We are living in so-called first world societies where economic disparity is trending toward developing world levels. Some numbers you can argue about individually if you like (and how does your head feel buried in the sand?), but the aggregate situation is beyond debate:
— The one percent holds 35.6 percent of all private wealth, more than the bottom 95 percent combined.
— The 400 wealthiest individuals globally have more wealth than the bottom 150 million Americans.
— Between 1983 and 2009, over 40 percent of all wealth gains flowed to the one percent and 82 percent of wealth gains went to the top five percent. The bottom 60 percent lost wealth over this same period.
— A significant amount of the redistribution of wealth, redistributed upward, took place following the 2008 market collapses in the United States as bailouts, shorts, repossession of home and land, and new laws helped the top end of the economy at cost to the bottom. More and more of government is controlled directly by corporations.
— The world’s one percent own $42.7 trillion dollars, more than the bottom three billion residents of earth.
— A rising tide lifts all yachts, as historian Morris Berman observed. Less than half of Americans do not own any stock at all. The wealthiest of Americans own over 80 percent of all stock, and 40 percent of America’s land.
It’s Getting Worse
Now add to that grim tally new information that shows the problem of gross income and wealth inequality is getting worse.
A report from McKinsey finds that in developed economies such as the United States two-thirds of all households experienced “flat or falling” incomes over the past decade, from 2005-2014. In the U.S., the portion was even worse: 81 percent.
“While the recession and slow recovery after the 2008 global financial crisis were a significant contributor to this lack of income advancement, other long-run factors played a role — and will continue to do so,” McKinsey notes. “They include demographic trends of aging and shrinking household sizes as well as labor-market shifts such as the falling wage share of GDP.”
Capital Beats Labor Every Time
As predicted by economists from Karl Marx to Thomas Piketty, this is the natural progression of capital (making money by owning things) over labor (making money by working.) It represents the same basic economic world of the Middle Ages, land-owning kings and serfs who have no option but to work the fields.
It is statistically likely that you won’t live a better life than your parents did. The economic world of your parents and grandparents was an aberration, a one time exception that was called the American Dream. And even that was largely limited the white people.
Do enjoy that gig economy youngsters, and hope Uber doesn’t put you out of an income by flooding the market with more drivers.
Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!
As America’s new economy starts to look more like the old economy of the Great Depression, the divide between rich and poor, those who have made it and those who never will, seems to grow ever starker. I know. I’ve seen it firsthand.
Once upon a time, I worked as a State Department officer, helping to carry out the occupation of Iraq, where Washington’s goal was regime change. It was there that, in a way, I had my first taste of the life of the 1%. Unlike most Iraqis, I had more food and amenities than I could squander, nearly unlimited funds to spend as I wished (as long as the spending supported us one-percenters), and plenty of U.S. Army muscle around to keep the other 99% at bay. However, my subsequent whistleblowing about State Department waste and mismanagement in Iraq ended my 24-year career abroad and, after a two-decade absence, deposited me back in “the homeland.”
I returned to America to find another sort of regime change underway, only I wasn’t among the 1% for this one. Instead, I ended up working in the new minimum-wage economy and saw firsthand what a life of lousy pay and barely adequate food benefits adds up to. For the version of regime change that found me working in a big box store, no cruise missiles had been deployed and there had been no shock-and-awe demonstrations. Nonetheless, the cumulative effects of years of deindustrialization, declining salaries, absent benefits, and weakened unions, along with a rise in meth and alcohol abuse, a broad-based loss of good jobs, and soaring inequality seemed similar enough to me. The destruction of a way of life in the service of the goals of the 1%, whether in Iraq or at home, was hard to miss. Still, I had the urge to see more. Unlike in Iraq, where my movements were limited, here at home I could hit the road, so I set off for a look at some of America’s iconic places as part of the research for my book, Ghosts of Tom Joad.
Here, then, are snapshots of four of the spots I visited in an empire in decline, places you might pass through if you wanted to know where we’ve been, where we are now, and (heaven help us) where we’re going.
On the Boardwalk: Atlantic City, New Jersey
Drive in to Atlantic City on the old roads, and you’re sure to pass Lucy the Elephant. She’s not a real elephant, of course, but a wood and tin six-story hollow statue. First built in 1881 to add value to some Jersey swampland, Lucy has been reincarnated several times after suffering fire, neglect, and storm damage. Along the way, she was a tavern, a hotel, and — for most of her life — simply an “attraction.” As owning a car and family driving vacations became egalitarian rights in the booming postwar economy of the 1950s and 1960s, all manner of tacky attractions popped up along America’s roads: cement dinosaurs, teepee-shaped motels, museums of oddities, and spectacles like the world’s largest ball of twine. Their growth paralleled 20 to 30 years of the greatest boom times any consumer society has ever known.
Between 1947 and 1973, actual incomes in the United States rose remarkably evenly across society. Certainly, there was always inequality, but never as sharp and predatory as it is today. As Scott Martelle’s Detroit: A Biography chronicles, in 1932, Detroit produced 1.4 million cars; in 1950, that number was eight million; in 1973, it peaked at 12 million. America was still a developing nation — in the best sense of that word.
Yet as the U.S. economy changed, money began to flow out of the working class pockets that fed Lucy and her roadside attraction pals. By one count, from 1979 to 2007, the top 1% of Americans saw their income grow by 281%. They came to control 43% of U.S. wealth.
You could see it all in Atlantic City, New Jersey. For most of its early life, it had been a workingman’s playground and vacation spot, centered around its famous boardwalk. Remember Monopoly? The street names are all from Atlantic City. However, in the economic hard times of the 1970s, as money was sucked upward from working people, Boardwalk and Park Place became a crime scene, too dangerous for most visitors. Illegal drug sales all but overtook tourism as the city’s most profitable business.
Yet the first time I visited Atlantic City in the mid-1980s, it looked like the place was starting to rebound in the midst of a national economy going into overdrive. With gambling legalized, money poured in. The Boardwalk sprouted casinos and restaurants. Local business owners scrambled to find workers. Everyone and everything felt alive. Billboards boasted of “rebirth.”
Visit Atlantic City in 2017 and it’s again a hollowed-out place. The once swanky mall built on one of the old amusement piers has more stores shuttered than open. Meanwhile, the “We Buy Gold” stores and pawnshops have multiplied and are open 24/7 to rip off the easy marks who need cash bad enough to be out at 4 A.M. pulling off their wedding rings. On a 20-story hotel tower, you can still read the word “Hilton” in dirt shadow where its name had once been, before the place was shuttered.
Along the Boardwalk, there are still the famous rolling chairs. They are comfortable, bound in wicker, and have been a fixture of Atlantic City for decades. They were once pushed by strong young men, maybe college students earning a few bucks over summer break. You can still ride the chairs to see and be seen, but now they’re pushed by recent immigrants and not-so-clean older denizens of the city. Lots of tourists still take rides, but there’s something cheap and sad about paying workers close to my own age to wheel you around, just a step above pushing dollars into the G-strings of the strippers in clubs just off the Boardwalk.
One of the things I did while in Atlantic City was look for the family restaurant I had worked in 30 years earlier. It’s now a dollar store run by an angry man. “You buy or you leave,” he said. Those were the last words I heard in Atlantic City. I left.
Dark Side of the Moon: Weirton, West Virginia
The drive into Weirton from the east takes you through some of the prettiest countryside in Maryland and Western Pennsylvania. You cross rivers and pass through the Cumberland Gap along the way and it’s easy going into the town, because the roads are mostly empty during typical business hours. There’s nothing much going on. The surrounding beauty just makes the scarred remains of Weirton that much more shocking when you first come upon them. Take the last turn and suddenly the abandoned steel mills appear like a vision of an industrial apocalypse, nestled by the Ohio River.
In 1909, Ernest T. Weir built his first steel mill next to that river and founded what later became the Weirton Steel Corporation. In the decades to come, the town around it and the mill itself were basically synonymous, both fueled by the industrial needs of two world wars and the consumer economy created following the defeat of Germany and Japan. The Weirton mill directly contributed to wartime triumphs, producing artillery shells and raw steel to support the effort, while Weirton’s sons died on battlefields using the company’s products. (A war memorial across the street from the mill sanctifies the dead, the newest names being from the battlefields of Iraq and Afghanistan.)
At its peak, the Weirton Steel Corporation employed more than 12,000 people, and was the largest single private employer and taxpayer in West Virginia. The owners of the mill paid for and built the Weirton Community Center, the Weirton General Hospital, and the Mary H. Weir Library in those glory days. For years the mill also paid directly for the city’s sewers, water service, and even curbside garbage pickup. Taxes were low and life was good.
In the 1970s and early 1980s, however, costs rose, Asian steel gained traction and American manufacturing started to move offshore. For the first time since the nineteenth century, the country became a net importer of goods. Some scholars consider the mid-1970s a tipping point, when Congress changed the bankruptcy laws to allow troubled companies an easier path to dumping existing union contracts and employee agreements. It was then that Congress also invented individual retirement accounts, or IRAs, which were supposed to allow workers to save money tax-free to supplement their retirements. Most corporations saw instead an opportunity to get rid of expensive pensions. It was around then that some unknown steelworker was first laid off in Weirton, a candidate for Patient Zero of the new economy.
The mill, which had once employed nearly one out of every two people in town, was sold to its employees in 1984 in a final, failed attempt at resuscitation. In the end, the factory closed, but the people remained. Today, the carcass of the huge steel complex sits at one end of Main Street, rusting and overgrown with weeds because it wasn’t even cost-effective to tear it down. Dinosaur-sized pieces of machinery litter the grounds, not worth selling off, too heavy to move, too bulky to bury, like so many artifacts from a lost civilization. A few people do still work nearby, making a small amount of some specialty metal, but the place seems more like a living museum than a business.
Most of the retail shops on Main Street are now abandoned, though I counted seven bars and two strip clubs. There’s the Mountaineer Food Bank that looks like it used to be a hardware store or maybe a dress shop. The only still-thriving industry is, it seems, gambling. West Virginia legalized “gaming” in 1992 and it’s now big business statewide. (Nationally, legal gambling revenues now top $92.27 billion a year.)
Gambling in Weirton is, however, a far cry even from the decaying Trump Hotel in Atlantic City. There are no Vegas-style casinos in town, just what are called “cafes” strung along Main Street. None were built to be gambling havens. In fact, their prior history is apparent in their architecture: this one a former Pizza Hut, that one an old retail store with now-blacked out windows, another visibly a former diner.
One sunny Tuesday, I rolled into a cafe at 7 A.M., mostly because I couldn’t believe it was open. It took my eyes a minute to adjust to the darkness before I could make out three older women feeding nickels into slot machines, while another stood behind a cheap padded bar, a cigarette tucked behind her ear, another stuck to her dry lips. She offered me a drink, gesturing to rows of Everclear pure grain, nearly 99% pure alcohol, and no-name vodka behind her. I declined, and she said, “Well, if you can’t drink all day, best anyway that you not start so early.”
Liquor is everywhere in Weirton. I talked to a group of men drinking out of paper bags on a street corner at 8 A.M. They hadn’t, in fact, been there all night. They were just starting early like the cafe lady said. Even the gas stations were stocked with the ubiquitous Everclear, all octane with no taste or flavor added because someone knew that you didn’t care anymore. And as the state collects tax on it, everyone but you wins.
Booze is an older person’s formula for destruction. For the younger set, it’s meth that’s really destroying Weirton and towns like it across the Midwest. Ten minutes in a bar, a nod at the guy over there, and you find yourself holding a night’s worth of the drug. Small sizes, low cost, adapted to the market. In Weirton, no need even to go shopping, the meth comes to you.
Meth and the Rust Belt were just waiting for each other. After all, it’s a drug designed for unemployed people with poor self-images and no confidence. Unlike booze or weed, it makes you feel smart, sexy, confident, self-assured — before the later stages of addiction set in. For a while, it seems like the antidote to everything real life in the New Economy won’t ever provide. The meth crisis, in the words of author Nick Reding in Methland: The Death and Life of an American Small Town, is “as much about the death of a way of life as the birth of a drug.”
The effects of a lifetime working in the mill — or for the young, of a lifetime not working in the mill — were easy enough to spot around town. The library advertised free diabetes screening and the one grocery store had signs explaining what you could and could not buy with SNAP (food stamps, which have been called the Supplemental Nutrition Assistance Program since 2008). The local TV channels were chock-a-block full of lawyers’ ads urging you to call in if you have an asbestos-related illness. A lot of health was left behind in those mills.
There are some nice people in Weirton (and Cleveland, Detroit, or any of the other industrial ghost towns once inhabited by what Bruce Springsteen calls “steel and stories”). I’m sure there were even nicer parts of Weirton further away from the Main Street area where I was hanging out, but if you’re a stranger, it’s sure damn hard to find them. Not too far from the old mill, land was being cleared to make way for a new Walmart, a company which already holds the distinction of being West Virginia’s largest private employer.
In 1982 at the Weirton mill, a union journeyman might have earned $25 an hour, or so people told me. Walmart pays seven bucks for the same hour and fights like a junkyard dog against either an increase in the minimum wage or unionization.
The Most Exclusive Gated Community: U.S. Marine Corps Base, Camp Lejeune, North Carolina
I grew up in a fairly small Ohio town that, in the 1970s, was just crossing the sociological divide between a traditional kind of place and a proper bedroom suburb. Not everyone knew each other, but certain principles were agreed upon. A steak should be one inch thick or more. A good potluck solved most problems. Vegetables were boiled, faith rewarded. Things looked better in the morning. Kids drank chocolate milk instead of Coke. We had parades every Memorial Day and every Fourth of July, but Labor Day was just for barbecues because school began the next day and dad had to get up for work. In fact, that line — “I’ve got to get up for work” — was the way most social events broke up. This isn’t nostalgia, it’s history.
In 2014, you could travel significant parts of the decaying Midwest and not imagine that such a place had ever existed. But turn south on Interstate 95 and look for the signs that say “Welcome to U.S. Marine Corps Base Camp Lejeune,” in Jacksonville, North Carolina. Actually, welcome to almost any U.S. military base outside of actual war zones, where a homogeneous military population and generous government spending (re)creates the America of the glory days as accurately as a Hollywood movie. For a first-time visitor, a military base can feel like its own living museum, the modern equivalent of Colonial Williamsburg.
Streets are well maintained, shaded by tall trees planted there (and regularly pruned) for just that purpose. Road, water, and sewer crews are always working. There are no potholes. There is a single school with a prominent football field, and a single shopping area. The restaurants are long-time Department of Defense franchise partners and there’s always a pizza place with a fake-sounding Italian name. Those creature comforts on such bases in the U.S. and around the world come at a cost to taxpayers of billions of dollars a year.
Some of the places employ locals, some military spouses, some high school kids earning pocket money after school. The kids bag groceries. Everybody tips them; they’re neighbors.
The centerpieces of any base like Camp Lejeune are the Base Exchange and the Commissary. The former is a mini-Walmart; the latter, a large grocery store. Both are required by law not to make a profit and so sell products at near wholesale prices. Because everyone operates on federal property, no sales tax is charged. When a member of a Pentagon advisory board proposed shutting down some of the commissaries across the U.S., a step that would have saved taxpayers about $1.4 billion a year, World War III erupted in Congress and halted the idea.
Over in officers’ housing areas, everyone cuts their lawns, has a garage full of sports equipment and a backyard with a grill. Don’t keep up your assigned housing unit and you’ll hear from a senior officer. People get along — they’re ordered to do so.
The base is the whole point of Jacksonville, the town that surrounds it. The usual bars and strip clubs service the Marines, and Camp Lejeune is close to being the town’s sole employer like that old steel mill in Weirton or the gambling palaces in Atlantic City. The base shares another connection to places like Weirton: as men lost their health in the mills thanks to asbestos and other poisons, so Camp Lejeune’s drinking water was contaminated with trichloroethylene, a known carcinogen, between 1953 and 1987.
There, however, the similarities end.
