TWO-FIFTHS OF A NATION'

...It is true that we have been neglecting these public services...

...To stimulate consumption toward higher economic growth, and directly to reduce poverty and deprivation, the tax burden on low-income families should be reduced...

...They need better education, health services, and housing...

...This has fostered overinvestment relative to consumption, recessions, and low economic growth...

...There was no reduction in the number of families with incomes less than half the amount needed to place them above poverty, and there was practically no reduction in the number of unattached individuals living in poverty...

...With less than half the income required to lift them out of poverty, there were almost 3.3 million families under the $2,000 income level, and about 1.75 million unattached individuals under $1,000—more than 12.5 million Americans...

...More constructive ways are available to deal with the balance of payments and the gold problem...

...The current economic recovery is now slowing down, even before reducing idle manpower and plant to anywhere near the point they were reduced in equivalent time periods during previous recoveries from recession since World War II...

...As for the prospects of the United States winning the economic "racf* with the Communist world, we mutt broaden our horizons to include more than the tools and technology of missiles and satellites and science...

...Since that time, great gains have been made in alleviating the plight of the poor...

...This article is based on "Poverty and Deprivation in the United States," a study recently completed by Mr...

...Our prime effort on the economic front today is directed toward a new trade program to expand our economic opportunities overseas...

...Our task is clearly far different...

...When we tolerate large and chronically rising unemployment, consequently freezing millions in poverty or deprivation when we have the technology to prevent it, it is no answer to say that unemployment is even higher in some underdeveloped countries which do not yet have the technology to prevent it...

...With adequate economic growth, the budget proposed in this study would not increase in size relative to total national production...

...What can we do...

...The number of unattached individuals living above the deprivation level should be increased from fewer than five million in 1960 to almost seven million in 1965, and to more than ten million in 1970...

...more than a fifth were non-white...

...In fact, the rate of productivity advance has been outrunning wage rate increases during the most recent years, and wage policies should contemplate wage rate adjustments geared to the enormous consumption deficiency...

...When large portions of our most competent youth cannot afford to go to college, it is no answer to say that the percentage of our youth attending college is higher than in other countries...

...It is but one manifestation of a growing popular consciousness, everywhere in the world, that the new technology makes persistent poverty intolerable by making it avoidable...

...We cannot meet this challenge by saying that the lowest tenth of our population lives better than nine-tenths of the people of India...

...John Kenneth Galbraith's The Affluent Society—in many respects an admirable book—concludes that poverty in the United States is no longer a "massive affliction...

...Legislation should liberalize payments under social security and related programs, in view of the extremely low incomes of recipients...

...Wage adjustments consistent with reasonable price stability are urgently needed...

...The fourth reason for the growing complacency about poverty and deprivation is the mistaken idea that, in order to achieve, a higher rate of economic growth, there should be greater stress upon direct measures to speed up investment in plant and equipment than upon direct measures to speed up private consumption...

...We become interested in economic growth and improvements in science and education, for example, because the Soviets are moving faster in these areas...

...They reason that most of these low-income conditions exist in "pockets" of the economy or result from "special" causes—such as underdeveloped or depressed areas, lack of education or skills, poor health, lack of personal discipline, and discrimination based on age or sex or color...

...The principal reason for this complacency is the impression of many Americans that the number of those living in poverty or deprivation, or at least those living in poverty, has been reduced to tolerable size...

...Just as the totalitarian nations will challenge us on this broader front in the years ahead, the nations of Western Europe are doing so already...

...vastly liberalized social security...

...Unless we quickly determine to do much better, and adopt programs realistically suited to this purpose, the prospect that the new technology and automation will be converted into a Frankenstein rather than a blessing will mount in the years ahead...

...The practical goals set forth in the economic studies on which this article is based call for rapid reduction of poverty and deprivation at home, and for balanced progress on all other fronts, which would lift domestic private consumption of goods and services about 100 billion dollars above the 1961 level by 1965, and almost 220 billion above the 1961 level by 1970...

