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Rethinking Dependency and the War on Poverty

Podcast

Rethinking Dependency and the War on Poverty

April 5, 2017
The Social Order

Peter Cove joins Brian Anderson to discuss his new book Poor No More: Rethinking Dependency and the War on Poverty.

Declaring the War on Poverty in 1964, President Lyndon Johnson stated that the goal was to “cure poverty, and above all, prevent it.”

50 years later, most people would agree that the signature campaign of the “Great Society” has shown mixed results, at best: Despite spending over $20 trillion on anti-poverty programs, the official poverty rate has barely moved.

Peter Cove is the founder of America Works, the nation’s first for-profit, welfare-to-work company that has placed nearly 1 million people into employment. Peter first became involved in the fight against poverty when he moved to New York in 1965 to join the Anti-Poverty Operations Board, where he helped write federal grant proposals and managed local programs.

Find out more about Peter Cove’s book on Amazon.​

Audio Transcript

Brian Anderson: Hello, I am City Journal editor Brian Anderson.  Thanks for joining us for the 10 Blocks Podcast, featuring urban policy and cultural commentary with City Journal editors, contributors, and special guests.

When President Lyndon Johnson declared a war on poverty in 1964, he said that the goal of the war was to cure poverty and, above all, prevent it.  Fifty years later most people would agree that Johnson’s signature Great Society campaign has shown, at best, mixed results.  While quality of life in the United States has improved, the official poverty rate has changed very little, despite more than $20 trillion having been expended on anti-poverty initiatives since the 1960s.  When President Bill Clinton joined with Republicans in Congress and promised to end welfare as we know it, the Left claimed that it would lead to a massive increase in poverty, with children and their mothers starving in the streets.  That didn’t happen.  Today welfare caseloads are down but new challenges have emerged.  Workforce participation, disability payments, and food stamps have all been moving in the wrong direction in recent years, and with automation threatening to displace millions of workers, even some conservatives are embracing the idea of a universal basic income, regardless of what it might mean to have a huge population on permanent dependency.  So where do we go from here?  Joining me to discuss the war on poverty and its history and its current situation is Peter Cove.  Peter is the founder of America Works, the first for-profit welfare to work company in America and author of the brand new book Poor No More: Rethinking Dependency and the War on Poverty.  Peter, thanks very much for joining us on 10 Blocks.

Peter Cove: Thank you for having me, Brian.

Brian Anderson: Let’s start off with a first question about your own history here.  You moved to New York City in 1965, as you describe in the book, to help fight President Johnson’s war on poverty.  So you were one of those original poverty warriors.  Can you explain whom you worked for at that time, what your position was, and what were some of the lessons you took from those early years?  And we are talking in the mid-60s on, really into the early 70s.

Peter Cove: Yeah, Brian.  I was working for something called the Anti-Poverty Operations Board, which was the predecessor of HRA, the Human Resources Administration, in New York.  And my job was really to help local community organizations write proposals and get them funded so that they could conduct anti-poverty programs.  I was a true believer.  I came in from the Left.  My parents were very liberal, as was I at the time.  And I found myself immersed in the world of poverty programs, evaluating poverty programs and running them.  And I’ve done that now for well over 50 years.

Brian Anderson: Now you’ve had a change of heart, in part based on your experience, running these initiatives, helping run these initiatives in New York.  Describe a little bit what it was that you started to see that caused your opinions to shift.

Peter Cove: Sure.  Maybe some of your listeners can remember Mae West.  She once said I was as pure as the new fallen snow, and then I drifted.  And that was me.  I drifted.  And the reason I drifted from believing so strongly in what we were doing was that I could see it really wasn’t working.  And the reason I could see that it wasn’t from the academic ivory tower position that many people have written about in terms of poverty, but I was on the ground running programs.  And they didn’t seem to be working.  One of the things that wasn’t working, and I knew this well, was that education and training as a first strike in moving people from welfare to work was failing.  And I used to argue with Senator Moynihan about this.  He did a very good job of defining the problem and we all paid close attention to that.  But his solution was more education and training.  And there were many research organizations that supported his notion.  But the truth was it really didn’t work.  And what we found in operating programs was that what worked was work.  That if you move people quickly into a job and help them stay in the job, which is really a very important piece of it, that that could help reduce the welfare roles.  And then using education and training to move the people up once they are in the job.  But a work first approach for us seemed to work, and for the people seemed to work much better than education and training.

Brian Anderson: Now disability payments and food stamps are some of the more popular programs of the anti-poverty effort.  The idea behind these programs is of course to help people who have fallen on hard times, but in your view have these programs disincentivized work just like welfare in its original incarnation did?  And what can be done to improve them?

