The Routledge Handbook of Poverty in the United States

Stephen Haymes, Maria Vidal de Haymes, Reuben Miller, Stephen Haymes, Maria Vidal de Haymes, Reuben Miller

• Publisher: Taylor & Francis
• Year: 2014
• Print ISBN: 9780415673440
• eBook ISBN: 9781317627395
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Health Care Delivery
• Index: Politics & International Relations

In the United States, the causes and even the meanings of poverty are disconnected from the causes and meanings of global poverty. The Routledge Handbook of Poverty in the United States provides an authoritative overview of the relationship of poverty with the rise of neoliberal capitalism in the context of globalization.

Reorienting its national economy towards a global logic, US domestic policies have promoted a market-based strategy of economic development and growth as the obvious solution to alleviating poverty, affecting approaches to the problem discursively, politically, economically, culturally and experientially. However, the handbook explores how rather than alleviating poverty, it has instead exacerbated poverty and pre-existing inequalities – privatizing the services of social welfare and educational institutions, transforming the state from a benevolent to a punitive state, and criminalizing poor women, racial and ethnic minorities, and immigrants.

Key issues examined by the international selection of leading scholars in this volume include: income distribution, employment, health, hunger, housing and urbanization. With parts focusing on the lived experience of the poor, social justice and human rights frameworks – as opposed to welfare rights models – and the role of helping professions such as social work, health and education, this comprehensive handbook is a vital reference for anyone working with those in poverty, whether directly or at a macro level.

PART I

From the production of inequality to the production of destitution

The U.S. political economy of poverty in the era of globalization

INTRODUCTION

María Vidal de Haymes, Stephen Nathan Haymes, and Michael Lloyd

Neoliberalism represents a reassertion of the liberal political economic beliefs of the 19th century in the contemporary era (Clark, 2005). In the United States, the dominant neoliberal public philosophy that has emerged in recent decades is that of Market Fundamentalism, which Block (2007) defines as “a vastly exaggerated belief in the ability of self regulating markets to solve social problems.” Such a philosophy replaces a notion of society with the marketplace and supports deregulation, tax cuts, and a retrenchment of public services (Block, 2007). The authors in this part trace the reassertion of liberal economic beliefs, globalization, and the rise of Market Fundamentalism in the United States through analysis of policies regarding debt, austerity, taxation, employment, and the privatization of public services, an agenda that has resulted in the deepening of poverty and economic inequalities in the United States.

In “Transnational Factors Driving U.S. Inequality and Poverty,” Rubin Patterson and Giselle Thompson call attention to the growing poverty in the U.S. and a reversal of the more than 150-year trend of generational gains in income and social mobility. They indicate that approximately one hundred million Americans, one-third of the U.S. population, are poor or nearly poor. They attribute these trends in inequality and poverty to the convergence of a number of factors: the financialization of the economy, the transnationalization of capitalism, deindustrialization, the automation of production, the deunionization of the workforce, rising consumer debt, the democratization of higher education, and the racialization of people of color for the purposes of electoral politics.

In “The Discursive Axis of Neoliberalism: Debt, Deficits, and Austerity,” Shawn Cassiman continues the analysis of neoliberal globalization by examining the discursive constructions of debt, deficits, and austerity within and in support of this system. Using Europe as an illustrative example, she discusses the relatively recent turn toward austerity driven by the European Commission, IMF, and European Central Bank. She extends her discussion to the United States’ debt crisis and argues that it is an outcome of global capitalism—thus the response needs to come from outside of that logic—and offers the Occupy Wall Street movement’s debt refusal campaign as an alternative to the neoliberal austerity discourse.

