Why Is Poverty, Inequality Growing?

The number of people living in poverty is the highest it's been since the U.S. Census Bureau started tracking poverty estimates. Plus, the gap between those earning the most and the least continues to grow. Host Michel Martin discusses the current state of poverty and income inequality with two experts on the subject, Timothy Noah and Peter Edelman.

MICHEL MARTIN, HOST:

I'm Michel Martin, and this is TELL ME MORE, from NPR News. Later in the program, we are going to talk about a highly touted education program that's come under new scrutiny, including from a former member. We'll talk about the debate over Teach for America. That's in just a few minutes.

But first, we want to spend some time today talking about what was always expected to be the central issue in this presidential campaign: the economy. But specifically, we want to talk about whether this economy serves most people equally well. By now, it's clear what the lines of argument are: The Republican, Mitt Romney, is arguing that the economy needs more freedom and less regulation to offer more opportunity. President Obama is arguing that the economy needs more fairness.

And we'll just let you know up front that our next two guests have both written provocative books that both tilt to the fairness side of the argument, but they come at the question from slightly different perspectives. So we've put them together.

Peter Edelman is a professor of law and the faculty director of the Center on Poverty, Inequality and Public Policy at Georgetown University. He's been thinking about and writing about poverty for more than four decades, since he traveled through the Deep South with the late Senator Robert F. Kennedy. Professor Edelman also recently wrote the book "So Rich, So Poor: Why It's So Hard to End Poverty in America."

Also with us, Timothy Noah. He is a columnist and senior editor for the New Republic. He's the author of a new book called "The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It."

Thank you both so much for speaking with us.

TIMOTHY NOAH: Thanks for having us.

PETER EDELMAN: My pleasure.

MARTIN: Peter, I'm going to start with you, because poverty is something that you've been thinking about for many, many years, as we've said. You say that you think that extreme poverty is actually increasing. Why do you say that?

EDELMAN: What's happened is that at the very, very bottom, we've lost cash assistance welfare for mothers and children. So the only thing that we have for people with really low incomes is food stamps. We have, now, 20.5 million people who have incomes below half the poverty line - that's below $9,000 for a family of three - and six million people whose only income is from food stamps. So that's a third of the poverty line, $6,000 for a family of three. That's just terrible, and it's the result of terrible public policy in the way in which the 1996 welfare law has played out.

MARTIN: Why has is it so hard to end poverty in this country?

EDELMAN: That really relates to what's happened to our economy, and also to family structure in the country. The problem is we have so many low-wage jobs, and we have so many people - generally single mothers - who only have one person in the household who could go out and earn money, and just can't get her family out of poverty, or out of near-poverty with the kind of job that she can get. Those two things together are just having a horrible effect, and that - together with politics, together with continuing attitudes about race and gender in the country - that's what's keeping us from doing better.

MARTIN: We're going to talk to Tim Noah in just a minute to talk more about income inequality. But income inequality also plays a role in your argument, as well. Are you arguing that income inequality is not just a symptom of growing poverty, but it's actually part of the problem?

EDELMAN: There's always been a divergence between the top and the bottom in this country, but it's just hugely grown in the last 40 years. So we've had growth, but everybody in the bottom half - not just the poor - have really not made progress at all, and at the very bottom, people have lost ground.

MARTIN: Tim Noah, this leads to you. You talk about two great divergences in your book. One is the skills gap. And then there's the income divergence between the top one percent and everybody else. Talk a little bit more about why this matters.

NOAH: Right. There are two gaps. One is based on skills. And my focus is on the middle class and the gap between people who have high school degrees and people who have college degrees and, increasingly, graduate degrees has increased. That's one divergence. The other divergence is the famous one percent versus the 99 percent, which has been a function, mainly, of out-of-control CEO pay and the financialization of the economy.

The skill-based divide is more complex, and it has partly to do with failures in our education system and the decline of the labor movement in this country.

MARTIN: Well, talk a little bit more, though, about why this matters. Of course, you know that there are many people who will argue that his gap doesn't matter at all, and, in fact, some would argue that this huge escalation in, you know, CEO pay is a good thing, because it's an incentive for people to be more creative, to try harder and to do things that lead to innovation. You say no.

NOAH: Right. Well, I think all arguments against the income inequality boom begin from the premise that of course we need some income inequality in the United States. Any capitalist system requires that skill and effort be rewarded to some extent. The question is: How much do you need? And the even more urgent question, I think, is: What happens when the inequality gap grows and grows and grows and never stops growing, as has been occurring since 1979? That's a true cause, I think, for concern.

It matters for our society, and I think it matters for our economy. In our society, you have a deepening sense of alienation between the middle class and the rich, and I would imagine also between the poor and the rich. And that is not healthy to our society.

With regard to the economy, it seems to me, if you need to reward people at the top, why don't you need reward people at the middle, at the median? We haven't seen incomes rise for the past decade. At the same time, we've seen productivity increase substantially. Now, if I'm at the median and I'm not going to see any economic reward from increasing my productivity, why should I make any effort at all?

