Continued from Part 2: Declining Wages. Or, Why the Poor Get Poorer
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” --Adam Smith
According to the Social Security Administration as of 2014, 51% of all workers in the U.S. now earn less than $30,000 a year.
The federal poverty level for a family of four is $24,250.
Approximately 38% of all American workers earned less than $20,000 last year.
This is not enough to raise a family on.
Consider a third of workers in 2010 earned less than $15,000 a year. Their average pay was just $6,000 each, reports David Cay Johnston in The Fine Print.
And these aren’t just part-time student workers, but millions who work 40 hours a week, with no paid vacation and no benefits. Half of those with jobs earned less than $26,364 in 2010.
We work a hell of a lot of hours to have such high poverty rates.
But it wasn’t always like this. During the Great Compression, “from 1960 to 1970, as the New Deal expanded into the Great Society, the number of Americans in poverty declined from 40 million to under 25 million… During the 1980s, as Reagan and George H. W. Bush reigned, those in poverty soared to 35 million… Following the Great Recession that marked the end of George W. Bush’s presidency, over 46 million Americans were in poverty,” writes Professor of Law Ian Haney Lopez in Dog Whistle Politics.
As of 2014, there are roughly 50 million people in poverty in the U.S. alone, or 15% of Americans, and there are tens of millions of Americans in a category called “near poverty,” states Pulitzer Prize-winning Journalist Chris Hedges in Empire of Illusion: The End of Literacy and the Triumph of Spectacle.
According to Poverty USA, this is the fourth consecutive year that the number of people in poverty has remained unchanged from the previous year’s estimate.
Shockingly, the US has the highest rate of childhood poverty of any major country, ranking 34 out of 35.
There is no shortage of journalists chronicling the incredible poverty decimating our country. At the forefront is muckraking journalist Barbara Ehrenreich’s firsthand account in her bestselling Nickel and Dimed: On (Not) Getting By in America, where she goes undercover as an unskilled worker in various jobs and cities across the nation and painfully learns just how underpaid and overworked those on the poverty line are – and that it takes not one, but two jobs to even afford housing. And this was in 1998.
Our economic conditions have only deteriorated with the Great Recession, and hard working Americans holding down multiple jobs can still barely make ends meet.
In The Working Poor: Invisible in America, Pulitzer-Prize winning author David Shipler explores the paltry wages and futile lives of our country’s working class unable to rise above the poverty line, from the menial labor of immigrants in small towns to the sweatshops and factories of city slums. The lesson is regardless of how hard they work, how many jobs they take, they are barely able to survive. One illness or setback is all it takes to ruin their lives.
Writer Linda Tirado further debunks the prosperity myth in her book Hand to Mouth: Living in Bootstrap America, where she gives her first-hand account of life on the edges of poverty, arguing that poverty is not a character defect, but a matter of disparity.
Freelance reporter Sasha Abramsky revisits the terrain of Michael Harrington 50 years after his groundbreaking chronicle of American poverty in The Other America. In Abramsky’s The American Way of Poverty: How the Other Half Still Lives, he differentiates between the long-term chronically poor and the new working poor, both the victims of a broken economy and political system.
There is no shortage of stories and statistics documenting the poverty class. What’s lacking is the proper perspective.
Our cognitive dissonance comes in our failure to recognize the source – and scope – of the problem, finding it easier to blame the poor for their lot in life, from the under-employed to the unemployed.
According to the U.S. Census Bureau, 49% of all Americans now live in a home that receives money from the government each month. This is less an indication of widespread abuse but a sign of just how dire the situation is – and how our current economic policy isn’t working.
Because middle class wages have dwindled so much, we can no longer afford to hire our own citizens to clean our homes or take care of our kids, which is why immigrants now do many of the jobs that native-born high school graduates once did. (Which means, they are not "stealing" our jobs.)
But let’s attack one myth at a time, starting with unemployment.
According to the U.S. Department of Labor, the official unemployment rate is only 5.6%, meaning 5.6% of the work force is jobless and actively seeking work. The Clinton Administration, in an effort to pump up how the numbers looked, decided those who had given up looking for work, or those who wanted full-time jobs but could find only part-time work, were no longer to be counted as unemployed.
This disappeared 5 million unemployed form the official unemployment rolls. So now, if you work 21 hours a week at Wal-Mart, you count as employed. Although your real wages place you below the poverty line.
The bad news is, the actual unemployment rate is 11.3%, which also includes those no longer looking for work.
According to Gallup, “Right now, as many as 30 million Americans are either out of work or severely underemployed. There's another reason why the official rate is misleading. Say you're an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 -- maybe someone pays you to mow their lawn -- you're not officially counted as unemployed in the much-reported 5.6%.”
Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older.
