Earlier this month, the Pew Research Center released a study that
found that most wealthy Americans believed “poor people today have it easy
because they can get government benefits without doing anything in return.”
This is an infuriatingly obtuse view of what it means to be poor in this country
— the soul-rending omnipresence of worry and fear, of weariness and fatigue.
This can be the view only of those who have not known — or have long forgotten —
what poverty truly means.
“Easy” is a word not easily spoken among the poor. Things are hard — the times
are hard, the work is hard, the way is hard. “Easy” is for uninformed
explanations issued by the willfully callous and the haughtily blind.
Allow me to explain, as James Baldwin put it, a few illustrations of “how
extremely expensive it is to be poor.”
First, many poor people work, but they just don’t make enough to move out of
poverty — an estimated 11 million Americans fall into this category.
And yet, whatever the poor earn is likely to be more heavily taxed than the
earnings of wealthier citizens, according to a new analysis by the Institute on
Taxation and Economic Policy. As The New York Times put it last week:
“According to the study, in 2015 the poorest fifth of Americans will pay on
average 10.9 percent of their income in state and local taxes, the middle fifth
will pay 9.4 percent and the top 1 percent will average 5.4 percent.”
In addition, many low-income people are “unbanked” (not served by a financial
institution), and thus nearly eaten alive by exorbitant fees. As the St. Louis
Federal Reserve pointed out in 2010:
“Unbanked consumers spend approximately 2.5 to 3 percent of a government
benefits check and between 4 percent and 5 percent of payroll check just to cash
them. Additional dollars are spent to purchase money orders to pay routine
monthly expenses. When you consider the cost for cashing a bi-weekly payroll
check and buying about six money orders each month, a household with a net
income of $20,000 may pay as much as $1,200 annually for alternative service
fees — substantially more than the expense of a monthly checking account.”
Even when low-income people can become affiliated with a bank, those banks are
increasingly making them pay “steep rates for loans and high fees on basic
checking accounts,” as The Times’s DealBook blog put it last year.
And poor people can have a hard time getting credit. As The Washington Post put
it, the excesses of the subprime boom have led conventional banks to stay away
from the riskiest borrowers, leaving them “all but cut off from access to big
loans, like mortgages.”
One way to move up the ladder and out of poverty is through higher education,
but even that is not without disproportionate costs. As the Institute for
College Access and Success noted in March:
“Graduates who received Pell Grants, most of whom had family
incomes under $40,000, were much more likely to borrow and to borrow more. Among
graduating seniors who ever received a Pell Grant, 88 percent had student loans
in 2012, with an average of $31,200 per borrower. In contrast, 53 percent of
those who never received a Pell Grant had debt, with an average of $26,450 per
And often, work or school requires transportation, which can be another
outrageous expense. According to the Leadership Conference on Civil and Human
“Low- and moderate-income households spend 42 percent of their total annual
income on transportation, including those who live in rural areas, as compared
to middle-income households, who spend less than 22 percent of their annual
income on transportation.”
And besides, having a car can make prime targets of the poor. One pernicious
practice that the killing of Michael Brown in Ferguson, Mo. — and the protests
that followed — resurfaced was the degree to which some local municipalities
profit from police departments targeting poor communities, with a raft of stops,
fines, summonses and arrests supported by police actions and complicit courts.
As NPR reported in August:
“In 2013, the municipal court in Ferguson — a city of 21,135 people — issued
32,975 arrest warrants for nonviolent offenses, mostly driving violations.”
The story continued:
“ArchCity Defenders, a St. Louis-area public defender group, says in its report
that more than half the courts in St. Louis County engage in the ‘illegal and
harmful practices’ of charging high court fines and fees on nonviolent offenses
like traffic violations — and then arresting people when they don’t pay.”
The list of hardships could go on for several more columns, but you get the
point: Being poor is anything but easy.
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The basic outlines of poverty in America are sadly familiar.
At last count, 46.5 million people were poor — 15 percent of the population.
Women and children, especially in single-mother families, were, as always, hit
Another group, people 65 and older, now seems vulnerable as well. In analyzing
the recent Census Bureau report on poverty, researchers at the National Women’s
Law Center found that from 2011 to 2012, the rate of extreme poverty rose by a
statistically significant amount among those 65 and older, meaning that a
growing number of them were living at or below 50 percent of the poverty line.
In 2012, this was $11,011 a year for an older person living alone.
An additional 135,000 older women became extremely poor in 2012, raising the
extreme-poverty rate in that group to 3.1 percent, And 100,000 older men were
extremely poor in 2012, raising the extreme-poverty rate in that group to 2.3
percent In all, nearly 1.2 million people age 65 and up were classified as
extremely poor in 2012.
The increase in extreme poverty requires utmost attention. For the most part,
Social Security has protected older Americans from poverty. In cases where older
people are poor, the afflicted often have been very old women, who have long
outlived their spouses and any nest egg.
In the law center’s research, however, the increase in extreme poverty was
concentrated in the 65-to-75 age group. Some of them could be among the
long-term unemployed, whose jobless benefits have been cut or run out. Or they
might be people who would generally qualify for public assistance in addition to
Social Security but are having trouble getting those benefits in the face of
administrative cutbacks at the state and federal levels.
The numbers alone don’t say why extreme poverty has risen or whether the rise
will be lasting or fleeting. But other data echo the law center’s findings. The
Census Bureau’s American Community Survey, which tracks a larger sample than in
its poverty report, shows an increase in poverty among those 65 and older, from
9.0 percent in 2010 to 9.3 percent in 2011 and 9.5 percent in 2012. That is not
a record; poverty rates for that group have reached 9.9 percent
But it would be devastating if recent increases became a growing trend. For now,
the best policy response is to do no harm. For example, budget proposals to cut
Social Security’s cost-of-living benefit, ill advised in any case, would be
especially unwise and untimely.
REAGAN famously said, “We fought a war on poverty and poverty won.” With 46
million Americans — 15 percent of the population — now counted as poor, it’s
tempting to think he may have been right.
Look a little deeper and the temptation grows. The lowest percentage in poverty
since we started counting was 11.1 percent in 1973. The rate climbed as high as
15.2 percent in 1983. In 2000, after a spurt of prosperity, it went back down to
11.3 percent, and yet 15 million more people are poor today.
At the same time, we have done a lot that works. From Social Security to food
stamps to the earned-income tax credit and on and on, we have enacted programs
that now keep 40 million people out of poverty. Poverty would be nearly double
what it is now without these measures, according to the Center on Budget and
Policy Priorities. To say that “poverty won” is like saying the Clean Air and
Clean Water Acts failed because there is still pollution.
With all of that, why have we not achieved more? Four reasons: An astonishing
number of people work at low-wage jobs. Plus, many more households are headed
now by a single parent, making it difficult for them to earn a living income
from the jobs that are typically available. The near disappearance of cash
assistance for low-income mothers and children — i.e., welfare — in much of the
country plays a contributing role, too. And persistent issues of race and gender
mean higher poverty among minorities and families headed by single mothers.
The first thing needed if we’re to get people out of poverty is more jobs that
pay decent wages. There aren’t enough of these in our current economy. The need
for good jobs extends far beyond the current crisis; we’ll need a
full-employment policy and a bigger investment in 21st-century education and
skill development strategies if we’re to have any hope of breaking out of the
current economic malaise.
This isn’t a problem specific to the current moment. We’ve been drowning in a
flood of low-wage jobs for the last 40 years. Most of the income of people in
poverty comes from work. According to the most recent data available from the
Census Bureau, 104 million people — a third of the population — have annual
incomes below twice the poverty line, less than $38,000 for a family of three.