MARTIN: If you're just joining us, this is TELL ME MORE, from NPR News. I'm speaking with Timothy Noah - that's who was speaking just now - and Peter Edelman. Both have recently authored books about income inequality and the persistence of poverty in this country.

Professor Edelman, I'll go back to you, here. First of all, you know that there are many people who also argue that people aren't more poor in this country, that extreme poverty is not worse than it was in the past. I know that one of the arguments that particularly bedevils you is the argument that, in fact, poor people are less poor than they used to be because they consume more calories, have more access to technology than any previous generation of poor people did in the past and, in fact, anywhere else in the world. Could you just address that, just briefly, if you would?

EDELMAN: If you're below the poverty line, why is it that you should be held to some kind of a third-world standard of being poor? That's ridiculous. Being poor in the United States is partly relative to what happens to other people, although try it and you'll find it doesn't work very well. And then the thing that's being left of these arguments is how many people are really in dire circumstance, where some kind of argument about their being here in the first world and not in the third world really doesn't apply. For some people, it really is like the third world in our country.

MARTIN: Well, one question that each of you addresses in your own way I'm interested in each of your perspective on it, it says: If things are as bad as you describe in both of your books, why isn't there more social unrest? I mean, we see in Europe, for example, where austerity measures have been proposed, that there are - there is - there are riots in the street. Why are we not seeing more of that here, Timothy Noah?

NOAH: I think partly it's because the decline of the labor movement. I think Americans do not naturally incline towards thinking collectively about their plight. There is a tendency - as you say - to kind of turn inward, to think that I am the captain of my fate, captain of my ship and so on. But the unions teach people to think collectively, and union representation is way, way down. In the 1950s, close to 40 percent of workers were covered by union contracts.

Now, in the private sector, that's down to seven percent. We hear a lot about public sector unions. We don't hear a lot about the really remarkable decline of private sector unions. We're back to where we were before the New Deal.

MARTIN: Professor Edelman, you have any thought about that?

EDELMAN: I think that the question of so much low-wage work has been with us for 40 years, and I think that people have become kind of inured to it and really think that nothing can be done about it. It's my hope that we haven't seen the end of what Occupy started, and that we get to the point where people are so disgusted by these incredible gaps between the top and the bottom that, as happened during the Progressive Era, they do begin to speak out about it, act about it and vote differently about it.

I think there's a real struggle that's quite possible, and that we should be having for those people who are between let's say the poverty line and twice the poverty line. We now have 103 million people who have incomes below twice the poverty line, below $44,000 for a family of four.

I think they're politically reachable if there would be more attention to them and more telling them that it's not their fault. There really is a structural problem that could be solved with a different politics.

MARTIN: Why should people who are doing well care about this?

EDELMAN: They should care because it really is the nature of our country that's at stake. For one thing, just in their self-interest, if they're corporate people, the fact is that if everybody in this country was a consumer, if more people were working and were getting a better income from work, they would sell more of their products and services.

But also, these kinds of gaps really turn us into a different country. The kind of corporate power that we have politically now really endangers our democracy.

NOAH: And I would agree with that. It's a bit parallel to what Martin Luther King said about racism. He said it didn't just harm African-Americans. It harmed the entire society. I think economic inequality similarly harms the entire society, and there's some research to back that up. Health outcomes, for example, are worse in societies where there's greater income inequality and, at the very least, that means that the rich are going to have to pay more for health care.

MARTIN: Let's just - in the minute we have left or couple minutes that we have left - let's hear from each of you about your prescriptions for this problem that you both described. Professor Edelman, you want to go first?

EDELMAN: I think the immediate thing is to restore the safety net at the very bottom, which we've destroyed by destroying cash assistance. But that's just the immediate thing, although it is a crisis. We have to figure out how to get more money into people's pockets from their work because jobs that pay enough to live on are at the heart of any poverty struggle. And, of course, educating our children and investing in our children is absolutely crucial.

MARTIN: Timothy Noah?

NOAH: Well, I would certainly agree with everything that Mr. Edelman says and, in addition, I would raise marginal rates on the rich. The top rate is now half what it was when Ronald Reagan was elected. I would create a jobs program in the government along the lines of the WPA in the 1930s. I would impose price controls on college tuition, which are out of control. I would also empower shareholders to restrict CEO pay and I would reregulate Wall Street, to some extent.

In addition to solving or addressing the income inequality problem, it would also make our economy much more secure.

MARTIN: Timothy Noah is senior editor at the New Republic. He's author of the new book, "The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It." He was kind enough to join us in our Washington, D.C. studio.

Peter Edelman is a professor of law and the faculty director of the Center on Poverty, Inequality and Public Policy at Georgetown University. He's the author of the new book, "So Rich, So Poor: Why It's So Hard to End Poverty in America." He was kind enough to join us on the line from Boston.

Gentlemen, thank you both so much for speaking with us.

NOAH: Thank you.

EDELMAN: Thank you very much.

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