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New report finds Americans lack economic mobility, opportunity

December 6, 2015 at 7:11 PM EDT
A striking lack of economic mobility exists in America, according to a new report released this week by the Brookings Institute and the American Enterprise Institute. Authors of the report, Kay Hymowitz and Larry Aber join NewsHour's Megan Thompson to discuss the findings.
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HARI SREENIVASAN: A report on poverty published on Thursday found a striking lack of economic mobility in America, that 43 percent of Americans born into families in the bottom fifth of the economic ladder are stuck there as adults, while 40 percent born in the top fifth stay there.

The data was part of Opportunity, Responsibility and Security: A Consensus Plan for Reducing Poverty and Restoring the American Dream. It was a partnership between two think tanks from different sides of the ideological spectrum, the Brookings Institute and the American Enterprise Institute.

And as part of our series on poverty called Chasing the Dream, the “NewsHour”‘s Megan Thompson sat down with two authors of the report, Kay Hymowitz and Larry Aber.

MEGAN THOMPSON: I want to talk about one of the issues that comes up pretty early in the report, which is the decline of marriage.

Kay, can you talk a little bit about that and how it’s related to poverty?

KAY HYMOWITZ, Manhattan Institute: Yes.

Well, we have had an increasing number of children living with single mothers and growing up with single mothers. If we look at it by race, about 72 percent of black children are born to single mothers, 53 percent of Hispanic children, and about 30 percent of white children.

And we now know, from years of researching this, that those children are at greater risk of all kinds of problems, one of them being poverty. The poverty rates among single-mother families is four to five times higher than that of children growing up with married parents.

LARRY Aber, New York University: Indeed, places we arrived at was that conservatives were able to say, my gosh, if we could help families plan their pregnancies effectively, a position historically taken by progressives, that would be a great thing.

And the real surprise is, progressives were able to say, not only are staple two-parent families the very best environments for children to develop, which we know now from 20 years of very rigorous research, but, in America anyway, the highest probability of getting to a stable two-parent family is through marriage.

MEGAN THOMPSON: There’s another surprising statistic in the report, that the wages of men in the 50th percentile and lower have basically stayed the same since the ’70s. I mean, why is that?

KAY HYMOWITZ: Well, I think there’s a lot of disagreement about why that is. And it’s not a question that we sought to answer.

LARRY ABER: And we didn’t settle that.

(LAUGHTER)

LARRY ABER: No.

KAY HYMOWITZ: But one of the possibilities, that it — is that it’s based on skill-based technologies that require people to have more skills before they can get a job.

I mentioned before, you could have a guy who dropped out of high school could go directly to a factory, a union job that would provide him with a fairly good life and his family with a fairly good life. That is no longer the case.

LARRY ABER: If African-American men’s wages rose at the rate of everybody else’s over the last 30 or 40 years, a huge amount of the poverty problem would be reduced.

So, there is a real problem with the lack of growth of wages among low-educated, young, and especially African-American men. So, we share that alarm over that.

MEGAN THOMPSON: In the report, you propose raising the minimum wage. I think some people might find that a little bit surprising that some conservatives sort of came around to that, given just how controversial, you know, it is, at least in Washington.

Kay, can you talk about the conservative justification for raising the minimum wage?

KAY HYMOWITZ: Well, that was a very tricky area.

(LAUGHTER)

KAY HYMOWITZ: I would say it was one of the two top trickiest of areas.

For instance, conservatives are — the conservative group was more likely to be worried about the loss of jobs that might follow a minimum wage increase more than the progressives were concerned about that. They were much more concerned about the income of the people who had the jobs.

LARRY ABER: This is an example of how the group tried to practice principled and reasoned discussion to get to decisions.

So, Kay is exactly right. The conservatives fear that an increase in the minimum wage is going to reduce jobs available for low-skilled people. The progressives don’t want that. Progressives fear that a job at such low wages now doesn’t lift the people who have low-wage jobs out of poverty.

Conservatives don’t want that either. So, we’re trying, on the basis of evidence, as well as values, to find the sweet spot. And that really was what the discussion was about. Now, the sweet spot is highly politicized. And so we’re trying to bring light, not heat, to these issues.

MEGAN THOMPSON: I noticed the report, though, didn’t mention…

(CROSSTALK)

KAY HYMOWITZ: Come with a number.

(LAUGHTER)

MEGAN THOMPSON: … a specific number.

(LAUGHTER)

KAY HYMOWITZ: Well, for that…

LARRY ABER: Yes, it should be higher than the current level and lower than $15 an hour.

(LAUGHTER)

LARRY ABER: And we all agree on that.

KAY HYMOWITZ: That’s where we had to leave it.

MEGAN THOMPSON: The report suggests that it could be helpful to increase work requirements for certain benefits.

KAY HYMOWITZ: Well, the 1996 welfare reform law, remember, emphasized personal responsibility. It added a work requirement. And that was something new in poverty policy.

And what we found is that welfare is no longer a chief driver of benefits for the poor. We have many, many other sources of benefits for the poor. And none of them, or very few of them, have any work requirements attached to them.

So, for conservatives, especially because they do believe that the welfare reform bill was basically a success, the belief is that we should — at the very least, we should experiment with work requirements for food stamps or for housing and that kind of thing.

And this continued, this debate, for quite a while.

LARRY ABER: The progressives on the committee did feel very, very strongly that, if we work-conditioned food stamps, there would be no safety net that certain very vulnerable families could not fall through.

And that seemed just unviable to us. On the other hand, I think that there is a belief that — and it’s consistent with the data — that work requirements in the welfare reform bill did increase single mothers’ labor force participation in a robust economy.

MEGAN THOMPSON: There’s another statistic in the report about how the employment rate among young African-American men has basically dropped in the last few decades.

Speaking in terms of solutions, how do we solve — how do we solve those problems?

KAY HYMOWITZ: Well, we have a great deal of concern throughout the report about what we call disconnected men, men who are not part of families.

We want to see better skills for these men. That is a major piece of our contribution, I think, here was to take the focus away so much from four-year college, and to think more about the kinds of opportunities that are available in more technical, more blue-collar areas. And so that’s another thing we would like to see.

LARRY ABER: When young men don’t either have the education to get the jobs that exist or the work experience to get it, then we have recommended apprenticeships as a form where they can get both, even — even when they’re not quite ready to take that next step into the formal labor market.

MEGAN THOMPSON: So, moving forward, what is next?

LARRY ABER: The sectors that now need to take up the challenge are political sectors, community organizations, the media.

(LAUGHTER)

KAY HYMOWITZ: State governments, too.

LARRY ABER: State governments, what cities could do in this.

So, I think our job was to indicate that it is possible for progressives and conservatives, through principled and reasoned discussion, to come up with a set of ideas that, on balance, would move us forward.

KAY HYMOWITZ: I think that we are facing a future where we have a lot of disgruntlement with the American dream, with the American promise, and rightfully so.

We are not providing the conditions that help people to move ahead and to take full advantage of the American possibilities.

MEGAN THOMPSON: Kay Hymowitz of the Manhattan Institute, Dr. Larry Aber of NYU, thank you so much for being here.

KAY HYMOWITZ: Thank you.

LARRY ABER: Thank you.

HARI SREENIVASAN: See more from the Chasing the Dream series, including our report on Americans living on less than $2 a day. Visit us online at PBS.org/NewsHour.

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