COLUMN ONE : Economic Gap Bodes Ill for U.S. : A full-time paycheck may not keep the wolf from the door in today’s economy. Working or not, many Americans are unable to make ends meet.

At a time when President Bush and his Administration are preoccupied with revolutionary change overseas and budget problems at home, an insidious and largely neglected domestic crisis of immense and swelling proportions is sapping the spirit and will of millions of Americans.

Poverty, long the scourge of the underclass, is rising like an evil tide to engulf the “working poor”--thousands upon thousands of Americans who hold down regular jobs and struggle to embrace the traditional values of middle-class society, but find themselves sinking despite their best efforts.

The number of Americans who worked but failed to earn enough to escape poverty increased by 2 million in the last decade. Almost 16 million employed people fall below the government poverty line; 4 million of them have full-time jobs.

“The working poor,” in the words of Sister Susan Beaton, a Roman Catholic nun who works with the homeless in Boston, “are getting creamed in this country.”

And, coming on top of the already staggering problems of the underclass, the “working poor” are pushing the nation’s overall poverty problem to an appalling level. In 1988, almost 32 million Americans, more than one in eight, fell below the poverty line. That was 6 million more poor persons than 10 years earlier.

Almost 12.5 million children, one of every five in America, were poor. Almost one of two black children lived in poverty, and so did more than one of every three Latino children.

All this after eight years of booming plenty for the rich and the upper-middle class--a period that Martin Anderson, a domestic adviser to President Ronald Reagan, has called “the greatest economic expansion the world has ever seen.” It was also a period in which the average wage, after adjustment for inflation, dropped to its lowest level in almost a quarter of a century.

And the government statistics count only those individuals and families who meet the official definition of poverty, now calculated to be an annual income of $9,435 or less for a family of three.

Millions of others, although technically living above the poverty line, have little more than bare necessities and struggle with illiteracy, homelessness, crime, disease and all the other afflictions of the poor. So fragile is their grip on the economic ladder that the slightest jolt can be disastrous. Illness or divorce, a cut in pay or a cutback in working hours can suddenly hurl these workers and their families into an abyss of want and fear.

“There is a whole set of people down there who aren’t from part of the underclass, who aren’t necessarily even officially poor, but who are very marginal and struggling to make it,” said Isabel Sawhill of the Urban Institute. “They are doing all the things that they are supposed to do, but having a hell of a time.”

No wonder, Sawhill said, that young men and women from underclass neighborhoods see no percentage in completing school and entering the job market. “Particularly if there is some alternative like (dealing) drugs or welfare,” she said.

Interviews with social workers, local officials, university analysts and poor families in cities and towns throughout the country during a six-months-long Times study found growing frustration and anger at the larger society’s seeming indifference to the gathering crisis.

In Oakland, Sister Simone Campbell, a Roman Catholic nun and lawyer who helps the poor with legal problems, confided in her office one recent afternoon that she faced the unpleasant task of informing a client that she had better quit her job as a secretary-receptionist in a small firm and apply for welfare. The client, a recently divorced mother of two children, earned $728 a month after deductions and, according to Campbell, could not pay her rent and child care costs out of so meager a salary.

“She’s working now and she’s not going to like that I’m going to tell her I think she ought to be on (welfare) aid in order to support her kids,” Campbell said.

Most Americans have seen that the most extreme form of this poverty--the plight of the underclass--as indelible images on their television screens. But the underclass, in a strange and ironic way, may have comforted many Americans about the crisis of poverty. Focusing on the underclass makes the crisis seem distant, black and so extreme as to defy solution.

It masks the reality that millions of other Americans are in dire straits.

It is this reality--the extent to which economic problems have gone beyond the usual bounds-- that prompted Harvard University sociologist David T. Ellwood (exaggerating to make his point) to say: “Remember one important thing. The poor are us, not just them.”

A host of related problems follow in poverty’s wake:

--A health-care system so inadequate that 37 million Americans lack medical insurance and infants die at a faster rate here than in any other country in the Western industrial world;

--An educational system so deficient that it has produced 20 million to 30 million functionally illiterate adults who cannot compete for most new jobs;

--Drug-fueled crime and murder rates so intractable that the United States is putting a larger proportion of its population in jail than any other country except South Africa and the Soviet Union;

--A shortage of moderately priced housing so acute that almost half the poor must spend 70% of what little they earn on rent.