For comparison, in Depression-era Germany, the unemployment reached 40%, directly contributing to xenophobia, anger, paranoia, and manipulation, not unlike modern-day America. All we are missing is a charistmatic right-wing dictator to rile up our basest of nationalist instincts. If you watch the GOP debates, you may find one, two, or even half a dozen who could easily fill the role, minus the charisma.
Another comparison begging to be shared: According to Thom Hartmann, The U.S. recovered from the Great Depression by passing minimum wage laws, increasing corporate taxes and taxes on the wealthy, establishing social security, and becoming the employer for all the unemployed through programs like the WPA to create a vibrant middle class. In other words, democracy.
Germany, however, chose corporatocracy, where corporations merged into government, creating unequal protection for working citizens, privatizing much of the commons, and creating an illusion of prosperity through continuous and every-expanding war, which led to World War II.
Let’s look at the sociological impact of unemployment. According to a 1976 congressional study, each 1% rise in unemployment correlated to:
495 more deaths from liver cirrhosis (i.e., drinking yourself to death)
628 more homicides
920 more suicides
3,440 more inmates in prison
4,227 more admissions to mental hospitals
20,240 more fatal heart attacks and strokes
Social class doesn’t just determine the kind of life you live, but how long you live.
According to the Washington Post, demographers have long known that wealthier people tend to live longer than the poor, but now they’ve found that as income declined among white men and women between the ages of 45-54 without a college degree, the rate of death has increased since 1999, a reversal after decades of improvement – a rate comparable to the toll of AIDS in the U.S. (roughly half a million people).
As researchers Richard Wilkinson and Kate Pickett discovered in The Spirit Level: Why Greater Equality Makes Societies Stronger, under conditions of inequality, there are greater rates of imprisonment, violence, teenage pregnancies, obesity, mental health problems such as anxiety, depression and addiction, lower literacy scores, and reduced life expectancy.
According to the Economic Mobility Project and the Economic Policy Institute:
-Poor kids who succeed academically are less likely to graduate from college than richer kids who do worse in school.
-Even if they graduate from college, the children of the poor are still worse-off than low-achieving children of the rich.
This trend does not appear to be reversing anytime soon.
“[From] real estate agents in Florida, to bank tellers in New York, to computer programmers in Colorado, even to people with Ph.D. degrees… The New Poor are legion, certainly among the nation’s 6 million long-term unemployed. In 2010, the Census Bureau reported, another 2.6 million Americans slipped below the official poverty line, bringing the total to 46.2 million people – the highest number in 52 years…Baby boomers in their late 50s and early 60s…have been especially hard hit. By late 2011, 4.3 million of them, roughly one in 6 Americans age 55-64, were unable to find full-time work, and half of them have been looking for more than 2 years,” reports Hedrick Smith in Who Stole the American Dream?
As a society, we seem to have little compassion for the unemployed and under-employed.
As Barbara Ehrenreich explains in Bait and Switch: The (Futile) Pursuit of the American Dream, “From the point of view of the economic winners, those who occupy powerful high paying jobs, the view that one’s fate depends entirely on oneself are remarkably convenient. It explains winners’ success in the most flattering terms while invaliding the complaints of the losers.”
William Kleinknecht elaborates on this idea in The Man Who Sold the World, explaining that the ignominy of social Darwinism “nourished a view of the lower classes as predestined by genetics and breeding to live in squalor. The doctrine had been promulgated by the economist Herbert Spencer in the midst of England’s Industrial Revolution in the 19th century, but it achieved its greatest success decades later in America, where it served as the perfect rationalization for the new class of capitalist amassing great fortunes in the Gilded Age. If men, women, and children labored for squalid sustenance…while the rich built their mansions in Newport, social Darwinists counseled them not to worry; it was a matter of ‘natural selection’ and ‘survival of the fittest’…For the leisure class of Americans, the less fortunate were vulgar and uninteresting, appearing in popular fiction and theater only as urchins and moral reprobates. When newspapers delved into big-city slums, it was only to chronicle the appalling crimes of their residents… But a succession of popular movements – Populism, Progressivism, and the New Deal – helped raise the estimation of the working class in the public imagination…The poor were no longer seen as genetic mediocrities but as victims of heartless industrial expansion and the rapid growth of American cities."
That is, until the modern-day conservative movement re-introduced the idea, led by today’s economic elite.
In Ehrenreich’s This Land is Their Land, she documents how the rich get richer and the poor get poorer, as well as analyze how wealthy corporations engineer the gap through social, political, and economic policy-making – all deliberately designed to add wealth to the 1% at the expense of the middle class and the poor.
Private affluence = public squalor.
If you’re still in doubt, I’ll let Warren Buffet, CEO of Berkshire Hathaway, take it from here:
“There’s class warfare, all right…but it’s my class, the rich class, that’s making war, and we’re winning.”
We’ll see how in... Part 4, Return of the Robber Barons. Or, How the Rich Get Richer.