Wednesday, February 9, 2011

Waging a Living

The last couple days in class we have been watching the documentary Waging a Living. The documentary serves two purposes. First, the visuals and presentation style of a documentary lend themselves to showing students, rather than telling them, about important topics related to poverty. The other purpose? Variety. The premise of the documentary is to follow four working families as they struggle to provide for their family at a low wage. Robert Weisberg, the director of Waging a Living, commented in an interview, “My goal was to get people to take a new look at the prevailing American myth that hard work alone can overcome poverty”.

The documentary was extremely depressing. Fathers not paying child support. Difficult tradeoffs between health care and rent payments. Loads of debt. Divorce and single motherhood. Addiction. But, despite the depressing visuals and gut wrenching moments the video succeeds in telling a story about how Americans struggle to provide for themselves and the people in their care.

There are numerous topics worth talking about, but, three common threads stick out as enormously important: family structure, geography, and education. Each of the people in this story lived in broken families with many children under their care. For the single mothers (and one single grandmother) there were three, four, and seven children respectively. The man in the documentary faithfully payed $200 in monthly child support with his meager $12.75 hourly wage ---he lived in San Francisco, CA. The incidence of poverty and single parenthood is high. According to the Census there were roughly 800,000 families in poverty in 2008 and 2009. The percentage of those families headed by Single Mothers were 18.4% and 18.8% respectively. The rate of single motherhood is significantly higher amongst the poor than other populations. Also, mothers tend to be worse off following divorce because there is a sizable correlation between low education and single motherhood.

The geography of the people in this documentary is problematic because they live in areas with high cost of living: San Francisco, CA, New York City, NY, and Hazlet, NJ. Unfortunately, poverty measures do not make geographical adjustments (neither does the Earned Income Tax Credit). The lack of geographical adjustment is an obvious alteration that should be made to the poverty line and tax code. However, many states such as New York have already made changes to reflect the fact that income in New York City is quite different than other areas. Also, some states have adopted higher minimum wages than federal law. But, to demonstrate the vast differences in purchasing power consider that if you lived in Tallahassee and earned $10,000 that would be equivalent in cost of living to $24,000 in San Francisco.

Finally, educational attainment was low amongst all of the people in this documentary. This was extremely troublesome because once upon a time their were good paying jobs that could be obtained with only a high school degree. But, that time has passed. The Bureau of Labor Statistics provides the following advice to people who will soon be searching for occupations, "Math and computer skills are very important. Strong communication and analytical skills are also important." Certifications and degrees are used to determine candidacy for jobs in a number of fields. Below are statistics about median income and unemployment by level of education.

In the documentary one of the women obtains her Associates Degree. However, her pay increase causes a larger reduction in her overall benefits. This is called an "implicit marginal tax rate" because for each additional dollar she earns she reduces her overall resources because she loses eligibility for a variety of government programs. She aptly calls it, "hustling backwards". For a more comprehensive look at the implicit marginal tax rate there was a good article written at the Mises Institute blog.

The documentary showed the sadness and pain that comes with poverty. Ultimately, I believe the director was correct ---in a sense. Hard work alone may not pull people out of poverty. There are numerous barriers to getting ahead: single motherhood, lack of education, and more stressful situations than I may understand. And, there are many changes that could be made to help these people that haven't yet been made (I'll talk about these in greater depth in another post, but, I think you can see some of them here). But, hard work must be a part of it. 

By no means are these comments an exhaustive list; but, I hope these comments are descriptive about the reasons many people, like the people portrayed in the documentary, are in poverty. What can be done? I'm not entirely certain. But, I have my own questions. How can marriages be strengthened? How feasible is it to adjust for geography? Or, will churches and other nonprofits fill the void? Finally, what steps can we take in educational reform that will decrease disparities for low income students?

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