(Illustration: Jean-François
Martin; Photo: David Hunsinger)
Work
and spending: What really matters
Two professors — one in sociology, one in psychology
— explore what drives the economic decisions and upward mobility
of the poor
By Katherine Levy Feldman ’78
Workplace success stories in unexpected
places
Sociology professor Katherine S. Newman prides herself on, as she puts
it, “swimming against the current.” In the 1980s she researched
downward mobility, a topic few had investigated since the Great Depression.
The downward trend was always there for some people, she explains, “but
no one was paying attention.”
Newman, who arrived at Princeton three years ago as the Malcolm Stevenson
Forbes ’41 Professor of Sociology and Public Affairs, always has
paid attention. Her interests lie in the study of social stratification,
with a special emphasis on the meaning of mobility, work, poverty, and
violence in American culture. She’s passionate about her topics,
in part because they are rooted in her own experiences: When she was 14,
a major downturn in California’s aerospace industry left her father
unemployed, and he never worked again in a professional capacity. The
family lost its home; Newman’s mother took a series of poorly paid
positions; and Newman worked at odd jobs during her years as a student
at the University of California, San Diego.
At 53, Newman — an anthropologist by training who has taught at
Columbia, Berkeley, and Harvard — is a prolific and prize-winning
author. She calls herself a “public scholar” and works hard
to address audiences within and outside the academy, often speaking on
radio and television. Her most recent work, Chutes and Ladders: Navigating
the Low-Wage Labor Market, was released in October. The New York
Times Book Review called it a “valuable ... collection of carefully
drawn portraits of people who got their start working at the bottom rung
of the American economy.” Chutes and Ladders is a follow-up
to the study Newman and her team of doctoral students began in 1993 and
first documented in the book There’s No Shame in My Game,
which in 2000 won the Robert F. Kennedy Book Award and the Sidney Hillman
Foundation Prize for writers who pursue social justice and public policy
for the common good.
There’s No Shame in My Game, Newman’s initial exploration
of the daily struggles and triumphs of low-wage workers, was based on
interviews with 200 workers in minimum-wage fast-food jobs in Harlem and
100 job-seekers who had been turned down for similar jobs in 1994. It
punctures the myth of the unmotivated working poor, offering personal
accounts of the daily lives of those struggling to make ends meet. Chutes
and Ladders revisits these workers to see how they fared in the prosperity
of the 1990s, when America’s worst-paid workers saw wages rise ahead
of prices for the first time in decades. What did these historic trends
mean for the working poor? Why were some workers who had little going
for them in the mid-’90s able to climb the ladder of success, becoming
what Newman dubs “high flyers,” while others moved in the
opposite direction or stayed stagnant?
Once again Newman’s findings, which she acknowledges are based
on a relatively small number of people, deflate presumptions about upward
mobility among the poor. Her detailed and engaging portraits show that
the factors that make a difference in the lives of the working poor generally
are the same ones that make a difference in the lives of wealthier American
workers: education, family structure, work experience, and luck. The high
value placed on work and the meaning it adds to individuals’ lives
reaches far deeper into the inner city than many sociologists previously
believed, she found.
In 1993, Newman was teaching at Columbia University and living in West
Harlem. Each Monday she would walk down 125th Street on her way to work,
and see the street crowded with others who were also going to work. It
struck her that these people, rushing to get to their jobs, clearly were
not the ones William Julius Wilson was writing about in 1987 in his landmark
work, The Truly Disadvantaged. Wilson, Newman explains, argues
that one consequence of deindustrialization was to move jobs out of cities,
leaving behind an underclass that was trapped and for whom welfare had
destroyed the concept of work. “It was clear to me from the beginning
that Wilson’s numbers were a misrepresentation of a neighborhood
that he painted in very broad brush strokes,” Newman says.
Newman set out to document the stories of the 200 individuals who had
landed jobs in the fast-food restaurants in Harlem and Washington Heights
and the 100 others who later were turned down. Then, over eight years,
against a backdrop of increasing national economic prosperity —
high growth, low unemployment, and negligible inflation — Newman
revisited some of her subjects to see how they were doing. She and her
team conducted extensive research, consisting of personal interviews and
field observation. In addition, 12 of their subjects kept detailed diaries
that provided large and small details of their everyday lives. “The
methods are anthropological, the topic is sociological, and the quantitative
analysis is economic,” Newman explains about her approach. “If
your mission is to communicate to a broader public, then it is important
to convey a texture to the lives of your subjects, which is difficult
to do in strictly quantitative terms.”
At the completion of the original project, Newman was “quite pessimistic”
about the individual and collective futures of those she was writing about.
“It appeared — after two years of observation — that
their futures would look a lot like their pasts: poor,” she writes.