They struggle to make ends meet every month.
Half the jobs in the nation pay less than $34,000 a year, according to the
Economic Policy Institute. A quarter pay below the poverty line for a family of
four, less than $23,000 annually. Families that can send another adult to work
have done better, but single mothers (and fathers) don’t have that option.
Poverty among families with children headed by single mothers exceeds 40
Wages for those who work on jobs in the bottom half have been stuck since 1973,
increasing just 7 percent.
It’s not that the whole economy stagnated. There’s been growth, a lot of it, but
it has stuck at the top. The realization that 99 percent of us have been left in
the dust by the 1 percent at the top (some much further behind than others) came
far later than it should have — Rip Van Winkle and then some. It took the Great
Recession to get people’s attention, but the facts had been accumulating for a
long time. If we’ve awakened, we can act.
Low-wage jobs bedevil tens of millions of people. At the other end of the
low-income spectrum we have a different problem. The safety net for single
mothers and their children has developed a gaping hole over the past dozen
years. This is a major cause of the dramatic increase in extreme poverty during
those years. The census tells us that 20.5 million people earn incomes below
half the poverty line, less than about $9,500 for a family of three — up eight
million from 2000.
Why? A substantial reason is the near demise of welfare — now called Temporary
Assistance for Needy Families, or TANF. In the mid-90s more than two-thirds of
children in poor families received welfare. But that number has dwindled over
the past decade and a half to roughly 27 percent.
One result: six million people have no income other than food stamps. Food
stamps provide an income at a third of the poverty line, close to $6,300 for a
family of three. It’s hard to understand how they survive.
At least we have food stamps. They have been a powerful antirecession tool in
the past five years, with the number of recipients rising to 46 million today
from 26.3 million in 2007. By contrast, welfare has done little to counter the
impact of the recession; although the number of people receiving cash assistance
rose from 3.9 million to 4.5 million since 2007, many states actually reduced
the size of their rolls and lowered benefits to those in greatest need.
Race and gender play an enormous part in determining poverty’s continuing
course. Minorities are disproportionately poor: around 27 percent of
African-Americans, Latinos and American Indians are poor, versus 10 percent of
whites. Wealth disparities are even wider. At the same time, whites constitute
the largest number among the poor. This is a fact that bears emphasis, since
measures to raise income and provide work supports will help more whites than
minorities. But we cannot ignore race and gender, both because they present
particular challenges and because so much of the politics of poverty is grounded
in those issues.
We know what we need to do — make the rich pay their fair share of running the
country, raise the minimum wage, provide health care and a decent safety net,
and the like. But realistically, the immediate challenge is keeping what we
have. Representative Paul Ryan and his ideological peers would slash everything
from Social Security to Medicare and on through the list, and would hand out
more tax breaks to the people at the top. Robin Hood would turn over in his
We should not kid ourselves. It isn’t certain that things will stay as good as
they are now. The wealth and income of the top 1 percent grows at the expense of
everyone else. Money breeds power and power breeds more money. It is a truly
A surefire politics of change would necessarily involve getting people in the
middle — from the 30th to the 70th percentile — to see their own economic
self-interest. If they vote in their own self-interest, they’ll elect people who
are likely to be more aligned with people with lower incomes as well as with
them. As long as people in the middle identify more with people on the top than
with those on the bottom, we are doomed. The obscene amount of money flowing
into the electoral process makes things harder yet.
But history shows that people power wins sometimes. That’s what happened in the
Progressive Era a century ago and in the Great Depression as well. The gross
inequality of those times produced an amalgam of popular unrest, organization,
muckraking journalism and political leadership that attacked the big — and
worsening — structural problem of economic inequality. The civil rights movement
changed the course of history and spread into the women’s movement, the
environmental movement and, later, the gay rights movement. Could we have said
on the day before the dawn of each that it would happen, let alone succeed? Did
Rosa Parks know?
We have the ingredients. For one thing, the demographics of the electorate are
changing. The consequences of that are hardly automatic, but they create an
opportunity. The new generation of young people — unusually distrustful of
encrusted power in all institutions and, as a consequence, tending toward
libertarianism — is ripe for a new politics of honesty. Lower-income people will
participate if there are candidates who speak to their situations. The change
has to come from the bottom up and from synergistic leadership that draws it
out. When people decide they have had enough and there are candidates who stand
for what they want, they will vote accordingly.
I have seen days of promise and days of darkness, and I’ve seen them more than
once. All history is like that. The people have the power if they will use it,
but they have to see that it is in their interest to do so.
February 9, 2012
The New York Times
By SABRINA TAVERNISE
WASHINGTON — Education was historically considered a great
equalizer in American society, capable of lifting less advantaged children and
improving their chances for success as adults. But a body of recently published
scholarship suggests that the achievement gap between rich and poor children is
widening, a development that threatens to dilute education’s leveling effects.
It is a well-known fact that children from affluent families tend to do better
in school. Yet the income divide has received far less attention from policy
makers and government officials than gaps in student accomplishment by race.
Now, in analyses of long-term data published in recent months, researchers are
finding that while the achievement gap between white and black students has
narrowed significantly over the past few decades, the gap between rich and poor
students has grown substantially during the same period.
“We have moved from a society in the 1950s and 1960s, in which race was more
consequential than family income, to one today in which family income appears
more determinative of educational success than race,” said Sean F. Reardon, a
Stanford University sociologist. Professor Reardon is the author of a study that
found that the gap in standardized test scores between affluent and low-income
students had grown by about 40 percent since the 1960s, and is now double the
testing gap between blacks and whites.
In another study, by researchers from the University of Michigan, the imbalance
between rich and poor children in college completion — the single most important
predictor of success in the work force — has grown by about 50 percent since the
The changes are tectonic, a result of social and economic processes unfolding
over many decades. The data from most of these studies end in 2007 and 2008,
before the recession’s full impact was felt. Researchers said that based on
experiences during past recessions, the recent downturn was likely to have
aggravated the trend.
“With income declines more severe in the lower brackets, there’s a good chance
the recession may have widened the gap,” Professor Reardon said. In the study he
led, researchers analyzed 12 sets of standardized test scores starting in 1960
and ending in 2007. He compared children from families in the 90th percentile of
income — the equivalent of around $160,000 in 2008, when the study was conducted
— and children from the 10th percentile, $17,500 in 2008. By the end of that
period, the achievement gap by income had grown by 40 percent, he said, while
the gap between white and black students, regardless of income, had shrunk
Both studies were first published last fall in a book of research, “Whither
Opportunity?” compiled by the Russell Sage Foundation, a research center for
social sciences, and the Spencer Foundation, which focuses on education. Their
conclusions, while familiar to a small core of social sciences scholars, are now
catching the attention of a broader audience, in part because income inequality
has been a central theme this election season.
The connection between income inequality among parents and the social mobility
of their children has been a focus of President Obama as well as some of the
Republican presidential candidates.
One reason for the growing gap in achievement, researchers say, could be that
wealthy parents invest more time and money than ever before in their children
(in weekend sports, ballet, music lessons, math tutors, and in overall
involvement in their children’s schools), while lower-income families, which are
now more likely than ever to be headed by a single parent, are increasingly
stretched for time and resources. This has been particularly true as more
parents try to position their children for college, which has become ever more
essential for success in today’s economy.
A study by Sabino Kornrich, a researcher at the Center for Advanced Studies at
the Juan March Institute in Madrid, and Frank F. Furstenberg, scheduled to
appear in the journal Demography this year, found that in 1972, Americans at the
upper end of the income spectrum were spending five times as much per child as
low-income families. By 2007 that gap had grown to nine to one; spending by
upper-income families more than doubled, while spending by low-income families
grew by 20 percent.
