Urban Poverty in America: <em>The Truly Disadvantaged</em> Revisited

"Quite frankly, I think that Obama's programs have prevented poverty, including concentrated poverty, from rapidly rising, considering the terrible economy."
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Selected landmarks from the Corktown Neighborhood of Detroit, Michigan.
Selected landmarks from the Corktown Neighborhood of Detroit, Michigan.

The Truly Disadvantaged, written by Harvard professor William Julius Wilson, was first published in 1987 and significantly impacted the debate about the causes of urban (ghetto) poverty and potential public policy solutions. Professor Wilson argued fundamentally that changes in the structure of the U.S. economy were the primary drivers of increased social and economic dislocation of the urban poor which require comparable solutions based upon national and regional economic reforms. Professor Wilson presents a public policy agenda based on this economic analysis, informed by an assessment of adverse behavioral norms and discrimination as factors facilitating the persistence of an urban "underclass."

Twenty-five years later, given that most of these challenges have been exacerbated by the global recession, high rates of unemployment and the increased social isolation of poor urban areas, Professor Wilson's work remains relevant. I recently interviewed Professor Wilson about the contemporary relevance and legacy of the book, in light of responses to the book from academics and policy-makers, contemporary ideological narratives framing the discourse on urban poverty, current trends in the U.S. economy, the impending fiscal cliff confronting America at the end of 2012, the 50th anniversary of Dr. Martin Luther's King's "I Have a Dream" speech in 2013 and the social vision for America which it proclaimed, and more.

The full interview will appear in the Harvard Journal of African American Public Policy in April.

The almost complete restructuring of the American economy, from a predominantly manufacture-driven one to a service-driven one, in a very short time, had tremendous adverse consequences on the urban underclass just as you and others predicted when the book was written. As this continues it will undoubtedly only exacerbate the joblessness that is at the heart of the perpetuation of the underclass. How has this radical restructuring of the economy affected social dislocation and poverty in the cities since the time the book was written in general?

The first edition of The Truly Disadvantaged was published 25 years ago. However, the economic processes emphasized in the book have continued -- the loss of manufacturing jobs, the movement of jobs from cities to the suburbs and overseas, and even greater internationalization of the economy, especially through trade liberalization facilitated by free trade agreements in the 1990s. Moreover, given the expansion of low-wage jobs lacking fringe benefits, and the polarization between high-wage and low-wage occupations, higher education is even more critical for social advancement in the labor market today. Furthermore, the adverse effects of deindustrialization on inner-city black employment continue to be severe. Moreover, there are still major racial differences in concentrated poverty. Although the country experienced dramatic declines in concentrated poverty in the 1990s, including declines in urban black neighborhoods, the substantial decreases may simply have been blips of economic boom in the 1990s rather than permanent trends. Unemployment and individual poverty rates have increased since 2000, and there is every reason to assume that concentrated poverty rates are on the increase again, although complete data on concentrated poverty will become available only after a more thorough analysis of the 2010 census.

The problems of joblessness have continued and have even gotten worse for low-skilled blacks. The racial employment disparities have persisted. The black/white unemployment ratio seemed essentially fixed at 2.0 or greater, which means that even through economic upturns and downturns the black unemployment rate has been at least twice that of the white unemployment rate -- although during this current economic crisis the rate dipped below 2.0, because of the sharp increase in joblessness among whites.

The discourse about reclaiming the American Dream for middle-class Americans has received wide attention. Do the urban poor matter in America today? Is it possible to pursue "both-and" approaches instead of making a choice to focus on one group or the other?

Despite all the rhetoric about reclaiming the American Dream for middle-class Americans, the Obama administration has done more for lower-income Americans than any president since Lyndon Baines Johnson. Quite frankly, I think that Obama's programs have prevented poverty, including concentrated poverty, from rapidly rising, considering the terrible economy. Obama's stimulus package (the American Recovery and Reinvestment Act) earmarked $80 billion for low-income Americans, which included such things an extension of unemployment benefits, a temporary increase in the earned income-tax credit, and substantial additional funds for the Food Stamps (what we now call Supplemental Nutrition Assistance Program). It also included nearly $4 billion in job training and work force enhancement programs and $2 billion for neighborhood stabilization efforts.

Moreover, I consider the health care legislation as an antipoverty program. Over the long term the health care legislation will significantly benefit lower income Americans. Indeed the share of Americans who are uninsured declined between 2010 and 2011. And this improvement was in part due to a provision of he Health Care Bill that that allows children to remain on their parents' health plan until they reach age 26.

