Living Wage Contributing to Lower Street Crime

Crime rates — street crime rates, that is — have registered 1dramatic drops in the last decade.

Politicians clamor for credit. We’ve built more jails, some boast. We’ve made sentences longer, brag others. We’ve cracked down on minor offenses, say others.

Perhaps these punitive measures have contributed to the declining crime rates. And there is reason to believe that the increasingly popular community policing methods have strengthened law enforcement. Perhaps putting more police on the streets has cut into crime rates, as well. But with all of the focus on law enforcement measures (again, for street crime only; corporate crime law enforcement remains pitifully weak), politicians, the news media and most purported experts have ignored a strikingly obvious contributor to lower street crime rates: declining unemployment.

Now come economists Jared Bernstein and Ellen Houston of the Washington, D.C.-based Economics Policy Institute with a short booklet, “Crime and Work: What we can learn from the low-wage labor market,” that aims to remind us of the common sense notion that perhaps the best crime deterrent is ensuring the availability of jobs that pay a living wage. Although over the past year the Federal Reserve has moved to raise interest rates, declining and then relatively low interest rates for much of the. past decade permitted the unemployment rate to decline to well under 5 percent — far below the 6 percent level conventional economic wisdom had predicted would start an inflationary spiral. And in the last few years, persistently low unemployment rates have finally translated into (small) real wage increases for those at the bottom of the income ladder.

Bernstein and Houston show that these employment gains and wage improvements for those at the bottom end of the wage scale correlate very closely with declining street crime rates.

A series of charts comparing regional crime and unemployment for young men with a high school degree or less — the population committing the bulk of street crimes — reveals that year-to-year downturns in the street crime rate are typically simultaneous with declines in the unemployment rate.

The good news is that reducing and keeping unemployment low — a vital social goal and something well within the reach of policymakers, should they seek to achieve this objective — has the ancillary benefit of making a significant contribution to low street crime rates.

Jobs occupy potential criminals, take them off the street and vector them away from law-breaking. And employment earnings enable families and individuals to make ends meet, lessening the financial crunch that can encourage street crime.

But the cautionary note from Bernstein and Houston is that the benefits of an expanding economy are delivered last to those at the bottom of the class hierarchy; and that unemployment remains far, far too high among specific demographic groups.
“Even with the wage growth of the mid- to late 1990s, the wage levels for young black males generally remained at or below their 1989 peak in 1998,” they note. Moreover, even with an official 4.2 percent nationwide unemployment rate in 1999, unemployment among 16- to 24-year old black males was 26 percent. The lesson they draw is that sustained periods of low unemployment are needed to deliver real benefits to low-wage workers. It is only in the latter half of the 1990s that young male African-American workers began to register notable wage increases, and significant declines in unemployment rates.

“To lift the economic prospects of all low-wage workers is not only a worthy economic and social goal,” Bernstein and Houston conclude, “it is one that will pay off in the long run by offering potential [street] criminals a legitimate alternative.”

There is no secret about how to improve low-wage workers prospects. Key measures include: low interest rates; an increased minimum wage designed to ensure all workers earn a living wage, and tied to the inflation rate; and increased unionization, so that workers can join together to defend their interests in the workplace and the policy sphere. For the corporate lobbyists who resist these measures, perhaps knowing that these policies can cut street crime rates will persuade them to drop their opposition.

To see the executive summary and introduction to the Economic Policy Institute report, go to www.epinet.org.