Poverty in America

September 19, 2010 at 6:14 pm Leave a comment


U.S. map with counties labeled by FIPS code ac...

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“If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin.”  – Charles Darwin

“The poor you will always have with you.” – Jesus

In America right now we are in the midst of what some are referring to as The Great Recession. We are paying the price for those years of excess lived between the last recession at the dawn of the new millennium and the first rumblings of troubles in the mortgage industry in 2007.

We tricked ourselves into thinking everything was great with profits manufactured by creative accountants in the home lending business, and later by creative accountants employed by Wall Street to hide losses from speculation made, largely, in the sub-prime mortgage industry. Now we have to pay the piper.


But guess who’s paying the piper. It’s not the same men who made the decisions that caused this mess. Those guys all got bonuses based on false profits and golden parachutes. Why? Well, because we have to pay our best talent. We don’t want to run them off, of course. So, the piper gets paid mostly by the middle class. Or, rather, by the people who used to be the middle class. The middle class in America is dwindling in numbers.

The unemployment rate is at a national average of 10%. Some areas of the United States have an unemployment rate of 15%. It’s still better than the 20% national average during The Great Depression, but we can no longer fool ourselves with the fable that we are a prosperous nation.

The percentage of people who are living at or below the poverty level in the United States now is 14.6%. There are now more poor people living in America than there have been since 1959, when the government first started keeping track of these numbers. To make that real for you, one in seven Americans today lives in poverty. What is the definition of poverty in America today? If you are a single person who made less than $11,000 last year, then the government says you are living in poverty. If you are a family of four, and you are living on less than $22,000, then the government considers you poor.

I don’t know about you, but I don’t know how I would survive on $11,000 a year. After my rent got paid, I would have just a little over $4,000 a year to live on. Would that even pay for food, let alone utilities? Even if I forego such luxuries as a telephone or internet access or cable or a vehicle, would $4,000 be enough to buy food after the electricity and water bill was paid each month? And without “luxuries” like a phone and internet, then how would I look for work?

There’s a misconception in America that if you don’t work in the United States or if you are poor in our country, then it must be because you are lazy. You choose to be poor. After all, this is the land of opportunity where anyone can be anything he wants to be. If you’re not working, then it must be because you don’t want to do so.

I’m not too good to work at something “beneath me,” in order to bring home the bacon, and I think most Americans feel the same way. We will take whatever work we are offered, no matter how overqualified we are, no matter the fact that it doesn’t pay a living wage or provide benefits. It’s preferable to welfare or unemployment. If the only job left in America was flipping hamburgers at McDonald’s, then I wouldn’t turn up my nose at it just because I have a college education.

There are people who take advantage of “the system” in any country, bad apples, if you will. The vast majority of people, though, would prefer to be given an honest wage for honest work. As human beings we have an intrinsic psychological motivation to be useful and to feel needed. Work helps us to fulfill that need.

I am concerned that our great nation is on a fast track to no longer being great. What do I think the problem is? How do I think it can be fixed? The problem is that in America there is a growing disparity between the haves and the have nots, and the gap is widening at an alarming rate. The biggest sign of a healthy society is two things: a healthy, growing or at least sustaining middle class, and the treatment of a society’s “weakest links,” if you will. What do I mean by the weakest links? I mean the youngest and the oldest, the widowed, orphaned and the poor.

We have a big problem with a deficit in America, and the bigger the deficit the harder it will be for us to recover, and yet everyone says that we have to spend money to make money. So, we spend money we don’t have in order to provide a stimulus to the economy. Instead of eventually paying for that debt by taking it out of the pockets of the middle class, how about taxing the rich at a rate that’s consistent with the percentage that’s paid by the middle class? We are taxing the middle class into the poor house.

Now some of you may say, but the rich are already taxed at higher rates. That’s why we have something in America called a graduated income tax. The tax rates ARE higher for the rich. In theory. The truth of how it’s actually applied is that those very wealthy people who made the decisions that got us into this mess and then were never penalized for it get to take advantage of special tax laws and loopholes that lower their tax liability. So, while they are technically “paying” a higher percentage rate, their actual taxes compared to their actual income are nowhere near this designated percentage once their creative accountants get done with their tax returns. And it’s all perfectly legal.

We need to quit paying our executives at the exorbitant rates we’ve been paying them and pay the people who do the day-to-day work a decent living salary. We need to quit giving tax cuts to the people who can most afford to pay their taxes. We need to hold CEOs accountable for their actions. They should get paid based on their ability to produce real profits, not fictional annual reports. And we should quit rewarding these people with big bonus packages for putting thousands of people out of work.

The argument for golden parachutes and such is that executives of companies have to have a safety net so that they will not be afraid to take risks in order to make their companies profitable. I say that risk is risk. Why shield the executives from the personal repercussions of risk? It’s rewarding them for bad behavior. If they personally felt a hit to their pocketbooks as the result of their own decisions, then maybe they’d be more motivated to make wise decisions. The best way to keep executives honest is to make them accountable for their own actions, just the same as the assembly line worker at the plant is accountable for being on time and meeting his quotas for daily production. It’s the same concept, folks.

We live in a democracy. Why does all this corruption exist in a country founded on principles of freedom? I think it’s a combination of several reasons. For one thing, the poor don’t vote in large numbers. Our society, unfortunately, teaches them the cultural lesson that their opinions don’t matter. They become the victims of learned helplessness, and consequently they fail to exercise their right to vote. This self-fulfilling negative prophecy is probably proven true when they turn out to the polls and their interests are not protected because they are in the minority of the voters.

The middle class people who do vote, along with the wealthy, in good numbers, can get their agendas passed. You might wonder why more of the middle class don’t side with the poor, realizing how close they are to becoming one of them. Well, there are two reasons why they don’t. The first is fear. They are afraid that voting to penalize the very people who sign their paychecks will adversely affect them, and then they will become one of the poor. There is good reason to feel that way. As it stands right now, the Board of Directors of an unprofitable company is much more likely to lay off the rank and file employees than to approve a pay cut for its executives.

The other reason is hope. Those middle class voters hope that somehow, someday, with hard work, ambition, and initiative they can become one of those wealthy people. And when they do become one of those enormously rich folk, then they don’t want to have to share the fruits of their blood, sweat, and tears with the government or to be forced to share it with those who are less fortunate than they are. And so the cycle goes on.



Entry filed under: Current Events, Economy, Ethics, Human Rights, Politics, Social Commentary. Tags: , , , , , , , .

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