National (In)Security in the United States of Inequality
So effectively has the Beltway establishment captured the concept of
national security that, for most of us, it automatically conjures up images
of terrorist groups, cyber warriors, or "rogue states." To ward off such
foes, the United States maintains a historically unprecedented constellation
of military bases abroad and, since 9/11, has waged wars in Afghanistan,
Iraq, Syria, Libya, and elsewhere that have gobbled up nearly $4.8 trillion.
The 2018 Pentagon budget already totals $647 billion - four times what
China, second in global military spending, shells out and more than the next
12 countries combined, seven of them American allies. For good measure,
Donald Trump has added an additional $200 billion to projected defense
expenditures through 2019.
Yet to hear the hawks tell it, the United States has never been less secure.
So much for bang for the buck.
For millions of Americans, however, the greatest threat to their day-to-day
security isn't terrorism or North Korea, Iran, Russia, or China. It's
internal - and economic. That's particularly true for the 12.7% of
Americans (43.1 million of them) classified as poor by the government's
criteria: an income below $12,140 for a one-person household, $16,460 for a
family of two, and so on. until you get to the princely sum of $42,380 for a
family of eight.
Savings aren't much help either: a third of Americans have no savings at all
and another third have less than $1,000 in the bank. Little wonder that
families struggling to cover the cost of food alone increased from 11% (36
million) in 2007 to 14% (48 million) in 2014.
The Working Poor
Unemployment can certainly contribute to being poor, but millions of
Americans endure poverty when they have full-time jobs or even hold down
more than one job. The latest figures from the Bureau of Labor Statistics
show that there are 8.6 million "working poor," defined by the government as
people who live below the poverty line despite being employed at least 27
weeks a year. Their economic insecurity doesn't register in our society,
partly because working and being poor don't seem to go together in the minds
of many Americans - and unemployment has fallen reasonably steadily. After
approaching 10% in 2009, it's now at only 4%.
Help from the government? Bill Clinton's 1996 welfare "reform" program,
concocted in partnership with congressional Republicans, imposed time limits
on government assistance, while tightening eligibility criteria for it. So,
as Kathryn Edin and Luke Shaefer show in their disturbing book, $2.00 a Day:
Living on Almost Nothing in America, many who desperately need help don't
even bother to apply. And things will only get worse in the age of Trump.
His 2019 budget includes deep cuts in a raft of anti-poverty programs.
Anyone seeking a visceral sense of the hardships such Americans endure
should read Barbara Ehrenreich's 2001 book Nickel and Dimed: On (Not)
Getting By in America. It's a gripping account of what she learned when,
posing as a "homemaker" with no special skills, she worked for two years in
various low-wage jobs, relying solely on her earnings to support herself.
The book brims with stories about people who had jobs but, out of necessity,
slept in rent-by-the-week fleabag motels, flophouses, or even in their cars,
subsisting on vending machine snacks for lunch, hot dogs and instant noodles
for dinner, and forgoing basic dental care or health checkups. Those who
managed to get permanent housing would choose poor, low-rent neighborhoods
close to work because they often couldn't afford a car. To maintain even
such a barebones lifestyle, many worked more than one job.
Though politicians prattle on about how times have changed for the better,
Ehrenreich's book still provides a remarkably accurate picture of America's
working poor. Over the past decade the proportion of people who exhausted
their monthly paychecks just to pay for life's essentials actually increased
from 31% to 38%. In 2013, 71% of the families that had children and used
food pantries run by Feeding America, the largest private organization
helping the hungry, included at least one person who had worked during the
previous year. And in America's big cities, chiefly because of a widening
gap between rent and wages, thousands of working poor remain homeless,
sleeping in shelters, on the streets, or in their vehicles, sometimes along
with their families. In New York City, no outlier when it comes to
homelessness among the working poor, in a third of the families with
children that use homeless shelters at least one adult held a job.
The Wages of Poverty
The working poor cluster in certain occupations. They are salespeople in
retail stores, servers or preparers of fast food, custodial staff, hotel
workers, and caregivers for children or the elderly. Many make less than
$10 an hour and lack any leverage, union or otherwise, to press for raises.
In fact, the percentage of unionized workers in such jobs remains in the
single digits - and in retail and food preparation, it's under 4.5%. That's
hardly surprising, given that private sector union membership has fallen by
50% since 1983 to only 6.7% of the workforce.
Low-wage employers like it that way and - Walmart being the poster child for
this - work diligently to make it ever harder for employees to join unions.