“The pattern of privileged families today is intensive cultivation,” said Dr.
Furstenberg, a professor of sociology at the University of Pennsylvania.
The gap is also growing in college. The University of Michigan study, by Susan
M. Dynarski and Martha J. Bailey, looked at two generations of students, those
born from 1961 to 1964 and those born from 1979 to 1982. By 1989, about
one-third of the high-income students in the first generation had finished
college; by 2007, more than half of the second generation had done so. By
contrast, only 9 percent of the low-income students in the second generation had
completed college by 2007, up only slightly from a 5 percent college completion
rate by the first generation in 1989.
James J. Heckman, an economist at the University of Chicago, argues that
parenting matters as much as, if not more than, income in forming a child’s
cognitive ability and personality, particularly in the years before children
“Early life conditions and how children are stimulated play a very important
role,” he said. “The danger is we will revert back to the mindset of the war on
poverty, when poverty was just a matter of income, and giving families more
would improve the prospects of their children. If people conclude that, it’s a
Meredith Phillips, an associate professor of public policy and sociology at the
University of California, Los Angeles, used survey data to show that affluent
children spend 1,300 more hours than low-income children before age 6 in places
other than their homes, their day care centers, or schools (anywhere from
museums to shopping malls). By the time high-income children start school, they
have spent about 400 hours more than poor children in literacy activities, she
Charles Murray, a scholar at the American Enterprise Institute whose book,
“Coming Apart: The State of White America, 1960-2010,” was published Jan. 31,
described income inequality as “more of a symptom than a cause.”
The growing gap between the better educated and the less educated, he argued,
has formed a kind of cultural divide that has its roots in natural social
forces, like the tendency of educated people to marry other educated people, as
well as in the social policies of the 1960s, like welfare and other government
programs, which he contended provided incentives for staying single.
“When the economy recovers, you’ll still see all these problems persisting for
reasons that have nothing to do with money and everything to do with culture,”
There are no easy answers, in part because the problem is so complex, said
Douglas J. Besharov, a fellow at the Atlantic Council. Blaming the problem on
the richest of the rich ignores an equally important driver, he said: two-earner
household wealth, which has lifted the upper middle class ever further from less
educated Americans, who tend to be single parents.
The problem is a puzzle, he said. “No one has the slightest idea what will work.
The cupboard is bare.”
February 8, 2012
The New York Times
By NICHOLAS D. KRISTOF
Persistent poverty is America’s great moral challenge, but
it’s far more than that.
As a practical matter, we can’t solve educational problems, health care costs,
government spending or economic competitiveness so long as a chunk of our
population is locked in an underclass. Historically, “underclass” has often been
considered to be a euphemism for race, but increasingly it includes elements of
the white working class as well.
That’s the backdrop for the uproar over Charles Murray’s latest book, “Coming
Apart.” Murray critically examines family breakdown among working-class whites
and the decline in what he sees as traditional values of diligence.
Liberals have mostly denounced the book, and I, too, disagree with important
parts of it. But he’s right to highlight social dimensions of the crisis among
low-skilled white workers.
My touchstone is my beloved hometown of Yamhill, Ore., population about 925 on a
good day. We Americans think of our rural American heartland as a lovely
pastoral backdrop, but these days some marginally employed white families in
places like Yamhill seem to be replicating the pathologies that have devastated
many African-American families over the last generation or two.
One scourge has been drug abuse. In rural America, it’s not heroin but
methamphetamine; it has shattered lives in Yamhill and left many with criminal
records that make it harder to find good jobs. With parents in jail, kids are
raised on the fly.
Then there’s the eclipse of traditional family patterns. Among white American
women with only a high school education, 44 percent of births are out of
wedlock, up from 6 percent in 1970, according to Murray.
Liberals sometimes feel that it is narrow-minded to favor traditional marriage.
Over time, my reporting on poverty has led me to disagree: Solid marriages have
a huge beneficial impact on the lives of the poor (more so than in the lives of
the middle class, who have more cushion when things go wrong).
One study of low-income delinquent young men in Boston found that one of the
factors that had the greatest impact in turning them away from crime was
marrying women they cared about. As Steven Pinker notes in his recent book, “The
Better Angels of Our Nature”: “The idea that young men are civilized by women
and marriage may seem as corny as Kansas in August, but it has become a
commonplace of modern criminology.”
Jobs are also critical as a pathway out of poverty, and Murray is correct in
noting that it is troubling that growing numbers of working-class men drop out
of the labor force. The proportion of men of prime working age with only a high
school education who say they are “out of the labor force” has quadrupled since
1968, to 12 percent.
In 1965, Daniel Patrick Moynihan released a famous report warning of a crisis in
African-American family structures, and many liberals at the time accused him of
something close to racism. In retrospect, Moynihan was right to sound the
Today, I fear we’re facing a crisis in which a chunk of working-class America
risks being calcified into an underclass, marked by drugs, despair, family
decline, high incarceration rates and a diminishing role of jobs and education
as escalators of upward mobility. We need a national conversation about these
dimensions of poverty, and maybe Murray can help trigger it. I fear that
liberals are too quick to think of inequality as basically about taxes. Yes, our
tax system is a disgrace, but poverty is so much deeper and more complex than
Where Murray is profoundly wrong, I think, is to blame liberal social policies
for the pathologies he examines. Yes, I’ve seen disability programs encourage
some people to drop out of the labor force. But there were far greater forces at
work, such as the decline in good union jobs.
Eighty percent of the people in my high school cohort dropped out or didn’t
pursue college because it used to be possible to earn a solid living at the
steel mill, the glove factory or sawmill. That’s what their parents had done.
But the glove factory closed, working-class jobs collapsed and unskilled
laborers found themselves competing with immigrants.
There aren’t ideal solutions, but some evidence suggests that we need more
social policy, not less. Early childhood education can support kids being raised
by struggling single parents. Treating drug offenders is far cheaper than
A new study finds that a jobs program for newly released prison inmates left
them 22 percent less likely to be convicted of another crime. This initiative,
by the Center for Employment Opportunities, more than paid for itself: each $1
brought up to $3.85 in benefits.
So let’s get real. A crisis is developing in the white working class, a
byproduct of growing income inequality in America. The pathologies are achingly
real. But the solution isn’t finger-wagging, or averting our eyes — but
January 30, 2012
The New York Times
By DAVID BROOKS
I’ll be shocked if there’s another book this year as important
as Charles Murray’s “Coming Apart.” I’ll be shocked if there’s another book that
so compellingly describes the most important trends in American society.
Murray’s basic argument is not new, that America is dividing into a two-caste
society. What’s impressive is the incredible data he produces to illustrate that
trend and deepen our understanding of it.
His story starts in 1963. There was a gap between rich and poor then, but it
wasn’t that big. A house in an upper-crust suburb cost only twice as much as the
average new American home. The tippy-top luxury car, the Cadillac Eldorado
Biarritz, cost about $47,000 in 2010 dollars. That’s pricy, but nowhere near the
price of the top luxury cars today.
More important, the income gaps did not lead to big behavior gaps. Roughly 98
percent of men between the ages of 30 and 49 were in the labor force, upper
class and lower class alike. Only about 3 percent of white kids were born
outside of marriage. The rates were similar, upper class and lower class.
Since then, America has polarized. The word “class” doesn’t even capture the
divide Murray describes. You might say the country has bifurcated into different
social tribes, with a tenuous common culture linking them.
