I was 6 years old and sitting next to my grandmother at the table where as many as 14 of our extended family members ate our evening meals. I quickly finished my small plate of rice and beans, and said, "But, grandma, I’m still hungry." Everyone went silent. My grandma, Simmalikee, smiled at me, took her plate and scraped off the several spoonfuls she had not yet eaten onto mine. No, I thought. Not your food, grandma. Some other food. I sobbed as she coaxed me to eat each bite. No matter how empty my belly felt, I never again said I was still hungry after a meal.
That was a long time ago, and my grandma has been dead more than 50 years, but I have never forgotten that terrible moment nor what it means to be poor. If there was meat or fish on the table then, it was possum, deer, catfish and the occasional wild hog. In those days, before food stamps, we received surplus government hand-outs every month: rice, beans, cornmeal, lard, cheese and powdered milk. It was never enough, and toward the end of each month, everybody’s portions got smaller.
Since the enactment of what might be called the Third New Deal – LBJ’s Great Society programs: the Food Stamp Act of 1964, Medicare, Head Start, housing assistance, education grants and various other programs – the ravages of widespread poverty in America have been greatly reduced. Ameliorated, but not removed from what the propagandists so regularly call the No. 1 country on the planet. And lately, it’s been getting worse. Not just the ragged poverty many Americans associate with the Great Depression, inner cities or Indian reservations, but also middle-class slippage.
In the past few weeks, both from Republicans and Democrats, we’ve heard a great deal about the travails of Wall Street and the mythical Main Street in the acute economic crisis that has everyone who hasn’t already been downsized or foreclosed sitting on pins and needles. But far less – next to nothing, in fact – has been said about what’s going on elsewhere in America, in side streets and alleys where chronic structural economic problems dating back three decades continue to take a toll.
Today, about 20 percent of America’s children – 13.5 percent of all Americans – live in what is a very flawed federal measure of poverty whose parameters haven’t been changed in more than four decades.
Some 28 million Americans now receive some amount of help from the Food Stamp program, known since the beginning of this month as the Supplemental Nutrition Assistance Program. Soup kitchens everywhere are in tough straits. That’s because food prices have increased at a time when the numbers of people in need have risen and the people who donate, hampered by economic difficulties of their own, are contributing less.
At the other end of the scale, crunched state budgets mean reduced aid to higher education at a time when still-rising tuition costs are making it ever more difficult for people at the lower ends of the economic scale to do what every politician, social reformer and statistic says is a way out of those lower ends: more schooling.
As economists Claudia Goldin and Lawrence Katz observed in The Race between Education and Technology: Sixty years ago, the average tuition at a private college was about 14 percent of the median family income, 4 percent at a public college. These percentages for both types dropped still more until 1980. At that time they began a steep rise. By 2005, the average public college cost 11 percent of median family income, a whopping 45 percent for private colleges. There is financial aid, but not enough, and the system "can be harder to crack than Fort Knox," Katz and Goldin write.
Consequently, an America that once led in the percentage of college graduates each year now falls into the middle of the pack of developing countries, and is dropping.
According to the United Nations Habitat survey released last week, there is growing inequality in U.S. cities that could lead to social unrest and increased premature mortality. The survey of 120 cities found New York to be the ninth most unequal in the world. Inequality levels in Atlanta, New Orleans, Washington, and Miami were similar to those in Nairobi, Kenya and Abidjan, Ivory Coast, levels that are internationally recognized as the "alert" line used to warn governments. And not just cities:
"In western New York state nearly 40% of the black, Hispanic and mixed-race households earned less than $15,000 compared with 15% of white households. The life expectancy of African-Americans in the US is about the same as that of people living in China and some states of India, despite the fact that the US is far richer than the other two countries," it said. ...
"High levels of inequality can lead to negative social, economic and political consequences that have a destabilising effect on societies," said the report. "[They] create social and political fractures that can develop into social unrest and insecurity."
The Gini index (or coefficient) is a measure of income inequality, with 0 meaning everyone has the same income and 1 meaning one person has all income and everyone else has none. As Elizabeth Gudrais noted recently in Harvard Magazine’s Unequal America:
For the United States, the Gini coefficient has risen from .35 in 1965 to .44 today. On the per-capita GDP scale, our neighbors are Sweden, Switzerland, and the U.K.; on the Gini scale, our neighbors include Sri Lanka, Mali, and Russia.