Unlike the archipelago of American towns and cities abandoned to shrivel and die, the “city” inside Camp Lejeune continues to thrive, since its good times are fully covered by taxpayer money. The 23% of the national budget spent on defense assures places like Camp Lejeune of their prosperity.
And the military pays well; no scrambling for a minimum wage at Camp LeJeune. With combat pay more or less standard since 9/11 (the whole world being a battlefield, of course), the Congressional Budget Office estimates that the average active duty service member receives a benefits and pay compensation package worth $99,000. This includes a livable pension after 20 years of service, free medical and dental care, free housing, a clothing allowance, and more. In most cases, dependents of service members continue to live on a base in the United States while their husbands or wives, fathers or mothers serve abroad. Unlike in the minimum-wage jobs many other Americans now depend on, service members can expect regular training and skills enhancement and a clear path to promotion. Nearly every year, Congress votes for pay increases. The arguments for military benefits may be clear — many service members lead difficult and dangerous lives. The point is, however, that the benefits exist, unlike in so many corporate workplaces today. The government pays for all of them, while Atlantic City and Weirton struggle to stay above water.
Small Town America in the Big Apple: Spanish Harlem
The number of Americans who have visited Harlem, even for a quick stop at a now-trendy restaurant or music club, is unknown but has to be relatively small. Even many lifetime New Yorkers riding the uptown subway under the wealthy upper east side are careful to hop off before reaching the 116th Street stop. Still, get off there, walk a few blocks, and you find yourself in a micro-economy that, in its own way, has more in common with America of the 1950s than 2014.
There are, of course, no shaded areas along the block I was visiting in what has traditionally been known as Spanish Harlem, no boyish Little League games. But what you do find are locally owned stores with hardly a franchised or corporately owned place in sight. The stores are stocked with a wondrous hodge-podge of what people in the area need, including South American root vegetables, pay-as-you-go cell phones, and cheap school supplies.
These stores could not exist in many other places. They are perfectly adapted to the neighborhood they are in. While the quality of goods varies, prices are wondrously below what similar things cost a half-dozen subway stops away in midtown Manhattan. In the stores, the employees of these family businesses speak the same languages as their mostly Dominican immigrant customers, and those who work there are eager to make suggestions and help you find things.
People actually chat with each other. Customer loyalty is important, so prices are often negotiable. When he discovered that his customer was also his neighbor, one shop owner helped carry purchases upstairs. Another store informally accepted and held package deliveries for neighbors.
The guy selling frozen ices on the sidewalk nearby did not work for a conglomerate and doled out healthy-sized servings to his regulars. He told me that he bought his raw materials in the very grocery store we were camped in front of.
Even at night, the sidewalks here are full of people. I never felt unsafe, even though I obviously wasn’t from the neighborhood. People seemed eternally ready to give me directions or suggest a local eatery I shouldn’t miss. The one established mega-corporate store in the area, a Rent-a-Center charging usurious prices for junk, had no customers inside on the day I visited. The shop next to it, with an impressive array of used TVs and small appliances from unknown Chinese manufacturers, seemed to be doing gangbuster business. The owner shifted among English, Spanish, and some sort of Dominican creole based on the needs of his customers.
Few things here are shiny or new. There are vacant lots, an uncomfortable sight at night. Homeless people, some near naked despite the weather and muttering to themselves, are more prevalent than in Midtown. The streets have more trash. I saw drug deals going on against graffiti-scarred walls. There is a busy methadone clinic on a busy street. Not everyone is the salt of the earth, but local businesses do cater to the community and keep prices in line with what people could pay. Money spent in the neighborhood mostly seems to stay there and, if not, is likely sent home to the Dominican Republic to pay for the next family member’s arrival in town — what economist John Maynard Keynes called the “local multiplier effect.” One
study found that each $100 spent at local independents generated $45 of secondary local spending, compared to $14 at a big-box chain. Business decisions — whether to open or close, staff up or lay off — were made by people in the area face-to-face with those they affected. The businesses were accountable, the owners at the cash registers.
The stretch of Spanish Harlem I passed through is a galaxy away from perfect, but unlike Weirton, which had long ago given up, Atlantic City, which was in the process of doing so, or Camp Lejeune, which had opted out of the system entirely, people are still trying. It shows that an accountable micro-economy with ties to the community can still work in this country — at least in the short run. But don’t hold your breath. Target recently opened its first superstore not far away and may ultimately do to this neighborhood what cheap foreign steel imports did to Weirton.
I grew up in the Midwest at a time when the country still prided itself on having something of a conscience, when it was a place still built on hope and a widespread belief that a better future was anybody’s potential birthright. Inequity was always there, and there were always rich people and poor people, but not in the ratios we see now in America. What I found in my travels was place after place being hollowed out as wealth went elsewhere and people came to realize that, odds on, life was likely to get worse, not better. For most people, what passed for hope for the future meant clinging to the same flat-lined life they now had.
What’s happening is both easy enough for a traveler to see and for an economist to measure. Median household income in 2012 was no higher than it had been a quarter-century earlier. Meanwhile, expenses had outpaced inflation. U.S. Census Bureau figures show that the income gap between rich and poor had widened to a more than four-decade record since the 1970s. The 46.2 million people in poverty remained the highest number since the Census Bureau began collecting that data 53 years ago. The gap between how much total wealth America’s 1% of earners control and what the rest of us have is even wider than even in the years preceding the Great Depression of 1929. Argue over numbers, debate which statistics are most accurate, or just drive around America: The trend lines and broad patterns, the shadows of our world of regime change, are sharply, sadly clear.
After John Steinbeck wrote The Grapes of Wrath, he said he was filled with “certain angers at people who were doing injustices to other people.” I, too, felt anger, though it’s an emotion that I’m unsure how to turn against the problems we face.
As I drove away from Atlantic City, I passed Lucy the Elephant still at her post, unblinking and silent. She looks out over the Boardwalk, maybe America itself, and if she could, she undoubtedly would wonder where the road ahead will take us.
Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!
It’s not Trump you have to worry about. You’re thinking short-term.
As people struggle to find third-parties to blame for Hillary Clinton’s defeat (pick one or more: Putin, Bernie Bros, Comey, The Media, Electoral Collegians, the Racist/Misogynist Hordes), an amorphous group has emerged as a popular domestic target: stupid poor white people who do not understand how much better they have had it over the last eight years.
These slack-jawed yokels just can’t seem to grasp that they have great jobs in a growing economy. The numbers prove it: the U.S stock market is at record highs and unemployment at its lowest level since the Great Recession.
“Anyone claiming America’s economy is in decline is peddling fiction,” Obama said in his 2016 State of the Union address. He said his team has created a “more durable, growing economy” with “15 million new private-sector jobs since early 2010.” Tim Kaine also used the 15 million jobs talking point in the vice presidential debate.
But the problem isn’t jobs per se, it is income inequality.
This is the basis of the sense of economic disenfranchisement that drove many voters to seek change this past election, even if after seeing Sanders pushed out of the race that change meant overlooking Candidate Trump’s many shortcomings.
A big part of this inequality is while more Americans are working, more are working part time without benefits. Since 2007, the number of Americans involuntarily working part time has increased by nearly 45 percent.
Coupled with that is what many of those workers see as the failure of the Affordable Care Act (ACA; Obamacare) to live up to its promises. ACA was supposed to be the government supplying a key benefit employers refused to offer to part-timers. People may indeed now have access to insurance, but with high deductibles, they may not have access to healthcare. These are not people with ideological problems with Obamacare. They need help for their families and want the ACA changed.
In addition, because larger employers have to start paying into the ACA fund for each employee who works more than 29 hours a week, employers who offer the most jobs, retail, hospitality, and fast food, have cut most part-timers to 29 hours a week, down from the once-standard 39 hours a week that kept them outside of overtime.
Wages saw their biggest jump this year since 2008 — 2.9%. However, most of that increase came only in states that chose to raise their minimum wages independent of the stagnant federal minimum wage. And with inflation running about 2%, most of any increase was washed away. And what is .9% of minimum wage anyway? Pretty close to not a helluva lot.
Higher costs and less money. And of course for part-timers, vacation days, sick leave, pensions, child care, and other benefits remain elusive at best. The result is a workforce making up the gaps with multiple jobs, food benefits, and opioids. And they voted against the candidate that made a talking point out of saying she would maintain the status quo that was killing them.
Trump, of course, is unlikely to change much, but he represents change and that apparently was enough for a very large number of voters who still believe government may yet help them.
Their inevitable disappointment is likely to lead one of two ways: a complete giving up, a sad resignation they should be happy they get anything at all, or a rage that will seek out a true demagogue.
For despite all of the apocalyptic prose spewing out of cranky Clinton supporters and all the newly-minted, New York-based, Midwestern blue collar experts, Trump is not the antiChrist of American politics. He is a minor celebrity who stumbled into a stream of history, a classic case of being in the right place at the right time.
But keep an eye out in eight years for the next guy. That’s the one to fear.
BONUS: Here’s another opinion on all this, titled “It was the racism, stupid: White working-class ‘economic anxiety’ is a zombie idea that needs to die.”
And if Dems, progressives, liberals, whoever, keeps insisting poor whites are racist-sexists who voted for Trump primarily because he encourages their hate vibe, then the next Democratic candidate will lose their votes again. Given the drift of the economy, there will be more of them next time, too. This election was a pay-attention-notice to the Democratic party, and it is so far not just ignoring it, it is saying the whole notion is wrong.
Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!
I was talking to the African-American guy at one of the places I work. He’s about my age, and a janitor. He makes minimum wage, I make double that, but neither of us get any benefits and the only paid sick days either of us have are the few mandated by state law. We talk.
He seems less worried than I am about what will happen under the Trump administration to people of color. I’ve been reading Huffington Post and watching SNL, and there’s a lot to be worried about. I mean, Twitter much? It’s happening.
My janitor says I should be OK, but he’s “been f*cked for a long time.” While I was in college, he was in the Army, where the job skill he acquired was to drive a truck. Still, after the Army, he worked for Ford as a welder, the only job he ever had where he made more than minimum wage, at least until the factory closed down, sending him into a janitorial career. He can’t remember how many times he’s been hassled by the cops walking to and from work during the last eight years alone.
Anyway, we talk like this because I am a woke person (I studied that in grad school instead of working at Ford.) Some things we don’t have time to talk about because, well, he’s pretty busy cleaning up after all of us at work include, as the new administration takes office:
— From 1980 to 2008, the number of people incarcerated in America quadrupled, from roughly 500,000 to 2.3 million. The U.S. is 5% of the World population and has 25% of world prisoners. One in every 31 adults in America is under some form of correctional control.
— African-Americans constitute nearly one million of the total 2.3 million incarcerated population, locked up at nearly six times the rate of whites. African American and Hispanics comprise 58% of all prisoners, though only about one quarter of the U.S. population.
— One in six black men had been incarcerated as of 2001. If current trends continue, one in three black males born today can expect to spend time in prison during his lifetime. About 58% of the youth admitted to state prisons are Black.
We also didn’t have time to discuss that the reason Black Lives Matter exists right now is because unarmed Black people were killed at 5x the rate of unarmed whites in 2015. On average, two unarmed Black people a week are killed by police. Only 10 of the 102 cases in 2015 where an unarmed black person was killed by police resulted in officer(s) being charged with a crime, and only two of these deaths (Matthew Ajibade and Eric Harris) resulted in convictions of officers involved. In only a small handful of those killings did the current administration order the Justice Department to look into federal civil rights charges.
I had to get going (birthday party in the breakroom, but none of my millennial colleagues remembered to invite the cleaning staff, except maybe to sweep up afterwards), so we didn’t talk about African-American voter suppression in elections from 1869-2016, or mention that those Black people in jail, the ones inside the wall for felonies, are by and large denied the right to vote even after they get out.
He shared some thoughts as the term of America’s first black president ends.
He said he kinda wished Obama had worked harder to raise the minimum wage (last time on the federal level was 2009, but it was voted on by Congress in 2007 under Bush) and made available health insurance that had a deductible he could afford, but I quickly explained that that was all the Republicans’ fault, and pointed out the number of people of color Obama had appointed in his administration, as well as his many inspiring and heartfelt speeches after each mass shooting in America.
Anyway, there’s a lot of worry about come January, we agreed. He thanked me for standing with him in solidarity, changing my Facebook photo to reflect awareness, and asked that I pass along to the others at work that they please make sure their used paper towels end up in the trash can instead of next to it.
BONUS THE POINT: The setting is made up. So’s the janitor. That is satire, sarcasm, a fictional construct to say the problems of people of color will have under Trump are sadly nothing new. They are institutional — American — to our nation’s racist core. If anyone who cares tries to say the real issues are all part of one guy, Trump, they will imagine everything will be better when Trump goes away (Recount!) Well, Trump has “been away” for a very long time and look what’s happened. We have to fix a system now hundreds of years old in the U.S., fix ourselves, or nothing good will come of a Trump presidency, or any other.
It’s not about left and right anymore, not about Black and White. It is all about up and down. And it elected Donald Trump via a bumpy road. The next candidate to really figure it out will sweep into power.
And what it is is stated succiently by former McCain campaign chief strategist Steve Schmidt: jobs, specifically the loss of jobs to technology and globalization, and the changes to our society that that is causing.
The defining issue of our times, says Schmidt, is the displacement of workers, particularly those who traditionally held working class roles. America is watching a leveling down unprecedented in its history, a form of societal and economic devolution.
“I think that’s going to be the new fault line in American politics,” Schmidt said. “And the voters, the Bernie Sanders voter and the Trump voter — like fish netting, the fish can swing through the netting from left to right very, very easily.”
Schmidt focuses on Silicon Valley. “Let’s look at the Silicon Valley wing of the Democratic party and be clear about the partisan nature of all of these companies. We have these arguments about minimum wage — $12, $15. We’re 18 months away in this country from a robot in the window at the McDonald’s handing you your cheeseburger.”
“The number one job for not-college educated men in America is driving something somewhere. So when we talk about an era now of driverless trucks, driverless cars, where do those jobs go? Where’s that displacement?” Schmidt continued.
In essence, the growing irrelevance of American workers.
What started with the globalization of the 1980s, the literal export of jobs to places abroad chasing cheaper labor, is transitioning into its next phase, the “export” of jobs into the hands of automation. Traditional employment once considered secure (albeit low paying) that cannot be physically exported because it needs to happen at a specific geographic location, such as with service tasks, is doomed as sure as those jobs that used to be done by steelworkers in Ohio but now are performed in Shenyang.
Of course someone reading this will be mumbling something about to hell with those workers, let them get an education, retrain, whatever Darwinian crossed with dystopian curse they can conjure. The problem is long after you take away the jobs the people are still going to be there.
And while no one in Washington really cares about what happens to those workers per se, as long as they can vote they will matter to politicians.
It takes a special kind of demagogue, one with even more cynicism than usual, to fully exploit those workers’ literal fears for their lives, but s/he will emerge. Think of Trump as version 1.0, a kind of beta test. Trump likely never knew what he had within grasp, and spoke to this displaced group largely cluelessly and without the sophistication of a proper strategy.
But the next Trump will have the “advantage” of another four years of economic displacement, a slicker media profile undistracted by Trump’s crude buffoonery, as well as advisors like McCain campaign chief strategist Steve Schmidt, whispering lines in his or her ear that sound like bastardized versions of Springsteen lyrics. The hate mongering, racism, and name calling will be toned down for wider appeal.
Now there’s something to be afraid of.
You hear the expression “lesser of two evils” when people talk about how they will vote in November.
Poll after poll shows a growing number of voters saying they will vote negatively – they’re against Hillary, so they’ll hold their nose and vote Trump, and vice-a-versa.
It is also likely a large number of discontented voters will simply stay home on Election Day. Both candidates are among the most unpopular and least trusted in American history. One of them will end up in the White House.
How did we get here? How is it the only two mainstream candidates left standing Hillary Clinton and Donald Trump?
Hillary Clinton: All Appetite
Hillary Clinton is the archetypal 21st century candidate’s candidate, a fully formed tool of the oligarchy. Whether she wins or loses in November, she is the model for the next era of American politics.
