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Poverty
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Dr Margaret Coleman received her Ph.D. from the New School for Social Resaerch in May, 1996. She is a technician at Bell Atlantic NYNEX, and an adjunct professor in the CBA at New York University. She previously served as an adjunct at St. John's University. Her most recent publication is a chapter titled "Female Labor Supply during Early Industrialization: Women's Labor Force Participation in Historical Perspective" in Gender and Political Economy. Incorporating Diversity into Theory and Policy., Mutari, et. al., eds.(May 1997). Susan Pashkoff is currently Senior Lecturer in Economics at DeMontfort University, Milton Keynes, England. Her research interests include explorations of capital theory in classical and neoclassical economic theory and the role of ideology in the development of economic theory. She has published in several scholarly journals. A recent publication is "On Stirati on Wages," which appeared in Review of Political Economy in 1996. Susan received her undergraduate degree at SUNY Binghamton and holds the MA and Ph.D. from the New School of Social Research. Christine Rider is a Professor in the Department of Economics and Finance in the College of Business Administration at St. John's. She has published many books and journal articles, most recently An Introduction to Economic History, (South-Western 1995) and co-edited The Indusrial Revolution in Comparative Perspective, (Kreiger, forthcoming 1998). She holds a BS degree from the London School of Economics (University of London), a MA from CUNY Queens College, and a Ph.D. from the New School for Social Research. Paper prepared for presentation at Vincentian Chair of Social Justice, Research Colloquium, April 10, 1997. The authors gratefully acknowledge the support of a grant from the Vincentian Chair of Social Justice.
The last few years have seen the reversal of social policy towards the poor in the United States. Passage of the Personal Responsibility and Work Opportunity Reconcilation Act also known as Welfare Reform Act (WRA) in 1996 was the beginning of the end to "end welfare as we know it." On the surface, this Act appears to shrink the federally-based social welfare system by limiting eligibility for cash payments, imposing a work requirement, and capping the amount of time any person may receive welfare benefits. The WRA is intended to enable individuals to take personal responsibility for their lives, reduce illegitimacy--especially of births to teenage mothers--increase the numbers of working mothers, help balance the federal budget, and, in general, renew America's traditional moral values and preserve civilization1. All these ends are assumed possible because the U.S. economy is expanding, and because there is a general impression that the existing welfare system is broken, and the taxpaying public supports scrapping it. This last perception is further enhanced by the negative connotations surrounding the term "welfare," which have been encouraged by stereotyping those on welfare as fecund cheats living high on hard working taxpayers' money. This stereotyping has been accepted and promoted by politicians, who can then use these sentiments to support their own image as budget cutting, pro-morality public servants. None of these arguments is particularly new; we can find echoes of them in eighteenth and nineteenth century England, and in pre-Civil War New England. It is, in fact, remarkable that although these times and places seem very different from late twentieth century post-industrial America, we can identify three common themes: structural economic change, an ideological shift, and the idea of a living (or subsistence) wage. Change in social policy towards the poor in these two countries in two different centuries was a response to changing economic conditions which undermined the old certainties that social policy had previously been based on. Economic change altered productive relationships, economists tried to make sense of these changes and, in so doing, referred to a different set of political and philosophic thinking. Policy change was thought necessary because the structural economic changes had two effects. First, the changing economy reduced the ability of many to provide for their own subsistence, which swelled the ranks of the poor. Second, the demand for labor increased, specifically for women's labor. In the nineteenth century, the shift from agriculture to manufacturing in England was accompanied by a change in property rights (enclosures) which denied small farmers access to land; the result was an increase in family-based poverty. In New England, the beginning of industrialization plus other changes, including land shortage, and the increasing spread of cash markets, increased debt burdens on many families. One of the most publicized, but not the most widespread, ways in which families adapted to this pressure was to send their daughters to work in the new textile mills being built along the fast-flowing rivers of the area. Other methods utilized new forms of forced or contract labor, and changed the