"A poor country of its own kind"
by Tom Sullivan
The late, great, American middle class is broke. "America is the world’s poor rich country," writes Umair Haque at Medium. "Not a poor country like poor countries, but a poor country of its own kind."
A study released in May by United Way's ALICE Project reports 51 million American households are Asset Limited, Income Constrained, Employed. The figure includes 16.1 households officially poor plus another 34.7 million ALICE families. That is, while they may exist above the official poverty level, managing to pay for housing, food, transportation, child care, health care, and essential technology remains a daily struggle. Every month they face trade-offs. With no savings, they are one car repair or medical bill away from financial crisis. That's 43 percent of American households.
These are Americans living on a survival budget. CNN's Tami Luhby writes, "Many of these folks are the nation's child care workers, home health aides, office assistants and store clerks, who work low-paying jobs and have little savings, the study noted. Some 66% of jobs in the US pay less than $20 an hour."
Almost half of Americans are working to support an economy that isn't working to support them. They live and die in debt, Haque observes. They are effectively Neo-serfs:
Americans aren’t poor because they don’t work, they don’t work hard enough, or they don’t work long enough. They’re poor even if they do. In that sense, the final idea in the phrase ALICE is underwhelming, inadequate — it fails to really get to the root of the problem here. If the majority of people in a rich society are poor now…even though they’re “employed”…then clearly the problem isn’t the people…it’s the system.Another study released in May, this one from the Federal Reserve, examines the economic well-being of American households. Alexia Fernández Campbell explains what the gig economy means for those "independent contractors" working for "themselves," that is, for companies like Lyft and Uber:
Here is one of the most shocking statistics: 58 percent of full-time gig workers said they would have a hard time coming up with $400 to cover an emergency bill — compared to 38 percent of people who don’t work in the gig economy. Both numbers are alarming, but the gap suggests that this informal economy is far more destabilizing than Silicon Valley investors care to admit.In fact, a substantial number aren't using these jobs to supplement their incomes. These jobs are their incomes:
Economists at the New School and the University of California Berkeley published a report in July with some limited pay data, and discovered something alarming: Driving for ride-hailing apps in New York City is not really a part-time gig for people who want to earn extra cash.The New School believes companies could "easily absorb an increase in driver pay with a minimal fare adjustment and little inconvenience to passengers.” But that would mean more money for "employees" and less for investors.
More than half of their drivers are ferrying around passengers on a full-time basis, and about half of them are supporting families with children on that income. Their earnings were so low that 40 percent of drivers qualified for Medicaid, and about 18 percent qualified for food stamps.
There’s a place where pride becomes hubris. Where stoicism becomes vanity. Where self-reliance becomes ignorance of the common good. Americans are at that place right now, in this moment.This can only go on so long. Already, there are concentration camps on the southern border. Capitalism needs an upgrade and soon. One hundred years ago, Americans created a "civilized capitalism that protects people against the worst vicissitudes of the free market." That lesson has been forgotten. We need to relearn it. As the WWII song goes, we did it before.
American poverty — a middle class falling into ruin, the majority of people now effectively poor — is what gave rise to today’s problems: Trumpism, extremism, fascism, theocracy. It’s what drives religious fervour — save me, someone! It’s what ignites the spark of racial hatred all over again.
And until and unless this problem is addressed, my friends, in a tough and gentle and sane way, America is going to stay where it is. People that really understand political economy have a saying: “capitalism implodes into fascism.” That’s because it produces mass poverty, not riches, decline, not upward mobility — and the new poor then turn on everyone, neighbours, friends, allies, values, morals. If that sounds eerily like America today…then you should be able to see America tomorrow, too.