The American Way of Poverty: How the Other Half Still Lives (6 page)

Joyce’s words seemed to be borne out in February 2012, when Republicans agreed to back an extension of the payroll tax cut, but only on the condition that Democrats voted to reduce the maximum period a person could spend on unemployment insurance after losing a job from ninety-nine weeks to seventy-three. Because of the length of the economic crisis, and the difficulties so many erstwhile workers experienced when trying to chase down new work, huge numbers of families have been cut off from all access to cash—reduced to living barter-and-charity-based lives on the margins of American society. Ironically, in falling so far outside the mainstream economy, these men and women too often end up locked into a downward spiral. Around the country, several newspapers have reported on signs put up at companies hiring new workers: “Unemployed need not apply.”
¹²
Apparently, employers fear that the unemployed will have to be retrained, their work ethic and their habits of punctuality
relaunched. It is, some worry, too much baggage—far easier, when it’s an employer’s market, to simply pick from the active workforce.

Millions more are not listed as unemployed because they have long ago stopped looking for work; they are more ambiguously defined as being “jobless.” Unable to claim unemployment insurance, they live entirely on savings, on the largesse of friends and family, or on charity.

Yet this isn’t a story only about those without work. In fact, America’s scandalous poverty numbers also include a stunning number of people who actually have jobs. They are author David Shipler’s “working poor,” men and women who work long hours, often at physically grueling labor, yet routinely find they can’t make ends meet, can’t save money, and can’t get ahead in the current economy. At the bottom of that economy, income volatility is peculiarly high; casual laborers and hourly employees routinely see their hours cut, their wages reduced, or their jobs eliminated during downturns. Oftentimes, their crises are magnified by homelessness, addiction, and mental illness and by involvement with the criminal justice system—from the early 1970s through the early 2000s, America built up the biggest incarceration system in the world, a situation that I discuss in the second half of the book when exploring ways to meaningfully intervene against modern-day poverty.

For these men and women with no rainy-day funds to fall back on, income volatility too often results in instant deprivation. Agricultural laborer Laurentino Loera, a middle-aged man whose life possessions could be carried in a few plastic bags, and who slept nights on the floor of a community center in El Paso, quietly mentioned how a few weeks without being picked by the contractors to work the fields meant having to pawn his one consumer durable item: a small, portable, black-and-white television. For oyster fisherman
Byron Encelade, collapsed income meant that he couldn’t buy his grandkids Christmas presents. For 30-year-old massage therapist Lauren Kostelnick, meager earnings meant no health insurance and only being able to shop in thrift stores. For Walmart worker Aubretia Edick, low hourly wages combined with her manager allotting her fewer hours each week meant skipping meals and keeping her upstate New York house thermostat on low throughout the long winter months.

In his 1971 book
A Theory of Justice
,
¹³
the influential liberal philosopher John Rawls argued that the moral imperative of a political and economic system was to raise the condition of society’s most vulnerable, and that the means to do so were, largely, to be discovered by trial and error. In theory, growing inequality would pass his morality test so long as the condition of the poor was being bettered. In practice, however, because inequality tended to increase during moments when poor people were losing political and economic clout, such developments tended to raise a red flag. Far better to promote policies that have the effect of reducing the divides between the wealthiest and the poorest in any given society, he continued. Rawls wasn’t a take-to-the-barricades revolutionary. To the contrary: He believed his goals could be achieved within the framework of modern liberal democracies.

A few years earlier, no less a conservative grouping than the Chamber of Commerce’s Task Force on Economic Growth and Opportunity, composed of about one hundred titans of industry and finance, had reached a similar conclusion. “There is every reason to believe that the American economic system will continue to improve the relative position of those on the lowest rungs of the ladder,” they cheerfully proclaimed in 1965. “Income differences increase in the early stages of industrialization and decrease in later
stages. . . . It is primarily for this reason that the old socialist tradition in discussing income is dying out. Conditions no longer call for deep-seated and widespread social change.”
¹⁴
As evidence of this, the report cited the fact that in 1963 only 11 percent of families were living on less than $2,000 per year, whereas in 1929 fully 30 percent of families were making do on an income that equaled that amount in 1963 dollar values.
¹⁵

Yet despite the Pollyanna-ish assurances of the Chamber, growing inequality and accompanying upheaval
are
precisely what we are currently living through. By 2009, according to U.S. Census Bureau numbers, more than fifteen million households, totaling approximately 13 percent of all homes in the country, were living on less than $15,000 per year, roughly equivalent to what $2,000 was worth in 1963. And during the years that followed, things only got worse. “The inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to just under $15,000,” CBS News reported in December 2011. “And earnings for the next 20 percent have remained flat at $37,000.”
¹⁶
In other words, nearly fifty years after the Chamber’s declaration that a rising tide was lifting all boats, a considerably larger percentage of Americans were concentrated at the bottom of the economy than was the case during John Kennedy’s presidency—not exactly a ringing vote of confidence in its analysis of economic trends.
¹⁷
During the boom years of the early part of the twenty-first century, for example, the number of Americans living in poverty
grew
by six million; during the bust years that followed that boom, another nine million people were impoverished, while at the top of the economy the tremendous accumulation of wealth continued apace.
¹⁸
The Census Bureau calculated that more than twenty-three million households had incomes of more than $100,000 per year.
¹⁹
What was being hollowed out was the middle.