ways in which the "nonworking" were supported. In the late twentieth century, the major structural economic shift has been away from manufacturing, which has ceased to be a major employer of labor, and towards services such as health care and clerical services. The common characteristic of all shifts has been an increased demand for women's labor. The early period of industrialization in both Britain and New England was associated, for various reasons, with an expansion of women's wage work. Early textile mills were predominantly staffed by women (and children). Similarly, service occupations today rely disproportionately on women's labor. (In all cases, women's labor cost less than men's, though this fact is not central to the argument at this point.) In nineteenth century England, structural economic change was paralleled by a change in property rights away from social or community control over resources (including those resources that could be used to support the poor). In New England, the town fathers had used community resources to aid the poor, but this ability was increasingly whittled away by the privatization of industry. Today, we also see an increasing resistance to public support of the poor. Second, ideology has shifted away from approving some type of community provision to one emphasizing individual responsibility; specifically, a shift from a natural rights to a utilitarian philosophy. In England before 1834, the prevailing sentiment was that an individual could not control all influences on their material well being, hence society had a responsibility to help the less fortunate. Effectively, this translated into a right to subsistence, hence the existing poor laws provided guarantees of society's responsibility to provide for the poor and destitute. But, increasingly, utilitarian philosophy undermined this sentiment, and a series of poor law amendments, culminating in the infamous one of 1834, removed the idea of social responsibility. Hence, after 1834 the dominance of the idea of individual responsibility meant that an individual had no right to subsistence. Public provision of relief was reduced and made unpleasant so that it would act as a deterrent by being less attractive than any other alternative. The British argument was echoed in the United States with the addendum that, because the country was a democratic one not ruled by an aristocratic elite, the expenses of providing government were low (because wage workers' incomes were not being siphoned off to support an idle aristocracy), hence taxes would be lower than elsewhere. Therefore, if labor was both free and relatively untaxed, then wages, by definition, must provide a reasonable income to the wage earner. Today, a shift in policy similar to the nineteenth century shift is also obvious. For a brief period in the twentieth century, dating most notably from Roosevelt's New Deal policies in the United States, and from the Beveridge Report in Britain, there was a return to the idea of social responsibility for the poor. The near-collapse of the American economy in the 1930s--and the very real political threat this presented to the holders of power--demonstrated vividly the failures of individualism. But following the successes of the post-World War II economic expansion, a return to the utilitarian approach began to be discussed, starting in the 1970s but really taking off with the "Republican Revolution" of the 1980s. This line of argument is as follows: Economic expansion implies that poverty due to unemployment is the individual's own choice. If jobs are plentiful, then the able-bodied should work and not feed at the public trough2. This assumes that any job provides an adequate income. This links to the third common element, an element that has not yet come to the forefront in the discussions of welfare reform in the 1990s, but which was recognized by the eighteenth and nineteenth century economists. This third element is the meaning of "poor," and the problem of a wage that does not provide a living income. At the present time, it is implicitly assumed that market forces generate enough jobs for all job hunters and wages that will be sufficient to live on. This assumption justifies the "welfare to work" approach taken by the WRA, which requires 80 percent of all current welfare recipients to be off the welfare rolls within five years, and limits eligibility to welfare to five years in any one person's life time. But even if sufficient new jobs are forthcoming, the reality is that minimum wage work cannot bring a worker with dependents above the federal poverty level. Hence "ending welfare as we know it" will not end poverty as we define it today. Eighteenth and nineteenth century British economists were under no such illusion, and, while recognizing that "no work" resulted in poverty, also knew that wage work left workers and their families in poverty3. "Poor," in fact, referred to all those without property or a profession, so the ideological discussion in England was not so much over how to get the idle to work as it was over how to provide a subsistence (defined in cultural rather than basic physical survival terms) income. Recognizing