Author on "Taxing the Poor, Doing Damage to the Truly Disadvantaged"

Katherine S. Newman, PhD, discusses her book and focus on working poor.

Interviewer: Ieshia Haynie

Can you describe what “working poor” means to you? 

I define the working poor as people who work year round, full time, and still do not earn enough to pull above the federal poverty line. This is a fairly pure definition and yields a somewhat conservative estimation of the number of people in the U.S. who are affected by working poverty. Hence, we can also speak of working poor families, and then we are asking about households with at least one worker in them whose total income falls below the federal poverty line. This is a much larger number of people, of course, as it takes into account the millions of children who are not themselves in the labor force, but live in poor households that are trying to juggle the responsibilities that come with working (especially the care of children) on completely inadequate resources. 

How did the study of “poverty” and the “working poor” come to be mainstays in your scholarly work and research? 

I have always been interested in the meaning of work. Several of my early books dealt with downward mobility triggered by unemployment, where the cultural value of work as a source of identity and self-respect was central. My interest in the working poor stems originally from my concern that the press and most ordinary people equated poverty with being on welfare and out of the labor force. Most poor people work and are entitled, in my opinion, to the respect that adheres to all working people regardless of what they earn. But this was not widely understood and as the political heat attending the welfare reform bill of 1996 increased, I thought it was important to recognize that low wages represent a critical gateway to poverty and that our single-minded focus on public assistance was myopic and empirically unjustified.

What are some of the key challenges facing the working poor? 

It is very hard to manage the responsibilities of adult life — caring for children and dependent elders, providing health care for the family, maintaining a roof over everyone’s head in a neighborhood that isn’t dangerous — on a poverty wage. Working poor families are stressed by the ordinary challenges all families face because they are trying to achieve the same ends on desperately limited resources. We do very little to assist them, apart from the earned income tax credit, which is a vital resource for the working poor and one of the most successful anti-poverty “devices” we have ever developed. We provide little to no childcare; we pay little attention to the special needs working parents have for keeping their teenagers safe and moving along the right path in education. In good times, like those I described in “The Missing Class: Portraits of the Near Poor,” the working poor are more likely to “move up” because they are in the labor force and actively looking for better jobs. In bad times, they are vulnerable because they have such a slim margin for error.    

How would you describe the stigma of poverty? 

No one likes being poor, but I will go out on a limb here and say that the working poor garner greater respect than the non-working poor because they appear to be making every effort to take care of themselves. Of course, “on the ground” the two kinds of poor people are completely intertwined. Working poor women, in particular, often depend on mothers, sister, aunts and daughters to shoulder child care burden and enable themselves to stay in the labor force. Children certainly feel the sting of poverty when they cannot have the things their more privileged friends have. But on the whole, I think the true stigma sticks more to “dependency” than to poverty, and as much as I believe families on welfare have their own stories to tell that almost always see them moving in and out of the labor force and relying on public assistance as the “poor man’s unemployment insurance,” they do suffer greater stigma.  

What would be the impact of fair taxing policies? 

Our analysis suggests that if tax policies did not punish the poor we would see lower rates of mortality and morbidity, higher high school graduation rates, lower property and violent crime rates, and less teen pregnancy. Taxing the Poor shows that there is a significant relationship between the way we tax the poor and these pernicious outcomes. A fairer, more progressive tax policy, would begin to unravel the links between being born poor and staying poor, something we have both a moral and a pragmatic interest in accomplishing.

If you were to write an abstract on how to end poverty, what would it look like?  

Progressive income tax, elimination of sales tax that is not means tested, heavy investment in early childhood education and health care delivery, an expanded earned income tax credit, and a robust devotion to public service employment of the kind that FDR made a reality during the Great Depression. As a “New Deal Democrat,” I believe that leaving people on the sidelines of the labor force is the single biggest mistake we are making. Putting everyone to work, and helping them take care of their children when they do, would make the single biggest difference in the short and the long run.  

How best might we (the U.S.) bring about national and legislative awareness to the harmful effects of unfair taxing policies?

It is important that policymakers appreciate that it is not just how we spend, but how we tax that affects the life chances of the poor. The best way to make this case is to demonstrate how regressive tax policies are self-defeating — we see less return from public investments in health and education if that money comes from the pockets of the poor. Although the Great Recession pushed many states and localities to balance budgets by increasing sales taxes and other regressive instruments, taxing the poor to fund the public sector is truly penny wise and pound foolish.

Does the federal poverty line exclude some classes of Americans? 

The federal poverty line is in many ways a rather crude measure for defining who is officially poor, in part because it is based on the spending needs of a household in the 1960s. No absolute line can ever reasonably distinguish between who is poor and who is not. At the same time, having thoughtful measures of household economic and material well-being is important for targeting social policy. One lesson we learned from our research is the need to consider after tax income when evaluating the financial means of low-income families. Depending on where they live, poor families can face state and local tax bills that differ by more than $2,000 — a sum that amounts to more than 10 percent of household income for a family of three at the poverty line.

How can Congress remake the tax code to inspire equity and fairness? 

The federal tax code delivers billions of dollars every year in direct cash transfers through the mortgage interest and retirement savings deductions, among others. Yet these generous tax expenditures typically do not benefit low-income households. Expanding the Earned Income Tax Credit (EITC) — our nation’s most successful anti-poverty policy — and making the existing Child Tax Credit (EITC) refundable would have a powerful and meaningful impact on the lives of working families. At the same time, the federal government should work to incentivize and encourage states to abandon their own regressive tax systems, so that local policies of taxing the poor no longer undermine broader efforts of social policy.

Bio

Katherine S. Newman, PhDKatherine S. Newman, a widely published expert on poverty and the working poor and an experienced academic administrator, joined Johns Hopkins in September 2010 as the James B. Knapp Dean of the Krieger School of Arts and Sciences.

Newman was previously the Malcolm Stevenson Forbes '41 Professor in the Woodrow Wilson School of Public and International Affairs and the department of sociology at Princeton University, where she had taught since 2004. From 2007 until her departure from Princeton, she directed the university-wide Institute for International and Regional Studies. She founded and chaired the university's joint doctoral program in social policy, sociology and politics and psychology.

Previously, during eight years at Harvard University, she was the first dean of social science at the Radcliffe Institute for Advanced Study. While there, she designed a university-wide research program in the social sciences, promoting collaboration among faculty from the arts and sciences, public health, medicine, law and education.

Newman graduated from in 1975 from the University of California, San Diego, where she majored in sociology and philosophy. She earned a PhD in anthropology in 1979 from the University of California, Berkeley.