Clinton sees The People as some mass to be pandered to and manipulated. She is simply a machine to gain power for its own sake (and money.) The One Percent tagged her early as exactly who they want to see in charge, someone who could be bought off, and she was nice enough to create her own vehicle to allow them to conveniently do that — write a check to the Clinton Foundation. As a bonus, it was also tax-deductible.
If Hillary did not exist, it would have been necessary for the wealthy who control most of America to create her.
The Once and Future Hillary
That wasn’t necessary, as Hillary Clinton had spent her entire life preparing for this.
By all accounts an intelligent, committed, feminist coming out of law school, she quickly fell into the TV classic 1950s role of dependent spouse, as “first lady” of Arkansas when Bill was governor, and of course, in the White House. Sure, she was given health care to mess around with during Bill’s first term, but when the issue crashed and burned, her role was reassigned to make safe speeches calling for more rights for women and girls. Safe in that she was allowed to pound the pulpit for those ideals in enemy territory like China, but not in countries like Saudi Arabia.
She was the good wife. And good wives look the other way when hubby strays a bit, even to the point of having sex in the Oval Office. And that’s because Hillary knew the Democratic Party would owe her for not blowing things completely apart in a messy divorce certain to reveal even more bad news.
First up was a Senate seat, a springboard for her presidential run.
In November 1998 four-term incumbent Democratic New York Senator Daniel Patrick Moynihan announced his retirement, opening a seat in a Solid Blue state. In early 1999 the Clinton’s bought a house in Chappaqua, New York (with “donated” money), all so that by September she was eligible to run as a “New Yorker.” While in the Senate Hillary was served up prime committee slots, and voted the safe votes (the Iraq War vote was safe at the time, of course, as everyone wanted to go to war. Nobody foresaw that one bouncing back the way it did.)
By the time the George W. Bush era finally gave up, everyone on earth knew the next president was going to be a Democrat.
So 2008 was going to be Hillary’s big moment, the first woman president, the one to clean up the Bush wars, who knows, maybe even score a Nobel Prize. But Hillary misread the degree of change Americans wanted, and in return for putting her plans on hold for another cycle or two, she settled in for four years as Secretary of State as a consolation prize. And have you heard? She sat in the Situation Room the night bin Laden was killed!
Taking No Chances
As the 2016 election approached, the Clinton’s took no chances.
The favors Hillary accrued as Secretary of State via the Clinton Foundation were transformed into money and support. As she pretended not to run, Clinton packed her campaign war chest with big-money speeches. A happy “listening tour” (remember the Scooby Van?) was created to show everyone how human Hillary was. Debbie Wasserman-Schultz lined up the Democratic Party machinery. Designated schulp Martin O’Malley was set up as the loyal opposition so Hillary could create the appearance she was running against someone in the primary.
Then, oops, Bernie.
When Bernie Sanders came out of nowhere (as had Obama in 2008), Clinton again misread or did not care about how much change many Americans sought. As many long-suspected, and as we all now know after the hacks of the Democratic National Committee servers, the Party machinery was brought to bear against Sanders. The mainstream media was lined up to belittle, marginalize and ignore him. The millennial vote Sanders inspired was largely written off by Clinton. Bernie was reduced to a sad, little old man helping nominate someone at the Democratic Convention he clearly loathed.
Add to that the flood of disdainful remarks talking points-prepped Democratic pundits spewed forth, announcing as one support for Libertarian Gary Johnson or Green Party candidate Jill Stein is near-treason. A voter’s well-reasoned, act-of-conscious decision to support one of the two is held as nothing less than support for the Dark Lord.
The Democrat machinery and the people who control it made Clinton the inevitable candidate. There was no one else who ever had a chance. America was told to suck it up and vote for her, whether they liked it or not.
Trump Stumbles into His Role
The Republican Party fully misunderstood its constituency, thinking one of a spray of robo-candidates would be good enough to simply run as Not Obama, Not Hillary.
Each candidate on offer fell into the mold of ultra-mainstream, such as the why-am-I-here Jeb Bush, or the nut case category with Ben Carson. Ted Cruz couldn’t make up his mind, and vacillated between the two options. The plan was likely to meld the two wings into a ticket and scoop up as many conservative votes as possible.
Whatever Trump may have really been thinking when he started his campaign, he stumbled on to something hiding in plain sight. Large numbers of Americans, mostly white and formerly middle class, were angry. They were really angry. They had been left behind as the country changed, left like an audience at a magic show who saw the trick done, but couldn’t for the life of them figure out how it had happened. These people knew they were getting poorer, they could not find decent jobs, and they wanted someone to blame.
He told them it was not their fault. It was because of Obama, it was the Chinese, it was the Muslims, the Blacks, the Democrats, NAFTA, immigrants, refugees, whoever they feared and hated, whatever they wanted to hear. He told them their racism and hate was valid, and gave them a place to express it as no one in the mainstream had ever before done in a modern campaign.
Trump became a predator sniffing the wind. When he sensed people fed up with Hillary’s scamming for donations, he said he was self-funded. When he sensed people wanted change, he said he was an outsider. When voters tired of Hillary’s lawyerly answers and outright lies, Trump came out as plain spoken, even rude and crude — what candidate before had ever spoken of his penis size on the national stage?
Weakness overseas? Bomb the f*ck out of them. Worried about China? Renegotiate. Tired of terrorists? Torture them, maybe kill their families. Problems with the economy? I can fix it, says Trump, and he didn’t need to explain how because while no one really believes it, they want to believe.
Whole races and religions were condemned. People were bored with long think pieces and empty political language. Trump dished things out in 140-character Tweets. Voters made up their minds with the same tool they use to follow Beyonce.
As a sign of Trump’s populism, and his popularity, he has garnered more small-dollar donations for the GOP than any other Republican candidate in history, and all that only since he seriously started asking for contributions in June. “He’s the Republican Obama,” Politico quotes one operative about Trump monetizing his Republican supporters.
Like nearly every person in the media, and the Democratic and Republican parties, I suspect when he first started out Trump never expected the ball to bounce as it did. Running was an ego thing, an elaborate prank, performance art, something maybe good for business. No such thing as bad PR.
But as others wrote him off, including the oligarchy, Trump learned.
Every time someone said “well, that’s the end of Trump” after some outrageous statement, Trump learned he needed only to top himself in the next sound bite. People wanted him to be racist, they wanted him to be larger than life, and they didn’t care if he lied or exaggerated. Most of the media, still reporting his latest statement (birther, debates are rigged) as a bad thing, still don’t get it.
Face It: They Are Us
America will have Trump or Clinton in the White House for the next four years because they are us.
Clinton is the ultimate end product of a political process consumed by big money. She is the candidate of the One Percent. She believes in nothing but the acquisition of power and will trade anything to get it. The oligarchy are happy to help her with that.
Trump is the ultimate Frankenstein product of decades of lightly-shaded Republican hate mongering. He is the natural end point of 15 post-9/11 years of keeping us afraid. He is the mediagenic demagogue a country gets when it abandons its people to economic Darwinism, crushes its middle class, and gives up caring what happens to its minorities.
Both candidates are markers of a doomed democracy, a system which somewhere in the past reached its apex and has only now declined enough that everyone, not just the boiling frogs, can see where we are. They’re us, people. We watched this happen, and we’ll be stuck trying to live with the results.
In the presidential debates, Trump and Clinton referenced the NAFTA and TPP trade deals. What are they and are they good, or bad, for America?
What Are NAFTA and TPP?
The North American Free Trade Agreement (NAFTA), which went into force in 1994, and the Trans-Pacific Partnership (TPP), which is still pending ratification in the U.S. and elsewhere, are international trade agreements.
Trump is unambiguously, totally, absolutely, hugely opposed to both deals and any others in the future. He has held that position from Day One.
Clinton, less so. NAFTA was pushed through by Bill, and Hillary continues to defend it. As Secretary of State she strongly advocated for the TPP. She continued that advocacy during the first part of her campaign, right up until Bernie Sanders started to score points against her by opposing it. Hillary then shifted to also opposing it. No one knows what her stance will be if she is elected.
Meanwhile, the Obama administration is still hoping to force TPP through a lame duck Congress following the election. Hillary would then be free to shrug her shoulders come January and claim the TPP is not her responsibility.
The Basics Of Trade
International deals like NAFTA and the TPP are designed to promote more trade, more goods and services, and sometimes more workers, moving across borders. The deals typically reduce taxes and tariffs, change visa rules, and sometimes soften regulations that keep foreign products out. The phrase used most often is “lower the barriers.”
So, if widgets made at a higher cost in the U.S. can be made more cheaply in Vietnam and then imported into the U.S., something like TPP can facilitate that by lowering American tariffs on widgets. Meanwhile, Vietnam might be required to change its agricultural import system to allow American genetically modified fruit into Hanoi’s supermarkets.
Looking at You, NAFTA
NAFTA is a good place to start in learning more, as it involves three countries — the U.S., Canada, and Mexico — that generally get along, play reasonably fair, and already had a robust cross-border trade. Lots of non-variables there. Plus, since NAFTA’s been around for over 20 years, there should be a decent consensus on how it worked. That will provide a real world example to weigh against a newcomer like the TPP.
There are numbers. For example, the U.S. Chamber of Commerce says increased trade from NAFTA supports about five million U.S. jobs. Unemployment was 7.1% in the decade before NAFTA, and 5.1% from 1994 to 2007. But then again unemployment from 2008 to 2012 has been significantly higher.
You can find similar ups and downs on imports and exports, the value of goods, and the like. Some are clearer than others; since 1993, U.S. exports to Canada and Mexico have climbed 201 percent and 370 percent. The problem is trying to attribute them. Global economics is a complex business, and pointing to a singularity of cause and effect like NAFTA is tough. And NAFTA, remember, was just three countries. The TPP would draw in 12 nations.
The Latin phrase cui bono means “who benefits?,” and is used by detectives to imply that whoever appears to have the most to gain from a crime is probably the culprit. More generally, it’s used to question the advantage of carrying something out. In the case of things like NAFTA and TPP, the criminal context might be more applicable.
NAFTA made certain products cheaper for American consumers, as manufacturing costs are lower in Mexico than Idaho. American companies who found new export markets abroad also saw a rising tide of new money. That’s the good part (for a few.)
However, allowing American firms to make things abroad and import them into the U.S. free or cheap moves jobs out of the United States. A current case cited by Trump is Carrier. Carrier sent 1,400 jobs making furnaces and heating equipment to Mexico. Mexican workers typically earn about $19 a day, less than what many on Carrier’s former Indiana assembly line used to make in an hour.
Carrier will see higher profits due to lower costs. They put Americans out of work.
Economists will often claim that such job losses are part of the invisible hand, how capitalism works, duh. The laid off workers need to learn to code and build web pages, migrate to employment hot spots such as California like a modern day Tom Joads. But pay a visit to nearly anywhere in what we now blithely call America’s Rust Belt, and see how that’s working out.
Retraining industrial workers just does not happen overnight, even if there was free, quality education (there’s not.) Indeed, since the beginnings of the hollowing out of America, it has not happened at all.
The risk is also that retraining takes unemployed, unskilled people and turns them into unemployed, skilled people. Training is only of value when it is connected to a job. Remember, even if all those unemployed Carrier people somehow learn to build web pages, America’s colleges are churning out new workers, digital natives, who already have the skills. Even Silicon Valley’s needs are finite.
Everybody Wins, Except for Most of Us
Economist Robert Scott claims over the last 20 years, trade and investment deals have increased U.S. trade deficits and cost Americans their jobs. For example, the agreement allowing China into the World Trade Organization led to trade deficits that eliminated 3.2 million jobs between 2001 and 2013. Meanwhile, the United States already faces a trade deficit with countries in the proposed Trans-Pacific Partnership that cost two million U.S. jobs in 2015.
In his 2008 book, Everybody Wins, Except for Most of Us, Josh Bivens showed increased global integration harms working Americans. Bivens estimated that the growth of trade with low-wage countries reduced the median wage for full-time workers without a college degree by about $1,800 per year in 2011.
A Broader View
If one is asking whether or not international trade agreements are good for America, one needs to think bigger. On a whole-of-society level, economics is about people. We all want American companies to make money. It’s also great that Walmart is full of low-cost consumer electronics from Asia, or Carrier air conditioners fresh from Mexico, but you need money — a job — to buy them.
Think broader, and you’ll see economics is about people. Let that answer the question for you about whether international trade agreements are good or bad for America.
How ya’ doing? I mean money-wise. Too much? Maybe not enough?
So let’s listen to economist Paul Krugman explain why we are so screwed. Not we will be screwed, or maybe things will go that way, or we will in the future. Nope, it already happened, though most of us haven’t yet figured it out.
Krugman, and the economist he discusses, Thomas Piketty, paid attention in math class, and the other classes, too. That’s why they understand this stuff and I’m still trying to suss out why no matter how many hours I stay on the job and how much I save, it is never enough.
In case you’re reading this on your 15 minute break at Target, I’ll try to summarize.
The American Dream (Patrimonial Capitalism)
The myth of the American Dream is the dominating factor in keeping people mostly complacent in the United States. You know it — work hard, and your life will improve. Well, maybe not your life, but your kids’, or at least your grandkids’. If that doesn’t work, it is the fault of the Irish immigrants, or the darn Chinese, or those welfare freeloaders. Ask Donald Trump how it all works.
The thing that makes the myth so powerful is that the tiny percent that is true sounds better than the 99 percent which is a lie. As long as near-constant growth could be assured, enough pieces would fall to the the lower and middle classes to make the Dream seem real. It helped that a kindly media would promote the heck out of every exception, whether it was the shoeshine boy in the late 19th century who went to college, or the plucky guys who invented some new tech in their garage and became billionaires. See, you can do it too, just like if we run hard enough, everyone can be in the Olympics. It’s just a matter of wanting it, believing in yourself, having passion and grit, right?
The Undeniable Reality of the Now
The bulk of the industrial jobs are gone and never coming back; ask Detroit, or the people in Youngstown and Weirton. People have been talked out of most union jobs, convinced somehow that organizing was not in their own interest, and now they find themselves accepting whatever minimum of a wage they can get. Food stamps and other need-based programs are finding more and more middle class users, as suburban people who once donated to charities are now lining up out front of them. Health care paid for by our own taxes is seen as a give away to lazy people. This is the stuff Bernie Sanders talked about.
Like with gravity, the universe doesn’t care if you “believe” it or not; it is just true, independent of what you “think.” That you have been taught this all is something you can choose to believe or not is the weight that holds us all down.
Drilling Down Into Our Miserable Lives
In case you have a few more minutes on your break, or if you’ve been laid off since starting this article, here are some more things happening out there whether you believe in them or not. You can read more about all of this in Thomas Piketty’s book, Capital in the Twentieth Century.
— Our income inequality rate is higher than it ever has been in our own history, is growing, and is higher than in countries in Western Europe and Canada.
— The inequality is driven by two complementary forces. By owning more and more of everything (capital) rich people have a mechanism to keep getting richer, because the rate of return on investment is a higher percentage than the rate of economic growth. This is expressed in Piketty’s now-famous equation R > G. The author claims wealth is growing at six-to-seven percent a year, more than three times faster than the size of the economy.
— Wages are largely stagnant, or sinking, driven by factors in control of the wealthy, such as automation that eliminates human jobs and the not-adjusted-for-inflation minimum wage more and more Americans now depend on for their survival.
— All of this is exacerbated by America’s lower tax rate on capital gains (how the rich make their money) versus wages (how the 99 percent make their money.)
— Because rich people pass on their wealth to their relatives, the children of rich people are born rich and unless they get really into fast women and cocaine, will inevitably get richer. They can’t help it. The gap between the one percent and the 99 percent must grow.
— Social reforms, such as increased education opportunities and low-cost health care, are incapable without tax changes significantly affecting income equality. The only people who can change society are those who profit from it not changing. That’s the big reveal on why we are in so much trouble.
FUN FACT: Until slavery was ended in the United States, human beings were also considered capital, just like owning stocks and bonds today.