Meanwhile, we’ve got John McCain and Sean Hannity and a whole rancid cabal of the like-minded – all of them beneficiaries of nearly three decades of redistribution of wealth upwards – bellyaching over expressions like "spreading the wealth." People who never imagine or care that when some Americans talk about visiting their broker these days, they mean pawn.
Those some are becoming more numerous as a result of declining earnings. Real weekly wages (real: meaning adjusted for inflation) in the United States rose during every decade from 1830 to 1970. But since 1973, it’s been mostly a downhill slide, with the exception of the late ‘90s.
1964: $686
1974: $714
1984: $632
1994: $589
2004: $630
2008: $612
What this doesn’t show is the growing gap between low and middle and, especially, between low-middle and high-wage earners. Nor does it show the effects in other ways. The fact that families met the lowered wages by having the "bread-winner" take a second or third job, or having another family member, usually female, find work outside the home. While this has both social and economic benefits, it also created problem, among them higher divorce rates, which, in turn, raised the poverty rate for single women, especially single women with children. People also met the reduced real wages problem by borrowing more, or putting daily expenses on credit cards. Consequently, some 15 percent of after-tax personal income now repays debt. Many middle-class people dealt with falling incomes by extracting accumulated equity from their homes. All this merely delayed the structural effects of falling income.
At the top end of the scale, things were moving in the other direction.
As pointed out a year ago by Greg Ip in the Wall Street Journal:
The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.
The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
In the late 1990s, there was a small reprieve from the steady downward flow in average income and inequality gap. That has changed drastically in the past eight years, and it’s been nowhere worse than among African Americans. As reported by the Economic Policy Institute in September:
On all major economic indicators – income, wages, employment and poverty – African Americans were worse off in 2007 than they were in 2000. Although the American economy has grown significantly since 2000, African Americans have not shared in America’s prosperity. The current economic downturn and the subprime mortgage crisis bode ill for the immediate future for African Americans.
The overall social well-being of African American communities depends on job growth. The historical evidence shows clearly that job and wage growth are the keys to reducing black poverty. Without reductions in child poverty, we can expect lower economic achievement, higher rates of teen pregnancy, and a higher rate of crime in black communities.
All Americans are hurting from the failure of recent strong productivity growth to translate into wage growth for average workers. All Americans will benefit from a more equitable distribution of the wealth of American society. African Americans, in particular, need policies that will attend to their low employment rates, low wages and high poverty rates.
A decade ago, the economic outlook for African Americans was quite different.
Starting in earnest in 1980, but talked about since the minute Franklin Roosevelt dropped dead at his desk, Republicans (assisted by neoliberal Democrats) enacted fundamentalist economic policy, which won them elections. But their free market fundamentalism, a combination of public service cuts, tax reductions, deregulation and incessant preaching about welfare queens (and other alleged horrors of the New Deal legacy) failed to stop the downward spiral of real wages and extra jobs, plus the upward spiral of debt and other attempts that the affected people tried to maintain the middle-class standards. Standards that they had been told was their American birthright by both political parties.
Of course, "middle class" itself has lost meaning over the years. For some presidential candidates, the dividing line is $5 million, and while that was meant as a joke, sort of, plenty of politicians have put the figure at an income of around $200,000 or better, which only 2 percent of the population earns. The middle of the middle class, the national median income, is about $50,000 per year (although it varies widely by state).
That’s the Main Street we’re really talking about. Americans on the side streets and alleys are doing far worse. And many more Americans are on the verge of joining them.
It wouldn’t take all that much money, as economist Doug Henwood has pointed out, to bring all the officially poor households up to the poverty line: 0.5 percent of gross domestic product, or just over 3 percent of the income of the richest fifth of American households. Maybe 5% to bring everybody up to "a civilized standard."
But in this watershed year, with experts and amateurs alike comparing the current situation with the Great Depression, people on the small "d" democratic side of the far left have a serious question to ask themselves. Do we support, as our predecessors in the 1930s did, a system of government regulation and other intervention which rescues the system and offers a more worker-friendly environment until things get better? Then watch the rightwing and neoliberals renew business-as-usual? Or do we demand a more fundamental economic change?