Ron: This group in the middle that we're concerned with up to, say, $60,000, $65,000 a year.
Robert: Household income, yes.
Ron: They are the ones we need to help.
And they don't get nearly as much help as this bottom group does.
Robert: Ron Haskins, long-time expert on issues concerning struggling Americans at the Brookings
Institution.
Thanks for being here.
Ron: Glad to be here.
Robert: So, you worked with scholars from both the left and the right to produce a report,
Work, Skills, Community.
Restoring opportunity for the working class.
Tell me about the facts concerning this group that you thought needed attention.
Ron: There are a whole set facts.
The first chapter in the volume, after introduction and a bunch of preliminary material, is about
the facts on which we built the rest of the arguments.
We describe roughly how many people there are.
There are the people between who are...have a high school degree but they do not have
a four-year degree.
They live, of course, all over the United States.
We show a map where they're concentrated.
A number of them are concentrated in areas that won't surprise you, like the Appalachian
area, Ohio, places that have had high unemployment in the past.
But these are people who are...they're making it but barely.
And many of them are not going up.
They're struggling to keep their heads above water.
And in describing these people, having met a number of them and visited...we both visited
a number of these groups, I would emphasize struggling and..
They have not given up.
They're trying.
They're trying to help their kids.
But I do think a number of them are pretty discouraged and they did not expect what has
happened to them.
And that shows up in the facts about what their financial condition is.
And especially, we have a section on debt and on wealth, which affects...you know, net,
amount that their worth.
And for almost all families, a lot of people don't know this, for almost all families,
except really wealthy families, it's how much they have in their house.
And so many of these families lost their home during the recession and they haven't recovered
completely.
So, they have zero or close to zero wealth.
And that's gonna affect their retirement.
And they don't have enough money to make it up.
So, there are lots of issues here that we try to spell out in that facts chapter.
So, anybody who reads the report can start off with, you know, with the space of set
of facts.
One other thing that I would mention that I think is very important, I think there's
a growing awareness of this in the country but drugs are a big problem.
And we have a great team of researchers from Princeton, who described this problem in great
detail, others have as well.
And we've had a number of books in the last three or four years.
You have a great expert here at AEI, Sally Satel.
And this group has not only expanded but they've gone deeper and deeper in the hole.
And many of them, it does appear to be hopeless and, in fact, they die.
So, we have what...a Nobel Prize winner called "Deaths of Despair."
And we give data on that problem, it has increased greatly, and it's concentrated in the same
areas as these working-class families.
So, that's another big problem, and we really don't have any good solutions for that.
Robert: So, stagnating wages, declining wealth, exposure to drug addiction, and serious health
issues, a feeling of hopelessness.
Politics in Washington, has it responded to their needs?
Ron: If it has, it has not been a great response.
We just passed an opioid bill, as you know.
Maybe that'll have some effects.
In the past, this kind of legislation has not had much of an impact.
A lot of people think if Washington responds and does the right thing it'll make a big
difference, that usually is not the case.
You could have marginal effects.
But over a period of years, if you have a number of good policies, like what we propose,
then it could make a difference.
So, that's what we're hoping.
We're hoping and a lot of simultaneous changes in policy that are applied evenly and wisely
over a period of years would have an impact on this problem.
So, reduce...
Robert: At the local level and at a federal level?
Ron: Yes, at the local and state...well, I'm thinking local and state level.
So, we apply it.
We do something about opioids.
We do something about wages.
We do something about employment.
We do something about community.
I think all these things have a potential to make a difference.
Robert: So, one more preliminary question that...we went down to Kentucky to see something
and to get a sense of a successful program.
What did we see?
Ron: The most impressive thing to me was...and I love this in part of it because it was undertaken
by the private sector, primarily automobile companies, but it's expanded now.
And Toyota created a program in which they focused on kids who are high-school graduates
and were pretty smart.
It wasn't, you know, kids who are doing the worst from high school, but kids who are,
say, roughly in the middle, and who do not have plans to go to a four-year college.
And this, of course, is right...
Robert: Right, at the heart of our...
Right.
Ron: ...in our sweet spot, the group that we're concerned about.
And let me say that I have filed this research for a number of years and I think, as a nation,
we've made a mistake by overemphasizing the importance of four-year education.
Now, I think you have to be real cautious here because I love the idea of four-year
education.
I want my kids to get a four-year education.
I was intent myself on getting a four-year education.
But we have millions of kids who...they're not gonna do well on a four-year institution
because they're not prepared for it.
And we have encouraged many of them to go to college and they went to college.
They didn't finish.
