Shipler, author of the Pulitzer Prize-winning Arab and Jew (1986), examines the complex issues behind poverty and changes in policy and ideology regarding the poor. Shipler fleshes out statistics and social policy with compelling portraits of people who struggle to maintain lives for themselves and their families with low-paying jobs and little social support. Looking at workers from a variety of racial and ethnic backgrounds, from illegal immigrants working on farms in California to factory workers in New Hampshire, Shipler vividly portrays the plight of people living on the very brink of economic disaster, some of whom are only one paycheck away from homelessness. He examines schools, job-training programs, and health-care services aimed at low-income people that often fall woefully short of actually helping their clients. Finally, Shipler ties together the micro and macro factors that condemn the working poor to a marginalized existence. This is a compelling, insightful book for those interested in issues of poverty and social justice. Vanessa Bush
Copyright © American Library Association. All rights reserved
Review
“This is one of those seminal books that every American should read and read now.”
—New York Times Book Review
“The Working Poor...should be required reading not just for every menber of Conbress, but for every eligible voter.”
—Washington Post Book World
"The Working Pooris a powerful exposé that builds from page to page, from one grim revelation to another, until you have no choice but to leap out of your armchair and strike a blow for economic justice."
—Barbara Ehrenreich, author, Nickel and Dimed
"Through a combination of hard facts and moving accounts of hardships endured by individuals, David Shipler's new book fills in the gaps and denounces the many myths of the politically drawn caricatures and stereotypes of workers who live in poverty in America. His call to action powerfully argues that we must simultaneously address the full range of interrelated problems that confront the poor instead of tackling one issue at a time. It is a compelling book that will shift the terms of and reinvigorate the debate about social justice in America."
—Bill Bradley
“The 'working poor' ought to be an oxymoron, because no one who works should be impoverished. In this thoughtful assessment of poverty in twenty-first century America, David Shipler shows why so many working Americans remain poor, and offers a powerful guide for how to resuscitate the American dream. A tour de force of a forgotten land.”
—Robert B. Reich, University Professor, Brandeis University, and former U.S. Secretary of Labor
From the Inside Flap
Most of the people I write about in this book do not have the luxury of rage. They are caught in exhausting struggles. Their wages do not lift them far enough from poverty to improve their lives, and their lives, in turn, hold them back. The term by which they are usually described, working poor, should be an oxymoron. Nobody who works hard should be poor in America. from the Introduction
From the author of the Pulitzer Prize winning Arab and Jew, a new book that presents a searing, intimate portrait of working American families struggling against insurmountable odds to escape poverty.
As David K. Shipler makes clear in this powerful, humane study, the invisible poor are engaged in the activity most respected in American ideology hard, honest work. But their version of the American Dream is a nightmare: low-paying, dead-end jobs; the profound failure of government to improve upon decaying housing, health care, and education; the failure of families to break the patterns of child abuse and substance abuse. Shipler exposes the interlocking problems by taking us into the sorrowful, infuriating, courageous lives of the poor white and black, Asian and Latino, citizens and immigrants. We encounter them every day, for they do jobs essential to the American economy.
We meet drifting farmworkers in North Carolina, exploited garment workers in New Hampshire, illegal immigrants trapped in the steaming kitchens of Los Angeles restaurants, addicts who struggle into productive work from the cruel streets of the nation s capital each life another aspect of a confounding, far-reaching urgent national crisis. And unlike most works on poverty, this one delves into the calculations of some employers as well their razor-thin profits, their anxieties about competition from abroad, their frustrations in finding qualified workers.
This impassioned book not only dissects the problems, but makes pointed, informed recommendations for change. It is a book that stands to make a difference.
From the Back Cover
"The Working Pooris a powerful exposé that builds from page to page, from one grim revelation to another, until you have no choice but to leap out of your armchair and strike a blow for economic justice."
--Barbara Ehrenreich,
author, Nickel and Dimed
"Through a combination of hard facts and moving accounts of hardships endured by individuals, David Shipler's new book fills in the gaps and denounces the many myths of the politically drawn caricatures and stereotypes of workers who live in poverty in America. His call to action powerfully argues that we must simultaneously address the full range of interrelated problems that confront the poor instead of tackling one issue at a time. It is a compelling book that will shift the terms of and reinvigorate the debate about social justice in America."
--Bill Bradley
"The 'working poor' ought to be an oxymoron, because no one who works should be impoverished. In this thoughtful assessment of poverty in twenty-first century America, David Shipler shows why so many working
Americans remain poor, and offers a powerful guide for how to resuscitate the American dream. A tour de force of a forgotten land."