And the plight of the poor threatens the well-being of all the nation. Corporate executives fear that they cannot compete in the world market with a labor force enfeebled by illiteracy. Hospitals are curtailing services because of the crush of uninsured poor people coming to emergency rooms for non-emergency treatment. Crime and drugs choke the quality and decency of life in the cities.

Acute as the problem is--and clear as its outlines are to the social workers, sociologists and other specialists who deal with the poor--most other Americans seem unmoved. Without thinking very hard about it, Americans as a society apparently have chosen to tolerate this level of poverty.

“Either we don’t think we have the resources or we don’t want to spend the resources or we don’t want to put forth the effort,” said Robert Johnson, administrator of Grady Memorial Hospital in Atlanta, which serves that city’s poor. “Yet . . . we also know these problems don’t go away by themselves. It’s almost like we’re kidding ourselves.”

Of the more than $1 trillion annual federal budget, about 12% is allocated specifically to aiding the poor. The government spends more than twice that much for defense. In Washington, even those who say they would like to do more complain that the hands of the federal government are tied by budget restraints.

State and local governments are trying to patch things up. Volunteer organizations, encouraged by President Bush, do what they can. But only the federal government has the resources to meet the crisis head on.

Despite the widespread belief--encouraged by the Reagan Administration--that government programs aimed at problems associated with poverty have been failures, more than a few of those programs have met their objectives. The problem is that many individual programs are too small, and all of them together do not add up to a comprehensive attack on a multifaceted problem.

Food stamps, for example, have alleviated hunger. The Head Start program has improved the preparation of poor children for school. The WIC (women, infants and children) program has improved the nutrition and general health of impoverished pregnant women, new mothers and their young children.

But many such programs are starved for funds and vital companion programs--follow-on educational efforts to preserve and extend the gains achieved by Head Start, for instance--are inadequate or nonexistent.

So stark is the contrast between the anemic state of anti-poverty programs and affluent America’s ability--and readiness--to accomplish awesome feats in some areas (sending explorer satellites deep into space, for example, and devoting millions of dollars to the protection of endangered species of wildlife), that many poor people have come to see dark motives.

Especially in poor black neighborhoods, many have concluded that the white power structure is intent on wiping out black people and has encouraged the scourge of crack cocaine toward accomplishing this heinous end.

An amateur mural outside a large grocery store in a poor section of Oakland recently featured a large figure of Uncle Sam labeled “Uncle Crack.” He was shown pushing a long line of naked and chained black slaves toward a door marked “Suicide.”

Even some white social workers accept certain aspects of that conspiracy theory. In Atlanta, Fulton County social worker Dawn Hines said that she simply cannot believe the government is unable to prevent cocaine from entering the country. “If there’s anything they want to stop, they stop it,” she said. “If a country has violated a trade agreement about oranges, we don’t allow those oranges into this country.”

In Oakland, Carl Metoyer, an even-tempered black lawyer and registered Republican, said he believes that “only a highly organized mass type of activist protest” could prod Washington into doing something about the crisis of poverty.

“I think that it’s time, probably, for us to come together in something like the ‘60s,” he said. “That’s not to say anything violent, but I certainly would be realistic enough to recognize the potential for violence.”

Although some academics think the connections may be overestimated, most analysts believe that the problems of housing, medical care, illiteracy, drug abuse and crime are closely related and were spawned, in one way or another, from the same source: persistent, worsening poverty.

Sister Susanne Beaton, the nun who works with homeless mothers in Boston’s Roxbury district, cited a Boston Globe poll that showed Americans far more concerned about drugs than about homelessness. “What they don’t understand,” she said, “is that if you don’t have a home, you become so desperate that you may end up taking drugs.”

“You can’t just look at a person’s illness, per se, and not look at where they are living and what are their stresses,” said Charlene Turner, a medical social worker at Atlanta’s Grady Memorial Hospital. “It’s all connected.”

In California, Dr. Robert Cooper, director of the West Oakland Health Clinic, displayed a small chart he had prepared for members of the board of his nonprofit clinic. The chart showed boxes marked “physical health,” “mental health” and “substance abuse” with arrows darting to and from each other and rushing, as well, to a large central box labeled “Social: housing, income, education, food/clothing.”

“There’s no way you can ever escape the fact that the core of all this is a large social service problem,” Cooper said.