...Our economic growth during the past nine years has been at little better than half the needed rate...

...But during the years 1953-1960, marked by low economic growth and chronically-rising idleness of manpower and plant, the average annual rate of reduction in the total number of Americans living in poverty dropped to 1.1 per cent...

...From 1935 to 1947, the pace of reduction was 4.8 per cent annually, reflecting the permanent economic reforms of the 1930s, and the great economic expansion of the World War II era...

...During the three decades from 1929 to 1960, the total number of Americans living in poverty was reduced at an average annual rate of 2.2 per cent...

...The latter are confronted with the harsh need to hold down the rate of advance in their miserably low living standards, in order to squeeze out enough resources to build their industrial and technological capabilities...

...Toward these ends, and to enlist the active cooperation of an informed people, the President's Economic Reports, under the Employment Act of 1946, should contain a detailed "American Economic Performance Budget," including specific targets for the reduction of poverty and deprivation, which the President should take to the people...

...But in recent years, there has been a growing complacency about the widespread poverty and deprivation still in our midst...

...A quickening sense of our obligation to meet these human needs is the key to the dilemma posed by a "second industrial revolution" in the United States...

...The Federal budget, as an instrument of economic growth, should be about three billion dollars higher in fiscal 1963 than is now officially proposed, and by calendar 1965 should rise above the officially proposed fiscal 1963 level by about 16.5 billion...

...The most obvious unmet needs in the United States are concentrated among the more than two-fifths of a nation who still live in poverty or deprivation...

...A modest but acceptable goal would be to regain maximum employment by the end of 1963, with unemployment reduced to less than three per cent of the civilian labor force...

...It is the start of a much larger planning effort under freedom...

...When we enduringly accept an economic growth rate far below our own potentials and needs, it is no answer to say that we do not need to grow as fast as others because we are now more fully developed than they...

...The number of unattached individuals living in poverty should be reduced from nearly four million to fewer than 2.5 million, and then to approximately one-half million...

...During inflationary price movements in recent years, excessive price increases and profits per unit during boom periods have been accompanied by insufficent increases in wage rates and total wages in real terms...

...The Soviets have been concentrating more than we have upon the industrial sector and upon science and education because, in view of their relative underdevelopment, these matters have come first...

...These factors are present and require attention, but they explain only a fraction of the widespread poverty and deprivation today...

...Current goals and programs should be evaluated first in terms of the economic growth objectives which are essential to a satisfactory rate of reduction of poverty and deprivation...

...This approach might be valid if the American economy were prone to operate close to total utilization of LEON H. KEYSERLING, former chairman of the President's Council of Economic Advisers, is a consulting economist and attorney and president of the Conference on Economic Progress...

...From year to year, we change the direction of our emphasis as the Soviets register progress in some new area...

...They would also be fewer in number because attainment of satisfactory economic performance would require the very programs which would operate directly to remove or greatly reduce the "special" causes of poverty and deprivation...

...Of those living in poverty in 1960, more than a fourth were in consumer units (families and unattached individuals) where the head was not employed...

...President Kennedy recently stated our top domestic problem for the 1960's...

...This limited viewpoint tends to make us the followers rather than the leaders...

...The second reason for doing so little about private poverty—growing out of the notion that the American people have now become affluent in their private economic lives—is the conviction that relief of our seriously starved essential domestic public services requires first attention...

...This would mean another recession before 1965, further large increases in chronic idleness of manpower and plant, and a lower rate of reduction of poverty and deprivation...

...Unless present policies and programs changed markedly, my estimate is that our average annual economic growth rate during 1962-1965 may not be significantly higher than the 2.5 per cent average annual rate during 1953-1961...

...The truth is that there were more than seventy-seven million Americans still living in poverty or deprivation in 1960—of whom more than thirty-eight million lived in poverty...

...To legislate special taxes and other incentives to investment, while ultimate demand for products is short, would merely repeat errors which sparked the deficient economic performance in recent years and hurt investment in the long run...