The upper tribe is now segregated from the lower tribe. In 1963, rich people who
lived on the Upper East Side of Manhattan lived close to members of the middle
class. Most adult Manhattanites who lived south of 96th Street back then hadn’t
even completed high school. Today, almost all of Manhattan south of 96th Street
is an upper-tribe enclave.
Today, Murray demonstrates, there is an archipelago of affluent enclaves
clustered around the coastal cities, Chicago, Dallas and so on. If you’re born
into one of them, you will probably go to college with people from one of the
enclaves; you’ll marry someone from one of the enclaves; you’ll go off and live
in one of the enclaves.
Worse, there are vast behavioral gaps between the educated upper tribe (20
percent of the country) and the lower tribe (30 percent of the country). This is
where Murray is at his best, and he’s mostly using data on white Americans, so
the effects of race and other complicating factors don’t come into play.
Roughly 7 percent of the white kids in the upper tribe are born out of wedlock,
compared with roughly 45 percent of the kids in the lower tribe. In the upper
tribe, nearly every man aged 30 to 49 is in the labor force. In the lower tribe,
men in their prime working ages have been steadily dropping out of the labor
force, in good times and bad.
People in the lower tribe are much less likely to get married, less likely to go
to church, less likely to be active in their communities, more likely to watch
TV excessively, more likely to be obese.
Murray’s story contradicts the ideologies of both parties. Republicans claim
that America is threatened by a decadent cultural elite that corrupts regular
Americans, who love God, country and traditional values. That story is false.
The cultural elites live more conservative, traditionalist lives than the
Democrats claim America is threatened by the financial elite, who hog society’s
resources. But that’s a distraction. The real social gap is between the top 20
percent and the lower 30 percent. The liberal members of the upper tribe latch
onto this top 1 percent narrative because it excuses them from the central role
they themselves are playing in driving inequality and unfairness.
It’s wrong to describe an America in which the salt of the earth common people
are preyed upon by this or that nefarious elite. It’s wrong to tell the familiar
underdog morality tale in which the problems of the masses are caused by the
The truth is, members of the upper tribe have made themselves phenomenally
productive. They may mimic bohemian manners, but they have returned to 1950s
traditionalist values and practices. They have low divorce rates, arduous work
ethics and strict codes to regulate their kids.
Members of the lower tribe work hard and dream big, but are more removed from
traditional bourgeois norms. They live in disorganized, postmodern neighborhoods
in which it is much harder to be self-disciplined and productive.
I doubt Murray would agree, but we need a National Service Program. We need a
program that would force members of the upper tribe and the lower tribe to live
together, if only for a few years. We need a program in which people from both
tribes work together to spread out the values, practices and institutions that
lead to achievement.
If we could jam the tribes together, we’d have a better elite and a better mass.
The New York Times
By ELIZABETH H. BRADLEY
and LAUREN TAYLOR
IT’S common knowledge that the United States spends more than any other country
on health care but still ranks in the bottom half of industrialized countries in
outcomes like life expectancy and infant mortality. Why are these other
countries beating us if we spend so much more? The truth is that we may not be
spending more — it all depends on what you count.
In our comparative study of 30 industrialized countries, published earlier this
year in the journal BMJ Quality and Safety, we broadened the scope of
traditional health care industry analyses to include spending on social
services, like rent subsidies, employment-training programs, unemployment
benefits, old-age pensions, family support and other services that can extend
and improve life.
We studied 10 years’ worth of data and found that if you counted the combined
investment in health care and social services, the United States no longer spent
the most money — far from it. In 2005, for example, the United States devoted
only 29 percent of gross domestic product to health and social services
combined, while countries like Sweden, France, the Netherlands, Belgium and
Denmark dedicated 33 percent to 38 percent of their G.D.P. to the combination.
We came in 10th.
What’s more, America is one of only three industrialized countries to spend the
majority of its health and social services budget on health care itself. For
every dollar we spend on health care, we spend an additional 90 cents on social
services. In our peer countries, for every dollar spent on health care, an
additional $2 is spent on social services. So not only are we spending less,
we’re allocating our resources disproportionately on health care.
Our study found that countries with high health care spending relative to social
spending had lower life expectancy and higher infant mortality than countries
that favored social spending. While the stagnating life expectancy in the United
States remains at 78 years, in many European countries it has leapt to well over
80 years, and several countries boast infant mortality rates approximately half
of ours. In a national survey conducted by the Robert Wood Johnson Foundation,
four out of five physicians agreed that unmet social needs led directly to worse
Unfortunately, instead of learning from countries like Sweden and France, we
prefer the frantic scramble to recover money from one part of the health care
system only to reallocate it toward retreads of previously failed reforms. We
pretend that the fresh schemes are innovative, but they are usually long on
promises, short on details and often marked with an annoying acronym: H.M.O.,
F.S.A., A.C.O. and so forth.
It’s time to think more broadly about where to find leverage for achieving a
healthier society. One way would be to invest more heavily in social services.
This may be difficult for many Americans to swallow as it suggests a potentially
expanded role for government. Out of respect for individuals’ rights, our
current social programs are mostly opt-in, leaving holes for the undocumented,
uneducated and unemployed to slip through cracks and become acutely ill.
Emergency rooms, though, are not allowed to opt out of providing these people
extraordinarily expensive medical treatment before discharging them back to
wretched conditions and their inevitable return to the E.R.
The impact of sub-par social conditions on health has been well documented.
Homelessness isn’t typically thought of as a medical problem, but it often
precludes good nutrition, personal hygiene and basic first aid, and it increases
the risks of frostbite, leg ulcers, upper respiratory infections and trauma from
muggings, beatings and rape. The Boston Health Care for the Homeless Program
tracked the medical expenses of 119 chronically homeless people for several
years. In one five-year period, the group accounted for 18,834 emergency room
visits estimated to cost $12.7 million.
We can learn from the star pupils in our analysis. Other countries have created
government ministries that marry health and social care. Earlier this year, the
Department of Health in Britain released plans to create health and well-being
boards comprising local government representatives, primary care physicians,
hospital administrators, children and adult-services specialists and public
health directors, who will coordinate care for their constituencies across the
health and social care spectrum. We should think expansively about how to
construct similar programs that enable much needed integration of these mutually
dependent sectors. The Department of Veterans Affairs is leading the way, with
programs called “stand downs” that simultaneously address the health and social
needs of retired service members.
It is Americans’ prerogative to continually vote down the encroachment of
government programs on our free-market ideology, but recognizing the health
effects of our disdain for comprehensive safety nets may well be the key to
unraveling the “spend more, get less” paradox. Before we spend even more money,
we should consider allocating it differently.
Bradley is professor of public health at Yale
director of its Global Health Leadership Institute,
it like to be poor? Thankfully, most Americans do not know, at least not
firsthand. And times are tough for the middle class. But everyone needs to
recognize a chilling reality: One in three Americans — 100 million people — is
either poor or perilously close to it.
The Times’s Jason DeParle, Robert Gebeloff and Sabrina Tavernise reported
recently on Census data showing that 49.1 million Americans are below the
poverty line — in general, $24,343 for a family of four. An additional 51
million are in the next category, which they termed “near poor” — with incomes
less than 50 percent above the poverty line.
As for all of that inspirational, up-by-their-bootstrap talk you hear on the
Republican campaign trail, over half of the near poor in the new tally actually
fell into that group from higher income levels as their resources were sapped by
medical expenses, taxes, work-related costs and other unavoidable outlays.
The worst downturn since the Great Depression is only part of the problem.
Before that, living standards were already being eroded by stagnating wages and
tax and economic policies that favored the wealthy.
