Mr. Mishel, noting that other wealthy nations have far less poverty.

One relatively easy device would be to boost the minimum wage. It has been $5.15 an hour since 1997. In the last eight years, it has lost 17 percent of its purchasing power to inflation. One member of a family working full time at minimum wage and another half time at that wage level will barely lift a family of four above the poverty level of $15,067.

Most of the poor are working - not idle, notes Mr. Zweig.

The Department of Labor predicts most of the fastest-growing jobs in the next decade will be such service jobs as retail sales clerks, food preparation people, cashiers, janitors and cleaners, waiters and waitresses, and nurses' aides. Many such jobs are paid at minimum wage.

And these jobs can't be outsourced to El Salvador or elsewhere, notes Zweig.

Another boost for the poor could come if business people decided to pay workers more, experts say. If that's unlikely, change the laws in ways that would strengthen unions enough so that they could insist on higher wages.

Other ways to help the poor would be to establish national healthcare system. Or make the EITC and unemployment insurance more generous.

"We can't let things go the way they are," Zweig says. "There is too much suffering."