Many commentators across the political spectrum write about the importance of jobs as a path out of poverty. I often cite the statistic that only 3.2% of families with at least one full-time, year-round worker are poor. Others identify job creation and wage growth as key efforts to fight poverty. Yet, some criticize the employment argument for poverty reduction as naïve, misleading, or flat-out wrong. Although employment alone certainly will not end American poverty, these criticisms miss the broader point.
People celebrate the passage of the minimum wage for fast-food workers by the New York State Fast Food Wage Board during a rally in New York July 22, 2015. Reuters
Ensuring that all people who want to work are working will reduce poverty. And it will free up government resources to help those who cannot work, including the elderly, people with serious health issues and disabilities, and their children.
President Obama has made similar arguments. At a poverty event in May, he said:
First of all, I think we can all stipulate that the best antipoverty program is a job, which confers not just income, but structure and dignity and a sense of connection to community. Which means we have to spend time thinking about the macro-economy, the broader economy as a whole.
Most people want to work for precisely these reasons. In New York City, we conducted a survey of 270 men receiving general cash assistance and employment services in 2007 (before the recession). When asked about their attitudes toward work, 70% said they would take a job at any wage and 70% also said that a boring job was better than no job. When asked to rate their problems finding a job, the most common reason was “not enough jobs.” This was more common than lack of job skills, lack of education, and lack of experience.
This is one reason why the recent wave of minimum wage increases is concerning. Much has been written about the benefits and costs of minimum wage increases, with much disagreement among economists. But a comprehensive study cited by many minimum-wage supporters (because it largely concludes that the job-loss effects of modest minimum wage increases in the US are small) seems to confirm that large minimum wage increases will hurt employment.
This is one of the critical points missing in many of these discussions. Any negative effect on jobs, however small, would likely make the situation for the men in our survey even more difficult. If the best antipoverty program is a job, government should support policies aimed at job growth, and should not increase wages for some while making employment harder to find for others.
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