Conservative politicians and analysts are spouting their usual denial. Gov. Rick
Perry and Representative Michele Bachmann have called for taxing the poor and
near poor more heavily, on the false grounds that they have been getting a free
ride. In fact, low-income workers do pay up, if not in federal income taxes,
then in payroll taxes and state and local taxes.
Asked about the new census data, Robert Rector, an analyst at the conservative
Heritage Foundation told The Times that the “emotionally charged terms ‘poor’ or
‘near poor’ clearly suggest to most people a level of material hardship that
doesn’t exist.” Heritage has its own, very different ranking system, based on
households’ “amenities.” According to that, the typical poor household has
roughly 14 of 30 amenities. In other words, how hard can things be if you have a
refrigerator, air-conditioner, coffee maker, cellphone, and other stuff?
The rankings ignore the fact that many of these are requisites of modern life
and that things increasingly out of reach for the poor and near poor —
education, health care, child care, housing and utilities — are the true
determinants of a good, upwardly mobile life.
Government surveys analyzed by the Center on Budget and Policy Priorities
indicate that in 2010, just over half of the country’s nearly 17 million poor
children, lived in households that reported at least one of four major
hardships: hunger, overcrowding, failure to pay the rent or mortgage on time or
failure to seek needed medical care. A good education is also increasingly out
of reach. A study by Martha Bailey, an economics professor at the University of
Michigan, showed that the difference in college-graduation rates between the
rich and poor has widened by more than 50 percent since the 1990s.
There is also a growing out-of-sight-out-of-mind problem. A study, by Sean
Reardon, a sociologist at Stanford, shows that Americans are increasingly living
in areas that are either poor or affluent. The isolation of the prosperous, he
said, threatens their support for public schools, parks, mass transit and other
investments that benefit broader society.
The poor do without and the near poor, at best, live from paycheck to paycheck.
Most Americans don’t know what that is like, but unless the nation reverses
direction, more are going to find out.
The New York Times
By CHARLES M. BLOW
American political discussion has finally turned to the right target: jobs.
Even so, the president’s jobs bill is already being nickeled and dimed from the
right — and the left — even though it is only throwing nickels and dimes at the
problem to begin with. But at least it’s a start, even if a long-overdue one.
To understand just how overdue it is, one need look no further than the
absolutely dreadful data issued this week by the Census Bureau about the
increasing numbers of people falling into poverty. No matter how you slice it,
There are now 46.2 million poor Americans.
Of those, 2.6 million fell into poverty last year.
At 15.1 percent, the poverty rate is at its highest since 1993.
Bloody, bloody, bloody.
But even those numbers somewhat obscure the true historic nature of the crisis
and the effect that the recession, falling wages and chronic joblessness have
had on those living in poverty. If you remove children and the elderly and just
look at working-age adults — those 18 to 64 — the picture is even more bleak.
The percentage of that group that is in poverty is the highest recorded since
President Lyndon B. Johnson declared a “war on poverty” during his first State
of the Union address in January 1964.
And it’s not that most of these people don’t have jobs. It’s that they don’t
have good jobs that pay enough to push them out of poverty. Three out of four of
those below the poverty line work: half have full-time jobs, a quarter work part
time. Only a quarter do not work at all.
This raises an important distinction — not only do we need to create more jobs,
we need to increase the number of good jobs. And we can’t see that quest for
good jobs as an internal skirmish between warring political ideologies. It’s an
international war. At least that is the way Jim Clifton, chairman of Gallup,
frames it in his fascinating — and frightening — new book, “The Coming Jobs
According to Clifton, “the coming world war is an all-out global war for good
(He defines a good job, also known as a formal job, as one with a “paycheck from
an employer and steady work that averages 30-plus hours per week.”)
In the book he makes this striking statement, drawing from all of Gallup’s data:
“The primary will of the world is no longer about peace or freedom or even
democracy; it is not about having a family, and it is neither about God nor
about owning a home or land. The will of the world is first and foremost to have
a good job. Everything else comes after that.” The only problem is that there
are not enough good jobs to go around.
Clifton explains that of the world’s five billion people over 15 years old,
three billion said they worked or wanted to work, but there are only 1.2 billion
full-time, formal jobs. Therefore his conclusion “from reviewing Gallup’s
polling on what the world is thinking on pretty much everything is that the next
30 years won’t be led by U.S. political or military force.”
“Instead,” he says, “the world will be led with economic force — a force that is
primarily driven by job creation and quality G.D.P. growth.” And guess who is
vying for the lead? That’s right: China.
And I must say, we don’t appear to be poised to fight this war. In education
we’ve gone from leading to lagging, our infrastructure is literally crumbling
around us, ever-expanding health care costs threaten to suffocate us and our
politics have succumbed to paralysis.
A widely-cited 2009 study by the consulting firm McKinsey & Company, “The
Economic Impact of the Achievement Gap in America’s Schools,” found that the
recent American educational achievement gaps — between black and Latino students
and white ones; between low-income students and the rest; between low-performing
states and the rest; and between the United States as a whole and
better-performing countries — not only cost the economy trillions of dollars,
they also “impose on the United States the economic equivalent of a permanent
According to a recent report by the Urban Land Institute and Ernst & Young,
China has “about 9 percent of G.D.P. devoted to infrastructure, compared with
less than 3 percent in the United States.” And the Report Card for America’s
Infrastructure graded by the American Society of Civil Engineers in 2009 was so
full of C’s and D’s that it looked like Rick Perry’s college transcript. The
group estimated that $2.2 trillion of investment over five years was needed to
bring conditions up to par. We’re not even close to that.
Furthermore, Clifton points out that 30 percent of America’s students drop out
or do not graduate on time. He concludes, “If this problem isn’t fixed fast, the
United States will lose the next worldwide, economic, jobs-based war because its
players can’t read, write or think as well as their competitors in a game for
And, a Rand Corporation study released last week found that “between 1999 and
2009, total spending on health care in the United States nearly doubled, from
$1.3 trillion to $2.5 trillion. During the same period, the percentage of the
nation’s gross domestic product devoted to health care climbed from 13.8 percent
to 17.6 percent. Per person health care spending grew from $4,600 to just over
We simply can’t sustain that sort of growth.
Clifton enumerates 10 “demands” that America will have to master to “lead the
new will of the world” — from drastically increasing exports, to having
investments follow “rare entrepreneurs versus the worldwide oversupply of
innovation,” to something as basic as doing a better job of identifying where
likely customers are. But at the top of the list is understanding that the world
has a shortage of good jobs and every decision of every leader must be informed
by increasing the share of those jobs.
He puts it this way:
“The war for global jobs is like World War II: a war for all the marbles. The
global war for jobs determines the leader of the free world. If the United
States allows China or any country or region to out-enterprise, out-job-create,
out-grow its G.D.P., everything changes. This is America’s next war for
The New York Times
By JASON DePARLE
and SABRINA TAVERNISE
WASHINGTON — The discouraging numbers spilling from the Census Bureau’s poverty
report this week were a disquieting reminder that a weak economy continues to
spread broad and deep pain.
And so it does. But not evenly.
The Midwest is battered, but the Northeast escaped with a lighter knock. The
incomes of young adults have plunged — but those of older Americans have
actually risen. On the whole, immigrants have weathered the storm a bit better
than people born here. In rural areas, poverty remained unchanged last year,
while in suburbs it reached the highest level since 1967, when the Census Bureau
first tracked it.
Yet one old problem has not changed: the poor have rapidly gotten poorer.
The report, an annual gauge of prosperity and pain, is sure to be cited in
coming months as lawmakers make difficult decisions about how to balance the
competing goals of cutting deficits and preserving safety nets.