Today, the most affluent 1 percent of the population control fully 40 percent of the country’s wealth, the economist Joseph Stiglitz wrote in
Vanity Fair
in 2011.
²⁰
And during the past three decades,
the more rarified one’s position on the income scale is, the more one has been able to accumulate a disproportionate share of the nation’s treasure. Economist Emmanuel Saez of the University of California, Berkeley, and his coauthor, Thomas Picketty, of the Paris School of Economics, have calculated that from the mid-1960s through the early 2000s, the share of national income controlled by the top 0.01 percent of Americans increased from a little more than 0.5 percent to approximately 3 percent, reaching levels last seen during the heyday of the Roaring Twenties. In other words, about 30,000 Americans control one in thirty of the dollars circulating among a population of roughly 300 million people.
²¹

During the early years of the recession, the wealth of the top strata of the population
did
decline somewhat, as stock values and other assets took a hit. By 2012, however, income for America’s new elites had roared back to at least pre-recession levels. Saez and his colleagues at UC Berkeley estimated that fully 93 percent of income gains in 2010 went to the country’s top 1 percent.
²²
If you were in that top 1 percent in 2010, Saez calculated, you could expect to see your income increase by 11.6 percent. If you were in the bottom 99 percent, your income would have grown by only 0.2 percent.

Not surprisingly, the further down the income spectrum one goes, the worse one’s prospects for economic advance become. In fact, for the bottom 23 percent of earners, real wages, adjusted for inflation, are much lower today than they were in 1979. Even more starkly, according to a 2011 CBS News report, close to half of all Americans at that time were either living at or below the poverty line, or just slightly above it, living off of amounts meager enough to qualify in government surveys as being “low income.”
²³

That a country as wealthy, as technologically advanced, and as creative as America in the twenty-first century should be seeing an explosion in the numbers of residents going hungry and homeless; an increase in mortality rates among those at the bottom of the economic ladder (in 2005, the United Nations’
Human Development Report
concluded that America’s infant mortality rates had been on
the rise since the beginning of the century);
²⁴
public schools underfunded to the point of collapse; and plummeting standards of living for tens of millions of workers has precious little to do either with the hand of God or the blind forces of nature. Instead, this situation has far more to do with the emergence of a set of political and economic priorities that privilege wealth accumulation for the few over the well-being of the many.

We will get far further in understanding twenty-first century American poverty if we consider how entrenched the new plutocracy, and its economic agenda, has become than if we look solely for explanations regarding the purported intellectual, economic, and cultural inadequacies of the poor. It is, after all, surely no coincidence that the United States, the country with the wealthiest elite in the Western world, and an economy that has averaged 2.2 percent productivity gains each year since 1947,
²⁵
also has vastly higher poverty rates than its peer nations.

Shortly after the financial crisis hit, the OECD published a table on income distribution: Even after government benefits were factored in, more than 11 percent of the American population had incomes of only 40 percent of the median income in the country. In Great Britain, that number was only a little above 6 percent; Germany’s number was a little more than 4 percent. In Sweden it was 3.8 percent; and in the Netherlands, 2.7 percent.
²⁶
Even Greece and Ireland, two countries tottering toward bankruptcy, had a far lower percentage of their populations living significantly below the poverty line than did the United States.

“What’s most striking in the past few years is the absolute absence of discussion of poverty on the public agenda,” noted University of California at Santa Barbara historian Alice O’Connor, who has built her career studying Americans’ shifting attitudes toward poverty over the centuries. “It’s just not there. The great shift is that
we’ve come to accept very high levels of poverty as either inevitable or the way things should be.” For O’Connor, the callous approach to poverty wasn’t unprecedented in American history, but it
was
something that found equivalents only distantly back in time. “You’d have to cycle back to the Gilded Age,” in the latter decades of the nineteenth century, “to find a similarly untroubled acceptance of mass poverty,” she believed. These days, said O’Connor, politics has become increasingly reliant on big-dollar contributors, and in so becoming has lost touch with the expectations of the vast majority of Americans who cannot afford to buy access to the political process. “The narrow politics of winning elections,” she averred, “has less and less to do with connecting with what people really care about, and more to do with raising money and buying media and these kinds of things.”