And so she was surprised by her findings four years later: In general,
her subjects did well from 1993 to 1997. Four years after the initial
study, 73 percent of those interviewed were employed; 78 percent had a
high school diploma or general-equivalency diploma, compared to 42 percent
who had a diploma in 1993. In 1997, 29 percent had some college education,
compared with only 9 percent in 1993. The median wage of people who were
working in 1993 had increased from $4.25 per hour to $7.49 per hour.
Even more impressive are accounts of the “high flyers” Newman
encountered in 2002, when 20 percent of her subjects were earning at least
$15 per hour. We meet people like Jamal (a pseudonym, as are all the names
in the book), who left behind not only his early-morning shift in the
local fast-food restaurant in Harlem where Newman first encountered him
in 1993, but his address and poor living conditions. In 2002, Newman found
Jamal in northern California, where he had been employed on and off for
eight years by a manufacturing plant that provides lamination for wood
flooring. “In 1994, [Jamal] was earning the minimum wage and living
in a rooming house in a slum, surrounded by crime and drugs,” she
writes. “By 2002 ... he was earning $32,000 a year, living in a
two-bedroom trailer in a pleasant community, and was a married man with
three children and a fourth on the way.” His lack of education and
his inconsistent level of dedication to his job “put the brakes
on Jamal’s occupational mobility,” Newman concedes, but “measured
by the distance he has traveled, Jamal has a lot to be proud of.”
Kyesha, a single mother working the drive-through window of a restaurant
in 1993, had managed to find similar success, landing a highly coveted
public-sector job as a caretaker in the Malcolm X Housing Project in Harlem.
“These jobs are among the few prospects for steady work with benefits,
like health insurance, pensions, disability, and overtime,” Newman
writes. “Kyesha finally has landed in civil-service paradise, which
is exactly what she hoped for back in the years when she worked for minimum
wage at Burger Barns.” (“Burger Barn” is a pseudonym
for a national chain of fast-food restaurants.) Her future looked bright
indeed, with possibilities for promotion and increased pay.
And there was Lauren, who was rejected for a job in the Harlem Burger
Barn in 1993, but by 2002 was earning about $30,000 per year in the accounting
department of a prominent nonprofit foundation. Lauren had spent a summer
in a public-jobs program for teens, parlayed the experience into an internship
where she was trained in accounting, and – when she became pregnant
and was forced to go on welfare — went back to school. A series
of temporary jobs led to the position in the foundation because, Newman
writes, “Lauren’s instincts about the value of education were
right on target.” The foundation job offered tuition reimbursement
for any further education she wanted to pursue.
Progress up the job ladder was by no means universal — about a
third of the people Newman revisited in 2002 were unemployed or still
earning minimum wage. But the degree of movement generally was surprising,
and “the fact that the Harlem study was undertaken during strong
economic conditions does not seem to overstate the extent of upward mobility,”
she says.
Jamal, Kyesha, and Lauren advanced their careers by means of fairly
traditional strategies: acquiring more education or training, climbing
the rungs of internal job ladders, especially in firms that were growing,
and/or landing a union or civil-service job. They also frequently switched
jobs (a tactic Newman deems “crucial to getting higher wages”
regardless of the economy), and relied on family networks for child care
and temporary housing. Their paths up the ladder were neither linear nor
constant; they moved in and out of employment, but never stopped trying
to get ahead.
Often what propels the poor onward and upward is their “strong
personal belief in the value of work even as they are confronted, day
after day, with lifestyles or attitudes that contradict their beliefs
— often within their own families,” Newman writes. As Adam,
arguably the highest flying of Newman’s high flyers, says: “You
know that saying, ‘Keeping up with the Joneses?’ Well,
I am the Joneses.” This finding is in contrast to most sociological
research on concentrated poverty, which “emphasizes how the inner-city
poor are separated from the rest of American society,” Newman notes.
Nothing, she argues, could be farther from the truth: “What we see
through their eyes ... is a powerful commitment to values that pull them
closer to a conservative ‘red-state’ perspective than the
liberal ‘blue-state’ view that most sociologists, including
myself, subscribe to,” she writes.
Working “sustains a person’s sense of place in the American
cultural universe by locating even low-wage workers on the right side
of the moral barrier that separates them from those who have absented
themselves from the work world,” Newman writes. “Every time
the question was asked, a clear majority of our respondents told us they
would choose work over welfare.”
Scholars have praised Newman’s latest book for its scope as well
as for its substance. “Newman’s accomplishment is to keep
studying a group of low-income individuals long enough to see how their
lives change,” says Andrew Cherlin, Griswold Professor of Sociology
and Public Policy at Johns Hopkins University. “This long attention
span is rare, even among fine scholars.”