Its overall findings — income down, poverty up — are hardly surprising in the
worst economic downturn since the Great Depression. Of equal interest, with
fiscal knives in the air, are the looks at who has suffered the most and who has
“Certainly in a recession we want to put resources where they’re most needed,”
said Eugene Steuerle of the Urban Institute, who served as a Treasury official
under Democratic and Republican presidents. “And in a recession, needs change
dramatically from group to group.”
Perhaps no households have weathered the downturn better than those headed by
people 65 and older, whose incomes rose 5.5 percent from 2007 to 2010. By
contrast, household income for every other age group fell. Among people ages 15
to 24, it plunged 15.3 percent.
Partly that is because older Americans get more of their income from pensions
and investments, so a job shortage hurts them less. Also, the generation now
retiring has been the most prosperous in history, so as poorer Americans die
off, the income of the age group grows.
Such data is likely to feed longstanding debates about generational equity,
since the largest portion of safety net spending goes to those 65 and older,
through Social Security, Medicare, and Medicaid.
“We are spending too much of our limited resources on the elderly, and not
investing enough in programs for younger Americans, such as job training and
education,” said Isabel V. Sawhill, a budget expert at the Brookings
Another noteworthy finding comes from the suburbs, which have traditionally had
the lowest rates of poverty. Suburban dwellers experienced a sharp increase
toward the end of the past decade. Nearly 12 percent of them were living in
poverty in 2010, the highest level ever recorded, up from just 8 percent in
2001. (The rate in cities was 19 percent, but rose less sharply.)
“There’s been a suburbanization of poverty,” said Alan Berube, a Brookings
demographer, who cited the growth of service, retail and construction jobs that
lured low-income Americans to the suburbs before the recession. “The notion of
poverty being only in inner cities and isolated rural areas is increasingly out
of step with reality.”
Household income fell in every region of the country from 2007 to 2010. But it
fell much less in the Northeast (3.1 percent) than in the South (6.3 percent),
the West (6.7 percent) or the Midwest (8.4 percent). And the Northeast was the
only region where household income did not fall last year.
The declines in the West have been fueled in part by the collapse of the housing
industry, especially in Arizona and Nevada. And the Midwest has suffered idled
factories. Its status as the hardest-hit region is likely to come into play next
year as presidential candidates hunt such big Electoral College prizes as
Michigan, Iowa, Wisconsin and Ohio.
“The big hurt has been in the manufacturing and construction industries, which
were big in the Midwest and West,” said Timothy Smeeding, an economist at the
University of Wisconsin, Madison.
The census findings present two competing stories of immigrants — a reminder of
just how economically diverse that group has become. From 2007 to 2010, they
have fared both better and worse than the native born.
Among people born in the United States, household incomes declined 6.1 percent.
Among non-citizens, the decline was steeper — 8 percent. But for immigrants who
had attained citizenship, the decline was only 3.9 percent.
That latter group may disproportionately include the highly educated
professionals who increasingly fill the new Americans’ ranks. A recent study by
Audrey Singer, a demographer at the Brookings Institution, found that the number
of immigrants with college degrees now exceeds those who lack a high school
“The high-skilled people are starting to dominate,” she said
Two worrisome numbers in the report raise questions about the recent response of
the safety net. Poverty has risen especially fast among single mothers. More
than 40 percent of households headed by women now live in poverty, which is
defined as $17,568 for a family of three.
That is the first time since 1997 that figure has been so high. Analysts
attribute the rise in part to changes in the welfare system, enacted in the
mid-1990s, which make cash aid much harder to get. Those changes were credited
with encouraging recipients to work in good times, but may leave them with less
protection when jobs disappear.
“The business cycle is going to hurt them a lot more than it used to,” said
Robert Moffitt, a Johns Hopkins University economist.
Poor people not only grew more numerous — 46.2 million — but also poorer. Among
the poor, the share in deep poverty (defined as having less than half the income
to escape poverty) rose to the highest level in 36 years: 44.3 percent.
The census data may overstate hardship by failing to count some benefits the
needy receive, like tax credits and food stamps. But it also may also understate
their needs by failing to adjust for health care expenses and variations in the
cost of living.
About 20.5 million people are in deep poverty, with food stamps increasingly
replacing cash aid as the safety net of last resort. More than 45 million people
get food stamps, an increase of 64 percent since January 2008. About one in
eight Americans, and one in four children, receives aid. Using an alternative
definition of income, the Census Bureau found that food stamps lifted 3.9
million people above the poverty line.
“Given that poverty and hardship are likely to continue for some time, it’s
imperative that we protect the program,” said Stacy Dean, an analyst at the
Center on Budget and Policy Priorities, which aids in food stamp outreach
The New York Times
By SABRINA TAVERNISE
WASHINGTON — Another 2.6 million people slipped into poverty in the United
States last year, the Census Bureau reported Tuesday, and the number of
Americans living below the official poverty line, 46.2 million people, was the
highest number in the 52 years the bureau has been publishing figures on it.
And in new signs of distress among the middle class, median household incomes
fell last year to levels last seen in 1997.
Economists pointed to a telling statistic: It was the first time since the Great
Depression that median household income, adjusted for inflation, had not risen
over such a long period, said Lawrence Katz, an economics professor at Harvard.
“This is truly a lost decade,” Mr. Katz said. “We think of America as a place
where every generation is doing better, but we’re looking at a period when the
median family is in worse shape than it was in the late 1990s.”
The bureau’s findings were worse than many economists expected, and brought into
sharp relief the toll the past decade — including the painful declines of the
financial crisis and recession —had taken on Americans at the middle and lower
parts of the income ladder. It is also fresh evidence that the disappointing
economic recovery has done nothing for the country’s poorest citizens.
The report said the percentage of Americans living below the poverty line last
year, 15.1 percent, was the highest level since 1993. (The poverty line in 2010
for a family of four was $22,314.)
The report comes as President Obama gears up to try to pass a jobs bill, and
analysts said the bleak numbers could help him make his case for urgency. But
they could also be used against him by Republican opponents seeking to highlight
economic shortcomings on his watch.
“This is one more piece of bad news on the economy,” said Ron Haskins, a
director of the Center on Children and Families at the Brookings Institution.
“This will be another cross to bear by the administration.”
The past decade was also marked by a growing gap between the very top and very
bottom of the income ladder. Median household income for the bottom tenth of the
income spectrum fell by 12 percent from a peak in 1999, while the top 90th
percentile dropped by just 1.5 percent. Overall, median household income
adjusted for inflation declined by 2.3 percent in 2010 from the previous year,
to $49,445. That was 7 percent less than the peak of $53,252 in 1999. Part of
the income decline over time is because of the smaller size of the American
This year is not likely to be any better, economists said. Stimulus money has
largely ended, and state and local governments have made deep cuts to staff and
to budgets for social programs, both likely to move economically fragile
families closer to poverty.
Minorities were hit hardest. Blacks experienced the highest poverty rate, at 27
percent, up from 25 percent in 2009, and Hispanics rose to 26 percent from 25
percent. For whites, 9.9 percent lived in poverty, up from 9.4 percent in 2009.
Asians were unchanged at 12.1 percent.
An analysis by the Brookings Institution estimated that at the current rate, the
recession will have added nearly 10 million people to the ranks of the poor by
the middle of the decade.
Joblessness was the main culprit pushing more Americans into poverty, economists
Last year, about 48 million people ages 18 to 64 did not work even one week out
of the year, up from 45 million in 2009, said Trudi Renwick, a Census official.
“Once you’ve been out of work for a long time, it’s a very difficult road to get
back,” Mr. Katz said.