One of the defining aspects of traditional capitalism is that the Capitalist, that one percent guy from the Monopoly game with the top hat, spats and monocle, invests capital. That investment, in land, a factory, an oil well, creates value (the monies) for him, and jobs for the rest of us.
The idea is that because the Capitalist risks his money/capital, he is assuming the greater risk and thus deserves the greater gain. This has been the way things have worked since feudal lords controlled land and allowed sharecroppers to keep pennies on the dollar they earned for him, on through to when people built factories and opened stores.
Traditional capitalism is that stuff you slept through in Econ 101. Risk gain, employment, jobs, whatevers unless you live off an allowance from Daddy.
Until the arrival of the gig economy.
The Gig Economy
For those who are living off an allowance from Daddy, or are one of the eleven Americans who still hold a traditional “job” where you do stuff, get paid a regular salary not tied to how many sneakers you sew each day, and receive those “benefits” you once heard grandpa speak of, the gig economy is where you work piecemeal, get paid a few table scraps and have no benefits or job security because you really don’t work for anyone.
These “gigs” are almost always performing low-level services, such as delivering food to or driving around people much wealthier than you. Those people cannot be bothered to walk to a restaurant or pilot a motor vehicle or clean up their kids’/doggies’ poo, so you do it because you don’t have many other options in hope of earning something more than minimum wage.
The gig economy is sometimes also known as the 1099 economy, after the IRS form used to report non-employee earnings, or the on-demand economy based on the way people get or don’t get opportunities to work. No one knows how big this shadow economy is, given the shifting nature of the work and the cash payments sometimes involved. But it is big and it is growing.
The less-discussed game changer of the gig economy is that traditional capitalists no longer need to put much money at risk at all. In fact the companies behind the gig economy, the people who run Uber and the others, are economically viable because they offload their cost of capital — the investment and depreciation on cars and the cost of keeping a driver fed and healthy — onto the drivers, who are only willing to accept such a bad deal because the labor market sucks. See how that works?
And if that’s not problem enough, the cheaper wages paid (for example, by Uber) to drivers, and thus the cheaper rides, also drive business with capital structures which make social sense out of business. They can’t compete with “drive your car into the ground, make whatever you might get along the way while we cash in.”
And when you talk about driving these days, you’re talking about Uber.
Uber has succeeded in almost completely pushing its operating costs (absent the relatively small investment needed to run the app and backoffice) down to people who often can’t afford it but are lured into trying because the alternatives seem even lower paying.
To drive for Uber, you need a late model car, in great shape, with four doors. It doesn’t have to be a black sedan, but if it isn’t Uber will exclude you from a number of ride requests.
So where does someone without a lot of money get a late model black sedan? If they can afford it, they buy one, but that means laying out a lot of money and taking on some heavy credit up front. More than likely, however, what a budding Uber driver does is lease his black sedan from an Uber-suggested third party contractor. You’ll find them right on the Uber website. They’ll take an average $500 deposit to sign you into a three year lease running $300 a month. So that all adds up to a capital investment by the driver of $11,300 over three years.
Next capital cost to the driver is insurance, expensive insurance, because the cheap minimum stuff you buy off the TV ads is not going to cover you driving passengers around. Don’t worry, though, as Uber will sell you just what you need, albeit at $4,600 a year. That works out to $13,800 for three years.
And, hey, driver, you need to pay for licensing, gas, maintenance, fines, regular car washes, depreciation of your vehicle and all the other stuff. Over three years, let’s call it $5,000.
So overall, the cost for you to get a job with Uber is about $30,100 over three years. If you don’t have the cash on hand, and need to borrow it, add on 13% interest or more if using a credit card, maybe more for second-level sources for people who don’t qualify for good credit.
But wait — many jurisdictions are now demanding additional licenses from Uber drivers, claiming they are operating a business. One of the more extreme plans under consideration is in Newark, New Jersey. The city is looking at a $500 annual fee to operate in the city, $1,000 additional license to pick up and drop off passengers at the airport and Newark Penn Station, and a $1.5 million insurance coverage requirement.
If the driver fails to make any of those payments, s/he instantly becomes unemployed, unable to pay enough to have a job to earn enough to pay for that job. This is, in economic terms, an extractive process — a third party takes profit, leaves the true costs of capital to the workers, and when they fail, to society who will need to step in and provide food benefits as a last resort.
In addition to having to raise their own capital to essentially buy themselves a job driving for Uber, drivers face risks far above the simple “risk” associated with any “investment.”
In addition to the obvious risks of accidents, bad reviews, and good/bad weather that cuts the number of people seeking rides, perhaps the biggest financial risk to any driver is Uber itself.
Imagine a situation where there are 10 riders in a city, and ten Uber drivers. For argument’s sake, let’s say each driver gets one fare a night. Uber makes money on its 27% share of 10 rides. Now, increase the number of Uber drivers to 100 (which makes getting a ride easier and faster for quicker profit for Uber and protects Uber when drivers quit) while the number of rides stays at 10. That means 90 drivers make nothing each night. Independent of the number of drivers, Uber still makes the same money on its share of 10 rides.
In 2015, Uber doubled the number of drivers in the U.S. As of October 2015, the company had 327,000 active drivers, more than doubling the 160,000 that gave rides in 2014. Some of the new drivers are absorbed by growth in ridership, some are not.
The other risk is that Uber sets prices, which vary even though the driver’s costs do not. For example, in order to theoretically boast ridership, Uber lowered prices in New York City such that individual drivers saw an average decline in payouts of 15%. The company also experimented with rate cuts in 99 other North American cities.
UberPool is a new service where multiple customers headed the same way can “share” a car.
Imagine two Uber drivers each carrying a single passenger along the same route which results in a fare of $11. After Uber takes its brokerage cut as well as its “safety fee” (even though the company still has the poorest driver background checks in the taxi industry), each driver ends up with $8 each in pocket, while Uber ends up with $6, a 27% commission for Uber.
Now along comes UberPool, and these same two serial riders get picked up by a single driver. Since UberPool offers passengers a substantial discount for sharing a ride, that means each passenger now pays $6 (in this example). After Uber takes its commission, including the safety fee, the payout to the driver is $4 for each passenger, or a total of $8. So the driver makes the same amount, but Uber’s take of the overall $12 for this ride is also $4 – a 33% overall commission. So Uber makes a higher percent on UberPool rides, yet the driver makes about the same amount.
The other side of financial risk is financial return, what you get after investing capital. For Uber drivers, there is no realistic average. Take a look at one of the many online driver forums and you’ll see a range of claimed payouts so wide (from sub-minimum wage to thousands a week) that it is of no real value. Here is at least one reasonable breakdown of costs and payouts.
Leaving aside the forum posters who are just lying for whatever reason, the variables of driving for Uber are such that averages are not really possible. One of the few variables under the driver’s control is number of hours worked, and many of those who claim high weekly payouts also claim to drive 12 or more hours a day. Leaving aside the not inconsequential question of whether you feel it’s safe to catch those guys 11.5 hours into their shift, it leaves the economic question of how many hours a week it takes in the gig economy to earn a decent living.
The New World Order
Unlike conventional labor, where one starts at zero on day one and begins earning money, or traditional self-employment where in return for capital investment one keeps 100% of the profits, the gig economy’s main point is that people working for places like Uber start behind, maybe $10,000 in the hole after they secure a car, insurance and all the rest. Uber, however, begins profiting from the driver’s labor immediately, and loses nothing when the driver is pushed aside.
All of the gain, none of the risk, in the New Economy where people pay for their own jobs.
What other business is there where the Capitalist takes almost no risk, invests no capital, and pushes all that down on his workers alone, while raking in money? Oh, rights, pimps. Welcome to the gig economy.
Like every American city in the Age of the 99 Percent, Los Angeles has a significant homeless problem.
Full-on shantytowns are now a feature of LA’s urban landscape, with colonies of desperate men and women setting up camps, and building shelters out of tarps, wherever they can find safe space to do so. The city’s homeless population rose 20% over the last two years, now estimated at 26,000 human beings, fellow Americans.
What to do about such a problem? Build affordable housing? Increase shelter outreach? Provide mental health and substance abuse counseling? Job training? Compassion for those less fortunate?
The Los Angeles City Council approved a law Wednesday that limits the possessions of homeless people to what can fit in a 60-gallon trash bin. The measure spoke to the will of the people, passing on a 13-1 vote, with some hippie councilman opposing. Another city councilman, who voted for the law, said the measure “balanced the city’s need for safe and clean streets with homeless people’s personal property rights.”
As long as those personal property rights are limited to what the LAPD, acting on behalf of the well-to-do, can easily throw away.
But some good news: the council backed off even stricter rules that would have limited homeless people to what they could carry in a backpack. But the law allows the city to clamp down in this way in the future without further public discussion.
Under the new measure, the city can impound homeless people’s “excess personal property” after providing 24 hours’ notice. The city will store the items for 90 days, during which time the owners can claim them. But they cannot evade further confiscation by moving the items to another public area, the ordinance says.
With no advance warning, the city can seize and impound a tent that has not been taken down during the day. Bulky and contaminated items can be seized and discarded without warning. Wheelchairs, crutches and walkers are currently exempt.
“We recognize this is just one step forward to address the homelessness crisis,” said the president of the Central City Association of Los Angeles.
Why, next thing you know the LAPD will just start putting rounds downrange and deal with the homeless in what will no doubt be called the final solution, of freedom.
(FYI: The photo above is my own, taken in New York City’s Washington Square Park; the one below, of Tom Morello of Rage Against the Machine, was taken by someone else)
Despite advances in medicine, technology and education, the longevity gap between high-income and low-income Americans has widened sharply. You want to talk inequality? Talk about this.
The poor are losing ground not only in income, but also in years of life, the most basic measure of well-being. In the early 1970s, a 60-year-old man in the top half of the earnings ladder could expect to live 1.2 years longer than a man of the same age in the bottom half, according to an analysis by the Social Security Administration. By 2001, and he could expect to live 5.8 years longer than his poorer counterpart.
New research offers even more horrifying numbers. Economists found for men born in 1920, there was a six-year difference in life expectancy between the top 10 percent of earners and the bottom 10 percent. For men born in 1950, that difference had more than doubled, to 14 years.
The serfs are dying. The castle-owners are buying themselves more years.
Poor health outcomes for low-income Americans have dragged the United States down to some of the lowest rankings of life expectancy among industrialized nations. The Social Security Administration found, for example, that life expectancy for the wealthiest American men at age 60 was just below the rates in Iceland and Japan, two countries where people live the longest. However, for Americans in the bottom quarter of the wage scale, their life expectancy is closer to that in Poland and the Czech Republic.
The gap in life spans started widening about 40 years ago, when income inequality began to grow.
Earlier in the 20th century, trends in life spans were of declining disparities, because improvements in public health, such as the invention of the polio vaccine and improved sanitation, benefited rich and poor alike. The broad adoption of medication for high blood pressure in the 1950s led to a major improvement for black men, erasing a big part of the gap with whites. But medical improvements can also drive disparity when they disproportionately benefit affluent Americans; for example, cutting-edge cancer treatments.
Imagine that — in one of the world’s richest countries, people die simply because we can’t find a way to provide them good healthcare as does the rest of the civilized world.
In America, we have a very crude understanding of social welfare programs. For most Americans, anything the government gives to its people (i.e., us) to keep us healthy, fed and educated, is a “handout” to lazy people who don’t deserve it.
Helping each other, using our tax money for us, as does most of the civilized world, is somehow wrong. In America, we’d prefer you starve to death, quietly if possible, as the rest of us are binge watching Netflix whilst eating Doritos.
Doritos we worked for, dammit. Albeit at our minimum wage jobs at Walmart, but whatever.
And with that, welcome to that rotting greenish boil head otherwise known as Oklahoma, where the Republican Party compared Americans receiving food stamp benefits to park animals fed by the public.
In the since-deleted Facebook post, the Oklahoma GOP offered a “lesson” by comparing the distribution of food stamps to 46 million Americans to a policy of the National Park Service to discourage the public from feeding animals “because the animals will grow dependent on handouts and will not learn to take care of themselves.”
Party Chairman Randy Brogdon offered a faux-apology in another Facebook post: “I offer my apologies for those who were offended – that was not my intention.”
Which is hilarious and clear proof he was dropped on his head as a child by his alcoholic mother, because of course it is obvious that comparing needy people to animals is offensive to absolutely everyone. Even a park animal could see that.
This also isn’t the first time the GOP has compared Americans to animals. In 2014, South Dakota Senate candidate Dr. Annette Bosworth’s posted a nearly identical post to her Facebook campaign page:
FUN FACT: A very large percentage of food stamp recipients are children (“cubs”), the elderly, and disabled people. Maybe it’s time to thin the herd.
Every candidate shouts about job creation, and some talk about the recovery from the last recession. Every month the Department of Labor releases new statistics about how many jobs have been created, improvements in the unemployment rate, and on and on.
There are parts of the society and the country where some of that is even partly true. But for about 20% of our states, it is not even partly close. An awful lot of the good news is just a numbers game.
Data compiled by the Associated Press shows ten U.S. states still have not regained all the jobs they lost in the Great Recession, even after six and a half years of “recovery,” while many more have seen only modest gains.
The figures are one more sign of the economic inequality, the one field America remains the undisputed global leader. The on-the-ground reality of negative job growth is why many Americans feel the economy has passed them by, and fuels support for angry candidates Donald Trump and Bernie Sanders.
Wyoming has three percent fewer jobs it did when the recession began. Alabama’s job total post-recession is -2.7 percent, followed by New Mexico at -2.6. New Jersey (Chris Christie!) has one percent fewer jobs than it did at the end of 2007, and Missouri is just below its pre-recession level. The other five losers are Mississippi, Nevada, Maine, Connecticut, and West Virginia.
Among the other states, several show only small gains past pre-recession job totals. Illinois, statewide with a population of over 12 million, has only 8,600 more jobs than it did in December 2007. Arizona’s job count is up just 9,200 with a population of six million (not counting illegal aliens.) And Ohio (Kasich!!!) has added just 58,100 jobs with its population of almost 12 million. Those gains are more or less (it’s less) statistically insignificant.
The states that saw the highest rates of job growth tell the story of the last few years. Some of the biggest gainers include:
Washington DC is a big, big winner, with significant growth from America’s largest employer, the federal government, all fueled significantly by the very profitable War of Terror.
The oil and gas drilling boom lifted North Dakota’s job count by more than 20 percent, though falling energy prices have caused significant layoffs in the past year. Need to check back with North Dakota in a year or two.
Texas has also benefited from the energy boom, as well as greater high-tech hiring in cities like Austin.
Utah and Colorado have also benefited from fast-growing information technology companies. Colorado especially has a large aerospace (read: defense) industry, so good for them.
More Americans work for less than minimum wage than work for minimum wage. They are the people who occupy tipped positions, mostly working as servers in restaurants.
They fall outside the minimum wage, and thus do not have even the weak assurances of an income the minimum provides. And those tips — they are great at some swanky joints, weak at lesser ones. Tips ebb and flow, depending on the weather (rain and snow can keep customers home), cheapo patrons and which shift one pulls; daytime Tuesday is not as good as Saturday night. Or a four top who orders wine with each course, or that family on vacation who “just wants ice water.” Your income depends as much on luck as anything you do with your time and labor.
Or here’s one strategy that does not depend on luck: encourage your waitresses to dress sexy, such as at Hooter’s, to pull in more tips, mixing sexual exploitation with exploitation of wages.
And save the speech about how all these folks should go out and get a different job if they don’t like the system. Almost two million Americans work below minimum, and they do not have access to two million currently available, better paying, jobs.
But from the restaurant owner’s side, the deal is sweeeeeeeeeet. They get to pay subminimum wage, and leave it up to the customers to make up their payroll. And if the customer stiffs the waiter, that’s no skin off the owner’s nose. And of course some owner’s skim the tips, and/or require servers to share their tips with the back of the house kitchen staff, diluting a small amount of money further.