--Robert B. Reich, University Professor, Brandeis University, and
former U.S. Secretary of Labor
About the Author
David K. Shipler worked for the New York Times from 1966 to 1988, reporting from New York, Saigon, Moscow, and Jerusalem before serving as chief diplomatic correspondent in Washington, D.C. He has also written for The New Yorker, the Washington Post, and the Los Angeles Times. He is the author of three other books—Russia: Broken Idols, Solemn Dreams; Arab and Jew: Wounded Spirits in a Promised Land (which won the Pulitzer Prize); and A Country of Strangers: Blacks and Whites in America. Mr. Shipler, who has been a guest scholar at the Brookings Institution and a senior associate at the Carnegie Endowment for International Peace, has taught at Princeton University, at American University in Washington, D.C., and at Dartmouth College. He lives in Chevy Chase, Maryland.
From The Washington Post
"The millions who are poor in the United States tend to become increasingly invisible," Michael Harrington wrote in The Other America (1962). "Here is a great mass of people, yet it takes an effort of the intellect and will even to see them." Harrington, a prominent democratic socialist, revealed that not all Americans were sharing in the prosperity of the Eisenhower era. The Other America brought the poor out of the shadows, appealed to the conscience of the educated middle class, became a bestseller and helped to inspire the War on Poverty. For a decade or so the existence of poor housing and poor health in the world's wealthiest country was regarded as a national disgrace, a social problem addressed with the sort of fervor later directed at illegal drug use and the graduated income tax. Compassion for the poor dwindled amid the stagflation of the late 1970s. It was ridiculed during Reagan revolution, whose old-fashioned belief in self-reliance reached its peak in 1996, when President Bill Clinton backed legislation to replace federal welfare with hard work.
Now poverty seems once again to have been forgotten. For the past 20 years the mainstream media have been obsessed with the lifestyles of the rich and famous -- not those of the poor and dispossessed. In The Working Poor, David K. Shipler directs our gaze to the people we encounter every day, yet hardly seem to notice, the low-wage workers who flip burgers at McDonald's, stock the shelves at Wal-Mart and sew the hems of designer clothes. Their misery hides in plain sight. Like Harrington's work of a generation ago, The Working Poor delivers an unsettling message for the comfortably well-off and complacent: "It is time to be ashamed."
Shipler's focus is not the lazy, the homeless, the seriously mentally ill -- the sort of people whom you might expect to be poor. Instead he chronicles the plight of those Americans who have jobs but still live in poverty. It is remarkable how many people fit that description. A conservative estimate would be between 35 and 40 million. "Poverty" is not easy to define, and regional differences in the cost of living make nationwide measurements particularly difficult. According to the federal government, in 2002 a family of four -- one adult, three children -- that earned $18,500 had an annual income above the poverty level. An adult in such a household, working forty hours a week, five days a week, would have to earn more than $8.80 an hour to remain above the official poverty line. That is an hourly wage 70 percent higher than the current federal minimum wage. However you measure poverty, it has been growing in recent years, along with disparities in wealth. One-fifth of the American population, those at the very bottom of the income scale, have a median net worth of $7,900.
I've spent a fair amount of time among the working poor, and Shipler conveys the stress and anxiety and chaos of their lives with extraordinary skill. There is nothing simple about the poverty he depicts. Shipler spent five years investigating the subject, and the depth of his reporting conveys a reality too complex to fit neatly into any liberal or conservative scheme. Poverty emerges in these pages not as the inevitable result of an unjust society or as a reflection of individual failings, but as a mixture of both. "Liberals don't want to see the dysfunctional family," Shipler argues, "and conservatives want to see nothing else." He supplies a haunting portrait of a woman whose upward mobility in the service industry is blocked, in large part, by the fact that she has no teeth. Poverty was responsible for her losing the teeth -- and lacking the sort of smile assistant managers like to see behind the counter, she became trapped in poverty. We meet victims of sexual abuse trying to recover from the trauma, migrant workers sleeping 12 to a room, sweatshop workers exploited by greedy employers, teachers and social workers struggling to lift children from the lower depths.
The sort of problems that are merely inconvenient for an upper-middle-class family -- a flat tire, a baby sitter who fails to show up, a bout of the flu -- can prove disastrous for the working poor. They live precariously near the edge, without job security, health insurance or money in the bank. A boss at Wal-Mart expects workers to come whenever needed, morning, noon or night. A labor contractor deducts a smuggler's fee, along with room and board, from a migrant worker's weekly paycheck. The owner of a sweatshop suddenly closes the business, then reopens at a new location, leaving workers with weeks of unpaid wages. And it's not just unscrupulous employers who prey on the poor. Financial institutions that offer easy credit can plunge them into debt. The annual interest charged by some check-cashing outfits -- where the poor must often do their banking -- can reach 521 percent.