Median income fell across all working-age categories, but was sharpest drop was
among the young working Americans, ages 15 to 24, who experienced a decline of 9
According to the Census figures, the median annual income for a male full-time,
year-round worker in 2010 — $47,715 — was virtually unchanged, in 2010 dollars,
from its level in 1973, when it was $49,065, said Sheldon Danziger, professor of
public policy at the University of Michigan.
Those who do not have college degrees were particularly hard hit, he said. “The
median, full-time male worker has made no progress on average,” Mr. Danziger
The recession has continued pushing 25-to-34-year-olds to move in with family
and friends to save money. Of that group, nearly half were living below the
poverty line, when their parents’ incomes were excluded. The poverty level for a
single person under the age of 65 was $11,344.
“We’re risking a new underclass,” said Timothy Smeeding, director of the
Institute for Research and Poverty at the University of Wisconsin, Madison.
“Young, less-educated adults, mainly men, can’t support their children and form
stable families because they are jobless,” he added.
But even the period of economic growth that came before the recession did little
for the middle and bottom wage earners.
Arloc Sherman, a senior researcher at the Center on Budget and Policy
Priorities, said that the period from 2001 to 2007 was the first recovery on
record where the level of poverty was deeper, and median income of working-age
people was lower, at the end than at the beginning.
“Even before the recession hit, a lot of people were falling behind,” he said.
“This may be adding to people’s sense of urgency about the economy.”
The suburban poverty rate, at 11.8 percent, appears to be the highest since
1967, Mr. Sherman added. Last year more Americans fell into deep poverty,
defined as less than half the official poverty line, or about $11,000, with the
ranks of that group increasing to 20.5 million, or about 6.7 percent of the
Poverty has also swallowed more children, with about 16.4 million in its ranks
last year, the highest numbers since 1962, according to William Frey, senior
demographer at Brookings. That means 22 percent of children are in poverty, the
highest percentage since 1993.
The census figures do not count noncash assistance, like food stamps and the
earned-income tax credit, and economists say that as a result they tend to
overstate poverty numbers for certain groups, like children. But rises in the
cost of housing, medical care and energy are not taken into account, either.
The report also said the number of uninsured Americans increased by 900,000 to
Those covered by employer-based insurance continued to decline in 2010, to about
55 percent, while those with government-provided coverage continued to increase,
up slightly to 31 percent. Employer-based coverage was down from 65 percent in
2000, the report said.
has been revised
to reflect the following correction:
Correction: September 13, 2011
An earlier version of this article gave an incorrect figure
for the number of
people the Census Bureau
found to be in poverty in the Unites States.
is 46.2 million people, not 56.2 million.
The New York Times
By SABRINA TAVERNISE
portion of Americans living in poverty last year rose to the highest level since
1993, the Census Bureau reported Tuesday, fresh evidence that the sluggish
economic recovery has done nothing for the country’s poorest citizens.
An additional 2.6 million people slipped below the poverty line in 2010, census
officials said, making 46.2 million people in poverty in the United States, the
highest number in the 52 years the Census Bureau has been tracking it, said
Trudi Renwick, chief of the Poverty Statistic Branch at the Census Bureau.
That figure represented 15.1 percent of the country.
The poverty line in 2010 was at $22,113 for a family of four.
“It was a surprising large increase in the overall poverty rate,” said Arloc
Sherman, senior researcher at the Center on Budget and Policy Priorities. “We
see record numbers and percentages of Americans in deep poverty.”
And in new evidence of economic distress among the middle class, real median
household incomes declined by 2.3 percent in 2010 from the previous year, to
$49,400. That was 7 percent less than the peak in 1999 of $53,252.
“A full year into recovery, there were no signs of it affecting the well being
of a typical American family,” said Lawrence Katz, an economics professor at
Harvard. “We are well below where incomes were in the late 1990s.”
According to the census figures, the median annual income for a male full-time,
year-round worker in 2010 — $47,715 — was virtually unchanged from its level in
1973, when the level was $49,065, in 2010 dollars, said Sheldon H. Danziger,
professor of public policy at the University of Michigan.
“That’s not about the poor and unemployed, that’s full time, year round,”
Professor Danziger said. Particularly hard hit, he said, have been those who do
not have college degrees. “The median, full-time male worker has made no
progress on average.”
The youngest members of households — those ages 15 to 24 — lost out the most,
with their median income dropping by 9 percent. The recession continued to push
Americans to double up in households with friends and relatives, especially
those ages 25 to 34, a group that experienced a 25 percent increase in the
period between 2007, when the recession began, and 2011. Of that group, 45.3
percent were living below the poverty line, when their parents’ incomes were not
taken into account.
“We’re risking a new underclass,” said Timothy Smeeding, director of the
Institute for Research and Poverty at the University of Wisconsin, Madison.
“Young, less educated adults, mainly men, can’t support their children and form
stable families because they are jobless.”
has been revised
to reflect the following correction:
Correction: September 13, 2011
An earlier version of this article gave an incorrect figure
for the number of
people the Census Bureau
found to be in poverty in the Unites States.
The number is 46.2 million people,
not 56.2 million.
In a decade of frenzied tax-cutting for the rich, the
Republican Party just happened to lower tax rates for the poor, as well. Now
several of the party’s most prominent presidential candidates and lawmakers want
to correct that oversight and raise taxes on the poor and the working class,
while protecting the rich, of course.
These Republican leaders, who think nothing of widening tax loopholes for
corporations and multimillion-dollar estates, are offended by the idea that
people making less than $40,000 might benefit from the progressive tax code.
They are infuriated by the earned income tax credit (the pride of Ronald
Reagan), which has become the biggest and most effective antipoverty program by
giving working families thousands of dollars a year in tax refunds. They scoff
at continuing President Obama’s payroll tax cut, which is tilted toward low- and
middle-income workers and expires in December.
Until fairly recently, Republicans, at least, have been fairly consistent in
their position that tax cuts should benefit everyone. Though the Bush tax cuts
were primarily for the rich, they did lower rates for almost all taxpayers,
providing a veneer of egalitarianism. Then the recession pushed down incomes
severely, many below the minimum income tax level, and the stimulus act lowered
that level further with new tax cuts. The number of families not paying income
tax has risen from about 30 percent before the recession to about half, and,
suddenly, Republicans have a new tool to stoke class resentment.
Representative Michele Bachmann noted recently that 47 percent of Americans do
not pay federal income tax; all of them, she said, should pay something because
they benefit from parks, roads and national security. (Interesting that she
acknowledged government has a purpose.) Gov. Rick Perry, in the announcement of
his candidacy, said he was dismayed at the “injustice” that nearly half of
Americans do not pay income tax. Jon Huntsman Jr., up to now the most reasonable
in the Republican presidential field, said not enough Americans pay tax.
Representative Eric Cantor, the House majority leader, and several senators have
made similar arguments, variations of the idea expressed earlier by Senator Dan
Coats of Indiana that “everyone needs to have some skin in the game.”
This is factually wrong, economically wrong and morally wrong. First, the facts:
a vast majority of Americans have skin in the tax game. Even if they earn too
little to qualify for the income tax, they pay payroll taxes (which Republicans
want to raise), gasoline excise taxes and state and local taxes. Only 14 percent
of households pay neither income nor payroll taxes, according to the Tax Policy
Center at the Brookings Institution. The poorest fifth paid an average of 16.3
percent of income in taxes in 2010.
Economically, reducing the earned income tax credit and the child tax credit —
which would be required if everyone paid income taxes — makes no sense at a time
of high unemployment. The credits, which only go to working people, have always
been a strong incentive to work, as even some conservative economists say, and
have increased the labor force while reducing the welfare rolls.
