Poverty rate in Mass. highest since 1960
Low-wage workers’ earning sare stagnant
The poverty rate in Massachusetts is the highest it’s been since 1960. The inflation-adjusted wages of the lowest-paid workers haven’t budged in decades. Income inequality in the state has become greater than in the nation as a whole.
But it could be worse. Public benefit programs such as Medicaid, the health insurance program for the poor, food stamps, and the early education program Head Start are keeping nearly 842,000 people out of poverty in Massachusetts.
A report out Monday by the Massachusetts Budget and Policy Center details the plight of the poor since President Johnson declared a war on poverty 50 years ago. The report’s findings were at the center of a symposium held Monday in Boston to take stock of Johnson’s “Great Society” initiatives and to unite social service agencies, government officials, academic researchers, and others to set a new agenda for addressing poverty.
“It’s so important to make the economy work for everyone,” said Joe Diamond, executive director of the Massachusetts Association for Community Action, a statewide association of agencies that help low-income residents. “Societies that have a widening gap between rich and poor become weaker and weaker.”
US wages and productivity increased in tandem from 1948 into the mid-1970s, according to the report. Since then, workers’ earnings have flat-lined even as productivity has climbed. In Massachusetts, productivity more than doubled between 1979 and 2012, adjusted for inflation, but the median income climbed just 18 percent.
At the same time, wages for the top 1 percent of earners skyrocketed. If wages across all income levels had grown equally, workers in the bottom 80 percent would be earning around $10,000 more a year, while the 1 percent would be earning almost $1 million less
A number of factors contributed to this divergence, said Noah Berger, executive director of the Massachusetts Budget and Policy Center, including declining tax rates that encouraged firms and senior executives to keep more of the profits for themselves.Well-paying manufacturing jobs also started disappearing. In 1970, manufacturing accounted for more than one in four jobs in Massachusetts; by 2006, the industry accounted for just one in 12.
The loss of manufacturing jobs removed a ladder to the middle class for people with high school educations, creating an economy of higher-wage jobs for people with college and advanced degrees, and low-wage service jobs for those with less education.
“We face two challenges,” said Berger, “making sure that children in every community have access to great schools, and finding ways to increase the wages and improve the working conditions in low-wage jobs.”
State budget cuts have also hurt low-income families, the report said. Over the past two decades, Massachusetts has implemented more than $3 billion in income tax cuts that have reduced funding for affordable housing, higher education, and other programs, according to the report. Spending on early childhood education, which allows parents to work and gives children a leg up in learning, has been reduced 23 percent; workforce training programs have been slashed 38 percent.
The changes in the economy have made it difficult for people to get out of poverty. Between 1960 and 1970, with Johnson’s Great Society taking shape, the poverty rate declined sharply, but then subsequently rose. The official poverty rate in Massachusetts is 12 percent, the same as in 1960.
The poverty threshold is less than $19,000 a year for a family of three in Massachusetts. When the “near poor” — those with incomes twice the poverty rate — are included, one in four Massachusetts residents are considered to be in need.
Without programs such as food stamps and the earned income tax credit, the poverty rate would rise to nearly 27 percent.
This poverty measure shows how much public benefit programs have helped residents, Berger said, presenting “a clearer vision of what’s actually happening.”
At the same time, he noted: “We wouldn’t say that it’s a story of success.”