A couple of recent articles in Salon both deal with a subject that even 20 years ago would have been unthinkable, that the United States of America is becoming a third world nation because of its failure to look after many of its people.
Firstly CJ Werleman briefly but succinctly presents the evidence:
America has become a RINO: rich in name only. By every measure, we look like a broken banana republic. Not a single U.S. city is included in the world’s top 10 most livable cities. Only one U.S. airport makes the list of the top 100 in the world. Our roads, schools and bridges are falling apart, and our trains—none of them high-speed—are running off their tracks. Our high school students are rated 30th in math, and some 30 countries have longer life expectancy and lower rates of infant mortality. The only things America is number one in these days are the number of incarcerated citizens per capita and adult onset diabetes.
Three decades of trickledown economics; the monopolization, privatization and deregulation of industry; and the destruction of labor protection has resulted in 50 million Americans living in abject poverty, while 400 individuals own more than one-half of the nation’s wealth. As the four Walmart heirs enjoy a higher net worth than the bottom 40 percent, our nation’s sense of food insecurity is more on par with developing countries like Indonesia and Tanzania than with OECD nations like Australia and Canada. In fact, the percentage of Americans who say they could not afford the food needed to feed their families at some point in the last year is three times that of Germany, more than twice than Italy and Canada.
Joan Walsh digs deeper into issues of pay and worker’s rights and comes up with some conclusions that worringly also apply to New Zealand.
… a quarter of people who have jobs today make so little money that they also receive some form of public assistance, or welfare – a proportion that’s much higher in some of the fastest growing sectors of the workforce. Or that 60 percent of able-bodied adult food-stamp recipients are employed.
Fully 52 percent of fast-food workers’ families receive public assistance – most of it coming from Medicaid, food stamps and the Earned Income Tax Credit — to the tune of $7 billion annually, according to new research from the University of California-Berkeley’s Labor Center and the University of Illinois.
McDonald’s workers alone receive $1.2 billion in public aid, the study found. This is an industry, by the way, that last year earned $7.44 billion in profits, paid their top execs $52.7 million and distributed $7.7 billion in dividends and stock buyback. Still, “public benefits receipt is the rule, rather than the exception, for this workforce,” the study concluded.
Then there’s Wal-Mart, which as Salon’s Josh Eidelson recently reported, boasted to a Goldman Sachs conference that “over 475K” of its 1.3 million workers make more than $25,000 a year – which lets us infer that almost 60 percent make less.
But it is not only fast food or Wal Mart employees who are receiving welfare.
One in three bank tellers receives public assistance, the Committee for Better Banks revealed last week, at a cost of almost a billion dollars annually in federal, state and local assistance. That’s right: One of the nation’s most profitable, privileged and high-prestige industries, banking, pays a sector of its workers shockingly low wages and relies on taxpayers to lift them out of poverty. In New York alone, 40 percent of bank tellers and their family members receive public assistance, costing $112 million in state and federal benefits.
Bank CEOs get multi-million dollar bonuses as profits soar, while millions of tellers are so poor they get welfare. Something’s wrong with that.
It appears that the American Dream has become a nightmare.
The U.S. now has the highest proportion of low-wage workers in the developed world, according to the Organization for Economic Cooperation and Development. One in four make less than two-thirds of the median wage, which is the same proportion that rely on public aid. It’s becoming more widely accepted that the spread and persistence of low-wage work is behind rising income inequality and reduced social mobility.
And Obama is heavily criticised for not doing anything about it although to be fair at least he is not standing on the steps of Capitol Hill with a baseball bat smashing what remaining protections for unions there are as the Republicans would be doing if they had the chance.
The article attributes the cause to the 1990s reforms which designated a job, any job, better than being on welfare.
At one level this is hard to argue with but I am sure that the creators of the reforms did not think for one minute that it would increase the leverage that the ultra wealthy already had on the country’s finances.
By not also demanding regular minimum wage hikes or putting muscle behind union organizing, Democrats have helped create a vast low-wage labor pool that hovers just above the poverty line, and sometimes still below it, thanks to public assistance, and lacks the economic and political muscle to improve their wages and working conditions. This can’t be good for anyone.
The American experience removes beyond doubt one of the supposed pillars of the capitalist system, that each person gets a shot at the big time. There clearly are barriers in the way and no matter how hard many people work they will never get to live the capitalist dream.
And it is also clear that the State’s resources are being badly spent.
… every dollar taxpayers spend subsidizing corporations paying poverty wages is a dollar not spent on early childhood programs, building universities or funding college education. Yes we need safety nets, but we also need ladders of opportunity. The government spending that built the post WWII middle class invested in education and research, and it was backed by the New Deal’s most effective anti-poverty initiative: the Wagner Act, which eased labor union organizing.
Today, we’ve got a threadbare safety net, but those ladders of opportunity are even more rickety and unreliable. We’re just not building them anymore – and that’s why we’re facing a crisis of income inequality and a stalling of the social mobility that used to be the heart of the American dream.
The lesson for New Zealand is that working for families is arguably masking some fundamental problems that we have with economic equity. And that if you want to do something about income equality then strengthening the Trade Union Movement may be the best thing that you can do.