the link between employment, poor relief and subsistence/a living wage brings to the forefront a link that is not apparent today, but which clearly shows the ideological bias of "welfare reformers". It is a link that directly relates to the failure of modern economies to provide an adequate material standard of living for their populations. THE INFLUENCE OF ETHICAL PHILOSOPHY In nineteenth century Britain, the dominant ethical philosophy changed from a natural rights to a utilitarian perspective with major consequences for the poor. At that time, "poor" was defined as both the unemployed without property income, and those who earned their living from wage labor, so the majority of the population were affected by both the transformation in the economic conditions of the time as well as this change in the philosophical underpinnings of social welfare policy. After t7he change in philosophy and laws, the conditions of life for the poor did not improve, and there was a steady retreat from a social welfare policy which attempted to ensure the subsistence of the poor. This transformation in social welfare policy is referred to as the Poor Law debate. The laws in question are the 1795-97 Poor Law Amendment, which was written in the natural rights tradition; the 1819 Poor Law Amendment, which was a compromise between the natural rights and utilitarianism; and the 1834 Poor Law Reform, which incorporated Jeremy Bentham's version of Utilitarianism. The arguments against the 1795-7 reforms made by Bentham and Thomas Malthus and their successors are similar to those opposing the Keynesian welfare state today. The primary difference between the natural rights and the utilitarian ethical philosophies lay in their assignment of poverty to either human nature or human intention. The natural rights tradition assumed that all people were entitled to subsistence, which is a natural right granted by God. Hence, the poor were "deserving" unless proven otherwise, and, if people were unemployed, they were so involuntarily, unless proven otherwise. Utilitarians, on the other hand, maintained that people were entitled to subsistence if and only if they worked for it; the right of subsistence had to be earned. Therefore people were "undeserving" unless proven otherwise, implying that those who were unemployed were so voluntarily. This distinction between the deserving poor with a right to subsistence and the undeserving poor provided a very basic motivation for the Poor Law reforms of the period. The Right of Subsistence: Thomasian Natural Rights Theory Thomas Aquinas defined three natural rights: the preservation of mankind, the preservation of society, and the worship of God. God created the world and although mankind can assert dominion over the world, mankind does not "own" it; the world is God's possession. Hence man's dominion over the world is limited; man is allowed to use the world, but does not have the right to do so; individual claims of property do not take precedence over natural rights. Aquinas also maintained that individual claims of property became invalid when there were people who were unable to attain basic subsistence, which essentially justified theft to ensure individual existence (Tully 1980). Similarly, John Locke demonstrated that although an individual's labor gives a right to property, once subsistence is obtained, that property right does not give the individual the right to exclude others from subsistence. Locke's position on charity is that it is a natural right; people are entitled to charity in order to secure their natural right to exist by obtaining their subsistence. There are four important implications of this human rights tradition which are applicable to the current debate. First, people are entitled to subsistence/charity unless proven otherwise (if, e.g. a person chooses to be unemployed). Second, those who have more than they need for subsistence have an obligation to provide for the less fortunate. Third, it is immoral to allow necessity to force a person into servitude. Finally, although charity is an individual act, civil society is made up of the obligations of individuals, hence within society, charity becomes the social contract of obligation between society and the individual, and must be defined as a natural law. Logically then, the right of charity should be extended to the state, which is therefore required to ensure the subsistence of its citizens (Tully, pp. 166-7). Implications for social welfare policies have to be extrapolated from the discussions of the natural rights philosophers on the right to subsistence and the moral obligation to give charity. In contrast, Jeremy Bentham, the originator of Utilitarianism, explicitly discussed the 1795-97 Poor Law Reform, and in so doing, revealed the differences between the natural rights tradition and utilitarianism on the questions of subsistence and charity. By the late eighteenth century, the Elizabethan Poor Laws were no longer able to cope with the rising tide of paupers. They had originally been passed at a time when many small farmers had been displaced from their land by enclosure, and were dependent on the landlords for wages. Given