The owners have no interest in having the government mess with that solid gold system if it can be helped.
As an example, New York state’s hourly minimum wage for tipped workers rose from $5.00 to $7.50 on January 1 (standard, non-tipped, minimum wage is $9.00 an hour in the state), much to the dismay of the New York State Restaurant Association. The restaurant owners lobbying group sent a letter to NY Governor Andrew Cuomo demanding that he freeze the tipped wage for five years. This letter comes just weeks after the National Restaurant Association filed an appeal with the state Supreme Court, claiming that Cuomo’s plan to raise the minimum wage further by 2018 is part of a longstanding pattern of discrimination “against the hard working men and women that own New York’s restaurants.”
Implied is a hearty “up yours to the working men and women that work in New York’s restaurants.”
Oh, and by the way, want to know if your favorite restaurant owner supports the freeze? You can’t. The Restaurant Association’s letter had more then 100 restaurant owners included as signatories. However, the Association will not release the names of the signatories because restaurateurs who have taken “political stances” in the past “have received death threats.” So it’s a safety issue. Right.
Employers should be responsible for paying their own employees, not relying on customers to hand over cash just to keep
serfs servers on the job.
When presidential candidate Bernie Sanders talks about income inequality, and when other candidates speak about the minimum wage and food stamps, what are they really talking about?
Whether they know it or not, it’s something like this.
My Working Life Then
A few years ago, I wrote about my experience enmeshed in the minimum-wage economy, chronicling the collapse of good people who could not earn enough money, often working 60-plus hours a week at multiple jobs, to feed their families. I saw that, in this country, people trying to make ends meet in such a fashion still had to resort to food benefit programs and charity. I saw an employee fired for stealing lunches from the break room refrigerator to feed himself. I watched as a co-worker secretly brought her two kids into the store and left them to wander alone for hours because she couldn’t afford childcare. (As it happens, 29% of low-wage employees are single parents.)
At that point, having worked at the State Department for 24 years, I had been booted out for being a whistleblower. I wasn’t sure what would happen to me next and so took a series of minimum wage jobs. Finding myself plunged into the low-wage economy was a sobering, even frightening, experience that made me realize just how ignorant I had been about the lives of the people who rang me up at stores or served me food in restaurants. Though millions of adults work for minimum wage, until I did it myself I knew nothing about what that involved, which meant I knew next to nothing about twenty-first-century America.
I was lucky. I didn’t become one of those millions of people trapped as the “working poor.” I made it out. But with all the election talk about the economy, I decided it was time to go back and take another look at where I had been, and where too many others still are.
My Working Life Now
I found things were pretty much the same in 2016 as they were in 2012, which meant — because there was no real improvement — that things were actually worse.
This time around, I worked for a month and a half at a national retail chain in New York City. While mine was hardly a scientific experiment, I’d be willing to bet an hour of my minimum-wage salary ($9 before taxes) that what follows is pretty typical of the New Economy.
Just getting hired wasn’t easy for this 56-year-old guy. To become a sales clerk, peddling items that were generally well under $50 a pop, I needed two previous employment references and I had to pass a credit check. Unlike some low-wage jobs, a mandatory drug test wasn’t part of the process, but there was a criminal background check and I was told drug offenses would disqualify me. I was given an exam twice, by two different managers, designed to see how I’d respond to various customer situations. In other words, anyone without some education, good English, a decent work history, and a clean record wouldn’t even qualify for minimum-wage money at this chain.
And believe me, I earned that money. Any shift under six hours involved only a 15-minute break (which cost the company just $2.25). Trust me, at my age, after hours standing, I needed that break and I wasn’t even the oldest or least fit employee. After six hours, you did get a 45-minute break, but were only paid for 15 minutes of it.
The hardest part of the job remained dealing with… well, some of you. Customers felt entitled to raise their voices, use profanity, and commit Trumpian acts of rudeness toward my fellow employees and me. Most of our “valued guests” would never act that way in other public situations or with their own coworkers, no less friends. But inside that store, shoppers seemed to interpret “the customer is always right” to mean that they could do any damn thing they wished. It often felt as if we were penned animals who could be poked with a stick for sport, and without penalty. No matter what was said or done, store management tolerated no response from us other than a smile and a “Yes, sir” (or ma’am).
The store showed no more mercy in its treatment of workers than did the customers. My schedule, for instance, changed constantly. There was simply no way to plan things more than a week in advance. (Forget accepting a party invitation. I’m talking about childcare and medical appointments.) If you were on the closing shift, you stayed until the manager agreed that the store was clean enough for you to go home. You never quite knew when work was going to be over and no cell phone calls were allowed to alert babysitters of any delay.
And keep in mind that I was lucky. I was holding down only one job in one store. Most of my fellow workers were trying to juggle two or three jobs, each with constantly changing schedules, in order to stitch together something like a half-decent paycheck.
In New York City, that store was required to give us sick leave only after we’d worked there for a full year — and that was generous compared to practices in many other locales. Until then, you either went to work sick or stayed home unpaid. Unlike New York, most states do not require such a store to offer any sick leave, ever, to employees who work less than 40 hours a week. Think about that the next time your waitress coughs.
Minimum Wages and Minimum Hours
Much is said these days about raising the minimum wage (and it should be raised), and indeed, on January 1, 2016, 13 states did raise theirs. But what sounds like good news is unlikely to have much effect on the working poor.
In New York, for instance, the minimum went from $8.75 an hour to the $9.00 I was making. New York is relatively generous. The current federal minimum wage is $7.25 and 21 states require only that federal standard. Presumably to prove some grim point or other, Georgia and Wyoming officially mandate an even lower minimum wage and then unofficially require the payment of $7.25 to avoid Department of Labor penalties. Some Southern states set no basement figure, presumably for similar reasons.
Don’t forget: any minimum wage figure mentioned is before taxes. Brackets vary, but let’s knock an even 10% off that hourly wage just as a reasonable guess about what is taken out of a minimum-wage worker’s salary. And there are expenses to consider, too. My round-trip bus fare every day, for instance, was $5.50. That meant I worked most of my first hour for bus fare and taxes. Keep in mind that some workers have to pay for childcare as well, which means that it’s not impossible to imagine a scenario in which someone could actually come close to losing money by going to work for short shifts at minimum wage.
In addition to the fundamental problem of simply not paying people enough, there’s the additional problem of not giving them enough hours to work. The two unfortunately go together, which means that raising the minimum rate is only part of any solution to improving life in the low-wage world.
At the store where I worked for minimum wage a few years ago, for instance, hours were capped at 39 a week. The company did that as a way to avoid providing the benefits that would kick in once one became a “full time” employee. Things have changed since 2012 — and not for the better.
Four years later, the hours of most minimum-wage workers are capped at 29. That’s the threshold after which most companies with 50 or more employees are required to pay into the Affordable Care Act (Obamacare) fund on behalf of their workers. Of course, some minimum wage workers get fewer than 29 hours for reasons specific to the businesses they work for.
It’s Math Time
While a lot of numbers follow, remember that they all add up to a picture of how people around us are living every day.
In New York, under the old minimum wage system, $8.75 multiplied by 39 hours equaled $341.25 a week before taxes. Under the new minimum wage, $9.00 times 29 hours equals $261 a week. At a cap of 29 hours, the minimum wage would have to be raised to $11.77 just to get many workers back to the same level of take-home pay that I got in 2012, given the drop in hours due to the Affordable Care Act. Health insurance is important, but so is food.
In other words, a rise in the minimum wage is only half the battle; employees need enough hours of work to make a living.
About food: if a minimum wage worker in New York manages to work two jobs (to reach 40 hours a week) without missing any days due to illness, his or her yearly salary would be $18,720. In other words, it would fall well below the Federal Poverty Line of $21,775. That’s food stamp territory. To get above the poverty line with a 40-hour week, the minimum wage would need to go above $10. At 29 hours a week, it would need to make it to $15 an hour. Right now, the highest minimum wage at a state level is in the District of Columbia at $11.50. As of now, no state is slated to go higher than that before 2018. (Some cities do set their own higher minimum wages.)
So add it up: The idea of raising the minimum wage (“the fight for $15”) is great, but even with that $15 in such hours-restrictive circumstances, you can’t make a loaf of bread out of a small handful of crumbs. In short, no matter how you do the math, it’s nearly impossible to feed yourself, never mind a family, on the minimum wage. It’s like being trapped on an M.C. Escher staircase.
The federal minimum wage hit its high point in 1968 at $8.54 in today’s dollars and while this country has been a paradise in the ensuing decades for what we now call the “One Percent,” it’s been downhill for low-wage workers ever since. In fact, since it was last raised in 2009 at the federal level to $7.25 per hour, the minimum has lost about 8.1% of its purchasing power to inflation. In other words, minimum-wage workers actually make less now than they did in 1968, when most of them were probably kids earning pocket money and not adults feeding their own children.
In adjusted dollars, the minimum wage peaked when the Beatles were still together and the Vietnam War raged.
Many of the arguments against raising the minimum wage focus on the possibility that doing so would put small businesses in the red. This is disingenuous indeed, since 20 mega-companies dominate the minimum-wage world. Walmart alone employs 1.4 million minimum-wage workers; Yum Brands (Taco Bell, Pizza Hut, KFC) is in second place; and McDonald’s takes third. Overall, 60% of minimum-wage workers are employed by businesses not officially considered “small” by government standards, and of course carve-outs for really small businesses are possible, as was done with Obamacare.
Keep in mind that not raising wages costs you money.
Those minimum wage workers who can’t make enough and need to go on food assistance? Well, Walmart isn’t paying for those food stamps (now called SNAP), you are. The annual bill that states and the federal government foot for working families making poverty-level wages is $153 billion. A single Walmart Supercenter costs taxpayers between $904,542 and $1.75 million per year in public assistance money, and Walmart employees account for 18% of all food stamps issued. In other words, those everyday low prices at the chain are, in part, subsidized by your tax money.
If the minimum wage goes up, will spending on food benefits programs go down? Almost certainly. But won’t stores raise prices to compensate for the extra money they will be shelling out for wages? Possibly. But don’t worry — raising the minimum wage to $15 an hour would mean a Big Mac would cost all of 17 cents more.
My retail job ended a little earlier than I had planned, because I committed time theft.
You probably don’t even know what time theft is. It may sound like something from a sci-fi novel, but minimum-wage employers take time theft seriously. The basic idea is simple enough: if they’re paying you, you’d better be working. While the concept is not invalid per se, the way it’s used by the mega-companies reveals much about how the lowest wage workers are seen by their employers in 2016.
The problem at my chain store was that its in-store cafe was a lot closer to my work area than the time clock where I had to punch out whenever I was going on a scheduled break. One day, when break time on my shift came around, I only had 15 minutes. So I decided to walk over to that cafe, order a cup of coffee, and then head for the place where I could punch out and sit down (on a different floor at the other end of the store).
We’re talking an extra minute or two, no more, but in such operations every minute is tabulated and accounted for. As it happened, a manager saw me and stepped in to tell the cafe clerk to cancel my order. Then, in front of whoever happened to be around, she accused me of committing time theft — that is, of ordering on the clock. We’re talking about the time it takes to say, “Grande, milk, no sugar, please.” But no matter, and getting chastised on company time was considered part of the job, so the five minutes we stood there counted as paid work.
At $9 an hour, my per-minute pay rate was 15 cents, which meant that I had time-stolen perhaps 30 cents. I was, that is, being nickel and dimed to death.
Economics Is About People
It seems wrong in a society as wealthy as ours that a person working full-time can’t get above the poverty line. It seems no less wrong that someone who is willing to work for the lowest wage legally payable must also give up so much of his or her self-respect and dignity as a kind of tariff. Holding a job should not be a test of how to manage life as one of the working poor.
I didn’t actually get fired for my time theft. Instead, I quit on the spot. Whatever the price is for my sense of self-worth, it isn’t 30 cents. Unlike most of this country’s working poor, I could afford to make such a decision. My life didn’t depend on it. When the manager told a handful of my coworkers watching the scene to get back to work, they did. They couldn’t afford not to.
For the first time since the Great Depression, a majority of U.S. public school students come from low-income families, according to a new analysis of 2013 federal data, a statistic that has profound implications for the nation.
The Southern Education Foundation reports 51 percent of students in pre-kindergarten through 12th grade in the 2012-2013 school year were eligible for the federal program that provides free and reduced-price lunches, a common indicator of food at-risk students living below the Federal Poverty Line.
Bottom Feeders Not Fed
“We’ve all known this was the trend, that we would get to a majority, but it’s here sooner rather than later,” said Michael A. Rebell of Teachers College at Columbia University, noting that the poverty rate has been increasing even as the economy has improved. “A lot of people at the top are doing much better, but the people at the bottom are not doing better at all. Those are the people who have the most children and send their children to public school.”
Free, universal public education was a cornerstone of America’s growth, seeking to assimilate waves of immigrants and to provide them with the basic education needed in their day to participate in the economy, i.e., first an elementary education only, enlarged to include high school as demands changed. Things stalled out there.
The trend toward majority-poor students in that public education system suggests further sorting out, at very early ages, of our once semi-egalitarian society into Haves (the one percent) and Have Nots (the 99 percent; the numbers are not that sharp yet, but definitely aimed that way.)
Stupid people can’t get good jobs. But stupid people also do what they’re told to do, especially if they depend on you to keep their kids just barely out of starvation.
We Don’t Need No Education
In addition, the majority-poor schools are sliding away from their educational function and are becoming simply extension of the social services net.
“When they first come in my door in the morning, the first thing I do is an inventory of immediate needs: Did you eat? Are you clean? A big part of my job is making them feel safe,” said Sonya Romero-Smith, a veteran teacher at Lew Wallace Elementary School in Albuquerque. Fourteen of her 18 kindergartners are eligible for free lunches. She helps them clean up with bathroom wipes and toothbrushes, and she stocks a drawer with clean socks, underwear, pants and shoes.
Romero-Smith, 40, who has been a teacher for 19 years, became a foster mother in November to two girls, sisters who attend her school. They had been homeless, their father living on the streets and their mother in jail, she said. When she brought the girls home, she was shocked by the disarray of their young lives.
“Getting rid of bedbugs, that took us awhile. Night terrors, that took a little while. Hoarding food, flushing a toilet and washing hands, it took us a little while,” she said. “You spend some time with little ones like this and it’s gut wrenching. These kids aren’t thinking, ‘Am I going to take a test today?’ They’re thinking, ‘Am I going to be okay?’”
When most people talk about economics there are lots of statistics, as if economics is about math. Economics is really about people. It shows who we are as a nation and tells us what we will become. In 21st century America, our hope now is that we’ll someday better people than we have become. But do the math; it’ll be a hard road.
In its most individual definition, jobs and work earn people money. They can feed themselves and their families, live inside and all the rest.
But at a more societal level, a broader, more fundamental level, work is more. Work can define a person, work can give purpose, make someone feel useful, engage the resources of a society, create goals. You could almost call it a soul, knowing that work saved more lives than any preacher.
The absence of work does just the opposite. People may be saved from starving by public assistance or charity (a vital part of society, caring for one another), but without purpose, they become cynical. They turn to drugs, legal like alcohol or illegal like meth, to replace the purpose and to fill the time. Without work, people give up. Rock bottom is a poor foundation for a nation to build on.
So here’s what is happening in our America. See if you can figure out where this all leads to.
Manufacturing was until the late 1970s the source of unprecedented wealth, spread proportionally across the economic spectrum in America. There were super rich people, and there were poor people, but there was also a thriving middle class that accounted for a huge section of our society. Without those jobs, economic apartheid, the one percent and the 99 percent, are inevitable.
