‘Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.’ John Steinbeck
This quote, among others, explains why, in spite of gross socio-economic inequality, there has not been any great upheaval in the United States. The “American Dream” excuses the inequality, holding up the carrot of class aspirations, effectively anticipating any disillusionment with the status quo. The “greatest nation on earth” is also a nation that is built upon gross injustices and inequalities.
The American Dream, Deferred
The New York Times reported on the rise in poverty in the US. According to 2010 Census data, 1 in 6, or 15.1% of Americans live in poverty. This is the highest level since 1993. In 2010, 2.6 million people slipped below the poverty line, joining the 46.2 million who were already living below the poverty line. This counters the trope of America as the “land of opportunity,” where everyone has a chance to ascend the socio-economic ladder. In fact, among OECD (Organization for Economic Cooperation and Development) nations, the US has the lowest levels of socioeconomic ascension. In a report on “Intergenerational Social Mobility across OECD Countries”, findings indicated that: ”To a large extent weak social mobility signals a lack of equal opportunities.”
The Economic Policy Institute, a Washington think-tank, argues that between 1979 and 2000 the real income of households in the lowest fifth (the bottom 20% of earners) grew by 6.4%, while that of households in the top fifth grew by 70%. The family income of the top 1% grew by 184%—and that of the top 0.1% or 0.01% grew even faster. Back in 1979 the average income of the top 1% was 133 times that of the bottom 20%; by 2000 the income of the top 1% had risen to 189 times that of the bottom fifth. (The Economist)
Contrast this with the change in middle and working-class American family incomes between 2007 and 2010: the bottom 20% (quintile) saw a 11.3% DECREASE in median income, compared to a 6.6% decrease for the middle quintile, and a 4.5% decrease in the upper quintile.
Median working-age household income dropped $6,298 between 2000 to 2010. Among African-American households, median income dropped $5,494 in the same period. That figure was $4,235 for Hispanic households. This particularly compelling when one considers the widening racial wealth gapin the US. The median net worth of white households is 18 times that of Hispanic households, and 20 times the median net worth of African-American households.**
The reasons for this disparity are historical. In the 19th century while most of the ancestors of African-Americans were property, the Homestead Act granted 160 acres of free land to any white settler west of the Mississippi River (this resulted in the mass displacement of Native Americans & wholesale ecological destruction). After emancipation, share-cropping, crop liens, cycles of credit, and the burgeoning prison complex were designed to limit the physical and socio-economic mobility of African-Americans.
During the 1st and 2nd Great Migrations, African-American descendants of enslaved Africans migrated Northward and Westward in search of more opportunities, only to face employment and housing discrimination. Housing discrimination took the form of Restrictive Covenants, private agreements stipulating the exclusion of racial groups from residential areas via home sales.*** Also, red-lining, where banks denied services or increased the cost of home loans in order to exclude non-whites, and maintain racial homogeneity among residents. 60 years after the US Supreme Court ruling for Shelley v. Kraemer (1948), which affirmed that restrictive covenants:
“private agreements to exclude persons of designated race or color from the use or occupancy of real estate for residential purposes do not violate the Fourteenth Amendment, but it is violative of the equal protection clause of the Fourteenth Amendment for state courts to enforce then.”
We see an increase in subprime mortgages geared toward Blacks and Hispanics. Approximately 80% of these subprime mortgages were adjustable-rate mortgages, which had higher rates of delinquency and default due to hikes in interest rates. The Subprime Mortgage Crisis of 2007 had a disproportionate effect on Blacks and Hispanics because their net worth is often tied to a house. What basically happened here was reverse-redlining- banks specifically targeted “risky borrowers” with lower incomes and lower chances of timely repayment, taking advantage of interest payments and late fees.
