Posts Tagged ‘poverty’

What recovery?

Posted: 16 September 2015 in Uncategorized
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The United States is more than six years into the officially designated and much-vaunted economic recovery from the Great Recession. But most Americans wouldn’t know it.

According to the latest report from the Census Bureau (pdf), median household income was $53,657 in 2014, not statistically different in real terms from the 2013 median of $54,462. This is the third consecutive year that the annual change was not statistically significant, following two consecutive years of annual declines in median household income. As a result, in 2014, real median household income was 6.5 percent lower than in 2007, the year before the Great Recession began.


Meanwhile, the official poverty rate in 2014 was 14.8 percent, meaning there were 46.7 million people living at or below the poverty line. Neither the poverty rate nor the number of people in poverty was statistically different from the 2013 estimates. Nor was poverty rate in 2014 for children under age 18 (21.1 percent) or their number (15.5 million). Both rates in 2014—the overall poverty rate and the child poverty rate—were significantly higher than they were in 2007.

And so I repeat my question: what recovery?


We always talk about $2 a day (the World Bank’s cutoff point for poverty around the globe) as if the problem were “over there” (e.g., the fact that nearly half the world’s population, 2.8 billion people, survive on less than $2 a day).

That’s nice.



Except, according to CBS Moneywatch [ht: ja], a growing number of American workers are struggling to live on just $2 a day.

The number of U.S. residents who are struggling to survive on just $2 a day has more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation. . .

The measure of poverty isn’t arbitrary — it’s the threshold the World Bank uses to measure global poverty in the [developing] world. While it may be the norm to see families in developing countries such as Bangladesh and Ethiopia struggle to survive on such meager income, the growing ranks of America’s ultrapoor may be shocking, given that the U.S. is considered one of the most developed capitalist countries in the world.


Clearly, Pope Francis’s criticisms of capitalism (as I have discussed here and here) have touched a nerve. They certainly have in the case of Harvard’s Ricardo Hausmann, who attempts to argue both that capitalism is not responsible for causing poverty and that more capitalism will eventually eliminate poverty.

Hausmann’s story is a very familiar one. What it comes down to is the idea that the majority of people before capitalism arrived one the scene were poor and as capitalism develops and more and more people became wage-laborers with rising real wages. But areas of the world still remain outside of capitalism and those people will remain poor unless and until capitalism is allowed to fully develop.

It’s a story that is as old as Adam Smith’s Wealth of Nations, and it’s been told and retold by generations of classical and neoclassical economists ever since.

Their story is certainly right about one thing: capitalism does create the promise of ending poverty.

The problem is, their story conveniently overlooks important aspects of the development of capitalism—all the ways capitalism has over the course of its history created more, not less, poverty. I’m thinking of four instances in particular.

First, Hausmann never examines the actual emergence of capitalism, the so-called primary of accumulation of capital, when noncapitalist producers (feudal serfs, members of family and tribal communes, and so on) were dispossessed of their land (as large landowners took possession of their lands) and then forced to have the freedom to sell their ability to work in both rural and urban labor markets.

Second, Hausmann fails to mention the working poor, all those people who work for someone else and yet remain (along with their children), because of low wages and intermittent employment, below the poverty line.

Third, there’s nothing in Hausmann’s story about capitalist instability and all the times (including, most recently, during the Second Great Depression) wage-laborers are thrown onto the unemployment lines and forced (together with their families) to try to survive on food stamps and other poverty-level programs.

Finally, Hausmann presumes all the poor self-employed workers in India and elsewhere somehow exist outside of capitalism, when in fact they are often producing commodities either for capitalist enterprises or for the other workers who are directly employed by those enterprises. They’re not outside capitalism; their work is inextricably connected to how capitalism operates, especially (but certainly not only) in the Global South.

Those are four main ways (and, of course, there are many others, which I don’t have the space to discuss here) capitalism does in fact cause poverty, in both the North and the South, now and over the course of its history

They are the reasons why, as Pope Francis said in a recent speech in Bolivia: “This system is by now intolerable: farm workers find it intolerable, laborers find it intolerable, communities find it intolerable, peoples find it intolerable.”


[ht: ja]

Cities are back on the nation’s radar—as the dynamic location of the “knowledge economy” and the “creative class.”

What, then, about the other cities, the spaces of concentrated poverty, structural racism, and police violence? Well, for the past year, we’ve been learning about some of them: Detroit, Ferguson, and Baltimore.

Still, how are all these other cities—three of which are in New York (Syracuse, Rochester, and Buffalo), according to a new report from the Century Foundation—not on the nation’s radar?



As it turns out, the list of ten metropolitan areas with the highest concentration of Hispanic poverty includes seven of the same areas in the previous list: Syracuse, Detroit, Rochester, Milwaukee, Fresno, Buffalo, and Cleveland.


The concentration of non-Hispanic white poverty, in contrast, is highest in a somewhat different list of metropolitan areas. Detroit, again, and McAllen stand out with more than one-third of their white poor living in high-poverty areas. Detroit, Fresno, and Syracuse are the only metropolitan areas on all three lists, but the concentration of white poverty is much lower in Fresno than in Detroit or Syracuse. Smaller metropolitan areas with fewer than 1 million persons dominate all three lists, but New York, the largest, is included in the list of cities with the highest concentration of white poverty.


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