The poor live in greatest concentration in the largely black inner cities. Chicago’s desolate South Side looks like a set designer’s urban fancy of the worst of the worst.

Most of 47th Street, once a bustling commercial street, is a shambles. Many of the shops have been burned out, wrecked or simply abandoned. Clusters of black men, but few women, hang around. The men, many of them in tattered clothes, congregate near corner liquor stores, one of the few kinds of shops to survive. One older man, walking jauntily and sporting a spiffy camel-hair coat and derby, breaks the pattern.

The 28 high-rise apartment buildings of the Robert Taylor Homes, one of the largest public housing complexes in the nation, loom a few blocks away on State Street. They hover over the old neighborhood like an enormous prison. Police say that 11% of Chicago’s murders take place there.

Although there is a police station on the complex grounds, private security guards check visitors coming to the apartments. Metal doors clang open for them after they sign in. Young men loiter outside, some shaky on drugs. Inside are mostly women and children living on welfare.

Many young fathers have no value as husbands in the inner city. They are not skilled enough to get jobs that can support a family. As unemployed husbands in the home, most deprive mothers and children of welfare. In Illinois, for example, welfare payments are made to a home with an unemployed father only if he can show that he recently lost a job.

Every big city has its persistent poverty.

In Philadelphia, Helen Newsome, a street-smart, 29-year-old unmarried mother, has been on and off welfare since 1977. She found a job in a mental health clinic for $5 an hour a few years ago, but her expenses ballooned past her salary when her second child, a son, was born last year. The father, an addict, contributed nothing to their support, so she quit her job and went on welfare.

Now at a job training center trying to prepare for better-paying work, she is not hopeful.

“I want off welfare . . . but I can’t do any better right now,” she said.

Talk of the underclass commands a good deal of attention from wealthier Americans. “You can’t just talk about poverty,” said the Urban Institute’s Sawhill. “That creates yawns these days . . . but when you talk about the underclass, perhaps . . . because it conjures up the things that people are afraid of--crime, drug abuse, child abuse and all these other terrible things--people get concerned.”

Sawhill and her associates have identified 880 neighborhoods as underclass areas, based on high school dropout rates, numbers of welfare recipients, male unemployment and numbers of households headed by women.

“My own view,” Sawhill said, “is that everybody living in those areas . . . is living in a miserable environment and is at risk.”

According to 1980 census figures, 2.5 million people lived in these underclass areas, and slightly fewer than 1 million of them are living below the poverty line. They represent only a small fraction of the poor population.

“For every person who is in the underclass, however it is defined, there are probably at least 10 other people who are poor,” said Robert Greenstein, director of the Center on Budget and Policy Priorities in Washington. “We have got to keep our eye on those other 10 people as well.”

The growth in poverty in the last decade, in the view of many specialists, is the inevitable consequence of an economy losing great numbers of relatively high-paying manufacturing jobs while gaining millions of less highly paid jobs in the service sector. From 1979 through 1987, service industries added 13 million jobs while 2 million jobs in the manufacturing sector were lost.

Many of these new jobs, including work in fast-food outlets, pay near-minimum salaries and offer little in the way of health insurance or other benefits or opportunity for advancement. According to the liberal Economic Policy Institute in Washington, 28% of all full-time retail jobs and 17% of service jobs pay less than $200 a week, while only 10% of manufacturing jobs pay that little.

Congress last fall boosted the federal minimum wage to $3.80 an hour as of this April 1, and to $4.25 an hour beginning April 1, 1991. The minimum wage had been $3.35 an hour since 1981 and was so eroded by inflation that, even according to the government definition, no one could support a family on it without being poor.

A full-time minimum-wage worker last year earned $6,968, only slightly above the poverty line for a single person and far below it for a family. And in 1987, according to the latest information from the U.S. Bureau of Labor Statistics, 4.7 million Americans, or 8% of all wage earners, were paid the minimum wage or less.

Richard Hite of Philadelphia, a 37-year-old, unemployed former Marine and soldier, said he had already chosen welfare because the status makes him eligible for Medicaid. As a minimum-wage laborer or dishwasher--the kind of work available to him--he figures he would have no medical insurance.

“The medical card is a benefit in itself,” he said. “It’s like having a job and and being able to save the money. . . . You can’t beat the medical benefits.”

The plight of people like Hite appears all the more disheartening because, while the poor grew poorer in the 1980s, the rich grew richer.