They wound up with debt.
So, now, they have the worst of both worlds.
They don't have better jobs and they have debt from college.
So, we need a strategy that helps people get in the middle there and get jobs that pay
$10,000 or $20,000 more than the typical, you know...
Robert: Entry-level jobs?
Ron: ...$10-an-hour job.
And we actually have pretty good studies that show that we can do that.
And this program is called Kentucky FAME.
And they now have...it started out with just a couple of employers.
It was designed primarily by employers, which, by the way, years of research have shown,
the most successful training programs are the ones that employers start and employers
run.
And the Federal Government needs to figure out how to subsidize them and not design a
program and say, "Here's what you have to do."
The employers are the ones that know what they need, they know the skills they need
to emphasize, and that's what we saw in this program.
We saw a beautiful place where they train these kids and give them the skills in electronics,
in welding, the kind of things that, you know...where there are a lot of jobs available.
And they pay, you know, $15, $20, $25 an hour, and they have a future.
So, that was very encouraging and they are doing well.
They've even expanded since we were there.
We were there a little over a year ago.
So, I think there are now 300 employers that are involved in that Kentucky FAME program.
So...
Robert: That's the kind of thing that we talk about and recommend and think needs to be
incentivized by the Federal Government.
So, turning a little bit to what Washington can or cannot do, you have been a long-time
supporter of the...something called the Earned Income Tax Credit, which tops up wages for
families with children in the household, often single mothers.
I think, Ron, you're the one who first taught me about the ways in which work requirements
blended with work supports can really bring families out of poverty and has really brought
families out of poverty.
We make a recommendation about another group that's been left out of that work support
system.
Tell us about that.
Ron: Right.
Well, I think the broader point here is that we have a lot of things that support single
mothers.
And they would support single fathers if they were custodial single fathers, but most of
them are not.
So, we support...We have a lot of programs and this Earned Income Tax Credit is one.
And it can be $6,000, $7,000 a year.
So this is very serious benefit.
We spend about $70 billion on a program.
So, this is serious policy here.
We don't have anything cool enough for men.
We have a dinky little $400, $500 a year maximum benefit for them if they go to work and earn
a wage.
So, we would like to increase that and we propose substantially increasing that for...it
would be primarily single fathers who would benefit from it.
But these are individuals who go to work and have earnings and are non-custodial.
They don't have kids.
And many of them have kids that they don't live with and they pay child support.
We actually have a very good study in New York City.
We have another one going on in Atlanta.
The study from New York City, this was perfectly timed with our report by coincidence.
It showed that there was actually an increase in the number of workers...of men, primarily
men who go to work.
They have increase in earnings.
And they have an increase in their payment of child support.
So, all three of those outcomes are very nice, it's a good thing that happened.
It's a very good company named Manpower Demonstration Research Corporation that demonstrated those
effects.
And now, they have another one going on in Atlanta.
We'll see if we have the same effects there.
These are not huge effects.
We wish they were bigger but they're still impressive and they're significant.
They're statistically significant.
Robert: This is one of those right and left combination things where we try to get people
to agree.
One thing that I think was important to me and I think was important to you and I wanted
you to sort of describe why it was important, was that it's deficit neutral or spending
neutral.
Tell us about that.
Ron: The left seems to be less intense about this but the members of our group on the left
were...they seem to be right where we were.
You know, the deficit is too big.
We gotta do something about the deficit.
And God knows, in the long run, what the consequence is gonna be.
We're already, you know, in the red zone.
We're gonna be hurt in the long run by this.
Robert: The red zone and the extent with that, the percentage of debt to GDP or the size
of our deficit is so high that we've lost opportunities to address it sooner.
And now, it's getting worse.
Ron: Well, yes, and there will be consequences.
That's what I mean by the red zone, especially impacts on economic growth, a number of studies
show that.
So, we're in danger territory and we gotta do something about it.
And the worst thing is that Washington seems...they're acting like they're not aware of it.
They have to be aware of it but they're not doing anything.
There's no serious action.
There are no serious proposals on the table.
And, in fact, many of their proposals that are more seriously being discussed now would
increase it even more.
Trump has a proposal, apparently, a lot of support among Republicans, to increase it
by another trillion dollars by a middle...he calls it a middle-class tax cut.
So, this is really a very serious problem.
And we wanted to, at least, be neutral.
We wanted not to increase the debt problem.
Robert: So, we found revenues from where?
Ron: So, we found revenue offsets.
And we made a number of changes in tax policy and in spending policy to offset...I'm not
sure you need a CBO, Congressional Budget Officer, estimate to really let you know if
you achieved that.
