Address at the 35th National Business Conference

New York City | March 4, 1966

We are not running a hand-out program - except that we are handing out new opportunities for permanent change. I emphasize the word permanent because our programs do not seek to produce temporary or transient alleviation of the symptoms of poverty. Rather we seek to attack those economic, cultural, and environmental factors which produce the symptoms.

The "War on Poverty", like most wars, tends to be noisy, visible, dirty, uncomfortable, and sometimes politically unpopular. Those of us close to this "War" think we are winning now, and we are confident that this war will be no exception to the victorious record of the U.S. in all its wars.

Last year an estimated two million people moved out of poverty. We cannot claim credit for them all but we do know and can prove statistically that our programs have reached one and a half million of the poor directly, and three and a half million indirectly. We do know that only fourteen months ago there was no Job Corps, no Neighborhood Youth Corps, no Project Head Start, no VISTA Volunteers. We do know that we created 600,000 jobs: Yet, in an economy of abundance, when unemployment has dipped to four percent, and will undoubtedly go lower, it may well be asked, what kind of person could still be poor in these prosperous times? Do we really need a War on Poverty now? Should we be attempting to fight two wars, when the deadlier one overseas requires an increasing proportion of our energies and resources?

These are hard questions. They are being asked by businessmen, by congressmen and by us. In a recent speech a well-known banker charged that the War on Poverty is "an anachronism that is diverting our energies from more relevant problems." Much more pressing issues, he said, have crowded poverty into a small corner. I wonder if that banker has ever visited or inspected that "small corner" of America into which poverty has supposedly been pushed.

It contains 32 million Americans, in every county, in every city and in every state in the nation: Just about one-sixth of our total population.

Fourteen million are children, under the age of fifteen! Another eight million are over 55; almost 70 percent are white; 55 percent are living in cities. The rest are scattered in pockets and trails of rural poverty.

Of the poor who are heads of families, the unemployment rate is three times that of the non-poor. By any standards, their cash income is insufficient to meet basic human needs; it is less than 23 cents per meal per day plus $1.40 for everything else -- housing, clothing, recreation, transportation, education, health and the whole range of goods and services most of us take for granted. On the average, this works out to an income of $3,130 per year for a family of four; about $1,500 for a single person living alone and for a family of seven we maintain that an income of $5,000 still is poverty....

The sunlight of our general economic expansion rarely reaches into this dark corner of our society. For example, we estimate that even if expenditures for defense should go up as much as $15 billion, there still would be 30 million people unreached by the nation's prosperity.

The fact is that a shockingly large number of our poor people: -- can't read or write, well enough to get and hold any job, or do not have the basic work experience or skills; or are too young, or too old, or too remote from the economic mainstream; or are the wrong color, or speak the wrong language; or are simply too numbed by hopelessness to move themselves out of poverty.

Approximately $21 billion will be spent in the next fiscal year by all agencies of the federal government to combat poverty. But the programs of the Office of Economic Opportunity will cost the tax payers only one cent out of every tax dollar. But this one cent out of every dollar provides the cutting edge of all our efforts. Because our one cent is directed at self-help, self-motivation, education and local community action. All of our programs are designed ultimately to end poverty rather than simply ameliorate the conditions of the chronically poor. We are not running a hand-out program - except that we are handing out new opportunities for permanent change.

I emphasize the word permanent because our programs do not seek to produce temporary or transient alleviation of the symptoms of poverty. Rather we seek to attack those economic, cultural, and environmental factors which produce the symptoms. We want to enable the poor, who have always been with us, to move themselves and their children out of poverty, for good!

OEO cannot perform this task alone. After all, we spend only one cent of each federal tax dollar. Thus we must have the cooperation of every element of our society. Cities and states, private organizations, business and labor, religious groups and social agencies. And as a consequence we are endeavoring to give a new and heightened meaning to the word "community." The War on Poverty demands community action, local action, and where this action is taking place the poor are being benefitted most.