...far more than half were in units whose head had eight years of education or fewer, and almost a third were in units whose head was female...

...By militating against economic growth and high employment, the tight-money policy and the continuing trend toward higher interest rates are self-defeating as a means of improving our international competitive position...

...Satisfactory economic growth depends upon the requirement that distribution keep pace with our evergrowing productive powers...

...Above and they need opportunity to earn much higher incomes through the enlarged job opportunities, the general upgrading, and the more rapid advance of real wages which result from a high rate of economic growth and maximum employment and production...

...The Common Market is not just a "trade" effort...

...Goals for the same years are to reduce the number of families living in deprivation from 10.3 million to about seven million, and then to 3.5 million...

...but glaring contrasts between affluence and poverty exist in both the private and public sectors of our economy, and cut across the two...

...But there is plenty of investment capital available...

...A third evidence of the growing complacency about low-income people is the widely-shared but erroneous idea that we can successfully carry our worldwide public responsibilities and sufficently improve our domestic public services only if we adopt policies deliberately designed to slow down expansion of private consumption...

...Unemployment insurance should be greatly strengthened at once...

...To treat "special" causes of poverty and deprivation by calendar 1965, compared with fiscal 1962, per capita Federal outlays for education and housing and community development should be approximately quadrupled, and for health services and research increased about 2.5 times...

...and release from the burden of unemployment which hits them with special force...

...This immediate dependence of economic growth upon rapidly rising living standards distinguishes us from the severely underdeveloped countries...

...our ever-increasing productive powers, and if, even then, the top priorities of our public needs were being slighted...

...If the economy as a whole performed satisfactorily, the low income people would number far fewer because total opportunity would be far greater...

...To help the poor and deprived get a larger share of total wage increases, the minimum wage floor should be lifted considerably, and its coverage should be much broader...

...Practical goals, consistent with the programs just detailed, and with an economic growth rate high enough to achieve and sustain maximum employment and production, are designed to reduce the number of families living in poverty from more than ten million in 1960 to fewer than two million in 1965, and then to approximately one-half million by 1970...

...Current proposals such as the tax credit for business investors repeat the erroneous policies which stimulated investment excessively relative to consumption at various times in recent years, and thus intensified frequent recessions and low economic growth...

...Sometimes, they are results rather than causes...

...While all thinking people agree about the urgency of this problem, small progress has been made toward its solution...

...About a fourth of the total number of people living in poverty had consumer unit heads aged sixty-five or older...

...This total represented an improvement over the much larger number in poverty or deprivation in 1929, but a reduction of about nineteen per cent in more than thirty years, at a rate of about 0.7 per cent per year, and the fact that progress has been substantially halted in recent years, is hardly ground for complacency...

...It is more nearly an afterthought...

...A fraction of these lived in wealth...

...Average individual benefits under the old age insurance program should be approximately doubled within a few years, with comparable gains under the Federal-state program of old age assistance...

...At the opposite extreme, living at or above what might be called the affluence level, there were 3.3 million families with incomes of $15,000 or more, and fewer than a half million unattached individuals with incomes of $7,500 or more—about 12.5 million Americans, or about seven per cent of the population...

...It we continue to be highly selective and limited in our choice of goals, responsive to the Russia of yesterday rather than to the Russia of tomorrow, we shall wake up some day and find ourselves being outdistanced in the rate of advance in living standards and in the rate of reduction of poverty and deprivation, just as we have already awakened to find ourselves outdistanced in other significant areas...

...It is to prevent the swiftly advancing technology and automation from continuing to cause—with periodic ups and downs—a long-term rising volume of unemployed workers and idle plants...

...and more than two-fifths lived in the South...

...Two-fifths of our entire population in 1960 were living at a level well below widely accepted criteria of what constitutes a decent standard of living within the American economy...

...We are being subjected to an overall test of our national values and pur-posefulness, involving every element of human capabilities and aspirations...