As just one example, since the 2009 taxpayer-paid bailout, General Motors has cut high-paid workers for cheaper labor, hiring. The automaker hired around 18,000 hourly production workers, allowing the company to remove skilled trade jobs. The Center for Automotive Research says General Motors Company saves approximately $57,000 a year per worker when it replaces a skilled $32 per hour union worker with a $15 per hour less-skilled, temp or non-unionized employee. These were once the “good jobs” that sustained a growing economy. They are gone. They have been replaced with…
Service jobs. Service jobs do not create anything. They simply move some money from one hand to another, with a larger company taking a cut and sending the cash off to another city, another state, or another country. In 2014 America, manufacturing employs 1/10 of Americans. Services accounts for nearly 90%. America’s largest single employer in 1960 was General Motors. In 2014, it is Walmart. The “occupations” that account for the most jobs now are retail salespersons, cashiers, and restaurant workers. Those jobs pay minimum wage or less (for restaurant workers who can get tips), rarely offer any benefits and are rarely full-time.
Working for subsistence wages, supplemented with public benefits, does not create value for humans. It is a modern-day form of feudalism, or perhaps more similar to raising livestock than growing a society.
My book, Ghosts of Tom Joad: A Story of the #99 Percentconfronts these issues head on. The book is fiction, in that it wraps the economics and societal changes of the last fifty years into the story of one family. The book is all true in that what happens to that family, and in particular the main everyman character Earl, happened to millions of American families that believed the myths of growth, hard work and a sustainable middle class even as the super wealthy were pulling the money right out of their hands in front of their eyes. Ignore the rising waters, until you feel them up to your Katrina-like lips.
Choosing to not believe something doesn’t make it go away.
My book is set in Ohio, but the stories in it can be taking place today anywhere in the United States outside a few pockets of affluence centered on a few major cities, or a handful of growth industries such as government and defense.
If you want to know where the 99 percent came from, this is part of the answer. Think of it as a good story, with a conscience.
I was eating in the food court below Grand Central Station in New York. There was a cold rain outside, and a good portion of the people around me appeared to be homeless.
Many were making the rounds of the trash cans and tables, eating the food they found. There were cops nearby, as well as National Guardsmen on terror watch duty. There seemed to be a sort of understanding at work, such that the cops left the homeless alone as long as the homeless left the paying customers alone.
I wasn’t going to finish my meal. There wasn’t much left, but some. What was the right thing to do?
A) Leave the meal. A mouthful for someone hungry is better than nothing;
B) Throw it away. It would have been embarrassing to offer a small amount available only because I’d already gorged myself;
C) Go buy another full meal (I could afford it) and give it to one of the hungry people;
D) Demand my government stop spending 54% of my taxes on war (actually more, if you consider black budgets, paramilitary forces, and intelligence costs) and start taking care of its own people. I have the resources to feed one person, but we have the resources to feed all Americans. If only we were willing. I don’t always know what’s right, but I know what is wrong.
The middle class, which for 40 years has represented a majority of the country in practice, and formed the foundational belief in what has been known as the “American Dream,” is now just half the United States, according to a new report.
Over at least the last four decades, productivity gains have gone largely to the top of the economic pyramid, increasing both their income and wealth. Real income growth has been flat for most Americans, even as the cost of living has increased.
Need it in numbers?
The share of America’s income going to the middle class has fallen from 62 percent in 1970 to 43 percent now. Today, the majority of our national income goes to the upper class, which reaps a 49 percent share. (by comparison, the share of income going to the upper class in 1970 was just 29 percent). The median wealth of middle class households has fallen by more than one-fourth since the beginning of this century.
Need it in simple terms?
The rich are getting very much richer, seeing their wealth grow exponentially. The middle class is shrinking. Meanwhile, the poor are still poor and their numbers are growing. We are indeed heading toward a society within a society within the world’s wealthiest nation — one percent of “us” now own half of everything.
The implications of this path are dark.
At the point where a handful of people control most of the wealth, and the other money in our nation is so diffuse as to make those individuals in the bottom 99 percent of our society irrelevant except as cheap labor, we live in a modern day version of feudalism. Money is power, and a select handful now can control elections with “donations,” can have laws written and rewritten to match their needs, can keep a lid on the minimum wage more and more of us depend on now to get by, manipulate college loan and mortgage rates to keep people in debt, and secure ownership of the land we live on and the places we live. Hyper-wealthy people through their charitable foundations are free to social-engineer our world, paying to say grow one form of educational system while leaving another to wither on limited funding.
How did the wealthy pull off the greatest peaceful takeover of a nation in human history? Very easily. Their master stroke, however, was not to take predatory capitalism to its extreme, but to do so without sparking more than a whisper of disagreement from the very people they trod upon.
Here is the linchpin of how the rich have taken us: they have convinced average Americans to act and vote against their own interests, in part by manipulating them into opposing any program that has a chance of benefiting black and brown equally or more than themselves. Decent health care and nutrition for everyone? That’s socialism!
Our entire culture is fear-based, from our religion to our media to Wall Street. It drives everything, and fear is the most powerful tool that rulers can use to manipulate people. It is this constant state of fear that really makes us exceptional compared to every other advanced nation.
People, we have been bought. Someone else now, in every effective and meaningful way, owns us. Suckers.
Ghosts of Tom Joad is fiction per se, but fiction based on fact. My story of the intentional destruction of an entire class of people through economic disparity is mirrored in so many people’s lives.
Here is one of those stories, originally submitted to this blog as a comment, but well-worth repeating here (lightly edited):
From 1955 to 1965, my Dad lived near Youngstown, Ohio. He moved up from the Mississippi Delta and worked at Packard Electric and some steel mills to get through college at Youngstown University.
I drove through Youngstown last month for the first time after my Uncle’s funeral (submariner for six years, at Pearl Harbor, worked for 40 years at the General Motors Lordstown plant). Youngstown today reminded me of Detroit (as a firefighter, I tend to notice lots of empty lots where houses once stood).
I graduated from high school in Detroit in 1983. The place has really gone even more downhill since 2008; my old house on the West side has been stripped out (dead dog carcass in the dining room), probably a 25 percent vacant rate.
I don’t see things getting better anytime soon. I’m doing OK as a firefighter, but I’m making less than I did 13 years ago and the powers-that-be have been going after the public unions (now that less folks are in private unions than before the Great Depression).
Here’s another from Comments:
This blog resonates with me as I grew up in Troy, Ohio in the 1960s and ’70s before moving to New Jersey in 1974. I experienced small town America with Soap Box Derby races and Memorial Day parades and watching 4th of July fireworks from the levee on the Miami River. I went to college in Bethlehem, Pennsylvania, where “The Steel” ran the longest continuous steel mill in the world, something like 11 miles. A few years ago I read that the foundry part downtown had been turned into a casino and I knew that the U.S. was dying of capitalist rot.
My long dead friend Joe was the son of the owner of a bar in downtown Lorain. My Polish friends had fathers that worked the steel mills. My high school used to play Admiral King, and my trip there was to the other end of the universe. The last several times in Lorain the major bridge was out for repair and it sure took a long time to fix it. I used to drive 6 and 2 driving to BGSU. Joe commented while dying that he remembered us tooling down that road doing 120 mph in my Detroit iron/389 Pontiac.Both of us were immigrant stock and soldiered for this country. Joe is still buried in Lorain with his parents.
In October 2013 I stayed at Port Clinton and it was depressing. Half the business district was depressed. Tourism is down. A condo in town sold for $20K. Bowling Green town is dull and needs a paint job and new roofs. Cleveland is a slum, as is Euclid where my folks lived.The house I grew up in has been demolished. The inner city is every bit of what you wrote about, but worse. If that’s possible then things are really bad.
There are so many, too many, such stories out there, good people who believed what they had been told only to find themselves discarded when companies found they could make more money somewhere, somehow else. They all are the ghosts of Tom Joad now.
We hear a lot about the “one percent” and the “99 percent” but what kind of net worth scores you a top slot in the real-life Hunger Games here in America? How much money do you need to be just average? The answers tell you just about everything you need to know about modern day America.
Short answer: Oh, we’re so screwed.
The Federal Reserve’s 2013 Survey of Consumer Finances released in September of 2014 is among the most recent data. The nice folks who compiled all of this waded through massive amounts of data. They caution they did not include 11 ultra high net worth individuals due to identity issues whatever that means, so the very top of this accounting could actually be even worse in reality. And don’t forget, the super-rich have had two whole years to accumulate even more money since this all was tabulated.
Let’s start at the top. The term “one percent” is now semi-meaningless, though you will need about $8 million to join them anyway. What really matters now is the top .1 percent. To crack that level you need to have well over $30 million in net worth.
But I get it, no one here is packing those kind of bucks. We’re all sort of average Americans, right? Maybe. To count yourself in at the 50 percent mark you need to possess some $82,000. How are we doing, students and young marrieds? Keep in mind net worth is what you own minus what you owe, not necessarily how much money you earn. So those students loans and that VISA card debt count against your ranking here, sorry.
The good news is that if you own nothing, have no savings or investments but also have no debt — you are precisely at zero — you are in the 11.8th percentile of net worths. Yep, that means about 11 percent of us have negative net worths. About a third of us have a net worth of only $15,000, not exactly a significant bumper against some bad luck, like losing your job or getting sick.
It’s a pretty bleak picture, but here it is:
But rich people have problems, too. Luckily, a group of brave psychiatric professionals, dubbed “wealth therapists,” have emerged to come to their aid.
The UK Guardian (America’s best newspaper) profiled Clay Cockrell, a former Wall Street worker turned therapist, who spends his days helping New York’s wealthiest people.
So what issues are America’s One Percent struggling with? Cockrell tells us there is guilt over being rich in the first place, which makes the rich feel that they have to hide the fact that they are rich. And then there is the isolation – being in the One Percent, it turns out, can be lonely.
And the problem is growing. According to Oxfam, the richest One Percent have seen their share of global wealth increase from only 44 percent in 2009 to 48 percent in 2014. It will break 51 percent by next year.
The wealth therapists also say things have only gotten worse for their clients since the debate over income inequality that has been spurred on by movements like Occupy Wall Street.
“The Occupy Wall Street movement singled out the One Percent and painted them globally as something negative,” said Jamie Traeger-Muney, another wealth psychologist. “I am not necessarily comparing it to what people of color have to go through, but it really is making value judgments about a particular group of people as a whole.”
Traeger-Muney specializes in the unique issues inheritors face. “You can come up with lot of words and sayings about inheritors, and not one of them is positive: spoiled brat, born with a silver spoon in their mouth, trust fund babies, all these things,” she said, adding “I am shocked by things that people say. If you substitute in the word Jewish or black, you would never say something like that.”
Hyper-wealthy, we all feel your pain. Thus, today, we are all part of the One Percent. #WealthyLivesMatter (say the wealthy.)
In another step in the long political tradition of imposing bombastic, faux populist, hate-mongering solutions to problems that don’t really exist, Maine Governor Paul LePage announced he is tired of able-bodied food stamp recipients zipping around on jet skis instead of looking for jobs that do not exist.
His state thus proudly announced it will disallow Supplemental Nutrition Assistance Program (SNAP, the official term for food stamps) benefits for childless households with certain assets worth more than $5,000. A home equity and a person’s primary vehicle (but what if that vehicle is a $1.5 million Ferrari?) won’t count against the limit, but the state has issued a list of things that could: “bank accounts, snowmobiles, boats, motorcycles, jet skis, all-terrain vehicles, recreational vehicles, campers” and other valuables.
“Hard-working Mainers should not come home to see snowmobiles, four wheelers or jet skis in the yards of those who are getting welfare,” LePage said in a statement. Left out of course is how those “hard-working Mainers” know exactly how is getting welfare among jet ski owners, but, whatever, when you are inciting hatred you don’t sweat the details.
OK. So if you are poor, you need to become poorer to get food assistance, because, sure if you have more than $5,000 bucks worth of whatever you are rich enough. The, after those one-time sell offs of your assets for pennies on the dollar to richer folks, you are then poor enough for welfare. Circle of life kinda stuff.
Of course all this righteousness begs the question of how many SNAP recipients in Maine have jet skis in their yards. Exactly how many?
“We hear examples and concerns from clients and constituents quite frequently,” a spokesperson for the governor replied. He declined to give a number, or an estimate, or to cite even one specific case.
He also declined to answer the “So what?” question; so what if someone who needs food assistance has minimal assets. Is the idea that one needs to sell off everything one owns, down to the walls, and only then ask for something to eat? How the f*ck mean of a society are we?
Federal law imposes resource limits for SNAP eligibility, but states generally waive the limit for applicants if they already qualify for even modest assistance from another means-tested safety net program. It’s a policy called broad-based categorical eligibility, and most states offer it.
In the aftermath of the Great Recession, almost all states also waived time limits on food stamp benefits for able-bodied adults without dependents, and those limits are coming back now that the unemployment rates are falling. LePage’s administration imposed the time limit — billed as a “work requirement” — ahead of schedule, ending benefits for 9,000 Mainers this year.
Oh, and about those jobs. Minimum wage in Maine is $7.50 an hour. Most minimum wage jobs offer 29 or fewer hours a week. So, even before taxes, that works out to $217 a week. Assuming a full 52 weeks of employment, that adds up to $11,310. So hah hah, the poverty line in Maine for one person is $11,945.
“What’s next? Grandma can’t buy groceries until she sells her engagement ring?” said Representative Drew Gattine, a Democrat who co-chairs the state legislature’s Health and Human Services Committee. (Answer: No. For no apparent reason, jewelry will not count toward the asset limit in Maine.)
Now, one more question.
How much in free food benefits are those lazy ass jet skiers in Maine sucking up? In other words, how much money will the new system in Maine save those angry tax payers, especially given the bureaucratic infrastructure needed to discover who has assets such as jet skis, and then to process them out of the SNAP system, lousy free-loaders?
The average person in Maine receives all of $122.79 a month in food benefits.
There is a myth that welfare is a good deal, money for nothing.
Maybe to some it works that way, but in Kansas a family of three gets a maximum of $429 a money in cash, about $35 bucks a person a week. I don’t know, I guess that is one way to live, but not a way too many people want to live.
But if you are one of the people who thinks that is still too generous, boy has Kansas got some new laws for you.
Haters Gonna Hate Once Elected
Kansas welfare recipients will be unable to withdraw more than $25 per day in benefits under a new law sent this week to Governor Sam Brownback by the state legislature. Like most states, Kansas distributes benefits via a debit card.
The bill also prohibits welfare recipients from spending their benefits at certain types of businesses, including liquor stores, fortune tellers, swimming pools and cruise ships.
“We’re trying to make sure those benefits are used the way they were intended,” one state representative said. “This is about prosperity. This is about having a great life.”
Under the new rule, a family receiving the maximum benefit would have to go to the ATM more than a dozen times to get the full benefit, which would be whittled away by an 85 cent fee for each withdrawal after the first one. And since many recipients do not have bank accounts, they will pay an ATM fee on top of that for each withdrawal. If you figure $3 (+.85) a transaction, times 12 pulls, that’s about $46 a month, a de facto reduction of benefits of more than ten percent for no real reason whatsoever.
The federal welfare reform law of 1996 gave states significant leeway to design their own programs. Missouri, for example, is considering a bill to forbid food stamps from being spent on steak or seafood. No more cheap fish heads for you! But even welfare advocates were taken aback by the $25 daily limit in Kansas, something that has not been implemented in any other state.
“This provision makes it nearly impossible for a recipient who does not have a checking account to pay rent,” said Liz Schott of the Center on Budget and Policy Priorities. The Kansas provision originally would have limited daily benefits to $60, but that was reduced through an amendment.
We’re left with some questions.
I’m pretty sure no one thinks it would be right for welfare recipients to spend benefits designed to feed hungry people at liquor stores, fortune tellers, swimming pools or cruise ships. One wonders, however, at the codification of that into law. Do the Kansas benefit cards even know they are in an ATM on the Love Boat versus one at the grocery store? Is there in fact even one case of a welfare receipt spending his money on a cruise? At a maximum of $429 a month, it seems hard to save up the thousands of dollars cruises cost, especially given the airfare from Kansas to the nearest ocean. And since you can withdraw cash and then spend it on booze or fortune telling if you really want to, isn’t the whole thing pointless?
