Posts Tagged ‘poverty’

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In his Prison Notebooks, Antonio Gramsci wrote: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum morbid phenomena of the most varied kind come to pass.”*

The world is once again living an interregnum. It is poised between the failed economic model of recovery from the crash of 2007-08 and the birth of a new model, one that would actually work for the majority of Americans.**

Morbid symptoms abound, including slow economic growth, persistent poverty, and obscene levels of inequality. Perhaps even more significant, especially at this point in the so-called recovery, when according to mainstream economists and policymakers full employment has been achieved, workers’ wages are actually declining.

According to the latest release from the Bureau of Labor Statistics (pdf), both real average hourly and weekly earnings for production and nonsupervisory employees decreased 0.4 percent from December to January. And, over the course of the past year (January 2016 to January 2017), real average hourly earnings for all employees failed to increase (remaining at $10.65 (in constant 1982-1984 dollars) and real weekly earnings actually decreased by 0.4 percent (from $368.66 to $366.32).

That’s what happened under the last administration, based on an economic model that is dying. And there’s nothing in the new administration’s proposed economic policies that promise any better. In fact, the likelihood is that things will stay the same or get even worse for most American workers in the next four years.

Only large corporations and wealthy individuals will likely gain from promised changes in business regulations and tax policies.

That’s a scenario that pretty much guarantees the appearance of even more morbid symptoms in this interregnum.

 

*The passage is from Notebook 3 (pp. 32-33), written in 1930, which appears in the second volume of the English edition of the full Prison Notebooks, edited and translated by Joseph A. Buttigieg.

**Nicholas Eberstedt [ht: bg], of the American Enterprise Institute, argues the current model failed around the turn of the century, with warning signs even earlier: “For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then—and broke down very badly.” David Brooks, as it turns out, concurs.

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Greece is a perfect example of how to turn a bad economic situation into something even worse. As Reuters reports,

Rescue funds from the European Union and International Monetary Fund saved Greece from bankruptcy, but the austerity and reform policies the lenders attached as conditions have helped to turn recession into a depression.

As a result, the poverty rate in Greece almost doubled (between 2008 and 2015), rising from 11.2 percent to 22.2 percent.

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And average (per adult) GDP has fallen below what it was three decades ago.

Meanwhile, IMF and European institutions are demanding further austerity measures (equivalent to 2 percent of gross domestic product) before agreeing on a new deal to aid Greece.

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Before the new Republican administration has a chance to implement its campaign promises and dismantle the social safety net, it’s useful to remember who in fact is assisted by the existing programs.

According to a new study by the Center for Budget and Policy Priorities, people of all races and ethnic groups who lack a bachelor’s degree receive significant help from the safety net. But white working-class adults stand out.

Among working-age adults without a college degree, 6.2 million whites are lifted above the poverty line by the safety net — more than any other racial or ethnic group. In addition, the percentage of people who would otherwise be poor that safety net programs lift out of poverty is greater for white working-age adults without a college degree than for other adults without a college degree.

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But we also need to remember how brutal U.S. capitalism is, before government programs are taken into account.

In particular, as can been seen in the table above, the poverty rate before taking income from government programs into account is more than three times higher among working-age adults without a college degree (30.4 percent) than among other adults (8.7 percent). And while poverty rates are lower for white adults without a college degree (24.3 percent) than for other adults without a degree (43.1 percent for Blacks and 36.2 percent for Hispanics), 1 in 4 white adults who lack a degree is poor before accounting for government benefits and tax credits.

The fact is, government anti-poverty programs are so important—for white, Black, and Hispanic Americans—precisely because capitalism in the United States generates so much poverty among its workers, especially those without a college degree.

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Like economic inequality, murder inequality in America is stark and obscene.

According to a new study by the Guardian,

In 2015, Chicago had the highest total number of gun homicides of any city in America. . .

Just 13% of census tracts in Chicago saw multiple gun murders in 2015, and these tracts were responsible for 65% of the city’s gun homicides.

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In that same year, there were more than 13,000 gun homicides throughout the United States. But half of those deaths were in just 127 cities, which contain almost a quarter of the population.

And it gets worse:

Even within those cities, violence is further concentrated in the tiny neighborhood areas that saw two or more gun homicide incidents in a single year.

Four and a half million Americans live in areas of these cities with the highest numbers of gun homicide, which are marked by intense poverty, low levels of education, and racial segregation. Geographically, these neighborhood areas are small: a total of about 1,200 neighborhood census tracts, which, laid side by side, would fit into an area just 42 miles wide by 42 miles long.

The problem they face is devastating. Though these neighborhood areas contain just 1.5% of the country’s population, they saw 26% of America’s total gun homicides.

Economic inequality means a small minority at the top captures the lion’s share of income and wealth. Murder inequality is equally grotesque—for a small minority at the bottom.

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It sure looks like a recovery: consumer confidence, corporate profits, and the stock market are all up. Way up over their Great Recession lows, as is clear from the chart above.

But the U.S. Conference of Mayors [ht: ja] is also reporting an increase in the demand for emergency food assistance. Forty-one percent of surveyed cities reported that the number of requests for emergency food assistance increased over the past year, while 71 percent of the cities reported an increase in the number of people requesting food assistance for the first time.

From the report (pdf):

Increased requests for food assistance were accompanied by more frequent visits to food pantries and emergency kitchens. Forty-one percent reported an increase in the frequency of visits to food pantries and/or emergency kitchens each month. . .

When asked to identify the three main causes of hunger in their cities, 88 percent named low wages; also 59 percent said high housing costs and poverty. Forty-one percent cited unemployment and 23 cited medical or health costs.

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Since the end of the recession, wage increases (almost 23 percent, in nominal terms) have not been able to keep pace with the increase in rental rates for housing (which are up 26 percent).

And the situation is even worse for extremely low-income households, according to the National Housing Trust Fund (pdf). The more than 10 million extremely low-income households accounted for 24 percent of all renter households and 9 percent of all U.S. households—and they face a shortage of more than 7 million affordable rental units. Thus, 75 percent of extremely low-income households are severely cost-burdened, spending more than half of their income on rent and utilities. And that means they don’t have enough money left over for food.

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Which is why cities across the country, from Charleston to Seattle, have had to increase the amount of food they distribute—7 years into the so-called recovery.