No matter how close to the bottom a family may fall, there is always a relentless, downward pull. "Poverty leads to health and housing problems," Shipler explains. "Poor health and housing lead to cognitive deficiencies and school problems. Educational failure leads to poverty." There is no simple way out of such vicious circles, and Shipler advocates remedies that are as complex as the social problems he addresses. A more responsive network of social services could simultaneously offer legal, medical, educational and even parenting support. A higher minimum wage and health insurance for all Americans would help, too. Shipler's proposals defy ideological labels; they are guided by a pragmatic appreciation of what might actually get results.
The Working Poor is not an easy read, and the darkness of the subject is only partly to blame. Shipler's hard work deserved a better editor. The structure of the book is sometimes confusing, and it would have benefited from a tighter focus, with fewer individual portraits and digressions. But this is an essential book. Even those who lack pity and compassion should be concerned about what is now happening to the poor. One of the great achievements of postwar America was the creation of a stable middle-class society. That achievement is unraveling. At the moment, the dispossessed are politically apathetic, distracted by video games and cable television, the modern equivalent of bread and circuses. Yet throughout our history, poverty and great inequalities of wealth have led to political extremism and social unrest. The Working Poor and Barbara Ehrenreich's Nickel and Dimed, a book that eloquently covers some of the same ground, should be required reading not just for every member of Congress, but for every eligible voter. Now that this invisible world has been so powerfully brought to light, its consequences can no longer be ignored or denied.
Reviewed by Eric Schlosser
Copyright 2004, The Washington Post Co. All Rights Reserved.
Excerpt. © Reprinted by permission. All rights reserved.
Chapter One
Money and Its Opposite
You know, Mom, being poor is very expensive. —Sandy Brash, at age twelve
Tax time in poor neighborhoods is not April. It is January. And “income tax” isn’t what you pay; it’s what you receive. As soon as the W-2s arrive, working folks eager for their checks from the Internal Revenue Service hurry to the tax preparers, who have flourished and gouged impoverished laborers since the welfare time limits enacted by Congress in 1996. The checks that come from Washington include not only a refund of taxes withheld, but an additional payment known as the Earned Income Tax Credit, which is designed to subsidize low-wage working families. The refunds and subsidies are sometimes banked for savings toward a car, a house, an education; but they are often needed immediately for overdue bills and large purchases that can’t be funded from the trickle of wages throughout the year.
Christie, a child-care worker in Akron, earned too little to owe taxes but got $1,700 as an Earned Income Credit one year, which enabled her to avoid the Salvation Army’s used-furniture store and instead buy a new matching set of comfortable black couches and loveseats for her living room in public housing.
Caroline Payne’s check went for a down payment on her house in New Hampshire. “I used my income tax and paid a thousand down,” she said proudly. When she sold it five and a half years later and her daughter lent her money to rent a truck for her move, she planned to pay her back “when I get my taxes.”
“I’m waitin’ for my income tax to come in so I can pay my real estate taxes,” said Tom King, a single father and lumberjack who lived in a trailer on his own land.
Debra Hall, who had started at a Cleveland bakery, was keen with anticipation after filing her first tax return. “I’ll get $3,079 back! What am I gonna do with it? Pay all my bills off,” she declared, “and I haven’t had anything new in the house. Do some good with it, that’s for sure. Minor repairs on my car. The bills are first, for my credit [rating], to get all my back debts paid. It will be well spent.”
The Earned Income Tax Credit is one of those rare anti-poverty programs that appeal both to liberals and conservatives, invoking the virtue of both government help and self-help. You don’t get it unless you have some earned income, and since its payments are linked to your tax return, you don’t get it unless you file one. That leaves out low-wage workers—especially undocumented immigrants—who get paid under the table in cash and think they’re better off avoiding the IRS. By filing, however, they would end up ahead, because they’d get to keep everything they earned and would receive a payment on top of that. The benefits kick in at fairly high levels—at earnings of less than $33,692, for example, for a worker who supported more than one child in 2003. At the lower income levels, the Earned Income Tax Credit can add the equivalent of a dollar or two an hour to a worker’s wage.
Enacted in 1975, the program was expanded under Presidents Reagan, Bush, and Clinton, and in 2003 paid more than $32 billion to 18 million households. Treasury officials worry about erroneous claims, honest or fraudulent, which may rise to 27 to 32 percent of the total.1 On the other hand, an estimated 10 to 15 percent of those eligible don’t file for it,2 partly because employers and unions often don’t tell workers that it exists. The presidents of two local unions in Washington, D.C., for example, one representing janitors and the other parking garage attendants, had never heard of the Earned Income Tax Credit until I mentioned it to them. And I have not yet come across a single worker or boss who knew that with a simple form called a W-5, filed with the employer, a low-wage employee could get some of the payments in advance during the year. When I mentioned the W-5 to Debra Hall and she then asked at her bakery, the woman who handled the payroll waved her away impatiently and said she knew nothing about it. Later, the tax preparer told Debra it was better just to wait and get the payment in one lump sum after she filed her return.