The $25 daily limit is also a bit unclear. That amount of money doesn’t get you very far at the grocery store, so it translates into little more than multiple trips each week plus the costs of ATM fees. That alone is at variance with trying to find or work a job, and child care. It does not seem to benefit anyone.
So what is the point? Well, politics for sure. Nothing says Republican in Kansas apparently like being needlessly mean to poor people. A lot of votes in that hater demographic. Right along side that is the idea that poor people deserve to suffer somehow.
So, Kansas, why not go for it? Why not just have welfare recipients publicly have to beg for money? Maybe something on TV, like American Idol, where the best beggar as voted on by the home audience gets an extra jar of peanut butter, or, as a special reward, a quick trip to the fortune teller?
“The magic cards tell me your future looks… very bleak…”
As the New Economy starts to look more and more like the Depression Economy of the 1930’s, the divide between rich and poor clearer as businesses fade and fail, Atlantic City provides a layers of urban archaeology pointing where we’ve been and maybe where we’re going.
We All Love Lucy
Driving in on the older roads, there’s Lucy the Elephant. Not a real elephant of course, Lucy is instead a freakish wood and tin six story hollow statue. First built in 1881 to add value to some Jersey swampland, Lucy has been reincarnated several times after fire, neglect and storm damage. Along the way, she was used a tavern, a hotel, and for most of her life, simply an “attraction.” As owning a car, and the family driving vacations that accompanied ownership, became egalitarian rights in the 1950’s and 60’s, all manner of tacky attractions popped up along America’s roads: cement dinosaurs, teepee-shaped motels, museums of freaks, and spectacles such as the world’s largest ball of twine.
Lucy—and Atlantic City—set the trend well into the early 1970’s. Between 1947 and 1973 actual incomes in the U.S. rose at the same level for everyone, more or less evenly spread across the societal spectrum. In 1932 Detroit produced 1.4 million cars, in 1950 it rose to eight million, then peaked at twelve million in 1973. America was a developing nation, in the best sense of that word. Yet as the U.S. economy changed, money began to flow out of the working class pockets that fed Lucy. From 1973 to 1993 the top one percent of Americans saw income grow eighty percent, and by 1989 the one percent owned forty percent of U.S. wealth. Atlantic City hurt. The famous Boardwalk (remember Monopoly? The street names are all from Atlantic City) became a crime scene, too dangerous for casual tourists, and drugs took over for tourism. It wasn’t different than the rest of America, just more intense.
Atlantic City Rolls the Dice on Legalized Gambling
Yet the first time I visited Atlantic City, some thirty years ago, things had again started to change. It was in the midst of a hyper national economy that gambling was legalized, and money poured into the area. The Boardwalk sprouted casinos and restaurants, and local business owners scrambled to find workers even as they considered early retirement based on the soaring value of the land they had held for generations. Everyone and everything felt alive, and billboards boasted of “rebirth.”
Thirty Years Later, Does the Bet Pay Off?
Thirty years later, a visit to Atlantic City once again reminds that life there isn’t any different than the rest of America, just more intense. On a twenty-story hotel tower, you can read the words “Hilton” in dirt shadow where the sign was removed as the place slammed shut. Trump Plaza, nothing if not a monument to excess and hubris from someone once admired as a business magician and pathetically now a presidential candidate, even before it closed was much of a caricature of elegance as the man himself. When I stayed there, the pillows smelled of sweat, the corner of doors were chipped, many areas needed paint and most of the bars and restaurants were as lonely as the former Greyhound bus terminal a few blocks away. People who appeared homeless harmlessly wandered in and out of the casino, itself tawdy and too dimly lit to inspire fun. It was like the air had been let out of the place.
Outside along the Boardwalk, the famous rolling chairs are pushed by recent immigrants and not-so-clean older denizens of the City. Lots of people still took rides, but it seemed that paying the workers to push you while you sat felt cheap and sad, just a step aside of pushing dollars into the g-strings of the strippers in clubs just off the Boardwalk. It felt too much like buying and discarding someone’s self respect to be considered fun. The swanky mall built on one of the old amusement piers had more shuttered than open stores. The family restaurant I worked in thirty years ago is now a tiny dollar store run by a man angry that I was just looking for old times’ sake. Plenty of “We Buy Gold” and pawn shops nearby, however. Though touted as a nouveau cuisine destination in ads, the only lines I saw were for people challenging the economics of the $7.98 all-you-can-eat buffet.
Where to Lucy?
There are always things that hint at optimism. Atlantic City survived Hurricane Sandy with little damage. The Hard Rock was doing good business with three dollar Miller Lite’s. Caesar’s had set up a glitzy room for Asian gamblers, complete with Chinese-speaking dealers and table games from Macau. Everyone turned from the old guys pushing the rolling chairs to see where the young guy running across the hot sand carrying two ice creams cones was headed.
The average American worker never earned as much again as in the peak year of 1973. Poverty rates also reached a historic low in 1973 and have risen steadily thereafter. One out of five American kids now lives in a household that cannot feed itself. Aside from it all, Lucy the Elephant still stands her post, unblinking and silent. She looks out over the Boardwalk, maybe America itself, and wonders where we are all headed.
There’s a homeless man I see from time to time near where I live. He sometimes begs for money. Sometimes people give him food, sometimes he forages in the trash. There’s his sign, written on the lid of an old cooler.
In America’s richest city, four blocks from where the Koch Brothers live, in a nation that has allocated $1.57 trillion to fund the wars in Iraq and Afghanistan, including $92.3 billion in fiscal year 2014, we don’t have much to offer this guy.
There are about 3,357 unsheltered people living on New York’s streets, like the guy who wrote the sign shown here, a six percent rise from 2013 to 2014. There are luckier ones. New York has 53,615 people who live in homeless shelters.
At the same time, overall property values for those who have places to live rose 10.4 percent across New York. Between 2003 and 2013, the number of New Yorkers with a net-worth of over $30 million rose higher than any other city in the world besides Singapore and Hong Kong,
We are willing to send humanitarian aid to Iraq and Syria, but not to our homeless in America. There’s your story for today.
Does income inequality matter to the richest Americans? Not very much. Here’s why. And it’s more than just greed-is-good; the rich will just get richer.
A study by economists at Washington University in St. Louis tells us stagnant income for the bottom 95 percent of wage earners makes it impossible for them to consume as they did in the years before the downturn. Consumer spending, some say, drives the U.S. economy, and is likely to continue to continue to dominate, as the decomposition of America’s industrial base dilutes old economy sales of appliances, cars, steel and the like. That should be bad news for the super-wealthy, us buying less stuff?
But that same study shows that while rising inequality reduced income growth for the bottom 95 percent of beginning around 1980, the group’s consumption growth did not fall proportionally at first. Instead, lower savings and hyper-available credit (remember Countrywide mortgages and usurous re-fi’s?) put the middle and bottom portions of our society on an unsustainable financial path which increased spending until it triggered the Great Recession. So, without surprise, consumption fell sharply in the recession, consistent with tighter borrowing constraints. Meanwhile, America’s the top earners’ wealth grew. The recession represented the largest redistribution of wealth in this century.
The gap between most Americans and those few who sit atop our economy continues to grow. For two decades after 1960, real incomes of the top five percent and the remaining 95 percent increased at almost the same rate, about four percent a year. But incomes diverged between 1980 and 2007, with those at the bottom seeing annual increases only half of that of those at the top.
This leaves the very real issue for the rich of who will buy all the stuff their big corporations make? But don’t worry. They’ve got it handled.
Taxpayer Subsidies to Big Corporations
Don’t worry about the big guys; they have figured out how to profit off poverty. Wal-Mart, Target and Kroger have made profits of $75.2 billion off food stamp purchases, even setting a new record in 2012.
And never mind how food stamps and other benefits are used by those same retailers to subsidize the low wages they pay their workers. Meanwhile, the same bill in Congress that would cut food stamps pays out farm subsidies to America’s billionaires, including Microsoft co-founder Paul Allen, Charles Schwab and S. Truett Cathy of Chick-fil-A.
The American Beverage Association, a lobby group that includes Coca-Cola, strongly opposes restricting soda purchases by food stamp recipients. Why? Recipients spend from $1.7 to $2.1 billion annually for sugar-sweetened beverages. While alcohol and other unhealthy items are restricted for purchase with stamps, soda stands available.
Government Defense Spending
About the only manufacturing-industrial sector of the American economy left prevailing over all foreign competition is defense. America buys its military hardware almost exclusively from domestic corporations (with a few crumbs tossed to allies like the UK and Israel) and fills the job ranks of the industry, contractors, and military with Americans.
In 2011, the U.S. government spent about $718 billion on defense, including arms sales and transfers to foreign governments. Hardware alone accounted for $128 billion. The total figure does not veterans benefits of $127 billion in 2011, or about 3.5 percent of the federal budget. America’s newest aircraft carrier cost $13 billion, not including development costs.
The Stock Market
The stock market (which set record highs in 2013) is a significant source of wealth in America. Indeed, what could be easier than placing money into an investment and, with no sweat or effort of one’s own, seeing it grow. A rising market lifts the national economy, and a rising tide lifts all boats.
The truth is closer to a rising tide lifts all yachts, as historian Morris Berman observed. Less than half of Americans own any stock at all. The wealthiest five percent of Americans meanwhile hold some 70 percent of all stock.
Bump the “top” group to the wealthiest ten percent of Americans and they own over 80 percent of all stock. At the same time, the lowest 90 percent own the leftover 20 percent.
So Don’t Worry about the Rich
These examples– and there are more– see tax write-offs, use of trusts to limit inheritance tax, offshore banking, large scale real estate (the top ten percent own about 40 percent of America’s land) show that income inequality is not a problem for the rich, and it is not a problem for America’s “economy” per se. The huge concentration of wealth in a small number of hands, and the methods by which those few acquire and maintain their wealth, means that the 99 percent of us edge closer and closer to playing no significant role in the economy anyway. We are becoming merely the collateral damage of income inequality.
In the U.S. forty-seven million people get SNAP (food stamps, Supplemental Nutrition Assistance Program, so you can sound odd while starving; it also uses a debit card system now, not actual stamps or coupons anymore.)
In Ohio, like most places, they pay out the whole state on the first of the month, millions of people, Pay Day, Food Day, Mother’s Day, people call it. “Their kind” of stores open early and stay open late on the first of the month because most people are pretty hungry come the Day, kind of mini-economic boom, or maybe more like a bear waking up in the winter to eat before going back to sleep. It’s the government keeping families— and businesses— alive, thirty days at a time.
A single person with nothing to her name in my old state of Virginia would qualify for about $200 a month in SNAP. We’ll assume by now she’s pretty skinny but fifty bucks a week for food is hard, hard. Sure, she can skip a meal if she needs to, and she does. However, in our America, something like ten percent of families with kids don’t have enough to eat. Our system is trending toward telling those kids to go to hell if they’re hungry.
Trick question; they’re already there.
Attempts to provide healthcare to more people, however flawed or hesitant, are opposed by too many of us. The quality of education kids get depends on how much money you have. Buy a nice house in a good neighborhood, or settle for whatever is nearby staffed by whoever they can get for whatever they are paying. Worse for college, where it is just all about the Benji’s. Same for safety. There’s no surprise that six of the ten most dangerous cities in America are decayed industrial towns— Flint and Detroit and Cleveland top the list. If the cops show up at all in those bad neighborhoods it’s to stop and frisk, or, to shoot. They’re not there to protect you, but to protect them.
While much of the disparity has been along racial lines, the new apartheid is one of dollars, not color, suburbanized.
So Get a Job
Unlike many other first world nations, we in America equate minimal life standards that benefit society as a whole and make a place more worth living in– eating, healthcare, education– with a certain level of employment. So, don’t like what you got? Go get a better job loser. Lazy, dumb people get what they deserve. I work for a living. Sound familiar? Dickens had his character Scrooge say back in Victorian England that hungry children might best “starve so as to reduce the surplus population.”
OK, I’ll go get a job. But then our society creates a significant portion of our available jobs to fall under the level of livable employment. More and more jobs tumble into minimum wage (or less; any employee eligible for tips does not have to be paid even the minimum) and limit the number of hours available each week to keep everyone below “full time” so no benefits need be paid. This creates the Working Poor, a permanent underclass.
The system also allows ignorant people to blame the working poor for their own suffering (and the ignorant people can then content themselves “knowing” it is not their responsibility to help) when in fact there is no way out. Not everyone can get or afford an education (see above), and of course even with an education the number of “good” jobs is limited. Education and training do not create new jobs. New jobs create the need for training and education. Without those jobs, all you are doing is making trained unemployed people out of untrained unemployed people.
Welcome to the Jungle
Having lived and traveled in the real Third World, it is clear where the lines meet out in the future distance. In many of those countries, two worlds exist in proximity. Out “there” are shanty towns where life expectancy is short and life is mean and hard, where kids die of diseases easily fixed with common vaccines and medicine, where access to clean water is a daily challenge and where scavenging through the garbage of wealthy people counts as a job. The real 99 Percent.
Meanwhile, the smaller one percent group of wealthy people literally wall themselves off inside compounds. They send their children to private schools, they shop at exclusive stores and they either fly out for medical care or import doctors in. Other than household servants (paid as little as possible by people who keep as much money for themselves as possible) or perhaps some poverty tourism, the two worlds rarely meet. And don’t talk about guns and some mythical American Spring. The rich are well-armed, up to private paramilitaries in some parts of the world. Opiates of all flavors work to destroy will. Poverty creates it’s own sense of weakness, and in most cases the poor come along to too-quietly just accept their fate. Medieval serfs and Confederate slaves mostly did the same.
Absent a change in America, that’s our future. Actually, some parts of America are ahead of the curve. Go to any large American city and we are mostly there; a few miles from some of the highest-priced real estate in the world in midtown Manhattan you fall into the free-fire zone of the South Bronx.
Prefer numbers? Between 1947 and 1973 actual incomes rose percentage-wise at the same level for about everyone. But from 1973-1993 the top one percent of Americans saw income grow seventy-to-eighty percent and today the one percent own forty percent of U.S. wealth. They own the jobs, the businesses, the stock, the land, maybe the people themselves.
We have created what is essentially a growing third world inside of our shrinking first world society.
There are many sides to whistleblowing. The one that most people don’t know about is the very personal cost, prison aside, including the high cost of lawyers and the strain on family relations, that follows the decision to risk it all in an act of conscience. Here’s a part of my own story I’ve not talked about much before.
At age 53, everything changed. Following my whistleblowing first book, We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People, I was run out of the good job I had held for more than 20 years with the U.S. Department of State. As one of its threats, State also took aim at the pension and benefits I’d earned, even as it forced me into retirement. Would my family and I lose everything I’d worked for as part of the retaliation campaign State was waging? I was worried. That pension was the thing I’d counted on to provide for us and it remained in jeopardy for many months. I was scared.
My skill set was pretty specific to my old job. The market was tough in the Washington, D.C. area for someone with a suspended security clearance. Nobody with a salaried job to offer seemed interested in an old guy, and I needed some money. All the signs pointed one way — toward the retail economy and a minimum-wage job.
And soon enough, I did indeed find myself working in exactly that economy and, worse yet, trying to live on the money I made. But it wasn’t just the money. There’s this American thing in which jobs define us, and those definitions tell us what our individual futures and the future of our society is likely to be. And believe me, rock bottom is a miserable base for any future.
Old World/New World
The last time I worked for minimum wage was in a small store in my hometown in northern Ohio. It was almost a rite of passage during high school, when I pulled in about four bucks an hour stocking shelves alongside my friends. Our girlfriends ran the cash registers and our moms and dads shopped in the store. A good story about a possible date could get you a night off from the sympathetic manager, who was probably the only adult in those days we called by his first name. When you graduated from high school, he would hire one of your friends and the cycle would continue.
At age 53, I expected to be quizzed about why I was looking for minimum-wage work in a big box retail store we’ll call “Bullseye.” I had prepared a story about wanting some fun part-time work and a new experience, but no one asked or cared. It felt like joining the French Foreign Legion, where you leave your past behind, assume a new name, and disappear anonymously into the organization in some distant land. The manager who hired me seemed focused only on whether I’d show up on time and not steal. My biggest marketable skill seemed to be speaking English better than some of his Hispanic employees. I was, that is, “well qualified.”