the low level of economic development, the seasonal nature of agricultural employment, and the lack of sufficient non-agricultural employment, the government recognized that it had some responsibilities to the working classes. Hence the original Elizabethan Poor Laws provided work for the unemployed, bound pauper children into apprenticeships, and provided relief for those unable to work. For those who were able but unwilling to work, the Poor Laws could be used to force employment within the workhouse. Towards the end of the eighteenth century, agricultural prices rose, due mainly to two bad harvests plus taxation to support the cost of war with France. There was also worker unrest in both agricultural and industrial districts. These events stimulated legislation to amend the Poor Laws to protect the working classes. The 1795-97 Poor Law Amendment was justified by Adam Smith's argument which rationalized that the price of wage goods could be set to ensure workers' subsistence (Smith, 1776 I.x.c. p. 158). Smith's economic efficiency argument noted that any laws preventing labor mobility would create both wage and profit differentials throughout the country. He also argued that because the institutional structure of a society tended to favor property and business owners, legislation passed to protect workers is fair and equitable; it protects their right to subsistence. Therefore, if there is a monopoly situation in which the price of output included a quasi-rent, and because land rent is a monopoly price deriving from the private appropriation of land, then it is legitimate to subsidize bread to ensure subsistence. This argument justified the "infamous" Speenhamland amendment of 1795-97 which tied the amount of relief to the size of family and the price of bread. Outdoor relief ("outside" the workhouses) was pegged to the size of family and the price of wheat. Residency requirements for relief were also relaxed which resulted in increased labor mobility and the migration of workers into urban areas. The amendments were primarily concerned with the alleviation of poverty in rural areas, which reached high levels due to seasonal unemployment, the restructuring of agricultural production, and the introduction of labor saving machinery. Bentham, however, criticized the amendments on three grounds. First, he opposed the presumption that all poor people were qualified for relief; he believed that people should demonstrate that they deserved relief, and the indolent or dissolute should not get the same "entitlements" as their more industrious brethren. Second, entitling everyone to the same benefit was inconsistent with the principles of utilitarianism, which proposed differential rewards or penalties for industriousness or indolence. Third the reforms, by guaranteeing all workers the same income, were in effect an attack on income and hence on property, the results of industriousness and frugality. Therefore, while the natural rights philosophy disqualified people for relief if they refused employment, it still assumed that all were entitled to relief unless it was demonstrated that they were not. Bentham, on the other hand, believed that because people were naturally lazy, they were not entitled to charity because immoral behavior should not be rewarded. Poverty was both natural and moral; the undeserving poor were poor because of their human nature: they were indolent, negligent and dissolute, and should not be treated in the same manner as the deserving poor (Bentham, 1797 p.7). He suggested three alternatives. First, private charities, not government, should give relief. Second, there should be a mechanism to distinguish the deserving from the undeserving poor. Third, those who temporarily fell on hard times should obtain loans rather than relief. Thomas Malthus also believed that poverty was natural. It derived from natural laws governing population growth and agricultural production, and changes in institutions or human laws could not cure poverty. Malthus therefore also opposed attempts to reform the Poor Laws, because trying to abolish or diminish any inequality in the distribution of income would only reduce everyone to the same level of poverty. He further linked the increase in the number of paupers, even in a flourishing state, to increased births, recommending passage of a law to deny parish relief to children, both legitimate and illegitimate, (Malthus, 1798, p. 201). Parents would then be dependent on private charity which was unlikely to increase, so the resulting hardships were likely to reduce population growth, eliminating poverty by operating on the supply side of labor. Malthus' contemporary, David Ricardo, was in many ways a transition figure between the natural rights and the utilitarian approaches. His philosophic orientation was undoubtedly utilitarian, yet unlike Malthus, he did not blame the poor for their poverty. For Ricardo, poverty had its roots in the economic and social system, but not because it was difficult to increase food production as in the Malthusian tradition. Rather people were poor because the accumulation of capital was not enough to provide employment at high enough wages