Thursday, May 05, 2005

From Clarke, with Tough Love

"Continuing to pursue this flawed agenda (welfare and W-2) of pouring money into these failed programs to someday uplift people who are unmotivated and uneducated into the mainstream has dealt a catastrophic blow to any hope of eliminating what is cultural in nature, not economic."
David Clarke, Milwaukee Journal Sentinel, May 4, 2005 (1)

Beneath the overblown rhetoric, there is a kernel of truth here: a man's economic status derives, in part, from his culture. Culture includes attitudes toward education, self-reliance, work, morality, and responsibilty for one's family. The power of government programs, no matter how well-designed, to inculcate attitudes favorable to economic success is limited. Clarke favors total elimination of both welfare and W-2.

Although much of what the Sheriff wrote is true, I believe his response would be devastating to tens of thousands of poor people in Milwaukee and elsewhere in Wisconsin.

Education: Opportunity wasted
My own alma mater, Milwaukee Washington High School, 2525 N Sherman Blvd., is a good example. The truancy rate at Washington is now about 74% (2). Of all students entering Washington, only about half ever graduate, the rest drop out, and drop-outs over 16 are not considered truant. Therefore, of all 17-year olds living in the Washington attendance district, only about 13% are actually attending class on any given school day. A free high school education, crucial to obtaining most entry-level jobs in today's economy, is simply being thrown-away by the vast majority of teen-agers on the north side of the City of Milwaukee.

The Underground Economy: Survival in the Inner City
The Underground Economy (UE) is the exchange of goods and services for cash, which is not reported to the IRS, Job Service, or W-2 agencies. This includes both legal activities ( like child care, home-cleaning, auto repair, snow- shoveling, hair-weaving) and illegal (drugs and prostitution). Thanks to the UE, many inner-city residents are actually more prosperous than they appear on government statistics. On the other hand, much of the violence in poverty areas stems from business disputes and collection problems in the illegal sector of the UE that cannot be resolved through courts or binding arbitration. Income from legal UE activities is low, irregular, and can lead to tax problems (3).

Military Service: A Ticket Out of the "Hood"
One government program that really does takes young people out of poverty (at least for a few years) is the US military, which will hire just about any high-school graduate and most male drop-outs. The military provides housing, food, wages, health-care and some types of training useful in civilian life (such as vehicle repair, flying, etc.). Some enlisted men even make a life-time career of the military.
Veterans are also eligible for college funds and mortgage help. Military service is risky, especially during war-time (that is, the foreseeable future), but your odds of surviving a 6-month stint in Iraq are about the same as surviving the same time in America's toughest neighborhoods.

The Job Market
About 5% of all Americans who want to work are unemployed. In poverty areas, the figure is closer to 40%, which exceeds depression-levels for the entire US. Of course, some of these people are actually working in the UE, and others would rather live off unemployment compensation, welfare, or the generosity of relatives and friends than work.
Another substantial segment of the long-term unemployed are people who are physically or mentally unfit for work, or who are so addicted to drugs or alcohol that they cannot keep a job.
Even when these groups are removed, the inner-cities of America are left with a substantial population of healthy and motivated people who simply cannot find a job.
The number of jobs accessible (4) to people living in the inner-cities has plummeted in recent decades, largely due to the movement of manufacturing work to suburban areas and outside the US, mainly to low-wage Asian countries. Retailers have also moved to suburbs and the more upscale areas of the cities. When unskilled jobs are open in the cities, there are hordes of applicants, and they come from the entire metropolitan area.
Massive retirements in the coming decades will inevitably open up more jobs, but only those with sufficient education and training, in addition to motivation, will be able to get them.

What would happen if welfare and W-2 were abolished?
According to Sheriff Clarke, people now dependent upon government checks will get themselves educated, form stable families, and work for a living. If so, it would be wonderful! Not only would we cut government spending, but at the same time improve the lives of the lower class!
My view of the consequences of abolishing these "safety-net" programs is far more bleak. I believe that most people who lost their welfare/W-2 income would try to participate more in the Underground Economy, leading to more competition and more violence. At the same time, many families unable to pay their rents would be foreced to double-up, leading to more overcrowding and more domestic violence. Robberies and burglaries would soar as poor people become more desperate.
Mothers who could not feed both themselves and their children would just feed themselves. Children would be neglected and abandoned; some might even starve.
Worse yet, many legitimate businesses in poverty areas would be forced to close, throwing even more people out of work and into poverty. Competition for the few full-time jobs available would be fierce, and most applicants would lose out.
Welfare systems were created, not by delusional liberals as Clarke says, but by practical people who understood that the real alternative is mass misery, unconscionable in our prosperous nation.
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(1)David Clarke, a former Milwaukee police captain, was appointed Sheriff by Republican Governor Scott MacCallum in 2002. He was elected to a full-term as a Democrat in November, 2002. Clarke ran for Mayor of Milwaukee in 2004, but came in third in the primary.
(2)Sherman Park Today, April, 2005
(3) Al Capone, king of Chicago's liquor UE during Prohibition, was sent to prison for income-tax evasion in 1931. In the UE, too much success is worse than too little.
(4) Since the poorest of the unemployed do not have a car, only jobs within walking distance of their homes or a busline are accessible to them.

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