But, at least, it's a signal that we were concerned about this problem and we did something
about it.
Robert: So, you've been in Washington a long time, Ron.
And, you know, the cliché is that nothing ever gets done and bipartisanship never really
happens or, at least, that's the cliché now.
Is that true?
Ron: No.
Robert: Tell us...
Ron: No, it's not true.
I think last year we did a lot of really interesting things.
We increased childcare support for working families.
That's a very good thing because we wanna help workers.
We changed the Child Tax Credit, which has the same effect and helps low-income families.
We passed a number of bills having to do with education and with related issues.
So, there have been...
And all of these are bipartisan.
We also did...
I don't wanna bore anybody about this but I've been following child protection issues,
abuse and neglect for many years.
And we've tried to have for many, many years now, trying to create a program that would
help states figure out ways to keep the families in their homes from the very beginning.
Now, this is a risky business because most of them have been involved in abuse or neglect.
So, you wanna work with the families, keep the kids safe and work with the families to
reduce the problems that the families are having, so we don't have to remove the kids
from their home.
Our history shows that if we remove kids from the home, the outcomes are not good.
This is a very...
Sometimes, you have to do it because the kids are...you know, they're physically threatened.
But once you do that, there are long-term consequences and it's hard to get the kids
in a stable setting.
So, this new program called Family...
Robert: Which is passed by Congress and signed by the President.
Ron: On a bipartisan basis, signed by the President called Family First, would provide
more money to the states to design these programs, if they're based on evidence, which is another,
I think, very strong thing.
And, by the way, as a footnote to my response to you, a lot of the programs that have gotten
support now are evidence-based programs or try to promote evidence-based programs.
So, there have been a number of programs in the last couple of years that are both based
on evidence, where reasonably they might be effective and they enjoyed bipartisan support.
Robert: So, in your judgment, a bipartisan group puts the other rapport with a whole
host of ideas, notwithstanding what we've seen in CNBC or Fox News, your view would
be based on, what?
Thirty-five years of experience here at Washington?
Would be there's a good chance the way things happen in this world that good ideas do lead
to better legislation and do lead to positive outcomes in the country.
Ron: Yes, that is correct.
And I am far from giving up on this idea.
The one caveat is it often takes a number of years to really penetrate, you know, the
Congress.
So, if we have a new Congress, at least a new House of Representatives, which seems
slightly less than 50-50 now, just a guess.
Then, the Congress, especially the House will be trying to do new things.
And some of them will involve spending, social policy would be very much on their agenda.
So, they may be looking around for stuff like what we did and we could go there.
And we might able to present the same ideas in the Senate.
Let's say that the Republicans do keep the Senate and they might be attracted to the
ideas, too.
We had very strong Republican members of this group as well as members on the left.
So, our proposals can appeal to both sides.
For some...
Robert: So, just last sort of question.
You spend most of your career focusing on people at the very bottom, and in advocating,
and researching, and describing solutions that can help them.
The fact is we've had some success at reducing poverty, reducing child poverty in the United
States.
People on the left and right agree with that and partly because we spent a lot of money
on it.
Ron: You have to admit though, they don't seem to have noticed it very much.
Robert: Yes, I know, but the numbers are stronger and better, in terms of getting people up
to that first ladder, but this other group was kinda unattended, too.
And so, do you think you'll have a chance for similar success now that Ron Haskins has
turned his attention to...
Ron: I don't think I'll have much of an impact.
Robert: I don't agree.
Ron: But this is a very, very good point that we've had good success at the bottom.
And that's the most basic thing and it's good that we did that.
And we've reduced poverty for sure and our programs have done...and we have shown that
low-income workers are way better off than they were in the past.
I think that's a success too, that the message goes forth.
You gotta work, you know, and that's a good thing because you're not gonna move up further
unless you do work.
But this group in the middle that we're concerned with that, you know, from up to, say, $60,000,
$65,000 a year...
Robert: Household income, yes.
Ron: They are the ones we need to help.
And they don't get nearly as much help as this bottom group does.
So, that's where our proposals are aimed.
And I hope we can make some progress and I'm not at all pessimistic that we could make
progress.
And that if we did, this group would be helped.
Robert: Ron Haskins, thanks for being here.
Ron: Glad to be here.
Thank you very much.
Robert: Hi, everyone.
That's the end of our discussion with Ron Haskins.
Thanks for watching.
And as always, let us know what other topics you'd like AEI Scholars to cover on "Viewpoint."
And to learn more about the working class in America, check the links in the description
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