to provide an adequate level of existence. But Ricardo opposed the Poor Laws, because farmers would be taxed most heavily, lowering agricultural profits, hence capital accumulation and thus employment and wages would be lower. He believed that wages should be high enough to ensure the subsistence of the working class. In summary, then, Ricardo opposed the Poor Laws because they reduced the opportunity to increase wages by increasing the demand for labor which resulted when capital accumulation outstripped population increase. However, he favored the gradual elimination of the Poor Laws (Ricardo, 1821, p. 107). The Poor Law reforms of 1819 partly reflect these different views on poverty. Residency provisions were tightened; taxpayers (rather than the magistrates) in each parish determined relief on the basis of the applicant's "character and habit;" loans could also be made available to the poor; the salaries of soldiers, sailors and merchants could be seized if they were not supporting their family; and owners of working class residences could be taxed. In general, these amendments were more concerned with the efficiency of the operation of poor relief and with minimizing expenditures than with punishing the poor for moral deficiencies or dealing with poverty as a social problem. Later on, the distinction between the deserving and the undeserving poor was clarified. The former, those who were maimed, sick, elderly or young, were unable to work or were unemployable, deserved relief. The latter were able bodied but unemployed, and therefore did not deserve outdoor relief, and were forced into the workhouses. The increasing influence of utilitarianism in the writings, for example, of James Mill, J.R. McCulloch, and Nassau Senior, influenced the 1834 Poor Law Reform. McCulloch was particularly interesting in this respect. He argued that the Poor Law helped maintain public order during hard times, but because this income support was independent of the thrift and industry of the poor themselves, it had a detrimental moral effect. It weakened the operation of "good" moral propensities by removing decisions concerning the individual's own future from their own control (McCulloch, 1854). Industrious, thrifty workers who had temporarily fallen on hard times should be taken care of by relatives or friends; the workhouse was only for the undeserving poor. This distinction solved the problem of treating all the poor alike, and was the Benthamite principle of lesser eligibility. That is, one contributed to society by work, but if a person did not work, they should be put into the workhouse and lose their liberty. Nassau Senior was more thoroughly critical of the Poor Laws, arguing that they removed income determination from operation of the market (income for the poor was not determined by the bargaining process between employer and employee). This removed the incentive for laborers to find work, which led to indolence and degenerated workers' morality. If instead (male) workers delayed marriage (and consequently raising a family) until they could afford to, this would raise the moral character of the poor and control population growth. These ideas influenced the Poor Law Commission which wrote the report on which the 1834 Poor Law reforms were based, ignoring the evidence collected by the commission's own investigator (which took seasonal unemployment into account). The Act removed the administration of the Poor Laws from the parishes, placing it under the control of a central body of Commissioners. It eliminated "supplemental" relief for wages, outdoor relief to the able bodied, and set criteria for relief on the principles of deterrence and less eligibility--conditions in the workhouses should be worse than anything outside. Hence families were separated in the workhouses. The eligibility criteria were based on birth, returning the situation to that criticized by Smith in the eighteenth century. Illegitimate children were denied relief. These provisions were universally hated by the working classes. The 1834 Reform, based on the eligibility rather than the entitlement principle, did not provide a solution to poverty. The discussions leading to the passage of the 1996 Welfare Reform Act (with the exception of provision of workhouses) were based on similar principles, implying, as they do, that unemployment is voluntary and hence the unemployed are not entitled to subsistence from the state, which should be reserved for those incapable of labor. The Conservatives, like their utilitarian predecessors, reject the view that poverty is a socially and economically generated phenomenon. top
