Debunking Myths About Wealth and Race
It’s not individual behavior that drives the racial wealth divide — it’s a system that many folks pretend doesn’t exist.
Solutions
How to Fix Rural Poverty
Regardless of the rhetoric, there's no substitute for simply raising the minimum wage to boost income in rural areas.
On Sept. 14, The New York Times reported on the recent survey of household incomes by the Census Bureau. Incomes are up across the spectrum, a first since the Great Recession started, but rural areas are not seeing the same jump: Incomes in metropolitan areas rose 6 percent, while rural areas saw a 2 percent drop.
Then, two days after the initial publication, The New York Times published a story titled, “Actually, Income in Rural America Is Growing, Too.” As in, they oops’d. The reason for the mix-up was a misunderstanding of a change in the definition of rural by the Census Bureau.
What looked like dropping income from year to year wasn’t comparing apples to apples, year over year.
Vox made the same mistake, and author Timothy Lee issued a more formal (and one might say more honest) correction, stating:
[The Census report] appeared to show a big gap between the gains of urban and rural households. It reported that households outside of metropolitan areas (which I’ll slightly imprecisely call rural) saw their incomes drop by 2 percent, while suburban households gained 4 percent and urban households gained 7.3 percent.
It seemed like a big deal, so I wrote an article about it.
Unfortunately for me – but fortunately for people in rural areas – it wasn’t true.
Lee goes on to explain the change in Census definition and a subsequent publication by the Census that showed rural incomes up 3.4 percent over the past year.
I understand how a mistake like this was made. I’ve spent countless hours sifting through government reports and academic studies trying to tease out the economic indicators that might shed some light on what’s happening nationally. These statistics, when used effectively, can illuminate underlying trends and help direct attention to serious social problems.
This statistic in particular, incomes of rural Americans may have, in the words of the Times non-correction correction, “seemed too irresistible. It confirmed suspicions about a link between people’s economic anxieties in rural America and the rise of Donald J. Trump,”
That link probably exists, and countless articles have argued how much economic conditions in America’s heartland have driven the rise of Trump at great length, but this particular study didn’t support that theory.
It did show, however, that rural incomes are much lower than urban incomes. How to raise wages for rural workers remains an incredibly important question to find and implement answers to.
While The New York Times was still operating under the “everyone’s income is up except rural folks” framework, they published a “Room for Debate” series of articles looking to explain why rural areas weren’t seeing the same boom as their urban counterparts and what could be done about it. Six participants from across the political spectrum weighed in.
Their answers ranged from the reasonable, like expanding public service student loan forgiveness to small farmers, to the absurd, like cutting corporate taxes to somehow trickle down some economic benefit to rural workers.
Absent completely from the discussion around how to raise wages was the radical idea to simply raise the federal minimum wage, something that hasn’t been done since 2009.
Edward Conard from right-leaning American Enterprise Institute was the only author to even mention the minimum wage saying, “Don’t raise the minimum wage, which excludes the lowest-skilled workers.”
There is no better substitute for raising wages than simply raising wages. At a time when over 40 percent of the country makes less than $15 dollar an hour, the time for a raise for those at the bottom is past due. The Fight for 15 movement has resonated in the minds of millions of workers for that simple reason. The current federal minimum, $7.25 per hour (or $2.13 for tipped workers) is lower than the basic cost of living in all 50 states.
Conard goes on to argue for subsidizing low-wage employers claiming it will increase demand for low-wage workers. This “feed the horse to feed the sparrows” approach is a step in the exact opposite direction of where the country should be going. Low-wage employers should be fined, not subsidized, as taxpayers end up having to cover the cover the gap between the wages they pay their employees and that employees’ cost of living.
The movement for a Low Wage Employer Fee is in its early stages, with groups like Jobs with Justice and Peoples Action laying out the framework for how it could work at the state and federal level.
Originally published by US News and World Report.