Employment discrimination along the lines of race is intimately tied to hindered educational attainment at the elementary, secondary & post-secondary level among people of color. History shows us that economic hardship has a harsher and more immediate impact on workers and families with low education attainment- especially in the American context, where there are few, if any, supporting structures to keep working-class people out of abject poverty. (In fact, the United States has effectively criminalized poverty, incarcerating millions of impoverished Americans. Examples of this include the imprisonment of homeless populations for “loitering.”) The Bureau of Labor Statistics data for August 2011 showed that the number of unemployed Americans remained unchanged at 14 million, and the number of the long-term unemployed (jobless for 27+ weeks) remained unchanged at 6 million (accounting for 42.9% of the unemployed). In July and August 2011, over 56,000 government jobs were cut, and this has a disproportionate affect on African-Americans, among whom the government is the largest employer. According to available data from the Bureau of Labor Statistics, the unemployment rate for African-American men climbed from 17.2% to 18% between August 2010 and August 2011. Compare this to white men’s unemployment rate dropping from 8.9% to 7.7% in the same period. Youth unemployment among African-Americans is also quite high.
This has affected youth and young adults also. The median income of Americans ages 15-24 dropped 9 percent last year. 5.9 million Americans between ages 25 and 34 live with their parents, up 26% from before the recession. Between August 2010 and August 2011, Black youth unemployment rose from 45.7% to 46.5%, while white youth unemployment dropped from 23.7% to 23.0% in the same period.
Also note that discrimination against unemployed job seekers on the part of employers is an ever-present reality. The New York Times ran a piece on this on July 26, 2011, entitled “Discriminating Against the Unemployed.” Essentially, job boards often feature job listings asking specifically for applications from currently-employed job seekers and recently-laid-off job seekers. This policy expressly excludes long-term unemployed job seekers, possibly eliminating more experienced and more skilled workers from the pool. Earlier this month, President Obama backed a bill that would bar discrimination against unemployed jobseekers. The bill, introduced on July 12, 2011 by Connecticutt Representative Rosa L DeLauro, can be seen here.
What is the Poverty Line? Who is Counted?
The poverty line in 2010 was set at $22,113 for a family of four. For an individual, that number was $11,139. Now let’s ask this question: WHO is left out of the sample pool? Undocumented workers, homeless populations, and prison populations come to mind. While many impoverished people in the US are visible- there are countless made invisible, erased. In fact, this erasure is strategic. In Arizona, the controversial Senate Bill (SB) 1070, which further criminalized undocumented workers and immigrants, was backed by private prisons. SB 1070, enacted by Arizona governor Jan Brewer in August 2010, effectively allows law enforcement agencies to identify, prosecute and deport undocumented immigrants. Unsurprisingly, Arizona’s prisons have filled with undocumented workers.
Private prisons owned by the CCA (Corrections Corporation of America), The Geo Group and Management and Training corporations profit about $5 Billion annually from the incarceration of Blacks, undocumented workers and women- the 3 fastest growing demographics among prison populations. Annually, they spend about $20 million lobbying state legislators for stringent anti-immigration bills in order to increase immigrant prison populations, thus profits. Please note that the 13th Amendment of the US Constitution abolished slavery, except as punishment for crime:
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Hunger in America:
1 in 7, or 43 million Americans depend on federal food subsidies to eat. Up to 1 in 4 children in the US go hungry. The Electronic Benefit Transfer (EBT) card is a lifeline for the fortunate hungry and un(der)employed who are able to qualify for food stamp benefits. However, while hungry bellies are filled, JP Morgan Chase’s coffers are filled.
“JP Morgan Chase provides food stamp debit cards in 26 states and the District of Columbia. The firm is paid per customer, and in the state of Indiana, JP Morgan earns $186,000 dollars month for its food debit card service. Critics say JP Morgan is making a fortune off American poverty.”
JP Morgan Chase has also saved money by outsourcing their call centers to India, where workers have few protections, and wages are as low as $3.50/hour. 14 million Americans are unemployed, and many more are underemployed and underpaid jobseekers trying to make ends meet, while multinational corporations outsource their operations to countries with low or nonexistent union presence and a dearth of labor laws protecting workers’ rights. This is the thanks that the US gets for 30 years of systematic and wholesale deregulation of business and neoliberal politicking overseas.
What was the point of this piece?
My point was to name the problem. The first thing a doctor or a nurse practitioner does is identify and name the problem. You can’t address social ills without first naming the problem.
** [See: Report: Rakesh Kochhar et al., Twenty-to-One: Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics (Pew Research Center 2011). ]
*** Check out James Loewen’s Sundown Towns, New York: The New Press, 2005