of The Influence of Ethical Philosophy or Structural economic changes and resultant shifts in attitudes towards the impoverished were also seen in New England. In the colonies, there were none of the attractions which are commonly believed to entice population to an area. There were no cultural institutions, schools, medical centers, libraries, churches, or recreation. Therefore, to import and maintain a labor force, the institutions of indentured servitude and slavery were used to hold a labor force in place until the late nineteenth century. Forty-five to eighty percent of all immigrant Caucasian labor arrived as indentures under long term contracts (Galenson, 1984). Indenturing was also used as a universal punishment for crime or poverty. Since imprisonment or institutionalization were seen as a waste of good labor, every county in the northeast held regular, public auctions of criminals, the impoverished, and the impaired, including children (Katz, 1986). In short, two-thirds of all immigrant and domestic labor was held in place by force and legal restrictions, not wages. During the colonial era, virtually all production in the northeast took place in the household. The significance of this is that the inter-related households in small communities had access to the surplus of production, which was directly distributed by the owners of that production. Each farm would distribute its own surplus production in exchange for products from someone else; shoes would be traded for smoked hams which would be bartered for time on a loom to weave cloth, and so on. Families which ran into temporary financial difficulties but who were not poor enough to be indentured were temporarily cared for by the surplus held in common by all communities. By the eve of the American Revolution, this pattern was changing. The ownership of production began to concentrate in the hands of speculators, and the craft production done on farms began to change over to wage work within the household. This pattern of the capitalization of production accelerated before and after the War of 1812. In 1808, there were 15 cotton mills in Massachusetts, by the end of 1809, there were 87 new mills. While there was a dramatic increase in the availability of wage work for the local population, the wages available did not sustain the same standard of living which had been prevalent when individuals and the community had access to the surplus of production from rural households. In short, it was the very creation of wage work which increased poverty in New England. With the "freeing" of the labor force from indenture contracts and the movement of large segments of the population into the waged labor force, the responsibilities of the town fathers and of industrialists for the impoverished changed dramatically. Under the indenturing system, those who owned the contract and property were required to provide life-long care for their dependents. With the introduction of waged labor, the new industrialists owed only a day's wage for a day's labor. As a result, indigents were numerous in both rural and urban areas as early as 1800, even though the tidal wave of immigrants usually associated with increasing poverty did not begin until after 1843. The old social contract had been broken; it was no longer clear who was responsible for wage laborers during layoffs, old age, or disability, nor who was responsible for abandoned women with children, widows, or incompetent persons. Growth of poverty and changing charity policies
Into the vacuum left by the end of the old social contract, new policies to deal with the poor were developed by upper class women who ran private charities, and politicians, all men, who administered public institutions and outdoor relief (Katz, 1986). The upper classes, political economists, and politicians almost universally believed poverty to be caused by personal failure. Charity was no longer a Christian duty to provide help to those incapable of helping themselves. The result of this work by private charities and politicians was a new social contract which had three facets: incarcerating the poor away from the community, removing children from indigent parents, and exploitation of the labor of the poor. While there were no federal policies governing charity for the impoverished, there was a strong regional similarity in the new social contract. Throughout the 1820s, New York, Boston, Philadelphia and most counties throughout the northeast exchanged delegations whose sole purpose was to unify local charity policies for both public and private institutions (Rothman, 1971). Josiah Quincy authored a pamphlet in 1821 for the Boston City Council which influenced policies passed throughout the northeast in the 1830s. Quincy opposed the existing charity system which provided some care for people in their homes, and made an almshouse available for the completely destitute. In its place, he proposed a workhouse where labor would be the divining rod separating the deserving from the undeserving poor. His statements make clear that, in his view, there were very few deserving poor, that the impoverished were so through their own personal failings. "The ... poor by reason of vice, constitute ... probably to a full two thirds of ... adult poor ... indolence, intemperance, and sensuality, are the great causes of pauperism in this country ... all this class can ... perform, daily, the complete task of a day laborer." Quincy included children in the category of undeserving poor with these remarks; "Intimately connected with this topic is that of providing for those idle and vicious children, of both sexes and different ages, which often under the company ... of thoughtless and abandoned parents, are