Before I could start, however, I had to pass a background and credit check, along with a drug test. Any of the anonymous agencies processing the checks could have vetoed my employment and I would never have known why. You don’t have any idea what might be in the reports the store receives, or what to feel about the fact that some stranger at a local store now knows your financial and criminal history, all for the chance to earn seven bucks an hour.
You also don’t know whether the drug tests were conducted properly or, as an older guy, if your high blood pressure medicine could trigger a positive response. As I learned from my co-workers later, everybody always worries about “pissing hot.” Most places that don’t pay much seem especially concerned that their workers are drug-free. I’m not sure why this is, since you can trade bonds and get through the day higher than a bird on a cloud. Nonetheless, I did what I had to in front of another person, handing him the cup. He gave me one of those universal signs of the underemployed I now recognize, a we’re-all-in-it, what’re-ya-gonna-do look, just a little upward flick of his eyes.
Now a valued member of the Bullseye team, I was told to follow another employee who had been on the job for a few weeks, do what he did, and then start doing it by myself by the end of my first shift. The work was dull but not pointless: put stuff on shelves; tell customers where stuff was; sweep up spilled stuff; repeat.
It turned out that doing the work was easy compared to dealing with the job. I still had to be trained for that.
You had to pay attention, but not too much. Believe it or not, that turns out to be an acquired skill, even for a former pasty government bureaucrat like me. Spend enough time in the retail minimum-wage economy and it’ll be trained into you for life, but for a newcomer, it proved a remarkably slow process. Take the initiative, get slapped down. Break a rule, be told you’re paid to follow the rules. Don’t forget who’s the boss. (It’s never you.) It all becomes who you are.
Diving straight from a salaried career back into the kiddie pool was tough. I still wanted to do a good job today, and maybe be a little better tomorrow. At first, I tried to think about how to do the simple tasks more efficiently, maybe just in a different order to save some walking back and forth. I knew I wasn’t going to be paid more, but that work ethic was still inside of me. The problem was that none of us were supposed to be trying to be good, just good enough. If you didn’t know that, you learned it fast. In the process, you felt yourself getting more and more tired each day.
Patient Zero in the New Economy
One co-worker got fired for stealing employee lunches out of the break room fridge. He apologized to us as security marched him out, saying he was just hungry and couldn’t always afford three meals. I heard that when he missed his rent payments he’d been sleeping in his car in the store parking lot. He didn’t shower much and now I knew why. Another guy, whose only task was to rodeo up stray carts in the parking lot, would entertain us after work by putting his cigarette out on his naked heel. The guys who came in to clean up the toilets got up each morning knowing that was what they would do with another of the days in their lives.
Other workers were amazingly educated. One painted in oils. One was a recent college grad who couldn’t find work and liked to argue with me about the deeper meanings in the modern fiction we’d both read.
At age 53, I was the third-oldest minimum-wage worker in the store. A number of the others were single moms. (Sixty-four percent of minimum-wage employees are women. About half of all single-parent families live in poverty.) There was at least one veteran. (“The Army taught me to drive a Humvee, which turns out not to be a marketable skill.”) There were a couple of students who were alternating semesters at work with semesters at community college, and a small handful of recent immigrants. One guy said that because another big box store had driven his small shop out of business, he had to take a minimum-wage job. He was Patient Zero in our New Economy.
State law only required a company to give you a break if you worked six hours or more under certain conditions. Even then, it was only 30 minutes — and unpaid. You won’t be surprised to discover that, at Bullseye, most non-holiday shifts were five-and-a-half hours or less. Somebody said it might be illegal not to give us more breaks, but what can you do? Call 911 like it was a real crime?
Some good news, though. It turned out that I had another marketable skill in addition to speaking decent English: being old. One day as a customer was bawling out a younger worker over some imagined slight, I happened to wander by. The customer assumed I was the manager, given my age, and began directing her complaints at me. I played along, even steepling my fingers to show my sincere concern just as I had seen actual managers do. The younger worker didn’t get in trouble, and for a while I was quite popular among the kids whenever I pulled the manager routine to cover them.
Hours were our currency. You could trade them with other employees if they needed a day off to visit their kid’s school. You could grab a few extra on holidays. If you could afford it, you could swap five bad-shift hours for three good-shift hours. The store really didn’t care who showed up as long as someone showed up. Most minimum-wage places cap workers at under 40 hours a week to avoid letting them become “full time” and so possibly qualify for any kind of benefits. In my case, as work expanded and contracted, I was scheduled for as few as seven hours a week and I never got notice until the last moment if my hours were going to be cut.
Living on a small paycheck was hard enough. Trying to budget around wildly varying hours, and so paychecks, from week to week was next to impossible. Seven hours a week at minimum wage was less than 50 bucks. A good week around the Christmas rush was 39 hours, or more than $270. At the end of 2013, after I had stopped working at Bullseye, the minimum wage did go up from a little more than $7 to $8 an hour, which was next to no improvement at all. Doesn’t every little bit help? Maybe, but what are a few more crumbs of bread worth when you need a whole loaf not to be hungry?
Working to Be Poor
So how do you live on $50 a week, or for that matter, $270 a week? Cut back? Recycle cans?
One answer is: You don’t live on those wages alone. You can’t. Luckily I had some savings, no kids left in the house to feed, and my wife was still at her “good” job. Many of my co-workers, however, dealt with the situation by holding down two or three minimum-wage jobs. Six hours on your feet is tough, but what about 12 or 14? And remember, there are no weekends or holidays in most minimum-wage jobs. Bullseye had even begun opening on Thanksgiving and Christmas afternoons.
The smart workers found their other jobs in the same strip mall as our Bullseye, so they could run from one to the next, cram in as many hours as they could, and save the bus fare. It mattered: At seven bucks an hour, that round trip fare meant you worked your first 45 minutes not for Bullseye but for the bus company. (The next 45 minutes you worked to pay taxes.)
Poverty as a Profit Center
Many low-wage workers have to take some form of public assistance. Food stamps — now called the Supplemental Nutrition Assistance Program, or SNAP — were a regular topic of conversation among my colleagues. Despite holding two or three jobs, there were still never enough hours to earn enough to eat enough. SNAP was on a lot of other American’s minds as well — the number of people using food stamps increased by 13 percent a year from 2008 to 2012. About 1 in 7 Americans get some of their food through SNAP. About 45 percent of food stamp benefits go to children.
Enjoying that Big Mac? Here’s one reason it’s pretty cheap and that the junk sold at “Bullseye” and the other big box stores is, too: Those businesses get away with paying below a living wage and instead you, the taxpayer, help subsidize those lousy wages with SNAP. (And of course since minimum-wage workers have taxes deducted, too, they are — imagine the irony — essentially forced to subsidize themselves.)
That subsidy does not come cheap, either. The cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion per year. McDonald’s workers alone account for $1.2 billion in federal assistance annually.
All that SNAP money is needed to bridge the gap between what the majority of employed people earn through the minimum wage, and what they need to live a minimum life. Nearly three-quarters of enrollments in America’s major public benefits programs involve working families stuck in jobs like I had. There are a lot of those jobs, too. The positions that account for the most workers in the U.S. right now are retail salespeople, cashiers, restaurant workers, and janitors. All of those positions pay minimum wage or nearly so. Employers are actually allowed to pay below minimum wage to food workers who might receive tips.
And by the way, if somehow at this point you’re feeling bad for Walmart, don’t. In addition to having it’s workforce partially paid for by the government, Walmart also makes a significant portion of its profits by selling to people receiving federal food assistance. Though the Walton family is a little too shy to release absolute numbers, a researcher found that in one year, nine Walmart Supercenters in Massachusetts together received more than $33 million in SNAP dollars. One Walmart Supercenter in Tulsa, Oklahoma, received $15.2 million, while another (also in Tulsa) took in close to $9 million in SNAP spending.
You could say that taxpayers are basically moneylenders to a government that is far more interested in subsidizing business than in caring for their workers, but would anyone believe you?
Back in the Crosshairs
Some employees at Bullseye had been yelled at too many times or were too afraid of losing their jobs. They were not only broke, but broken. People — like dogs — don’t get that way quickly, only by a process of erosion eating away at whatever self-esteem they may still possess. Then one day, if a supervisor tells them by mistake to hang a sign upside down, they’ll be too afraid of contradicting the boss not to do it.
I’d see employees rushing in early, terrified, to stand by the time clock so as not to be late. One of my fellow workers broke down in tears when she accidentally dropped something, afraid she’d be fired on the spot. And what a lousy way to live that is, your only incentive for doing good work being the desperate need to hang onto a job guaranteed to make you hate yourself for another day. Nobody cared about the work, only keeping the job. That was how management set things up.
About 30 million Americans work this way, live this way, at McJobs. These situations are not unique to any one place or region. After all, Walmart has more than 2 million employees. If that company were an army, it would be the second largest military on the planet, just behind China. It is, in fact, the largest overall employer in the country and the biggest employer in 25 states. When Walmart won’t pay more than minimum, it hurts. When it rains like that, we all get wet. This is who we are now.
I Was Minimum
It’s time to forget the up-by-the-bootstraps fantasies of conservative economists bleating on Fox. If any of it was ever true, it’s certainly not true anymore. There is no ladder up, no promotion path in the minimum-wage world. You can’t work “harder” because your hours are capped, and all the jobs are broken into little pieces anyone could do anyway. Minimum wage is what you get; there are no real raises. I don’t know where all the assistant managers came from, but not from among us.
I worked in retail for minimum wage at age 16 and again at 53. In that span, the minimum wage itself rose only by a few bucks. What changed, however, is the cast of characters. Once upon a time, minimum-wage jobs were filled with high school kids earning pocket money. In 2014, it’s mainly adults struggling to get by. Something is obviously wrong.
In his State of the Union Address, President Obama urged that the federal minimum wage be raised to $9 an hour. He also said that a person holding down a full-time job should not have to live in poverty in a country like America.
To the president I say, yes, please, do raise the minimum wage. But how far is nine bucks an hour going to go? Are so many of us destined to do five hours of labor for the cell phone bill, another 12 for the groceries each week, and 20 or 30 for a car payment? How many hours are we going to work? How many can we work?
Nobody can make a real living doing these jobs. You can’t raise a family on minimum wage, not in the way Americans once defined raising a family when our country emerged from World War II so fat and happy. And you can’t build a nation on vast armies of working poor with nowhere to go. The president is right that it’s time for a change, but what’s needed is far more than a minimalist nudge to the minimum wage. Maybe what we need is to spend more on education and less on war, even out the tax laws and rules just a bit, require a standard living wage instead of a minimum one. Some sort of rebalancing. Those aren’t answers to everything, but they might be a start.
People who work deserve to be paid, but McDonald’s CEO Donald Thompson last year took home $13.7 million in salary, with perks to go. If one of his fry cooks put in 30 hours a week, she’d take in a bit more than $10,000 a year — before taxes, of course. There is indeed a redistribution of wealth taking place in America, and it’s all moving upstream.
I got lucky. I won my pension fight with my “career” employer, the State Department, and was able to crawl out of the minimum-wage economy after less than a year and properly retire. I quit Bullseye because I could, one gray day when a customer about half my age cursed me out for something unimportant she didn’t like, ending with “I guess there’s a reason why people like you work at places like this.” I agreed with her: There is a reason. We just wouldn’t agree on what it was.
I’m different now for the experience. I think more about where I shop, and try to avoid big places that pay low wages if I can. I treat minimum-wage workers a little better, too. If I have to complain about something in a store, I keep the worker out of it and focus on solving the problem. I take a bit more care in the restroom not to leave a mess. I don’t get angry anymore when a worker says to me, “I really can’t do anything about it.” Now I know from personal experience that, in most cases, they really can’t.
Above all, I carry with me the knowledge that economics isn’t about numbers, it’s about people. I know now that it’s up to us to decide whether the way we pay people, the work we offer them, and how we treat them on the job is just about money or if it’s about society, about how we live, who we are, the nature of America. The real target now should be to look deeply into the apartheid of dollars our country has created and decide it needs to change. We — the 99 percent, anyway — can’t afford not to.
Neurotic Beauty: An Outsider Looks At Japan is a fine addition to a long list of books that attempt to explain Japan, what one observer has called the “most foreign of foreign countries.” Berman succeeds in his explanation mostly by avoiding the polarized industry of such explainers. To put Neurotic Beauty in context, let me explain.
The Explainer Industry
Almost all books “about Japan” (I’m leaving out the 600 page volumes on the geisha or the photo essays on whatever new trend is coming out of Harajuku) fall into one of two categories.
The predominant narrative declares Japan a near-perfect place, an epicenter of pure Zen that has whatever the author thinks his home country lacks. The minority opinion is that Japan has come over the hill and because of its poor treatment of women workers, warlike past or economic hollowness or whatever, is doomed to be a footnote when the history of modern civilization is written. Perhaps some sort of Switzerland with much better food.
Berman asks: Why can’t both be true? Why can’t Japan be a place with a once beautiful, encompassing culture of craftsmanship, that lost its way in the modern world and, if it can find again what it really is about at its core, become the first post-capitalist country?
A Cultural History of Japan, with an Angle
The book’s argument begins with a look at what Berman sees as Japan’s cultural soul, craftsmanship. He details the relationship early potters, sword makers and others had with their work, a desire to do more than simply make something — a desire to create themselves as human beings through a quest for perfection in their work.
Inklings of this tradition still exist in modern Japan, as anyone who has seen the documentary Jiro Dreams of Sushi can attest to. The sushi master requires his apprentices to practice for years before they can prepare food for customers, and the very few who stay on through the process get great joy from the process, more so than the results.
Japan Went Insane
As the Tokugawa (for simplicity’s sake, the samurai) era was coming to a close, Japan went insane, and abandoned all that, according to Berman. Fearful of being turned into a colony of the west, as was happening in China, the Japanese embarked on the Meiji Restoration. Science and engineering became the sole point of education, aimed in large part at building up a powerful military. Those forces, in imitation of the colonial west, would be turned on Japan’s Asian neighbors. Japan made itself almost literally overnight into as rapacious an imperialist nation as it possibly could.
And at that point, Berman draws a straight line through Nanjing, Pearl Harbor, Hiroshima and Nagasaki, leading right to the surrender that ended WWII. But instead of finding its way back to something of itself, Japan simply dropped capitalism in its imperial guise and picked it up in its hyper-consumerism guise. The so-called economic miracle of the 1960’s put appliances into homes and money into the hands of a booming middle class, but did nothing to fill the soul. The lost decades, and the current spiritual malaise in Japan as exemplified by the hikikomori and otaku cultures, were as inevitable as the spring rains which tear the cherry blossoms from the trees.
A Post-Capitalist Society
If you are at this point seeing some parallels to modern America, that is clearly intentional on Berman’s part (one of his earlier works is titled Dark Ages America: The Final Phase of Empire). Japan has been trying to “fill the hole” in its spiritual center for nearly a thousand years, first with Chinese learning (including Chinese Buddhism), then with a martial culture, then with imperialism, and, most lately, with consumerism. None stick; they are all too unfulfilling and incomplete.
The key difference between Japan and the U.S., however, is that because it has a legitimate soul to potentially return to (from the day the first Native American was murdered, America has been all about appetite), Japan holds on to a chance that it may become the first post-capitalist society, one where living becomes more important than owning. This is a theme which will be not unfamiliar to readers of Berman’s last book, Spinning Straw Into Gold: Straight Talk for Troubled Times. In Japan, there is something to fall back on.
It is a tall order, and Berman remains unsure what path Japan will take. Should it make the correct choice, however, the trope “only in Japan” could come to represent something more than Hello Kitty junk, bullet trains and cosplay.
Agree or disagree, Neurotic Beauty is a compelling, scholarly, narrative well-worth the time of readers seeking a better understanding of Japan.
I make no secret of my respect for Morris Berman’s body of work; read more here.