American business has been playing an active role in the War on Poverty. Businessmen sit on our advisory councils, and serve on our task forces. Private business is active in the Job Corps where many of our most successful centers operate on contract to American corporations, like GE, Litton, IBM, Xerox, RCA, Burroughs. This is no easy task which American business has taken on. These young men and women are at a difficult age. By and large they have been failures in all they have done -- school dropouts, unemployed, many without hope. The Job Corps experience for many of them is a thrilling thing -- think what it means to society and to the boy or girl when one of these becomes a productive citizen for the next 45 years, instead of a drain on society and perhaps a crime statistic. Profits from Job Corps contracts are boosting very few dividend rates, I fear. Headaches, I fear, are more characteristic. But contractors apparently are finding rewards in a difficult job that has its payoffs outside the financial record.

In the matter of job placement, too, we are enjoying active support from the business community. This is particularly essential. Nothing would be worse than to spend time and money changing these youngsters into good workers only to end up with no jobs.

Business has a vital stake in our victory. Put in its simplest terms, the War on Poverty seeks to return 30 million people to the main stream of American economic life. Today the poor are economically disenfranchised. They buy too little. They consume tax revenues. They are too often unemployed. They contribute little to the health and growth of our economy. The temporary full employment of a defense economy is not enough to help them out of poverty - permanently. Both World War II and the Korean war, had a profound impact in getting people out of poverty; thousands of jobs were created as a result of military preparation! But in 1948, five million Americans who had been sucked out of poverty for a year or two plummeted back in. And in 1954, three million Americans who had been lifted out of poverty temporarily, dropped back into it.

We call this our reentry problem; we are determined to stop it from happening again. How can this be accomplished? It will not be easy.

If I understand the situation correctly, our unprecedented peace-time economic success reflects the growing knowledge and ability of management both public and private. I see no reason to believe that we cannot continue to manage our fiscal affairs in such a way as to maintain high levels of employment. I think this will be the case even when the war in Vietnam is resolved. Marxists used to insist that the only thing that could keep a capitalist system going was the resort to military buildup and war. We now know for sure, if we didn't always, that this Marxist doctrine is nonsense. We now know that directing a full peace-time economy is something we can manage, that is something to be hoped for rather than feared, because in the long view it will improve the lives of all of us.

But full employment will not by itself win the War on Poverty. Full employment is a necessary condition for the success of direct anti-poverty programs which attack the social and economic factors which keep the poor down. As the unemployment situation improves, our task is to train the poor, in job skills, in literacy, in general understanding, so they can fill the jobs created by a booming economy and stay in those jobs permanently. This is not super-heating the economy. It is anti-inflationary. This human up-grading process makes these people more productive than they otherwise would be, they will be able to retain their jobs after the economy becomes less superheated. Much of what we do in our community action programs and elsewhere emphasizes these education and training aspects.

But we have much still to accomplish. Just as one example: Extraordinary differences between unemployment in this country and in western European nations. The unemployment rate for teenagers here in the U. S. is always two, three, or more times the average rate of unemployment. This is not generally true in European countries.

In Britain, Germany, and the Netherlands, the teenage unemployment rate is actually less than the over-all average! We have been interested in examining the reasons for this, and while the reasons are complex, and some of them do not bear on the problems we are discussing here today, one of them appears to be that American business is likely to insist on levels of achievement for prospective employees that are too high and that in fact tend to make employees over-qualified for the jobs they are doing. Not only does this exclude a good many of the people now in poverty, but it means that those who do get jobs frequently become dissatisfied. There really is no reason for a High School diploma for many jobs for which it is now a requirement. Elimination of this rigid diploma requirement might help teenage unemployment tremendously.

We have a difficult task ahead of us. I like to think of it as a task for all Americans, not just for those of us who are enlisted full-time in the War on Poverty. We have made mistakes, but we are making progress. I hope we can correct the mistakes and consolidate the progress. The president has asked us to eliminate poverty within a generation. I think this country has it in its power to do the job quicker than that.