It sure is better—if you’re the preparer. With cunning creativity, the preparers have devised schemes to separate low-wage workers from as much of their refunds and Earned Income Credits as feasible. The marvel of electronic filing, the speedy direct deposit into a bank account, the high-interest loan masquerading as a “rapid refund” all promise a sudden flush of dollars to cash-starved families. The trouble is, getting money costs money.
The preparers operate from sleazy check-cashing joints and from street-level outposts of respectable corporations. They do for a hefty fee what their clients could do for themselves for free with the math skills and the courage to tackle a 1040, or with a computer and a bank account to speed filing and receipt. But most low-wage workers don’t have the math, the courage, or the computer, and many don’t even have the bank account. They are so desperate for the check that they give up a precious $100 or so to get everything done quickly and correctly. “You get so scared,” said Debra Hall, who paid $95 to have her simple return done after ending twenty-one years of welfare. “I don’t know why it’s so scary, but I’d rather have it done right the first time.”
She was probably wise, because another disadvantage of being poor is that you’ve been more likely since 1999 to face an audit by the IRS. In that year, 1.36 percent of the returns filed by taxpayers making under $25,000 were audited, compared with 1.15 percent of those making $100,000 or more. The scrutiny was instigated by Republican congressional leaders who feared abuses of the Earned Income Tax Credit. In the face of bad publicity, the IRS shifted the balance in 2000 by auditing 0.6 percent of those under $25,000 versus 1.0 percent of those over $100,000. Thereafter, the audit rate tilted back and forth, to .86 and .69 percent, respectively, in 2001, then to .64 and .75 in 2002.3 In other words, as the IRS lost enforcement personnel, it dramatically reduced its scrutiny of well-to-do taxpayers, whose returns were once audited at the rate of 10 percent. This despite the fact that audits at the upper levels of income naturally tend to recover more dollars in lost revenue.
Evon Johnson never dared do another return herself after the IRS charged her $2,072 in taxes, penalties, and interest. Newly arrived from Honduras, she was working from 5 a.m. for a cleaning service in Boston that never withheld taxes and never sent her a W-2. She didn’t know they were supposed to do either. “I did my taxes, I fill it out, fine,” she said. But not so fine, evidently. “Three years after or four years after, IRS contact me saying that I owe them . . . like, $2,072. ‘Why do I owe you?’ And they say: because I didn’t declare my taxes. I say I did. . . . They say no. . . . I sent them a letter saying I was sending them $1,072 I think it was, ’cause I didn’t have no money at the time, and I was going to make small installments for the rest of the money. . . . You know what they did? I had a bank account, and they took the money from my bank account—every penny I had.” Ever since, she has happily paid $100 a year to a tax preparer, $100 a year for peace of mind. “I don’t want the IRS back on me,” she explained. “He do it and he sign it and put everything, so if any mistake, he gonna be the one who will have to deal with them.”
By the end of February, H&R Block’s storefront office on a dismal stretch of Washington’s 14th Street looked like a well-used campaign headquarters a week after Election Day. Most computer screens were dark, and the place was quiet and cavernous. All the desks were empty but one, occupied by Claudia Rivera, who used to prepare returns without charge at a library in Virginia. She and the manager, Carl Caton, didn’t have much to do now that the rush had passed, so they were happy to sit at a keyboard and explain.
Each form the taxpayer needed carried a fee: $41 for a 1040, $10 for an EIC (the Earned Income Credit), $1 for each W-2, and so on. Electronic filing cost another $25. So a simple return with two W-2s filed electronically would run $78. But it didn’t stop there. Block had a smorgasbord of services for people who lived on the edge. If you had no bank account, your refund could be loaded onto an ATM card that charged $2 per withdrawal. Or a temporary account could be opened into which the IRS payment could be deposited for a fee of $24.95. If you were enticed by Block’s offer of a “rapid refund” and wanted a check in a day or two, you paid H&R Block an additional $50 to $90, depending on the amount you were getting. The fee on 14th Street could be as much as $50 on a $200 refund, up to $90 for $2,000 or more.4
This was actually a loan, and for a very short time. Filing electronically usually gets you a check in two and a half weeks, according to the IRS, and five days sooner if it’s deposited directly into a bank account. At the most, then, the “rapid refund” loan, issued a day or two after filing, would run about fifteen days, which made the $90 fee on a $2,000 payment equivalent to an annual interest rate of 108 percent. At the least, the loan could run as little as four days, propelling the annualized rate to 410 percent on $2,000, and 2,281 percent on $200. (The highest percentage is incurred if the timing occurs perfectly: the return is filed by the IRS’s weekly deadline of noon Thursday, the loan check is not issued until after banks close Friday, the taxpayer can’t put it into his account until Monday, and the IRS ...