As a result, they rarely find themselves under any real pressure to increase
wages, which, adjusted for inflation, have stood still or even decreased
since the late 1970s. When employment is "at-will," workers may be fired or
the terms of their work amended on the whim of a company and without the
slightest explanation. Walmart announced this year that it would hike its
hourly wage to $11 and that's welcome news. But this had nothing to do with
collective bargaining; it was a response to the drop in the unemployment
rate, cash flows from the Trump tax cut for corporations (which saved
Walmart as much as $2 billion), an increase in minimum wages in a number of
states, and pay increases by an arch competitor, Target. It was also
accompanied by the shutdown of 63 of Walmart's Sam's Club stores, which
meant layoffs for 10,000 workers. In short, the balance of power almost
always favors the employer, seldom the employee.
As a result, though the United States has a per-capita income of $59,500 and
is among the wealthiest countries in the world, 12.7% of Americans (that's
43.1 million people), officially are impoverished. And that'sgenerally
considered a significant undercount. The Census Bureau establishes the
poverty rate by figuring out an annual no-frills family food budget,
multiplying it by three, adjusting it for household size, and pegging it to
the Consumer Price Index. That, many economists believe, is a woefully
inadequate way of estimating poverty. Food prices haven't risen
dramatically over the past 20 years, but the cost of other necessities like
medical care (especially if you lack insurance) and housing have: 10.5% and
11.8% respectively between 2013 and 2017 compared to an only 5.5% increase
for food.
Include housing and medical expenses in the equation and you get the
Supplementary Poverty Measure (SPM), published by the Census Bureau since
2011. It reveals that a larger number of Americans are poor: 14% or 45
million in 2016.
Dismal Data
For a fuller picture of American (in)security, however, it's necessary
todelve deeper into the relevant data, starting with hourly wages, which are
the way more than 58% of adult workers are paid. The good news: only 1.8
million, or 2.3% of them, subsist at or below minimum wage. The not-so-good
news: one-third of all workers earn less than $12 an hour and 42%earn less
than $15. That's $24,960 and $31,200 a year. Imagine raising a family on
such incomes, figuring in the cost of food, rent, childcare, car payments
(since a car is often a necessity simply to get to a job in a country with
inadequate public transportation), and medical costs.
The problem facing the working poor isn't just low wages, but the widening
gap between wages and rising prices. The government has increased the hourly
federal minimum wage more than 20 times since it was set at 25 cents under
the 1938 Fair Labor Standards Act. Between 2007 and 2009 it rose to $7.25,
but over the past decade that sum lost nearly 10% of its purchasing power to
inflation, which means that, in 2018, someone would have to work 41
additional days to make the equivalent of the 2009 minimum wage.
Workers in the lowest 20% have lost the most ground, their
inflation-adjusted wages falling by nearly 1% between 1979 and 2016,
compared to a 24.7% increase for the top 20%. This can't be explained by
lackluster productivity since, between 1985 and 2015, it outstripped pay
raises, often substantially, in every economic sector except mining.
Yes, states can mandate higher minimum wages and 29 have, but 21 have not,
leaving many low-wage workers struggling to cover the costs of two
essentials in particular: health care and housing.
Even when it comes to jobs that offer health insurance, employers have been
shifting ever more of its cost onto their workers through higher deductibles
and out-of-pocket expenses, as well as by requiring them to cover more of
the premiums. The percentage of workers who paid at least 10% of their
earnings to cover such costs - not counting premiums - doubled between 2003
and 2014.
This helps explain why, according to the Bureau of Labor Statistics, only
11% of workers in the bottom 10% of wage earners even enrolled in workplace
healthcare plans in 2016 (compared to 72% in the top 10%). As a restaurant
server who makes $2.13 an hour before tips - and whose husband earns $9 an
hour at Walmart - put it, after paying the rent, "it's either put food in
the house or buy insurance."
The Affordable Care Act, or ACA (aka Obamacare), provided subsidies to help
people with low incomes cover the cost of insurance premiums, but workers
with employer-supplied healthcare, no matter how low their wages, weren't
covered by it. Now, of course, President Trump, congressional Republicans,
and a Supreme Court in which right-wing justices are going to be even more
influential will be intent on poleaxing the ACA.
It's housing, though, that takes the biggest bite out of the paychecks of
low-wage workers. The majority of them are renters. Ownership remains for
many a pipe dream. According to a Harvard study, between 2001 and 2016,
renters who made $30,000-$50,000 a year and paid more than a third of their
earnings to landlords (the threshold for qualifying as "rent burdened")
increased from 37% to 50%. For those making only $15,000, that figure rose
to 83%.
