Posts Tagged ‘poor’

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The United States is characterized by increasing class segregation—as both a condition and consequence of growing inequality.

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We all know that the share of income going to the top 10 percent has steadily increased since the mid-1970s (from an already-high 33.41 percent in 1976 to an astounding 49.85 percent in 2014). That’s because a tiny group at the top has been appropriating a growing surplus and then distributing a large share of it to the other members of the top decile.

Now we know, thanks to recent research by Sean F. Reardon and Kendra Biscoff (pdf), that rising income inequality in the United States has been accompanied by increasing residential segregation by income:

Income segregation has increased over the last four decades, and has continued to increase in recent years. In large metropolitan areas (the 117 metropolitan areas with populations of 500,000 or more), the proportion of families living in neighborhoods with median incomes well above or below the median income of their metropolitan area has grown rapidly since 1970. . .In 1970, only 15% of all families lived in such neighborhoods, while 65% lived in middle‐income neighborhoods. By 2012, over one third (34%) of all families lived in either rich or poor neighborhoods, more than double the percentage in 1970. Over the same time period the proportion living in middle‐income neighborhoods declined from 65% to 40%.

And, they admit, this growing class segregation is not going to be easy to break:

In an era of very high income and wealth inequality, families have very different resources to spend on housing, and the housing market responds to this inequality in ways that exacerbate segregation. Given the importance of neighborhood contexts for children’s opportunities, and for shaping the experiences of the affluent, rising income segregation will likely only further exacerbate the economic inequality that has produced it. This self‐reinforcing cycle—where inequality begets segregation and segregation fosters inequality—will be hard to break.

Let’s call it the vicious cycle of class inequality and segregation.

As Thomas B. Edsall explains, that vicious cycle is both caused and reinforced by fundamental changes in the American social order and political system: from the fact that the increasingly segregated well-to-do have found ways of supporting and taking advantage of key services (health, education, job search and other opportunities) to aid themselves and their own children to the fact that (as Bernie Sanders recently reminded us) the top decile has been able to exercise much more influence over politics and policy (through voting and political donations) than its share of the electorate would suggest.

And, as we’ve seen in recent months, the combination of inequality and segregation has exacerbated tensions within the Democratic Party:

The “truly advantaged” wing of the Democratic Party. . .has provided the Democratic Party with crucial margins of victory where its candidates have prevailed. These upscale Democrats have helped fill the gap left by the departure of white working class voters to the Republican Party.

At the same time, the priorities of the truly advantaged wing — voters with annual incomes in the top quintile, who now make up an estimated 26 percent of the Democratic general election vote — are focused on social and environmental issues: the protection and advancement of women’s rights, reproductive rights, gay and transgender rights and climate change, and less on redistributive economic issues. . .

Sanders’s extraordinary performance to date. . .points to the vulnerability of a liberal alliance in which the economic interests of those on the top — often empowered to make policy — diverge ever more sharply from those in the middle and on the bottom.

As the influence of affluent Democratic voters and donors grows, the leverage of the poor declines.

Meanwhile, the vicious cycle of class inequality and segregation makes the rich richer, everyone else poorer—and the yawning gap between them continues to grow.

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In the current century, just as at the beginning of the last one, the dominant discourse of the poor has been plainly wrong.

As Katha Pollitt asks (in her review of Matthew Desmond’s Evicted: Poverty and Profit in the American City), 

What if the problem isn’t that poor people have bad morals – that they’re lazy and impulsive and irresponsible and have no family values – or that they lack the skills and smarts to fit in with our shiny 21st-century economy? What if the problem is that poverty is profitable?

As it turns out, there is a lot of money to be made from “a dilapidated trailer park or a black neighbourhood of ‘sagging duplexes, fading murals, 24-hour daycares’.”

Tobin Charney makes $400,000 a year out of his 131 trailers, some of which are little better than hovels. Sherrena Tarver, a former schoolteacher who is one of the only black female landlords in the city, makes enough in rents on her numerous properties – some presentable, others squalid – to holiday in Jamaica and attend conferences on real estate.

And, in turn, poor people are held back from the rent they’re forced to have the freedom to pay.

The main condition holding them back, Desmond argues, is rent. The standard measure is that your rent should be no more than 30% of your income, but for poor people it can be 70% or more. After he paid Sherrena his $550 rent out of his welfare cheque, Lamar had only $2.19 a day for the month. When he is forced to repay a welfare cheque he has been sent in error and falls behind on rent, he sells his food stamps for half their face value and volunteers to paint an upstairs apartment, but it is not enough. People such as Lamar live in chronic debt to their landlord, who can therefore oust them easily whenever it is convenient – if they demand repairs, for example, like Doreen, or if a better tenant comes along. Sherrena liked renting to the clients of a for-profit agency that handles – for a fee – the finances of people on disability payments who can’t manage on their own. Money from government programmes intended to help the poor – welfare, disability benefits, the earned-income tax credit – go straight into the landlord’s pocket and, ironically, fuel rising housing costs. Public housing and housing vouchers are scarce. Three in four who qualify for housing assistance get nothing.

There continues to be an enormous amount of poverty in this rich nation—and the system is maintained both because there’s profit to be made by slumlords and because evictions serve to destroy the lives of the poor and the communities they live in.

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Mark Tansey, “The Myth of Depth” (1984)

The original title of this post was, “What do liberal economists want?”

So, what is it they want? According to their public pronouncements, not a whole helluva lot.

The liberal mainstream economists who have been attacking Bernie Sanders’s proposals and Gerald Friedman’s analysis of those proposals have acknowledged they actually support some of Sanders’s proposals.

Like what? Well, Christina D. Romer and David H. Romer (pdf) “enthusiastically support. . .greater public investment in infrastructure and education.” And Paul Krugman, for his part, makes the case for more public construction.

That’s pretty much it.

The fact is, the arrogant liberal response to Sanders and Friedman carried out in the name of “responsible arithmetic,” which has created an “illusion of consensus,” has been been both timid (in terms of actual policies) and shallow (in terms of what it focuses on).

Liberals always want more public investment in infrastructure and education, because everyone wins—and no hard choices need to be made.

At the same time, they claim they’re the only ones doing the hard, deep economic analysis. But their methods and models only serve to make invisible what is really going in the economy, just below the surface.

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Take the recent kerfuffle about Friedman’s analysis (pdf). The attack by liberal mainstream economists has been all about the amount and level of economic growth—nothing at all about the kind of growth. And that, in the end, is what Sanders’s proposals and Friedman’s analysis are really focused on.

As everyone knows, the growth we’ve seen in recent decades—both before and after the Great Recession, has benefitted only a tiny group at the top. The incomes of everyone else have either stagnated or fallen further and further behind.

And what about going forward? Unless there’s a fundamental reorientation in the way the economy is organized, more growth—even with more public investment in infrastructure and education—will continue to benefit only the small group at the top of the heap.

What liberal mainstream economists don’t see—and don’t want the rest of us to wrap our heads and hearts around—is that growth, by itself, has only a small effect on incomes for poor and working Americans. It doesn’t raise wages, it doesn’t reduce poverty, and it doesn’t close the gap between productivity and wages. Not in any significant fashion. And it will probably make the distribution of income even more unequal than it is now.

That’s why increasing numbers of people have become disenchanted with the “liberal fantasy” and have begun to look elsewhere—below the surface—to ask new questions about how the economy is currently organized and how it might be reorganized to actually benefit poor and working people.