Diedre Melson, John Cox and Pamela Thatcher. Credit: Don Mathis.

Yesterday, Senator Jeff Merkley (D-OR) got off to an auspicious start as chair of the Banking Subcommittee on Economic Policy by doing something that is all too novel—inviting people with the most at stake in economic policy decisions to testify in Congress.

Three Oregonians featured in the HBO documentary American Winter joined four public policy experts at the subcommittee’s first hearing, entitled “The State of the American Dream—Economic Policy and the Future of the Middle Class.”

Senator Merkley set the context with some powerful and totally depressing statistics, including that between 1989–2010, hourly productivity grew more than three times as fast as wages did during that time; the bottom 20 percent of wage earners saw their average hourly wages decline by thirty cents; the next lowest 20 percent saw their earnings decline by 4.3 percent. In contrast, over that same period, the top 20 percent of workers enjoyed a nearly 30 percent increase in earnings.

And while middle-class earnings have declined, Senator Merkley noted that “the costs of basic features of the middle class such as public college, rent and utilities, and health expenditures have increased between 41 and 80 percent between 1970 and 2009.”

“The data seems to suggest that ordinary families have been slowly hurting for a while, the financial crisis and recession nearly crushed them and our budget austerity policies are making it even worse,” said the Senator.

Certainly the witnesses from American Winter agreed with his analysis.

Diedre Melson started working at age thirteen and, after graduating high school, enrolled in college. But after two and a half years she could no longer afford it, and so she transferred to “a career school” where she was certified as a medical assistant, cardiac technician and phlebotomist. 

She obtained a good job at the Alpha Plasma Clinic but was laid off along with 1,500 other workers when it was shut down during the recession. She was unemployed for two years before finding minimum wage work, and she received SNAP (food stamps) and housing assistance. But even with this assistance, she needed to sell scrap metal—as well as her plasma once or twice a week—to support her four children, two of whom are in college. She now works full-time for the 211info social services hotline and earns $13.50 an hour, but she still must turn to SNAP assistance to feed her family. 

Melson said she is frustrated with media that “exploit” instances of abuse of the safety net rather than showing the vast majority of people who turn to it in the midst of a financial crisis.

“[We] are not the people we see in the media—people taking advantage of the system—we‘re the working poor,” she said. “We’re people who get up every day, and try to pay our fair share, and try to pay our dues. But despite our efforts, we’re sinking.”

John Cox is also no stranger to hard work. He was raised on a cattle ranch and said, “From the time I could walk it seemed like I was having to get up at 4 am to feed the cattle in the winter—and that wasn’t going out in the barn, that was in open pastures.” He was taught by his “parents, grandparents and church” to believe in the American Dream, and his father constantly told him, “You take care of your job and your job will take care of you.”

Cox paid his way through college—which he noted was much cheaper then—working various jobs, including commercial fishing in Alaska, and sweeping volcanic ash from parking lots after the eruption of Mount St. Helens.

“I hadn’t been without a job since I was about 12 years old—until October 2008,” he said.

That’s when he was laid off from his position as an accountant. He was confident he would be rehired quickly, but ended up exhausting $35,000 in savings and $35,000 in his 401(k) to support himself and his 12-year-old son, who has Downs Syndrome.

“After the dreaded six months of unemployment, employers won’t look at you. They’re not anxious to hire a person of my age anyway,” said Cox, who is in his 50s.

After a year and a half, Cox applied for unemployment benefits that he “had always thought of as for other people.”

“I still am putting out job applications left and right. I’ve even looked at minimum-wage jobs—if it was just me, I would have no problem,” said Cox. “But when you work for minimum wage and you have to pay for daycare or a baby sitter, it’s just a wash. You can’t afford to work and pay a baby sitter.”

Wells Fargo is now trying to foreclose on his home—he owes far more on his mortgage than his home is worth (as did nearly one in four homeowners in the first quarter of 2013, according to Senator Merkley). Cox had purchased the house so that his son would have a “nest egg in the future when [I’m] not around.”

