Why American Poverty Rates Stopped Falling in the '70s, and Why a Better Story Was Not Told About It

Abstract

ABSTRACT Against welfare dependence models, this paper argues that in the '70s Americans flooded the labor market, helping to suppress wages and make more people poor. It also argues that capitalist markets normally generate unemployment, which sustains poverty; capitalist nations in Europe with less poverty don't have better free markets but their governments pay needy people more. These facts were invisible in the U.S. because the right framed the poverty debate. Because of the weakness of democratic socialism and because liberalism was not very radical, there was little opposition. American conservatives fixed people's attention on bad poor people and bad government rather than a failing economy and stingy government policies.