Name:
Location: Vancouver, B.C., Canada

I'm a PhD student in econ at UBC. For fun, I write this blog.

Tuesday, June 27, 2006

Edwards' bright ideas.

I have to say I'm intrigued by Ezra's account of John Edwards' emerging 2008 platform -- which appears to be a rather straight-up appeal to rich-country and rich-citizens-of-rich-country noblesse oblige. Edwards' basic pitch is the need to acknowledge income disparities and go about fixing them, whether it be from the West to the developing world and from the rich to the poor.

That's the thematic pitch. Substantively, though, it's hard not to adore gutsy, common-sense planks like:

1) Reform the poverty measure, which is a 1950s era anachronism based on food costs. Get an accurate metric which delivers an accurate count. Early estimations show that we'll have about a million more folks in poverty using such a standard.

It's true that the US poverty line is an anachronism and a disgrace, just like Gregg Easterbrook (I know, I know) effectively raged about a couple of years ago. Here's a great overview (pdf) by Howard Glennerster of LSE of how the US poverty line -- three times the income needed to purchase a minimum bundle of food -- came to be and why it hasn't been changed even as food has gotten cheaper relative to housing and energy costs. In a nutshell:

When Orshansky (1963) came to settle on her minimum food budget she chose the very lowest of the food budgets on offer from the Department of Agriculture. It was meant for those in emergency need... She remains appalled that it has been set in aspec ever since....By the late 1990s [her] poverty line had fallen to the equivalent of less than a third of median household income. This was a harsher measure than it had been in the 1960s and much harsher than most international poverty standards. The European Union has increasingly been using a measure of 60% of the median as the poverty line. This is much the same, in practice, of Britain's use of 50% of the mean...


But here's the part of Edwards' thumbnail platform that really grabbed me:

3) Raise the minimum wage to at least $7.50, triple the Earned Income tax Credit for workers without children, and end the marriage penalty hidden in the way it treats low-income couples.


Note that "without children". Yes, yes, yes. One problem with the EITC is that it discriminates horribly against poor people without kids. Here are this year's EITC tables. A single person working full time at $5.75/hour -- $11,500 a year -- gets an EITC of $17. A couple without children sees its EITC phased out at $13,500. Both figures just slightly above the current (abysmally low) U.S. poverty lines for one and two-member households. And the comparable EITC at those incomes for single parents or couples with two or more kids is $4400.

This is heinous public policy. Of course, the EITC should be higher for households with more members, with some allowance for the cost of child care. But the discrepancy as it stands right now (compare the figures at all incomes for a couple without children and a single parent with a child) is ridiculous. For one thing, it's essentially a way of bribing poor people to have kids. For another, it discriminates against those who can't have children and against those are, frankly, too responsible to try to support a child at the poverty line. For a third, it offers basically no additioanl income stability to young working-age men, the group who are the most vulnerable to income anxiety and also the most likely to be socially disruptive, to engage in crime, or to have weak labour market attachment.

Democratic politicians often tailor their policies rhetorically and substantively to families and kids because there is more public support and votes for "family-friendly" policies. I don't mean to get into dreary "character" analysis. But suffice to say, Edwards bucking that trend and proposing to put dollars where they're most needed -- among politically neglected constituencies -- actually speaks volumnes to me.

2 Comments:

Blogger Dave said...

Thanks for this, Laura. Good explanation of the EITC which I really hadn't paid any attention to in the past.

5:45 PM  
Anonymous Anonymous said...

1. Great points, but I have one little quibble about the noblesse oblige part. A substantial chunk of Edwards' platform was changing the incredibly unbalanced U.S. labor laws so workers can actually organize again, and start collective bargaining on their own behalf. It's not new, either. He was one of the few Democrats who talked about this in '03-'04, and the only Democrat who talked about it before non-union audiences. That's power and self-determination to the people, right there.

2. In a broader sense, I listened to his speech, and he wrapped these policies up in very traditionally conservative rhetoric: "work, responsibility, marriage, etc.,". One of Howard Dean's most notorious lines was the one about white guys with Confederate flags on their pickups, and how Democrats need to reach out to them in new language, etc. The problem (well, one of them) was, Dean would always deliver that line to audiences of middle class liberals, the liberals would all nod and applaud, and then...no follow-through.

Edwards actually seems to be doing this. Let's hope he can pull it off.

1:40 PM  

Post a Comment

<< Home

Web Site Hit Counters
Web Site Hit Counters