found begging in our streets ... beginning a system of petty stealing, which terminates often in the penitentiary" (Quincy, 1821). It was from political statements like Quincy's that the new three-pronged policies were developed. First, the poor were incarcerated away from the community. Prior to 1800, there were almost no buildings to house the poor and criminal. By the 1830s, every county in the northeast boasted a workhouse, orphanage, jail, or other edifice whose sole purpose was to separate the poor away from the community at large (Katz, 1986). In 1810, Boston had one almshouse, no prison, and a temporary holding facility for criminals. By 1839, there were two work farms, a juvenile jail, several orphanages, a long term prison (whose population averaged 60% male, 40% female through the 1830s), and countless private charities (Boston City Council, 1834-1839). Second, children were removed from indigent parents. By the 1830s, virtually all poor parents applying for either public or private aid had their children removed and sent to orphanages, juvenile jails, and workhouses (Abramovitz, 1992; Katz, 1986). Most of these children spent less than a year incarcerated before they were indentured out to businesses and farmers (Boston City Council, 1834-1839). The removal of children from indigent parents had two results. One, whether institutionalized or indented out, the children were educated to become part of a docile working class (Katz, 1986). In the absence of their parents, most communities hoped to inculcate solid middle class values (Rothman, 1971). Two, this made the parents' labor more easily exploited. Women with children who applied for aid deserved charity, only as long as they held to the strict Victorian morality standards in vogue at the time (Abramovitz, 1992). Once the mother was childless, she was no longer deserving of charity and could be forced to take any low wage job. Men in charge of children were simply deemed unfit parents. Third, the labor of the poor was exploited. Children in institutions either made garments and furniture for sale on the open market, or were hired out as day laborers for wages paid directly to the institutions. They were indentured or apprenticed out for a fee of $100 per contract, which was paid directly to the private or public charity (Boston City Council, 1834-1839). Women in prisons were employed, at no wages at all, to sew garments for private contractors (Boston City Council, 1834-1839). Outside the institutions, the labor of poor women was exploited by both the federal government and private charities. Sewing for piece rate in the home was one of the few socially acceptable occupations for widows and abandoned women. The wealthy would send their fine work to charities who in turn farmed it out to poor women at wages which tended to be at or below the lowest piece rates on the market. Matthew Carey, political economist and publisher, condemned the charities for creating the very impoverishment they were meant to resolve by paying substandard wages. He also condemned the federal government's practice of paying substandard wages for sewing armed forces uniforms; as it was such a large employer, it drove down wages throughout the 1820s in the entire region around Philadelphia (Carey, 1830). In summary, these new charity policies were the direct result of a change in the social contract which arose from the transformation of the New England economy during the industrial revolution. These new policies did not resolve anything, they simply shifted the blame of poverty onto the shoulders of the impoverished. The low wages received by the new free labor force contributed to poverty, and seasonal unemployment could no longer be handled within the community. top
of Poverty in New England or Swings of the pendulum, especially in political attitudes, frequently occur in history. This paper has shown that attitudes to the poor are affected by both changes in economic reality and political/ideological changes. The current shift to an emphasis on individual responsibility mirrors the change in policy in Britain and in New England in the 1830s. These changes did not eliminate poverty; they either removed it from public view (putting the poor into workhouses), or shifted the burden of ensuring subsistence. There is no inherent objection to requiring individual (or family) responsibility for subsistence for so long as the socio-economic framework permits it, but merely legislating a shift in this responsibility will not by itself solve the problem of poverty. Success depends on whether general economic conditions can accommodate increasing numbers of job seekers, and on the incomes attached to the jobs--there is no guarantee that the wage will be a living wage. Ironically, although the policy changes described here took place in generally expansionary times, the paradoxical results of unemployment coexisting with labor scarcity, and of prosperity coexisting with poverty, are also the outcome of general economic conditions. In the nineteenth century, the combination of a mismatch of skills and employers' ability to keep wages low resulted in poverty for many, even though they