The gap between rich and poor today is the widest one since the end of World War II. The richest 20% of American households earned an average, after adjusting for inflation, of $9,109 more in 1988 than they earned 10 years earlier. The poorest 20% of American families, meanwhile, earned an average of $576 a year less.

The poorest of the poor were at their worst state in the last 15 years. More than 11 million Americans, almost 5% of the population, were in families earning less than half the poverty-level income in 1988.

The gulf between rich and poor is evident in almost every city. Not far from downtown Atlanta stand two imposing structures. The national headquarters of Coca-Cola, a concrete and glass monolith in a small park, is surrounded by an iron fence. In its shadow is the Techwood housing project, a cluster of worn, two-story brick apartment buildings now inhabited by poor blacks. They were built half a century ago for poor whites as the first public housing complex in America.

“I drive to work every day by the housing project,” said social worker Hines. “Techwood and the Coca-Cola Co. are right next to each other. At Coca-Cola there’s a great, big high fence. Very nice, ornate, Art Deco, but too high for the Techwood folks to get over. They can’t get in to break in, and they sure can’t get in to get a job. They don’t have the skills.”

These two worlds meet, according to Atlanta police Detective Joseph Dallas, only when white Coca-Cola workers slip into Techwood to buy crack from their black drug dealers.

America’s crisis of poverty has brought reactions of astonishment and even gloating from economic competitors overseas. In a recent book, unpublished in the United States, Akio Morita, chairman of Japan’s Sony Corp., bared his contempt for the weakness of the United States in world trade competition.

“I must ask American executives if they regard workers as mere tools which they can use to assure profits and then dump whenever the market sags . . . “ he wrote. “The gap between rich and poor (in the United States) is enormous . . . an outrageous condition that should somehow be corrected.”

The American diplomat, historian and political analyst John Newhouse talked with many influential people in Western Europe and reported what he heard in a recent article in the New Yorker.

Europeans, he said, believe that “America’s standing in the world isn’t threatened by the discredited host of Marx or Lenin, or by any other lurking -isms. Nor are vital American interests threatened by anyone--not the Soviet Union, Nicaragua, Cuba or even Iran. The threat to America, as it is seen by trained observers, lies within.”

In 1964 a group of French volunteers, now known as the Fourth World Movement, came to the United States to, as one new member of the organization put it recently, “see what they could learn from the War on Poverty.” They found American poverty so devastating that, instead of returning to France, they decided to stay and help, adding volunteers from several other nations as well.

“The poverty and homelessness are more visible here than in Europe,” Benoit Fabiani, one of the French volunteers, said in a recent interview in Washington.

Statistics support that observation. In 1987, the U.S. infant mortality rate was the highest among the seven leading industrialized nations. American life expectancy at age 60 was no better than average--behind Japan, Canada and France and ahead of Italy, Germany and Britain.

Likewise, most other industrialized nations have chosen to spend more of their wealth on social welfare than has the United States.

The United States spends a smaller proportion of its gross domestic product on government social programs and taxes itself less than any other industrial power except Japan, according to the Paris-based Organization for Economic Cooperation and Development. In addition, according to the Economic Policy Institute, the United States spends a smaller proportion of its gross domestic product on elementary and secondary education than any of the others.

The government’s critics insist that Washington has refused to acknowledge that applying money to poverty problems could help--that some programs have proved that they can work.

The congressional General Accounting Office reported recently that the Agriculture Department, under the Reagan Administration in 1986, threw out the conclusions of a research team that reported positive results from the WIC nutrition program. Instead, the GAO said, the department published its own “less accurate” conclusions understating the program’s success.

Meanwhile, millions of the working poor struggle on.

Shirley Mae Hartman, a 57-year-old widow, earns $3.88 an hour working 28 hours a week as a secretary at a Baltimore social agency. She has allowed her son, a troubled, unemployed Vietnam War veteran, and his wife to move into the family home while she lives with her 84-year-old mother.

Hartman regards herself as too old to find a better job. But, though she can barely support herself on her wages and can do nothing for her son and daughter-in-law, she will not consider applying for welfare.

“I would like to earn enough to take care of myself and to help them,” she said wistfully.

Wages Hit a New Low. . . Average hourly wage of American workers, adjusted to 1977 dollars ‘73: High: $5.38 ‘89: Low: $4.80 Source: Bureau of Labor Statistics, Department of Labor