Pam Thatcher and her husband saved up before having their first child so that she could stop teaching preschool and work as a stay-at-home mother. But after they had their second child, her husband was laid off. 

“We cut back on every possible extra expense and carefully used our savings to pay for the basics like rent, food and diapers,” said Thatcher. “It wasn’t long before cutting corners was no longer enough and we were faced with the grim prospect of going without, or turning to social services and government assistance for help. Thank goodness there was help when we needed it.”

Thatcher said that prior to her own need for assistance, she thought “it was easy for people who depended on government programs” and that “the system bred abuse.” Now she sees that safety net programs “help keep families like [mine] just barely above water.”

“Something has gone wrong when instead of investing in programs that will help families get back on their feet, our elected officials are making cuts,” she said. “When you cut funding for SNAP, TANF or WIC you are making the decision to take away what little support people have to keep the lights on, or food on the table.”

Her husband has found a new job, but like so many other workers, he is earning a much lower salary than he was before the recession.

“Now, even with full-time work, we still struggle to make ends meet,” said Thatcher.

The panel’s public policy experts—Princeton economics professor Dr. Atif Mian, Demos senior policy analyst Amy Traub and venture capitalist Nick Hanauer—suggested many reforms to help rebuild the middle class, including raising the minimum wage to $15 per hour, investing in public education and reducing student loan rates to make college affordable, rebuilding the right to organize and collectively bargain and insisting that the wealthy and corporations pay a fair share of taxes as they did in the past.

Senator Merkley wondered if—absent such policy initiatives—we “are in danger of a national cycle of depressed aspirations replacing the motivating vision of the American Dream?”

Mian, Traub and Hanauer did an excellent job laying out the economic trends that are diminishing the middle class, and proposing ways to reverse these trends. But it was the voice of the people—represented by three Oregonians—that made this hearing so meaningful. Kudos to Senator Merkley for making that happen. I candidly think it will take 1,000 Diedres, Pams, and Johns doing sit-ins in congressional offices—along with other advocates for the poor and the middle class—to create the kind of change that is needed.

But in the meantime, Senator Merkley opened the door to authentic experience in his subcommittee, and I hope he will keep it open.

Online Actions

Support Head Start

Tell CEO Mike Duke: Walmart Workers Deserve a Raise

Tell Congress: Pass Elizabeth Warren's Bill To Give Students the same Interest-rate as the Big Banks

Protect Federal Nutrition Programs like SNAP and WIC

Publix: Join the Fair Food Program

12 Things You Can Do to Fight Poverty

The Price of Power to A Nation, Claudia Rowe, Equal Voice News

Clips and other resources (compiled with James Cersonsky)

In the conversation about poverty: don’t forget about deep and persistent poverty,” Laudan Aron and Margery Turner

America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth,” Sarah Ayres 

Affordable housing: For many, still out of reach,” Megan Bolton and Elina Bravve

Welfare for the Wealthy,” Mark Bittman 

Making the Mortgage Market Work for America’s Families,” Center for American Progress and the National Council of La Raza

The Food Stamp Fight,” Center for Economic and Policy Research

How liberals saved California,” David Dayden

Calif. Assembly Supports Domestic Workers, Immigrants,” Equal Voice News

Report: Entitlement changes to put seniors at financial risk,” Michael A. Fletcher

Pa. House panel to discuss block grant distribution,” Kate Giammarise

New Perspectives on Transforming States’ Health and Human Services,” Olivia Golden et al.

Financial Security of Elderly Americans at Risk,” Elise Gould and David Cooper

Inequality Rising—All Thanks to Government Policies,” David Cay Johnson

Working on CalWORKS,” Los Angeles Times

Teachers quietly serve as first responders to poverty,” Alfred Lubrano

House Bill Would Underfund WIC Nutrition Program,” Zoe Neuberger

Tell the Senate to Stop Filibustering Affordable College,” Isaiah J. Poole

Sequestration closes home-based Head Start program,” Mary Jane Skala

Thank you, James Cersonsky: James’s insights and writing made this blog better in recent months. He now turns to focus once again on his own reporting, which you will definitely want to follow.