...A fifth reason for complacency is to be found among those who, while giving priority to a higher rate of economic growth, say that this priority does not have much bearing upon reduction of poverty and deprivation...

...The sixth reason for growing complacency about poverty and deprivation is our misreading of the international situation—which is indeed our supreme problem...

...frequently, they are both, as I indicated earlier...

...In general, emphasizing these "special" factors does more to explain which groups of people in the community are poor or deprived because they are especially vulnerable to unfavorable social and economic trends, than to explain why the total number is so large...

...An all-out attack should be launched against farm poverty, through an improved national farm program, including higher consumption and export goals, more rapid elevation of farm income, selective inducements to improve patterns of farm production, and enlarged opportunities for non-farm employment of some people now in agriculture...

...The rich families who live close to impoverished schools present a contrast no more shocking than that of the poor families in slums who live within walking distance of rich universities to which they cannot afford to send their children...

...In some degree of deprivation, above poverty but short of minimum requirements for a modestly comfortable level of living, there were almost 10.3 million families in 1960 with incomes from $4,000 to just under $6,000, and more than two million unattached individuals with incomes from $2,000 to just under $3,000—more than thirty-nine million Americans, or also more than one-fifth of a nation...

...While all of these "special" factors require attention, they may be overdrawn as causes of poverty and deprivation...

...This requires expansion of both private consumption and public programs devoted to the general welfare— which means serving unmet human needs...

...But while we should do much overseas, the overwhelming bulk of our opportunity to use our mounting productive power is right here in the United States...

...To be sure, the weaker claimants are likely to be squeezed out first when there is not enough to go around, but the main difficulty lies in the shortage of total economic opportunity...

...And even after achieving this full utilization, we would still require twenty-five to thirty-five billion dollars worth of further increased production each year in the near future to absorb the rapidly growing labor force and the immensely accelerating technology and automation...

...Monetary policy should be liberalized...

...Keyserling and available at fifty cents a copy from the Conference on Economic Progress, 1001 Connecticut Avenue, Washington, D.C...

...further improvements in minimum wage standards...

...The exaggerated emphasis now being placed upon wage restraint may result in wage and consumption lags as undesirable as those of the past decade...

...Achievement of this volume of total expansion will require herculean efforts to expand both our private living standards and our needed public services, and to extend them to those now living in poverty or deprivation...

...This program is highly desirable...

...This is called allocating more of our total production away from the private and toward the public sector...

...The announced present goal of the Kennedy Administration is to reduce unemployment to four per cent by the middle of 1963, but it is now widely believed that current efforts will not achieve even this inadequate objective...

...Among basic programs most in need of change are these: ¶ The government ought to state higher and more realistic goals which define our potentials and priorities of need, and adopt more consistent and comprehensive policies for their achievement...

...We must rise to this challenge before it is too late...

...more than a sixth were rural farm people...

...In the poverty classification were almost 10.5 million multiple-person families with annual incomes under $4,000, and almost four million u> attached individuals with annual incomes under $2,000—approximately thirty-eight million Americans, or more than one-fifth of a nation...

...But in the years ahead, the Soviet challenge will extend to the production of consumer goods and to many other areas...

...the need is larger markets for products...

...But this soothing conclusion is based upon treating as living in poverty only those families with incomes of less than f1,000 a year, contrasted with the $4,000 which many authorities fix as the amount required to place the multiple-person family above the level of poverty in the American economy today...

...Aside from immediate considerations of national security, we would have the same jobs to do if totalitarianism and aggression did not exist...

...But scores of billions of dollars worth of increased production are needed to utilize fully even our existing capacities...

...For while many people are poor because they are uneducated or in poor health or suffer from low morale, cause and effect are just as frequently in the reverse order...

...Total benefit payments should be lifted above the 1961 level by about five billion dollars in 1962, and by more than nine billion by 1963, as first steps toward raising them about seventeen billion above the 1961 level by 1965...