Instead of picking on the poor, worry about creating jobs

Forum Extra

January 24, 1992

IT'S TIME to stop picking on the poor! They don't have the resources we need to get Maryland out of its current economic mess. Maryland needs jobs; it's time to start talking seriously about how to generate them!

Let's face it: The recent welfare cuts primarily punish children. Children make up most of the welfare caseload. Under the new welfare cuts, substandard grants have been returned to even more inadequate 1989 levels. A family of three receives $377. If that's not bad enough, this year the grant will be divided into two categories -- $264 for "basic" needs and $113 for "special" needs. Families (mostly dependent children) will lose special need dollars unless they meet certain requirements (still to be clarified), such as school attendance, timely rent payments and health check-ups.

The wisdom of this frightening idea has never been systematically tested out in any pilot program! This is our treatment for women and children. Under the general public assistance (GPA) cutbacks, men fare even worse!

But what do we really gain from this sort of prescription for balancing the budget? A significant rise in the misery quotient for Maryland citizens. Maybe, and only maybe, some small, short-term budgetary savings. And, almost certainly, an expansion of social problems that will generate greater budgetary demands in the long run. Even more important, not a single job will have been created! Yet it's jobs that we need to fuel the kind of economic expansion that will eventually balance the budget.

According to a recent study by Charles McMillion at Johns Hopkins Institute for Policy Studies, the larger Baltimore area has lost a significant number of blue- and white-collar jobs in the last two decades. For example, the manufacturing sector in the Baltimore area has lost nearly 64,000 jobs since 1970, while the port of Baltimore has lost more than 60 percent of its employment since 1969 (some 18,000 workers).

At the same time, since 1980 federal employment in the region has stagnated and will almost certainly decline with further cuts in the defense budget and other departments. This employment picture not only affects Baltimore. It also affects Maryland's Washington suburbs, as evidenced by the tremendous growth in the welfare rolls in Prince George's and Montgomery counties. Nor have Maryland's rural counties fared any better with respect to employment.

Clearly there is a connection between the rising welfare rolls and Maryland's economic troubles. But the connection is not that safety net programs are bringing down the state economy. Rather, it is that as the economy declines, state income from its traditional revenue sources cannot cover the cost of meeting basic human needs. The answer, then, is first to generate more revenue, and second to direct that revenue into the creation of jobs, decent health care and effective education. If we want to reduce the welfare rolls, we need to create decently paying jobs.

In order create jobs and invest in education, Maryland will have to generate greater income, and there is only one place to find it -- the top 20 percent of taxpayers. Maryland needs a progressive tax program, and the money that comes in from these increased taxes needs to be targeted to projects that create decent jobs at decent wages and to a solid education for every child. As people begin to work, their taxes and consumption will help the economy to grow, welfare rolls will decline and money will be available to finance the basic safety net of programs for the needy.

True, Maryland cannot break the economic down-cycle entirely by itself. The national economy needs attention as well -- but not through an amorphous capital gains benefit to the already wealthy, who can use that money for their own conspicuous consumption with no strings attached. We need progressive national tax measures and a coherent industrial policy, and the revenue that is realized needs to be reinvested in employment and industry and human capital that will promote further employment and make our country competitive again.

Corporations which find it profitable to move to Third-World economies in order to lower production costs, need to be taxed so as to return some of those profits to the national treasury for targeted redistribution across all 50 states. It's time to call on our most advantaged citizens and companies to sacrifice for the common good. They will get their investment back. It's time to stop the futile effort, in Maryland and nationally, of trying to balance the budget on the backs of the poor. That solution that cannot work!

This statement was signed by nine faculty members at the University of Maryland at Baltimore School of Social Work.

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