In last night’s vice presidential debate, Congressman Paul Ryan twice brought up the Republican ticket’s talking point that 15 percent of Americans live in poverty, and twice failed to offer a single idea on how a Romney administration would help create opportunities for low-income people.
He simply insisted, “We want to get people out of poverty, in the middle class, on to lives of self-sufficiency.”
The good news is that if Ryan truly wants to reduce poverty in a significant way—to make his mark as a champion of low-income people—he need not look any further than the thinkers in his own Badger State.
Four years ago, Community Advocates Public Policy Institute in Milwaukee asked: what would it take to reduce poverty in the state by more than half, to a rate below 5 percent? The institute spoke with a bipartisan group of local and national advisers, narrowing a pool of twenty-five possible policy changes down to four. Last month they rolled out their final proposal. Through sophisticated and widely respected quantitative modeling, Urban Institute demonstrated that the policies would reduce poverty by between 58 and 81 percent in Wisconsin.
The four recommendations are simple and clear:
- Create a senior and disability tax credit
- Expand a transitional, subsidized jobs program
- Increase the minimum wage to $8 an hour
- Reform the Earned Income Tax Credit
These four policy changes were chosen in part because they lend themselves to accurate modeling. Urban Institute concluded that implementation would dramatically reduce poverty for children, adults under 65, and seniors; people of all races; and for workers and those who can’t work.
“This report is one step in overcoming this fatalism that there’s nothing that can be done about poverty—one step in slaying that myth,” said Conor Williams, an economic policy analyst and consultant on the project.
“We can reduce the poverty rate to under 4 percent or 3 percent if we want to,” said senior fellow David Riemer.
The project looked at the 435,000 people in Wisconsin living below the poverty line in 2008: 100,000 were children; 60,000 were 65 or older; and about 60,000 were disabled and couldn’t work. That left 215,000 people of working age who were capable of working—nearly 20 percent of whom indeed worked full-time, all year long. The next largest group was those who either worked full-time part of the year, or worked part-time throughout the year.
“So the vast majority of adults in poverty are working—and they have both the desire and capacity to work,” said Williams. “The current situation is a market failure, and three of the four policies are small supplements to make the market function correctly so that working people are able to lift themselves out of poverty.”
With the proliferation of low-wage work those kinds of supplements are sorely needed. The Economic Policy Institute reports that 50 percent of jobs in the United States pay less than $34,000 per year, and 25 percent pay less than $23,000 annually (less than the poverty level for a family of four).