BY: Jack M.
“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” Franklin Roosevelt.
First off, this is not an article about ganging up on America. It’s not about U.S. bashing, and it’s not about pointing the finger at what may be the greatest nation on Earth. Canada, the United Kingdom, Japan and Australia – all members of the so-called First World – all grapple with this societal blight, and many nations around the world fare a lot worse than the United States. But here’s the thing – the United States is arguably the most powerful nation in the world. It’s the wealthiest nation in the history of our planet. Its economy is big enough to finance the exploration of space, the most powerful military complex in history and – perhaps most derisively – the bailout of some of the largest corporations and financial institutions within its own borders. It has less than five percent on the planet’s population but is responsible for about 20 percent of its GDP, and it has every amenity imaginable. And yet, according to the CIA’s World Fact Book, poverty in the U.S. – with its attendant maladies of homelessness and hunger – is greater than that in Ireland, Serbia, Tunisia and Vietnam, to name just a few. And if the CIA’s data is correct, it’s even higher than Russia and China. And that is – or should be – the embarrassment.
The Oxford English Dictionary defines poverty as “the condition of having little or no wealth or few material possessions; indigence, destitution.” Wikipedia characterizes poverty as “a state of deprivation or a lack of the usual or socially acceptable amount of money or material possessions.” Poverty has always existed in the United States – and again, to be fair, it has always existed in all ages and in all nations – but for reasons of convenience, the modern story of poverty in the United States began a little over 50 years ago with President Johnson’s War on Poverty. “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it,” Johnson said. And to suggest that this war is even close to being won is an exaggeration that’s difficult to deny. But why? Income inequality – the ever-widening disparity between the wealthy and the poor? Politics? I don’t think it takes a rocket scientist, or a social scientist or an economist to see that these two underlying causes are not just intertwined, but inextricably intertwined. So, the answers are yes and yes, but the following numbers and statistics will speak for themselves.
The U.S. Department of Health and Human Services has issued the following guideline for the definition of poverty in the 48 contiguous states for the year 2015. The amounts shown represent annual income before paying taxes, and the threshold numbers are somewhat higher for Alaska and Hawaii. And the U.S. Census Bureau has a similar set of guidelines. If a family’s total annual income is below the threshold, all members of that family are considered to be in poverty, and are lacking the income and means to meet the basic needs for food, clothing, shelter and health care.
|Persons in family/household||Poverty guideline|
In its simplest form, income inequality is a measure of the fairness – or the unfairness – of how a nation’s citizens share in the total income of that nation. It is a measure of how unequally income is distributed across the various strata of society, from the uber-wealthy to the indigent. It is a measure of the gap between the rich and the poor. There are a number of institutions that monitor and report on the income inequality of the world’s nations – the United Nations, the World Bank and the International Monetary Fund (IMF) to name just a few – but the most common and perhaps the best generally-accepted metric is what is known as the Gini Index (sometimes referred to as the Gini Coefficient). The Gini Index is a number between zero and one (or sometimes between zero percent and 100 percent), where zero represents the situation in which everyone shares equally in a nation’s income (perfect equality), and one (or 100 percent) represents the polar opposite, where a small handful of people receive all the income and everyone else receives none (perfect inequality). A measure of zero or one are, of course, virtually impossible, but the following Gini Index graphic for the year 2014, based on World Bank data, will give a very good idea of where the United States stands vis-à-vis the rest of the world.
The 2014 Gini Index of the world’s nations strongly suggests that the gap between America’s rich and its poor is significantly wider than most countries in Europe, Canada, Australia and even some countries in Africa.
The U.S. fares much better than most of South and Central America and many of the counties in southern Africa, but compared to Canada, Australia and most of Europe, it has fallen behind, and fallen behind significantly in some cases. The previously-mentioned World Fact Book suggests that about 70 percent of the countries in the world have a better Gini Index rating than the United States. But even worse than that, according to studies by the two economists Thomas Piketty and Emmanuel Saez, the gap between the incomes of America’s rich and its poor has been widening for more than 30 years. A report by Saez points out that in 2014, 20 percent of the country’s total income went to one percent of its earners, while a generation ago that same income went to 10 percent of its earners. To put that into some perspective, if income distribution in the U.S. today was the same as it was 30 or so years ago, every family in the bottom 80 percent of earners would have, on average, approximately $10,000 additional annual income. There are enough books, reports, charts, graphs and analyses on this topic of income inequality to fill a medium-sized library, but a study done by the Congressional Budget Office – a non-partisan U.S. government agency – perhaps wraps it up best: the 2011 report pointed out that for the period 1979 to 2007, the top one percent of earners had their net incomes increase by 275 percent, while the middle 60 percent of earners had their net incomes rise by a paltry 40 percent.