Others have praised Newman’s interdisciplinary approach —
an approach that she also uses in new joint doctoral-degree programs in
politics and public affairs, psychology and public affairs, and sociology
and public affairs that she and her colleagues have created for launch
next year. “The core of the enterprise is a three-semester seminar
that introduces doctoral students to the contributions all four of these
fields make to our understanding of social inequality,” she explains.
She brings this approach as well to an undergraduate course she is teaching
this semester, “Health, Housing and Employment: What Works for the
Poor in Small Cities,” a course that is grounded entirely in community-based
research. Working closely with the Trenton community organization Isles,
students are learning firsthand about the theories and practice of tackling
urban poverty – just as their teacher did.
(Illustration
Jean-François Martin; photo: Jon Roemer/courtesy Woodrow
Wilson School)
The psychology of economics: Studying
‘quirks and weaknesses’
If Professor Eldar Shafir had his way, more industries would recognize
that the customer is not always right. Take funeral parlors, for example,
where clients often function under great strain and grief — and
can be moved to buy expensive caskets and extras that reason would tell
them are unnecessary. “Human beings are generally fallible in systemic
and important ways,” says Shafir, 47, “and it may benefit
us not to assume that we can do things we often can’t do well.”
That perspective — a foundation of the growing field of behavioral
economics, of which Shafir is a practitioner — contradicts the traditional
view that consumers are rational beings who make choices based on reason.
“It is commonly believed that people make calculated and controlled
decisions, but research demonstrates the substantial influence of situational
factors on the way we think and act,” says Shafir, a professor of
psychology and public affairs. He believes that the classical assumptions
are compelling because they appeal to our intuition as well as to an idealized
view of how we view ourselves. But we’re all subject to “quirks
and weaknesses” that make us less than perfectly rational. “As
a behavioral scientist, you try to narrow the gap between what we theorize
about human behavior and what people actually do,” he says.
A native of Israel, Shafir has been at Princeton since 1989, and has
investigated behavioral aspects of decision-making across many disciplines
— including economics, politics, and medicine — and across
socioeconomic groups. Currently, he and his team of collaborators, including
colleagues at Harvard, Yale, the University of Chicago, and the Brookings
Institution, are investigating decision-making among lower-income people,
and debunking perceptions that poor individuals make decisions based either
on well-calculated adaptations to their circumstances or on unique misperceptions
of a “culture of poverty” with values that differ from the
mainstream. Rather, he says, the behavioral decisions of the poor are
no more calculated or deviant than those of the educated and affluent.
What do vary among economic groups are the consequences of similar behaviors:
Since people in poverty have little margin for error, those decisions
can have a much stronger impact on their lives.
While the approach may be the same, different things matter to the rich
and poor in their spending decisions. For example, Crystal Hall, a graduate
student working with Shafir, travels weekly to Trenton and Philadelphia,
where she tries to determine what matters most to residents of poor neighborhoods
when choosing between two contracts for cable-television service. Hall
proposes one contract with a company that is familiar; another —
with better fiancial terms — with a company the residents don’t
know. The same options are presented to residents of affluent neighborhoods.
Most low-income residents in the study are willing to pay more for service
from a familiar company, while wealthier people tend to choose the option
that is attractive financially. Shafir theorizes that the issue ultimately
is one of recourse: “The poor are more wary of something going wrong
and are more sensitive to issues of trust.”
According to Shafir, factors such as hassle or embarrassment can appear
inconsequential in standard economic cost-benefit analyses — but
they deter people in important ways. One example is the recent debacle
over Medicare Part D: Many senior citizens found the choices too difficult
to make. “If you talk to the policy-makers, they recognize that
facing lots of options is confusing, but feel confident that people will
ultimately focus on the important details and make their decisions,”
he says. Instead, Shafir has found that feeling hassled or conflicted
can deter people from making any decision. Similarly, Shafir and his colleagues
have observed that residents of low-income neighborhoods often pay more
to process checks from local check-cashing services rather than open bank
accounts where they might have to navigate an intimidating, unwelcoming,
and complicated system. They might patronize a business with more personalized
service — even if it costs more — to avoid the “condescension,
suspiciousness, or uncertainty offered by many institutions,” he
says.
Shafir believes his work contributes to efforts to devise nonintrusive
systems to help people make better choices — in some cases, by giving
them fewer choices: Think automatic-payroll deduction plans for savings
and retirement programs. For example, Shafir believes that people will
save more if they are encouraged to commit to higher payroll deductions
whenever they receive a salary increase. And they would eat healthier
foods if cafeterias were designed differently. “There’s evidence
that plate size and packaging, as well as the order in which food is presented
— salad before fruit before dessert — influences what people
eat,” he explains. “Simply placing the soda machine around
the corner in a school cafeteria [instead of by the main entrance] is
likely to lower consumption.”
Kathryn Levy Feldman ’78 is a freelance writer in Bryn Mawr,
Pa.