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Justin Katz: Move west, young welfare recipient

01:00 AM EDT on Wednesday, October 17, 2007

JUSTIN KATZ

THE McDONALD’S restaurant in Sidney, Mont., had difficulty filling available jobs even while advertising salaries up to $10 an hour, according to the AP. That income would put a family of four over the poverty level with a single worker.

The jobs posted on the McDonald’s Web site for Montana prove the $10 figure not to be the norm, although it’s notable that the Sidney restaurant has no openings. Nonetheless, salaries in general appear to be rising in the Mountain states in response to a low supply of workers. For 2006, Montana’s poverty and unemployment rates were down, and its median household income was up. In July 2007, the state’s unemployment rate was 2.7 percent — one of only four in the nation below 3 percent.

Rhode Island’s picture, by contrast, is a bit more peculiar. Judging from 2006 U.S. Census data (the latest available for all measures), Rhode Island’s poverty rate was down, but so was its median household income, while its unemployment rate was up.

From 2005 to 2006, around 12,000 people stepped past the poverty line in Rhode Island. However, almost 22,000 fell below the twice-poverty line, which is roughly $40,000 for a family of four. A reasonable inference, in other words, is that the economic and political regime that succeeded in pulling a fair number of people out of poverty in Rhode Island came with the cost of dragging almost twice as many people toward it.

The price appears higher the more carefully one looks. Considering the poverty-income ratio by family type, married households with children made up the majority of those falling out of the Census’s highest category for this data set (1.85). The rest of the decrease at the top came from unmarried households without children. This latter group could include retirees, or it could include promising young professionals, or it could be that households are switching groups by having children out of wedlock or divorcing, because the fastest-growing group at the top is that of unmarried households with children.

In other words, our system is specifically dragging down nuclear families and raising up less ideal structures. Champions of “alternative families” can’t dismiss this observation as based purely in cultural bias because the transition isn’t an even trade: A more granular view of the numbers reveals that the drop in the higher income groups isn’t dispersed among those earning over twice the poverty level, but derives entirely from individuals in households with incomes of three to four and of five or more times poverty.

We’re not talking working-class people slipping past an arbitrary income line to the benefit of those who are able to escape poverty. We’re talking a precipitous drop below what might be thought of as a “comfort line,” at which families — far from wealthy — move from just getting by to having enough money to put it to good use in the economy. The range that is so rapidly depopulating in Rhode Island — with over 28,000 fewer individuals in 2006 than 2005 — is precisely that which sustains, through taxes and economic activity, the tenuous safety net for those toward the bottom.

Families earning over $60,000 per year are also moving toward the threshold at which it becomes relatively easy to pack up and leave.

Beyond their presumably more marketable career skills, they are beginning to have the resources to carry them through the process of selling their homes, finding and buying new ones, and finding comparable jobs elsewhere.

Unless deterred by profligate giveaways, those toward the bottom of the economic ladder are also relatively mobile. The sort of work that they are likely to do around here does not vary much by region and does not require sharp learning curves with each change of employer. Montana, to name one state, combines an opening for such workers with a cost of living about 20 percent below ours. Struggling Rhode Island families would likely improve their lot more by moving there than by filling out government gimme forms here.

We are rightly reluctant to pick and choose who ought to go and stay from among our fellow citizens. However, if the choice that we make in the policies that we set is between highly skilled workers who provide the tax base on which the state operates and low-end workers who count as net drains on the system, then we’d do well to choose dynamism over stagnation. In the long term, the choice is an illusion anyway, as convergence just above the poverty level is a precursor to utter collapse.

Justin Katz, an occasional contributor, is administrator of anchorrising.com, a public-policy-discussion Web site.

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