Peter Cove: Absolutely.  What has happened in our country is that there has been an increase in dependency upon the government.  And that while material poverty has gone down some because we basically bailed out people through transfer payments and other kinds of supports, but what we have done is we’ve created people in classes that just don’t go to work and are dependent on the government.  Absolutely people who are disabled are part of that group.  Now, of course there are so many people who are disabled who could not go to work.  But to assume that people who are on disability payments cannot go to work is mistaken.  We estimated, America Works, and we deal with people who are on disability and place them in jobs, we estimate that something close to 40% of the people on disability payments could go to work.  And what happened, Brian, was that as people maxed out on welfare after their five years they were encouraged to go on to disability, SSDI.  In addition, it has become much easier to go on to disability.  But it’s not the only one of programs that have done this.  Let me give you an example.  During the Obama administration, we were placing people who were on food stamps into jobs.  And they were referred by the city to us.  The Obama administration decided that people on food stamps should not have to be asked to go to work if they were able-bodied, and stopped that.  You might ask why, and I’m not even sure I know the answer to it.  All I can say is people wanted to go to work.  They – it is the government that has put us in the position of people being dependent.  Yes, of course there are some bums out there.  But frankly most of the people who are on some form of dependency payment, given the opportunity, will go to work.

Brian Anderson: So the Obama administration really pushed in a very different direction than the Clinton administration did.  The Clinton administration famously signed the 1996 Welfare Reform Law, which did have a strong work component and time limitations.  So, in your view, the Obama administration just backed away from some of these work commitments.  Did they do this as well with traditional welfare programs?

Peter Cove: They made it a little easier for local cities to not have people going into work, but they didn’t back away from it completely.  They at least verbally supported it.  But again, in the 1996 welfare bill, specifically food stamp recipients and males were encouraged to be able to go to work if they were able-bodied.

Brian Anderson: So this is an unfortunate shift because there was a bipartisan consensus.

Peter Cove: Yes, there was.

Brian Anderson: There was a Left critique of work requirements.  I remember at the time there was a pretty vigorous debate in the 90s.  But a lot of Democrats signed onto Bill Clinton, followed Bill Clinton, and endorsed welfare reform.  And then you did have the remarkable success of the measure.  These days we have another interesting development which I think you might have some views on that are counter to what might be expected.  Many Progressives and Conservatives both are embracing this idea of a universal basic income.  You see this very popular, now, in Silicon Valley, where there is a lot of talk about automating millions of jobs and because this will displace so many people from the workforce we should, according to many in Silicon Valley, introduce a universal basic income so that everybody has at least some money coming in.  This is their response to poverty.  I am wondering, you know, how you see that.  Is this another kind of dependency trap or is there you know, is there something different here going on?

Peter Cove: I have to say I have great respect for Charles Murray.  The book her wrote about welfare and what it caused in this country is a landmark.

Brian Anderson: Losing Ground, right.

Peter Cove: Losing Ground.  But his suggestion, which it was originally, his suggestion for some guaranteed income for people I think is wrong and I say that respectfully because I believe work is what people want, not money coming in for not working.  And I think any proposal that gives people money for not working unless they absolutely can’t work, is crazy.  And therefore my proposal in the book is to do the following: It is to take all the money that we spend on welfare, except for people who are physically and mentally unable to work, take the rest of that money, take money for the poverty programs.  As you indicated, Brian, over $20 trillion dollars has been spent with precious little result.  And take that money and put it together and help create jobs in the private sector and where there aren’t enough in the public sector.  And I have suggestions of how to do that in both cases in the book.  I think work is a much better way and a much better answer to our problem of poverty in the United States, and I think most people who are poor would say that, than giving people money.

Brian Anderson: You are seeing a kind of moral quality to work beyond just the financial aspect of it, that there’s a character formation dimension.

Peter Cove: It’s not just a moral – you know, there’s been a number of studies that show that drug use increases, depression increases, obviously out of wedlock children increases over time, they become less friendly, less hardworking, less open to new experiences.  That comes from a recent study that was done.  There’s so many things about work that are important.  In 1982, I believe, Pope John Paul had an encyclical on work.  And I am paraphrasing.  But he said something that if you deny a person work, you are denying part of their spirituality.  So yes, there is, for me, although I am Jewish, a moral imperative to work, and to continue to use money to support people to not work is, to me, a violation of the person’s spirituality.

