by Tavis Smiley & Cornel West
There are nearly 150 million persistently poor and near poor people in America who are not responsible for the damage done by the Great Recession. Yet they pay the price. The poor did not create the deindustrialization of America, unmatched corporate profiteering and greed, more than a decade of foreign wars, and unregulated tax benefits for the wealthy. When the largest economic institutions in the world were brought to their collective knees, they went crawling to the government’s doorstep in search of salvation. The government obliged, allowing Wall Street to socialize its failure on the backs of Main Street Americans. The housing and jobs crisis they created fostered a poverty unseen in generations – not just in inner-city ghettos and barrios, but also in suburbs crossing all racial, age, and gender lines. Nearly one-third of the American middle class – mostly families with children – have fallen into poverty.
The aftershock of the current economic downturn in reality was a pre-recession tremor rumbling under the surface for at least the past three decades. While the incomes of the richest one percent of Americans–those making $380,000 or more–has grown 33 percent in the past 20 years, incomes for 90 percent of Americans – the rest of us – has stagnated or declined. According to IRS data, the average income in 2008 was $33,000. Twenty years prior the average American in 1988 earned $33,400, adjusted for inflation.
Despite talk of the job market’s seeming recovery, it remains harder than ever to find work in America. For many, having a job is still not enough. Even as corporate profits have soared (with 40 percent going to big banks), more adults are in poverty than ever before. Middle class jobs are vanishing. In 2011, high-wage industries accounted for only 14 percent of new jobs. Meanwhile, low-wage work made up almost half of all the job growth. Close to 9 million people said they were working part-time only because they could not find full-time employment.
We can no longer judge anyone who is living poor in America as someone who is lazy or who has made a series of avoidable bad choices. Such pat indictments and stereotypes obscure a fundamental truth: There is a poverty of opportunity in America. America no longer has enough work for able-bodied people, and too many working people are not paid a living wage. The catastrophic downward spiral created by the Great Recession and exacerbated by unfair tax exemptions on America’s wealthiest one percent has now sentenced million to the unenviable ranks of those who have lost the ability to earn a living in America.
Indulging our outmoded shame-and-blame poverty paradigms keeps us all peddling acceptable lies about poverty. These lies keep us safe and comfortable and willing to write off poverty as a character failure, or the result of addiction, mental illness, or a criminal past. We want to pin the tail on any available donkey that will keep us from having to define poverty as “being unable to make a living because we can’t find a job.”
For at least the past four decades, most Americans have been able to ignore the poor and deny the extent of poverty. Middle class people would disparage low-income people, low-income people would dog the working poor, and the working poor would bear down on the homeless poor– because we all want to feel like we have some sort of stature in life.
Be it shame and blame or utter disdain, all these attitudes were justified by stereotypes, distortions and lies about the poor. It took the Great Recession to make poverty a real threat to the American psyche. When folk who didn’t fit the stereotype
started losing their businesses, jobs and homes, and had to rely on government handouts, they took notice.
Our fear is that this recognition of poverty is temporary. Headlines trumpeting a boost in manufacturing and exports, or an uptick in the stock market, or lower jobless rates will lull many Americans back to the land of comfortable stereotyping and demonizing the poor.
Superficial snapshot indicators merely postpone a confrontation with the inevitable. America is no longer the indisputable world leader in innovation, manufacturing and production. Worse yet, premature post-recession celebrations mean that we’ve blown another opportunity to really grapple with and solve the over-arching problem of poverty.
Throughout this book, we’ve documented the history of poverty in America and the ambitious starts, abrupt stops, and agonizing downturns in its elimination. Lies have a life of their own. Once circulated, they spread and grow; they become enshrined facts. Just ask President Obama, who spent the majority of his term refuting the vicious lie that he wasn’t born on American soil or that he is a Muslim. And we can definitively say he is not a socialist.
Our intent with The Rich and the Rest of Us is to make us think about the pervasiveness of poverty, its real causation, and the threat is poses to our democracy. We want to raise awareness about poverty and discuss how best to end it– in our lifetime. But before we can launch a strategic plan, we must first address the big lies about poverty.
TEN LIES ABOUT POVERTY THAT AMERICA CAN NO LONGER AFFORD
Poverty is a character flaw. False. Poverty is the lack of money – period. The 150 million Americans in or near poverty are there as a result of unemployment, war, the Great Recession, corporate greed, and income inequality.
American manufacturing is going to bounce back. False. The United States has lost an average of 50,000 manufacturing jobs every month since 2001. Today, China dominates the global manufacturing industry and has no intention of releasing its title as “ the world’s top manufacturer.”
The Great Recession has ended. Not really. Most of the new jobs created since “economic recovery” began have been low-wage occupations. While 60 percent of the jobs lost during the economic downturn were in mid-wage occupations, 73 percent of the jobs added have been in lower-wage occupations such as cashiers, stock clerks, and food preparation workers. The Post Office, once a middle class safe have for non-skilled workers, recently announced a downsizing plan that will eliminate 35,000 jobs. Where and how will those workers be absorbed in the new economy?
Minorities receive the majority of government entitlements. False. Nearly half (48.5 percent) of all Americans live in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Seventy percent of food stamp recipients are white.
No one goes hungry in America. False. According to Feed America, 50 million Americans go to bed hungry and have no idea where their next meal will come from. Visits to food banks have risen 30 percent since the beginning of the recession.
America takes care of its veterans. Not true. The National Coalition for Homeless Veterans estimates that more than 67,000 veterans are homeless on any given night, but about 1.5 million are considered at risk of homelessness due to poverty, lack of support networks, or dismal living conditions and substandard housing.
Government handouts created the nation’s deficit. False. The dominant factors that led to the deficit dilemma were Bush-era tax cuts, wars in Iraq and Afghanistan, the trade deficit, the mortgage crisis, and the Great Recession, not discretionary spending, which amounts to roughly 15 percent.
America’s wealthiest pay more in taxes because they earn more. It’s “truthy” because it obscures the whole truth. The wealthiest wage earners pay about 21.5 percent taxes on their personal income but not on capital-gains earnings. Until the 1990s, the capital-gains tax was 28 percent. Under the Bush-era tax codes, the wealthiest Americans pay only 5.5 percent on capital-gain assets. According to the Obama administration, raising the capital-gains rate to 20 percent for those earning at least $250,000 a year would add another $12 billion to the treasury by 2014.
Medicaid takes care of our seniors’ health-care needs. Not really. Medicaid and higher heath-care expenditures have stretched elderly Americans’ limited budgets beyond their means. Medical care spending for those between the ages of 55 and 64 is almost twice the amount spent by those between the ages of 35 and 44. Rising health-care costs are the major contributor to the rise in bankruptcy filings among the elderly.
Poverty doesn’t exist in the suburbs. False. More and more people living in the nation’s suburbs are losing their economic stability and landing in the ranks of the poor. The number of poor people living in the suburbs of metropolitan areas rose 24 percent–from 14.4 million in 2006 to 17.8 million in 2010. By comparison, the number of poor living in central cities rose by 20 percent.
“In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme.” – Aristotle