Saturday, January 09, 2010

charitable hypocrisy

I posted a link about a year ago referencing a satirical piece that highlighted the social context in which a nonprofit operates. The nonprofit provides job training and employment for ex-cons, “black or brown men”, who were mostly arrested for petty crimes such as drug possession. Ironically, the daughter of a rich board member of this nonprofit was also involved in drugs, but sits comfortably in rehab with “her needs met” and her “crimes mitigated”.

W.E.B. DuBois’s the Philadelphia Negro, a study of blacks in Philadelphia at the turn of the twentieth century, reminded me of this satirical piece. DuBois notes that while Philadelphians were unwilling to give blacks decent jobs, they supported charitable institutions that cared for the poor. He writes:

For thirty years and more Philadelphia has said to its black children: “Honesty, efficiency and talent have little to do with your success; if you work hard, spend little and are good you may earn your bread and butter at those sorts of work which we frankly confess we despise; if you are dishonest and lazy, the State will furnish your bread free.” Thus the class of Negroes which the prejudices of the city have distinctly encouraged is that of the criminal, the lazy and the shiftless; for them the city teems with institutions and charities; for them there is succor and sympathy; for them Philadelphians are thinking and planning; but for the educated and industrious young colored man who wants work and not platitudes, wages and not alms, just rewards and not sermons—for such colored men Philadelphia apparently has no use.


~ W.E.B DuBois in The Philadelphia Negro (1899)

While much has changed since DuBois’s time, similarities remain. Too many jobs do not pay a living wage. And in the current state and structure of the economy, I don’t believe there are sufficient living wage jobs for everyone in this country. We live in country that relies upon low-paid labor to sweep our floors, clean our toilets and wash our dishes. We live in a global system where we rely upon low-paid labor to sew our clothes and manufacture our toys. And so the poor must always be amongst us.

There is a place for charity. But sometimes we might spend too much time trying to figure out most effective educational and training and rehab programs, and not enough time addressing the social structures that may have led to this poverty in the first place. We spend so much time trying to move individual people up the “educational ladder”—college or proper vocational training—so they can get good jobs. But many have already noted that there are too many people overeducated for their jobs. And I’m not sure if the economy will grow out of this problem.

America also likes to romanticize the individual entrepreneur both locally (Joe the Plumber) and internationally (microfinance anyone?), but worker-owned companies or cooperatives are often more effective at achieving economies of scale and lifting more people out of poverty.

Without resorting to the failed model of state ownership, could there be better ways to organize and structure work? Could we get rid of the need for janitorial staff by creating a cleaning rotation amongst office-workers? It may be inefficient, but that doesn’t make it a less appropriate way to organize work. Or, what if workers owned their companies so that they can share in the profits that their sweat and blood created? So that they are no longer just a cost to be reduced in order to increase profits.

Maimonides, a 12th century Jewish philosopher, noted that the highest degrees of charity was a business partnership (shared ownership) with a poor person. The rich board member no longer sits on the board of his fancy schmancy nonprofit/bakery, giving his large contributions (large for the nonprofit but pitiful compared to his assets), but instead starts a bakery and makes the poor black man a co-owner.

5 comments:

Nicholas said...

You make an interesting point about our endemic dependence on cheap labor meaning we need people to be poor. I can see an angle here of distributional inequality (we have more than enough and they have less than enough) and also of ultimate scarcity (when you hint there may not be enough living wage jobs for everyone).

I wonder - how much is poverty explained by either and both of these sources? If we were able to spread everything around evenly, would there be enough for everyone?

I also wonder: could a restoration of craftsmanship paradoxically result in greater aggregate wealth? If the things people made required more skill, ultimately represented grater wealth, and cost more, would not just the craftsman but society be the richer for it?

Finally, the business partnership Maimonides mentions does seem more loving, because in that case the welfare of the businessman is actually bound up with the other man. Saying "unless you succeed, I don't succeed" is much different than giving out of one's surplus.

Jonathan said...

Wow, my respect for W.E.B. DuBois just increased significantly. I didn't know much about him, but that quote indicates that he had a good understanding of the destructive consequence of high marginal tax rates on the poor created by social programs.

However, I'm a bit confused by your conclusion that poverty is an inevitable consequence of our economy as currently constituted. It's true that we have menial jobs that pay a pittance, but there's nothing magic about our current set of jobs. A few hundred years ago, 99% of the population did hard manual labor for a pittance. Today, that percentage is much smaller. There's no economic law that says it can't go to zero.

l e i g h c i a said...

Nick, I think God suggests through the practice of Jubilee, debt forgiveness and land restoration, that if we were all to truly follow God, there would be enough for all of us. As for the craftmanship question-- that's something interesting to chew on...

Jonathan, I don't know enough about marginal tax rates to know if that's DuBois was referencing, but he was adamant that charity, without economic opportunity, was insufficient. As for your latter comment-- the economy is changing. Do you think we can arrive at a point (technologically?) where there aren't menial labor/low paid jobs? Maybe from an economic model perspective, that's feasible. But I'm skeptical about it actually being possible, given current demographic and environmental trends.

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Jonathan said...

Leighcia,

Re: Marginal tax rates, Greg Mankiw has some good info.

To your second point -- economic theory predicts that a menial job will disappear when the cost of automating that task falls below the salary commanded by a human being. Thus there are two ways menial jobs decrease -- advances in technology and increases in wages commanded by menial labor.

Certainly inventions past and present give us hope for labor substituting technology. However, replacing people with machines could leave them worse than before if they can't find better jobs.

So we return to the issue of wages and job opportunities. I think that's really what this comes down to. From a prediction standpoint, you're correct that demographic and resource/environmental trends aren't promising. On the other hand, trends in technology look good. In the battle between those, wages have won out so far in the first world, and hopefully that continues.