worked. In the twentieth century, many of the jobs available to those coming off the welfare rolls do not pay wages high enough to support a family. The pressing problem of (labor saving) technological change also raises the issue of whether there will continue to be sufficient jobs to absorb job seekers. There is also a recognition that providing adequate support mechanisms for all those wishing to work (in the form of child care, public transportation or health coverage, for example) is expensive. While the "welfare to work" proposals were intended to reduce government budget expenditures, they are unlikely to do so--especially at the state and local levels which are being forced to pick up the slack resulting from the shifting of responsibility for the poor from the federal government. It seems likely that the problems of poverty will once again be hidden from public view, and will not be adequately dealt with for some time. What may force a change is a return to more depressed economic conditions and a return to public view of the poor (as happened during the 1930s, for example), combined with a realization that a national, not local, approach is needed to deal with the uneven impact of economic changes on the poor. Statistically, these policy changes will reduce poverty: by removing the possibility of permanent welfare roles, poverty, by default, becomes statistically insignificant because there are no records. But, just as in nineteenth century England and the United States, making poor relief or welfare available to fewer people does not eliminate poverty itself. 1. At the opening of the "Hearing on Welfare Reform" before the U.S. House of Representatives' Committee on Economic and Educational Opportunities, Chairman William Gooding stated, regarding the legislative effort to reform welfare. "...if we fail, then this great civilization, like those that went before us, will fall from within." (Contract with America: Hearing on Welfare Reform, 1995, p.1). return to paragraph 2. This line of reasoning assumes a homogenous labor supply and jobs with reasonably easily learned skills; some labor economists refer to it as the "queue" theory of labor markets, because of the assumption that employers hire further down the line as they need more workers. In reality, alas, jobs are heterogeneous, and especially in the late twentieth century, overall economic expansion has occurred with a less than proportionate expansion of employment opportunities. In fact, in either expanding or declining economics, demand for certain types of labor can be extremely high and that type of labor becomes scarce, while significant unemployment for other types of labor and in certain geographical areas still exists. return to paragraph 3. Nineteenth century American economists, for the most part, did not discuss the concept of the subsistence wage. return to paragraph Abramovitz, Mimi (1992). Regulating the Lives of Women: Social Welfare Policy from Colonial Times to the Present. Boston: South End Press. Bentham, Jeremy (2/1797). "Observations on the Poor Law Bill Introduced by the Right Hon. William Pitt," unpublished manuscript appearing in "Observations on the Poor Bill," (Joseph) Hume Tracts Number 38, University College London, pp. 2-48. Boston City Council, Boston, Massachusetts: City Council, Documents of the City of Boston, 1834-1839. Boston Public Library, Microfilm JS13.B6, Reels 1,2,3. Carey, Mathew (1830). "Essays on the Public Charities of Philadelphia, Intended to Vindicate the Benevolent Societies of this City from the Charge of Encouraging Idleness." Philadelphia: Carey and Hart, Kress Collection. Baker Library at Harvard, Cambridge, MA. Cowherd, Raymond (1977). Political Economists and the English Poor Laws: A Historical Study of the Influence of Classical Economics on the Formation of Social Welfare Policy. Athens, Ohio: Ohio University Press. Galenson, David W. (1984). "The Rise and Fall of Indentured Servitude in the Americas: An Economic Analysis," Journal of Economic History, Vol. XLIV, March, pp. 3-26. Katz, Michael B. (1986). In the Shadow of the Poorhouse. A Social History of Welfare in America, New York: Basic Books. McCulloch, J.R. (1854). A Treatise on the Circumstances which Determine the Rate of Wages and the Condition of the Labouring Classes, 2nd ed. New York: A.M. Kelley Publishers, 1967. Quincy, Josiah (1821). "Report of the Committee on the Subject of Pauperism and a House of Industry in the Town of Boston." Kress Collection. Baker Library at Harvard, Cambridge, MA. Ricardo, David (1821). Principles of Political Economy and Taxation, 3rd ed. Vol. 1 of The Works and Correspondence of David Ricardo, ed. P. Sraffa. Cambridge: Cambridge University Press, 1951. Rothman, David J., ed. (1971). Poverty in the USA, The Almshouse Experience: Collected Reports. New York: Arno Press and The New York Times. Smith, Adam (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Oxford University Press, 1976. Tully, James (1980). A Discourse on Property: John Locke and his Adversaries. Cambridge: Cambridge University Press. top
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Margaret S. Coleman, Ph.D., New
York University;