In other words, in an ever more unequal America, the number of low-income
workers struggling to pay their rent has surged. As the Harvard analysis
shows, this is, in part, because the number of affluent renters (with
incomes of $100,000 or more) has leaped and, in city after city, they're
driving the demand for, and building of, new rental units. As a result, the
high-end share of new rental construction soared from a third to nearly
two-thirds of all units between 2001 and 2016. Not surprisingly, new
low-income rental units dropped from two-fifths to one-fifth of the total
and, as the pressure on renters rose, so did rents for even those modest
dwellings. On top of that, in places like New York City, where demand from
the wealthy shapes the housing market, landlords have found ways - some
within the law, others not - to get rid of low-income tenants.
Public housing and housing vouchers are supposed to make housing affordable
to low-income households, but the supply of public housing hasn't remotely
matched demand. Consequently, waiting lists are long and people in need
languish for years before getting a shot - if they ever do. Only a quarter
of those who qualify for such assistance receives it. As for those
vouchers, getting them is hard to begin with because of the massive mismatch
between available funding for the program and the demand for the help it
provides. And then come the other challenges: finding landlords willing to
accept vouchers or rentals that are reasonably close to work and not in
neighborhoods euphemistically labeled "distressed."
The bottom line: more than 75% of "at-risk" renters (those for whom the cost
of rent exceeds 30% or more of their earnings) do not receive assistance
from the government. The real "risk" for them is becoming homeless, which
means relying on shelters or family and friends willing to take them in.
President Trump's proposed budget cuts will make life even harder for
low-income workers seeking affordable housing. His 2019 budget proposal
slashes $6.8 billion (14.2%) from the resources of the Department of Housing
and Urban Development's (HUD) by, among other things, scrapping housing
vouchers and assistance to low-income families struggling to pay heating
bills. The president also seeks to slash funds for the upkeep of public
housing by nearly 50%. In addition, the deficits that his rich-come-first
tax "reform" bill is virtually guaranteed to produce will undoubtedly set
the stage for yet more cuts in the future. In other words, in what's
becoming the United States of Inequality, the very phrases "low-income
workers" and "affordable housing" have ceased to go together.
None of this seems to have troubled HUD Secretary Ben Carson who happily
ordered a $31,000 dining room set for his office suite at the taxpayers'
expense, even as he visited new public housing units to make sure that they
weren't too comfortable (lest the poor settle in for long stays). Carson
has declared that it's time to stop believing the problems of this society
can be fixed merely by having the government throw extra money at them -
unless, apparently, the dining room accouterments of superbureaucrats aren't
up to snuff.
Money Talks
The levels of poverty and economic inequality that prevail in America are
not intrinsic to either capitalism or globalization. Most other wealthy
market economies in the 36-nation Organization for Economic Cooperation and
Development (OECD) have done far better than the United States in reducing
them without sacrificing innovation or creating government-run economies.
Take the poverty gap, which the OECD defines as the difference between a
country's official poverty line and the average income of those who fall
below it. The United States has the second largest poverty gap among
wealthy countries; only Italy does worse.
Child poverty? In the World Economic Forum's ranking of 41 countries - from
best to worst - the U.S. placed 35th. Child poverty has declined in the
United States since 2010, but a Columbia University report estimates that
19% of American kids (13.7 million) nevertheless lived in families with
incomes below the official poverty line in 2016. If you add in the number
of kids in low-income households, that number increases to 41%.
As for infant mortality, according to the government's own Centers for
Disease Control, the U.S., with 6.1 deaths per 1,000 live births, has the
absolute worst record among wealthy countries. (Finland and Japan do best
with 2.3.)
And when it comes to the distribution of wealth, among the OECD countries
only Turkey, Chile, and Mexico do worse than the U.S.
It's time to rethink the American national security state with its annual
trillion-dollar budget. For tens of millions of Americans, the source of
deep workaday insecurity isn't the standard roster of foreign enemies, but
an ever-more entrenched system of inequality, still growing, that stacks the
political deck against the least well-off Americans. They lack the bucks to
hire big-time lobbyists. They can't write lavish checks to candidates
running for public office or fund PACs. They have no way of manipulating
the myriad influence-generating networks that the elite uses to shape
taxation and spending policies. They are up against a system in which money
truly does talk - and that's the voice they don't have. Welcome to the
United States of Inequality.
Rajan Menon / TomDispatch