Similarly, in “Beyond Coincidence: How Neoliberal Policy Initiatives in the IMF and World Bank Affected U.S. Poverty Levels,” Pamela Blackmon discusses the rise of neoliberal policies of the IMF and the World Bank during the 1980s. These policies were advanced on global and domestic levels by Margaret Thatcher and Ronald Reagan in the United Kingdom and the United States respectively. On a global level, Blackmon argues that such policies resulted in increased poverty in the countries that followed these policies. Blackmon explores the degree to which a neoliberal shift occurred in U.S. domestic policies during the Reagan administration. She concludes that the decreased funding and deregulation of education, changes in transfer programs for the poor, and the decreases to top marginal income tax rates that characterized the Reagan-era policies contributed to increases in income inequality and poverty in the United States.

Recognizing taxation as a political practice, Kasey Henricks and Victoria Brockett argue that it is a vehicle of social control that organizes, maintains, and supports inequality over time. In “The House Always Wins: How State Lotteries Displace American Tax Burdens by Class and Race,” they focus on the role of lotteries in the United States and its social consequences for public finance. In their analysis, they detail the fiscal trends, particularly those induced by neoliberal policies, that created optimal conditions for lotteries to emerge as an alternative tax strategy to finance public services. They conclude that a lottery-based taxation scheme shifts the financial burden of public services away from elite interests to the racially and economically marginalized populations that play the lottery the most, replacing more progressive sources of state income, such as corporate and property taxes.

Similar to other authors in this part, Intae Yoon argues that the election of Ronald Reagan to the presidency in 1981 heralded in an era of neoliberal policies that resulted in increased income inequality and economic injustice. In “Consumer Credits as a Quasi-Welfare System for Failed Neoliberals’ Trickle-down Policies Between the 1980s and 2000s,” Yoon focuses on the deregulation of financial institutions, the dismantling of anti-trust laws, and deregulation of consumer credit markets, which he argues resulted in the increased vulnerability of low- and middle-income families and widening income gaps. The confluence of these policies and trends created a context in which low- and middle-income families turned to consumer credit as a quasi-safety net, while deregulated financial institutions expanded consumer credits to all income strata for more profits. Also focusing on consumer credit and financial institutions, Howard Karger examines how the poor are often steered towards fringe services, such as shortterm loans, check cashing, car loans, and tax refund services offered by peripheral financial institutions. These financial services are characterized by high user fees and extortionate interest rates, which Karger concludes are predatory in nature since they further impoverish borrowers, rather than provide financial products that help to build assets and increase household wealth. In this chapter, Karger provides an overview of some fringe economy services and the impact of neoliberal ideas on predatory lending, and concludes with possible approaches to restrain the depletion of resources from the already poor.

The chapters in this part contributed by Ashish Singh and Andrew Seligsohn and Joan Maya Mazelis examine the effects of globalization and neoliberal policies on their analysis of trends of employment and public service provision at national and local levels. In “Globalization and the Trends in Inequality of Poverty in the United States in the Last Decade,” Singh examines inequality and poverty in the United States within the context of globalization, through an analysis of changes in the unemployment–population ratio, unemployment rate, loss of employment (and subsequent re-employment), and average weeks of unemployment. The findings of her analyses indicate increases in poverty for all racial and ethnic groups and family types, as well as native and foreign born, in all regions. While Singh’s analysis indicates rising rates of poverty for all racial and ethnic groups, as well as family types, she found that the gap in poverty between Blacks and Whites, as well as across family types, significantly increased during 2002–2011. Furthermore, she found that all of the unemployment indicators included in her analysis increased considerably for the same time period, with the exception of re-employment of displaced workers, which significantly decreased.

In “Deindustrialized Small Cities and Poverty: The View from Camden,” Andrew Seligsohn and Joan Maya Mazelis provide a case study of the rise and collapse of Camden, New Jersey, to reveal the relationship between processes of globalization and what they term as the “immiseration in the emerging neoliberal order.” As a small, successful economic industrial city in the first half of the 20th century, Camden has been experiencing a serious decline since the 1980s, marked by a significant loss in population, jobs, and tax-base. Seligsohn and Mazelis note that precisely at the moment that unemployment generated demand for city services, the government capacity to respond had deteriorated. They characterize Camden city government as privatizing most services through outsourcing nearly all of its key functions to a non-profit development entity that is driven by powerful interests in the city and region. This is a move that challenges democratic processes by shifting control of the city away from public institutions under popular control to private institutions dominated by regional business and political elites.