Studies/Briefs (summaries written by James Cersonsky)

Keeping Kids in School and Out of Court,” New York City School–Justice Partnership Task Force. Though violence in New York City schools dropped 37 percent between 2001 and 2012, the number of suspensions in the latter half of that period shot up 40 percent. Using city data and task force findings, this report maps the landscape of punitive discipline. For example, it finds disproportionate suspension of special needs students and (increasingly) disproportionate suspension of students of color—in line with well-documented national trends in school discipline. Moreover, a relatively small group of schools account for the lion’s share of suspensions, summonses and arrests and most suspensions are for relatively minor incidents. The report offers sweeping recommendations for overhauling the system: a citywide initiative convening agencies, community-based organizations and unions that commits to informing policymaking with data; a graduated response protocol for student conflicts; across-the-board expansion of positive discipline supports; reduced reliance on suspensions and arrests; and improved educational planning and reengagement for youth in court or jail.

Working Hard, Left Behind: Education as a pathway from poverty to prosperity for working Californians,” the Campaign for College Opportunity and the Women’s Foundation of California. More than 40 percent of Californian children under the age of 18 are in low-income working families—a tough lot, as California ranks last in the country in the percentage of these families with high school degrees. Drawing from a large body of research, this report charts the reasons for the deficit and the policies needed to ensure quality education for this population. For one, nearly two-thirds of the state’s 24 million adults between the ages of 18 and 64 are people of color—who are thrown behind by a variety of systemic factors—and this proportion is much larger for younger segments of the population. California also boasts major deficits in higher education financial aid and state-subsidized childcare programs relative to need. The report proposes improving linkages between different parts of the educational pipeline, strengthening programs that provide basic skills and remedial education, bolstering financial aid and other resources and drafting a public agenda for higher education.

Vital Statistics

US poverty (less than $17,916 for a family of three): 46.2 million people, 15.1 percent.

Children in poverty: 16.1 million, 22 percent of all children, including 39 percent of African-American children and 34 percent of Latino children. Poorest age group in country.

Deep poverty (less than $11,510 for a family of four): 20.4 million people, 1 in 15 Americans, including more than 15 million women and children.

People who would have been in poverty if not for Social Security, 2011: 67.6 million (program kept 21.4 million people out of poverty).

People in the US experiencing poverty by age 65: Roughly half.

Gender gap, 2011: Women 34 percent more likely to be poor than men.

Gender gap, 2010: Women 29 percent more likely to be poor than men.

Twice the poverty level (less than $46,042 for a family of four): 106 million people, more than 1 in 3 Americans.

Jobs in the US paying less than $34,000 a year: 50 percent.

Jobs in the US paying below the poverty line for a family of four, less than $23,000 annually: 25 percent.

Poverty-level wages, 2011: 28 percent of workers.

Percentage of individuals and family members in poverty who either worked or lived with a working family member, 2011: 57 percent.

Young men (ages 25-34) working full time today: earning 10 percent less than their fathers did 30 years ago. (via Senator Merkley)

Families receiving cash assistance, 1996: 68 for every 100 families living in poverty.

Families receiving cash assistance, 2010: 27 for every 100 families living in poverty.

Impact of public policy, 2010: without government assistance, poverty would have been twice as high—nearly 30 percent of population.

Percentage of entitlement benefits going to elderly, disabled, or working households: over 90 percent.

Number of homeless children in US public schools: 1,065,794.

Annual cost of child poverty nationwide: $550 billion.

Federal expenditures on home ownership mortgage deductions, 2012: $131 billion.

Federal funding for low-income housing assistance programs, 2012: less than $50 billion.

Quote of the Week

“We‘re the working poor. We’re people who get up every day, and try to pay our fair share, and try to pay our dues. But despite our efforts, we’re sinking.”
   —Diedre Melson

This Week in Poverty posts here on Friday mornings, and again at Moyers & Company and AlterNet. You can e-mail me at [email protected] and follow me on Twitter.