Also, Obama worked out a deal with Republicans to address the impact of the recession on lower-income Americans, a negotiation, which, although resulting in an extension the Bush-era tax cuts, led to a 13-month extension of federal unemployment benefits for more than seven million jobless worker, as well as the continuation of programs that benefit the poor and working classes, including (a) the earned-income tax credit, (b) the refundable component of the Child-Tax-Credit, and (d) the 2 percent reduction in the Social Security Payroll tax for one year, all of which put more money in the hands of ordinary Americans. Finally, I should mention the $144 billion package passed in early 2012 by Congress to extend the payroll tax cut and unemployment insurance to the end of this year, programs that Obama pushed.

Now, when you consider how these policies fit in with into the broader sweep of policy changes over the last few decades, one has to acknowledge that the legislation enacted was in response to the extraordinary economic situation that now plagues this country. Taken together, they far exceed any legislations beneficial to low income Americans passed during either the Carter, Ford, Reagan, George H W Bush, Clinton, or George W. Bush administrations.

Next year is the 50th celebration of Dr. Martin Luther King, Jr.'s "I Have A Dream Speech." All of the economic indicators have shown that social mobility has fallen in the US and it is more so for ethnic minorities. In light of these findings what are the prospects for the future in terms of the black, urban "underclass"? What is the contemporary relevance of the Dr. King's Dream regarding the poverty alleviation in America?

Let me first emphasize, before I address this question directly, that a substantial segment of African-American population does not live in poverty. Many African Americans have done quite well in terms of education and employment during the last few decades. Indeed there is a widening gap between the haves and have-not in the black community. And I first call attention to this economic schism in my book, The Declining Significance of Race: Blacks and Changing American Institutions, published in 1978 by the University of Chicago Press, with a second edition in 1980. I noted in that book that while the conditions of the black poor have deteriorated as reflected in increasing joblessness, slower movement out of poverty, and increasing welfare receipt since the early 1970s, the conditions of the black middle class, those blacks who are trained and education, have improved. One of the legacies of previous racism and discrimination is that a disproportionate number of blacks are still poor, lacking skills and education. And in this day and age that is a recipe for failure, because unlike in previous years, social mobility is increasingly based on educational qualifications.

And given the poor educational training that so many black youngsters receive in the public schools and their high school drop-out rates, many are in danger of becoming permanent economic proletarians. Why? Because of the effects of fundamental changes in the economy. More specifically, the computer revolution rewards skilled workers, including skilled workers who are black, and displaces low skilled workers; and the globalization of the economy puts low skilled workers in this country, including low-skilled black workers, in greater competition with low-skilled workers in third-world countries. So, if you don't have skills or a decent education in this global economy your chances for mobility are minimal. This is a problem for all low-skilled workers but it is even more of a problem for low-skilled blacks because of the problem of race and employer racial preferences, not to mention the added problem of segregation, which decreases access to areas of employment growth. The problem is especially acute for low-skilled black males, and many turn to crime and end up in prison, which further marginalizes them and decreases their employment opportunities.

As the late black economist Vivian Henderson pointed out several decades ago, it is as if historic racism and discrimination put blacks in their economic place, in the sense that a disproportionate percentage of the black population is poor and unskilled, step aside to watch changes in the economy, including increasing technology, destroy that place. The unfortunate thing is that those poor blacks who have lost their jobs to technological innovations and the growing internationalization of economic activity are unlikely to get them back.

William Julius Wilson is the Lewis P. and Linda L. Geyser University Professor at Harvard University. He is one of only 20 University Professors, the highest professional distinction for a Harvard faculty member. He is the author of numerous publications, including: The Declining Significance of Race, winner of the American Sociological Association's Sydney Spivack Award; The Truly Disadvantaged, which was selected by the editors of the New York Times Book Review as one of the 16 best books of 1987; When Work Disappears: The World of the New Urban Poor, which was selected as one of the notable books of 1996 by the editors of the New York Times Book Review.

Wilmot Allen is founder of 1 World Enterprises, a consulting firm that advises on economic development and emerging market investing. Allen works in emerging market private equity with an international financial institution and is co-founder of the Partnership for Urban Innovation (PUI), a social innovation enterprise and research institution that addresses challenges confronting urban America through innovative approaches leveraging best practices, intellectual capital and partnerships from around the world. He holds an MBA from the Wharton School and MPA from the Harvard Kennedy School.