References

Block, F. (2007) “Confronting market fundamentalism: Doing ‘Public Economic Sociology.’” Socioeconomic Review 5(2), 326–334.

Clarke, S. (2005) “The neoliberal theory of society.” In A. Saad-Filho and D. Johnston (eds) Neoliberalism: A critical reader, London, Pluto Press, pp. 50–59.

1

BEYOND COINCIDENCE

How neoliberal policy initiatives in the IMF and World Bank affected U.S. poverty levels¹

Pamela Blackmon

Introduction

The dramatic increase in poverty levels in the developing countries from the 1980s to the 1990s has been well documented by economists and social scientists (Wheeler, 1984; Stewart, 1995; Huber, 2005). Scholars have also found that much of the increase in poverty in developing countries was due to changes in policies at the IMF and the World Bank (Edwards and Dornbusch, 1994; Edwards, 1995; Haggard et al., 1995;). These new policy directives for developing countries focused on structural adjustment initiatives broadly defined to include privatization, deregulation, and overall measures for these countries to embrace more marketoriented reforms as opposed to relying on governmental programs.

The policy shift at the institutions has also been attributed to the rise of Ronald Reagan in the United States and the concurrent rise of Margaret Thatcher in the United Kingdom. What has been little addressed is how policy changes at the IMF and the World Bank might also be reflected in similar U.S. governmental policies toward poverty. For example, many socio-economic indicators in the United States have declined over the last 20 years, especially following the 1980s. Data in a recent paper show that for the country’s least-educated whites, life expectancy has fallen by four years since 1990 (Olshansky et al., 2012). To what degree were shifts toward neoliberal policies of the international financial institutions of the IMF and the World Bank also seen in shifts in U.S. domestic policies? This chapter will explore the relationship between changes in U.S. domestic policies regarding poverty and the role of the United States as a powerful actor in the development and implementation of policies in the IMF and the World Bank.

The chapter will be organized as follows. The first section will review the ways in which structural adjustment policies resulted in increases in poverty for the countries that followed them, especially in the developing countries. The next sections address the relationship between similar policies implemented in the United States and subsequent rises in U.S. poverty as seen in an analysis of specific policies that are believed to have contributed to the increases in U.S. poverty and growing income inequality. These policies include the 1982 Educational Consolidation and Improvement Act, reduced federal spending for and deregulation of education, changes to transfer programs, and the Tax Reform Act of 1986. The final section provides some concluding remarks about the policy changes that have contributed to higher levels of poverty in the United States.

Problems with structural adjustment policies

The underlying framework of structural adjustment policies (SAPs) included a focus on policies such as privatization, deregulation, and an overall decrease in the level of governmental involvement in the economic realm. These were policies required by the IMF and the World Bank in return for loans and debt restructuring agreements for most of the countries in Africa and Latin America during the 1980s. As part of austerity measures, countries also reduced money for social expenditures in areas such as health, education, and welfare (Huber, 2005, p. 79). However, during the 1980s poverty rose dramatically in Africa and Latin America, whereas prior to this timef...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of figures
• List of tables
• List of appendices
• Editor biographies
• Notes on contributors
• General introduction
• PART I From the production of inequality to the production of destitution: the U.S. political economy of poverty in the era of globalization
• PART II Discourses of poverty: from the “culture of poverty” to “surplus population”
• PART III From the welfare state to the neoliberal state: from regulating to imprisoning the poor
• PART IV Global poverty and the lived experiences of poor communities in the United States
• PART V Organizing to resist neoliberal policies and poverty: activism and advocacy
• PART VI Reframing poverty in the era of globalization: alternatives to a neoliberal economic order
• Index