The gap between the incomes of America’s rich and its poor has been widening for more than 30 years.
And this brings me to the central themes of the article – poverty, homelessness and hunger in America. Putting aside for a moment the indelible fact of the increasing gap between America’s rich and its poor, the vast majority of America’s citizens are, of course, not living in poverty; they are not homeless, and they don’t go to bed, or to school, hungry. The numbers do vary slightly from year to year, and from study to study, but for about one American in seven – that’s about 45 million people – who are living below the poverty line, it’s a race to the bottom. Poverty is the source of many of the social problems that beset these people, with homelessness and hunger frequently being the immediate fallout. A study by the National Coalition for the Homeless reported that on any given day, there can be as many as 600,000 Americans who don’t have a home, with a full one-third of these under the age of 24. They sleep on park benches, back alleys, under bridges, in bus and train terminals and, if they are lucky, in shelters – disillusioned, disenfranchised and disconnected. And over the period of one year, as many as one-and-a-half million Americans will find themselves homeless at one time or another. But while the problem of homelessness is overt and visible, the problem of hunger goes largely hidden and unnoticed. The United States Department of Agriculture issued a recent report that highlights the problems of food security, and the numbers are disturbing. Between what the USDA refers to as “low food security” and “very low food security”, in 2014 there were in excess of 17 million American households whose members had no choice but to compromise and/or reduce their food intake because of lack of money – they either skipped meals or did not know where their next meal was coming from – forcing them in many cases to rely on the Supplemental Nutrition Assistance Program (formerly known as the Food Stamp Program), food banks or local community programs. And unfortunately, the problems of poverty don’t end with homelessness and hunger; health, socio-economic mobility, life expectancy, and education are all victims of this unholy covenant. Poverty gives rise to an increase in crime and incarceration rates, but its effects on children and the elderly are particularly offensive. The American non-profit agency, Feeding America, has reported that in the year 2014, more than 15 million children under the age of 18 in the United States of America, and nearly 5 million over the age of 65, were living in poverty. One can only imagine the quizzical look on the face of an eight-year-old girl opening her lunch box to find a couple of cookies, while her classmate has an apple, a sandwich and a carton of juice; or the 85-year-old widower forced to turn the heat off on a January night in Chicago. Cringe if you will, but if you’re in New York City, or Los Angeles or Houston, or any of the other great cities that make up your great nation, it’s real, it’s here, it’s now. And it’s America.
It’s all well and good, of course, to toss around a few statistics and flash a few graphs, but the all-important question that needs addressing is why is there income inequality in the first place, and why does it seem to be particularly prevalent in the U.S., and getting worse? The answers to these questions are as complex as the opinions of so-called “experts” are varied. Globalization, the exporting of American jobs, free market capitalism and runaway compensation packages for executives are frequently quoted as underlying causes. It’s all too easy to dismiss these as universal problems that the U.S. doesn’t have complete control over, and while this may indeed be true to a certain degree, America’s political machinery surely does have control over a deteriorating minimum wage, a biased tax system, a floundering labour movement and an education system that favours the well-off.
Based on data obtained from the U.S. Department of Labor, a 2015 report by the Economic Policy Institute has shown that over the last 40 or so years, the average minimum wage (it varies somewhat from state to state) in America has declined vis-à-vis the average American worker’s wage.
In summary, and while it may be something of an over-simplification, income inequality begets homelessness and food insecurity, which in turn beget compromised education and job opportunities, which in turn beget limited socio-economic mobility, which in turn begets more income inequality. It’s a vicious cycle. Historians have often cited the ever-widening rift between the social classes as one of the underlying causes of the collapse of the Western Roman Empire. “Those who cannot remember the past are condemned to repeat it” are the words echoed by the philosopher George Santayana, and if history is any indicator, the path that America is on could be a slippery one, leading inevitably to a fractured citizenry. Few of those who live in poverty are there by choice; they are there by circumstance and political short-sightedness. I can only suggest that you grab yourself a large megaphone and let your congressmen and congresswomen know what needs to be done.