Brian Anderson: Your company, America Works, has been doing this kind of effort for a long time now.  It has placed, I believe I am quoting this right, nearly a million people…

Peter Cove: That’s correct.

Brian Anderson: …into jobs since you started it.  And perhaps you could describe a little bit about, as you do in your book, the whole idea behind America Works and how that has operated and who you participate with.  I think listeners will be interested in that.

Peter Cove: Well I think, as you suggested at the beginning, we were the first for-profit welfare to work company in the United States, and we had developed, in the not-for-profit world, and I learned a lot of this in New York and then from programs I ran in Boston, that the way to get people out of poverty and out of, off of welfare, was to move them quickly into a job.  So I set up this company to move people quickly into a job and my wife, Lee Bowes, developed the process by which we were able to keep people in jobs.  And she always said at the beginning of the company the easy part is getting them into the job.  The hard part is keeping them there.  And consequently we are very aware that – I call it static in people’s lives – the abuse of mated home, the lack of understanding the morays of a workplace, housing, daycare, all of those things can get in the way of a person when they are in the job and blow them out.  And what we are there to do is to make sure, if they are a good worker and they want to work, that we help with those kinds of things.  So we, I think I’ve said we have put a protective cocoon around the people to allow them to continue to work while we help to take care of some of those problems for them.  So our job is very much like an employment agency.  Think of Kelly Services, or Manpower, Inc., or any employment service, but we are dealing with specialized needs.  It’s not just welfare recipients we deal with, by the way, Brian.  We deal with ex-offenders, as we mentioned people who are disabled, homeless veterans.  And ex-offenders have been the huge group that we have been dealing with.  And each of them, in their own way, needs certain kinds of assistance.  That’s what we do to keep them in the job.  And by the way, we were the first company in the country to really force the government to pay for what they were getting.  We went to the government and said we are a for-profit company, we only want to be paid if we deliver.  If we get the person off welfare and they are in a job for a period of time, three months, six months, whatever, then pay us.  And that was – they had never done that before.  So our model is one to be paid for what we do and also to assist people once they get into a job.

Brian Anderson: Your firm operates here in New York.  Where else are you engaged?

Peter Cove: We are in 17 other cities around the country, from San Francisco, to Washington, to Baltimore, to all over.

Brian Anderson: What about, and this can be the last question, the idea of training and reeducation.  There is certainly a lot of talk about that now with workers being displaced, the need to prepare people for different kinds of jobs in the new economy.  What’s your view, what kind of a role can training take place?  Who best does that retraining, reeducation?

Peter Cove: Well that’s a complicated question.  We are under contract now with the City of New York to do training for people but it is being done in conjunction with private companies.  So that unlike the failed training programs and education programs of the past which were run by people who really didn’t have any connection with the private sector and probably wouldn’t have been hired by the private sector, now the idea is that you do it with the private sector.  And do something we call contextualized training.  So there’s a real role for that.  But I often see the role basically played more strongly by the private companies.  Also, community colleges can play a very large role in this as well.  So I may come off sometimes sounding like I am anti-education and training.  I am not, of course.  We all got there because of our education and training.  But it has to be applied judiciously.  And I think the City of New York now is trying to do that and I think other places are as well.

Brian Anderson: Why did you want to write the book?

Peter Cove: I wanted to write the book because I knew that many of the people who I worked with back in the 60s and 70s and 80s and 90s had not changed their minds.  They still believed that what we were doing, all those programs, really had great value.  And I had changed.  Saul Bellow once said a great deal of intelligence can be invested in ignorance when the need for illusion is deep.  And I found that in my life, that the need for illusion was deep, and I wanted to write a book that let people know what really happened because I was there on the ground.

Brian Anderson: Well I think readers or listeners should definitely pick up a copy of the book.  It is a terrific read.  Part of it was born in the pages of City Journal I am proud to say.

Peter Cove: That’s right.

Brian Anderson: The book is called Poor No More: Rethinking Dependency and the War on Poverty.  It is just out from Transaction.  It is available on Amazon and from the Transaction website, I believe.  We would love to hear your comments about today’s episode on Twitter, @CityJournal with the hashtag #10Blocks.  And if you like the show and want to hear more, please leave ratings and reviews on iTunes.  Thanks for listening and thanks very much, Peter Cove, for joining us today.

Peter Cove: Pleasure.

Brian Anderson: You can subscribe to this and other Manhattan Institute podcasts in the iTunes store.  The audio edition and transcript is available on our website, www.City-Journal.org.  This is City Journal editor Brian Anderson.  Thanks again for listening to the 10 Blocks Podcast.

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