The moral argument would have been obvious before this polarized year. Nearly 90
percent of the families that paid no income tax make less than $40,000, most
much less. The real problem is that so many Americans are struggling on such a
small income, not whether they pay taxes. The two tax credits lifted 7.2 million
people out of poverty in 2009, including four million children. At a time when
high-income households are paying their lowest share of federal taxes in
decades, when corporations frequently avoid paying any tax, it is clear who
should bear a larger burden and who should not.
The New York Times
By CHARLES M. BLOW
Obama made history on Tuesday.
It was only the second time since Harry S. Truman’s State of the Union address
in 1948 that such a speech by a Democratic president did not include a single
mention of poverty or the plight of the poor.
The closest Obama got to a mention was his confirmation for “Americans who’ve
seen their paychecks dwindle or their jobs disappear” that, indeed, “the world
has changed. The competition for jobs is real.” I’m sure they appreciated that.
The only other Democrat not to mention poverty in the speech was Jimmy Carter in
1980, but even he was able to squeeze in one reference to at least a portion of
the poor and disenfranchised, stressing the continuation of jobs programs to
“provide training and work for our young people, especially minority youth.”
(Carter did mention the poor in a written version that he submitted to
John F. Kennedy didn’t say the specific words “poor” or “poverty” in his first
State of the Union, but he talked at length about providing “more food for the
families of the unemployed, and to aid their needy children,” securing “more
purchasing power for our lowest-paid workers by raising and expanding the
minimum wage” and of a new housing program to address the problem of “cities
being engulfed in squalor.”
So how is it that this Democratic president has the temerity to deliver a State
of the Union address that completely neglects any explicit mention of the
calamitous conditions now afflicting his staunchest supporters: the poor?
(In 2008, Obama won 73 percent of the vote of those earning less than $15,000 a
year, 60 percent of those earning between $15,000 and $30,000 and 55 percent of
the vote of those earning $30,000 to $50,000. Those were his widest margins of
victory of any income group and helped to propel him to victory.)
He talked at length about education (the most inspiring part of the speech) and
about civility and his repackaged bromides of global competitiveness and
investments in the future. And, of course, there were cautious mentions of
programs that benefit seniors and the need to protect and secure them. Can’t
forget the plea to the old people.
Protecting programs for seniors strikes the right chord morally and politically,
but the data show that seniors are not the ones feeling the majority of the pain
According to data from the Census Bureau, the percent of people ages 18 to 64
who were living in poverty in 2009 was higher than it had been in any year since
1959, while the percent of seniors living in poverty was lower than it had been
in any year since at least 1959.
(By the way, voters over 65 were the only age group that Obama lost in 2008.)
I, for one, refuse to believe that this is an either-or proposition. We can make
smart choices about protecting seniors and supporting younger Americans in need
at the same time. We don’t have to ignore the Annies among us to court the Miss
For the poor, this is the Obama Conundrum. He was obviously the best choice in
2008. And judging by the current cast of Republican presidential contenders, he
could well be the best choice in 2012. But does that give him license to obviate
his moral responsibility to his electoral devotees? Can and should they take his
snubs as a necessary consequence of political warfare as he makes every effort
to tack back to the middle and reconnect with those whose opinion of him
vacillates between contempt on a bad day and sufferance on a good one? Does
keeping him in the White House dictate keeping them in the shadows?
And things could get even worse for the poor if the president feels the need to
cut too many deals with the new Republican-led House in order to appear more
According to Brian Miller, the executive director of the nonpartisan and
Boston-based group United for a Fair Economy and co-author of the group’s report
entitled “State of the Dream 2011: Austerity for Whom?” released earlier this
month, “austerity measures based on the conservative tenets of less government
and lower taxes will ratchet down the standard of living for all Americans,
while simultaneously widening our nation’s racial and economic divide.”
As Miller put it, deficits that tax cuts for the rich helped to create “are
being used to justify a host of austerity measures that will harm Americans of
all races but will hit blacks and Latinos the hardest.”
According to Miller, “With 42 percent of blacks and 37 percent of Latinos
lacking the funds to meet minimal household expenses for even three months
should they become unemployed, cutting public assistance programs will have
devastating impacts on black and Latino workers.”
(Obama won 95 percent of the black vote and 67 percent of the Hispanic vote in
Even as my respect for this president as a shrewd politician has begun to
rebound, my faith in him as a fervent crusader for the poor and disenfranchised
has taken yet another nose dive. One’s tone-deafness — or blatant indifference —
to the poor has to be at Black American Express status to brag that “the stock
market has come roaring back” and “corporate profits are up” and not even
mention the unemployment rate or the continuing foreclosure crisis.
I want to believe that President Obama’s speech omissions were oversights, not
acts of arrogance. But I’m not sure.
President Truman wrote in 1953 that, “ultimately, no President can master his
responsibilities, save as his fellow citizens — indeed, the whole people —
comprehend the challenge of our times and move, with him, to meet it.” But, it
is sometimes hard to follow — indeed, to chase — a president who appears to be
moving, often at a full sprint, away from the people who once carried him.
the first year of the Great Recession, the number of Americans living in poverty
rose by 1.7 million to nearly 47.5 million. While hugely painful, that rise
wasn’t surprising given the unraveling economy. What is surprising is that
recent census data show that those poverty numbers held steady in 2009, even
though job loss worsened significantly that year.
Clearly, the sheer scale of poverty — 15.7 percent of the country’s population —
is unacceptable. But to keep millions more Americans from falling into poverty
during a deep recession is a genuine accomplishment that holds a vital lesson:
the safety net, fortified by stimulus, staved off an even more damaging crisis.
Congress should take a good look at those numbers, and consider that lesson
carefully, before it commits to any more slashing and burning.
The latest poverty figures are from the census “alternative” data, developed in
the 1990s to count income and expenses that the “official” data omit. For
example, the official measure counts only cash income to gauge poverty (defined
as $21,756 for a family of four in 2009). The alternative figures cited above,
which closely follow criteria from the National Academy of Sciences, include
noncash federal benefits, like food stamps (and set the poverty line at $24,522
for a family of four). That gives a truer picture of a family’s economic status.
What analysts have found is that the antipoverty effect of government
intervention in 2009 was profound. Calculations by the Center on Budget and
Policy Priorities, a liberal-leaning research group, show that specific stimulus
provisions — including expanded federal jobless benefits, new and improved tax
credits for workers and bolstered food stamps — kept 4.5 million people out of
poverty in 2009. Only Social Security and the earned income credit did more to
The results are likely to be roughly similar in 2010 because most of the 2009
law was continued last year. The portents going forward are not good.
Federal aid is being scaled back, even though growth is not yet robust enough to
make a sizable dent in unemployment. Late last year, Republicans blocked the
extension of a successful stimulus program that had created 250,000 subsidized
jobs for young people and low-income parents. They claimed the stimulus was an
expensive failure, even as they pressed to renew the high-end Bush tax cuts. As
part of the tax-cut deal, President Obama and Congress agreed to extend federal
jobless benefits in 2011, but the checks will be $25 less a week than under the
stimulus. That reduction could push an estimated 175,000 more people into
poverty in 2011. The deal also included a one-year payroll tax cut that will
benefit most workers, but it is less helpful to the lowest-income workers than a
now-expired tax break in the stimulus.
With 14.5 million people still out of work, and more than 6 million of them
jobless for more than six months, reducing federal help now will almost ensure
more poverty later. That would impose an even higher cost on the economy and
budget because ever poorer households cannot spend and consume.
We know it goes against the prevailing rhetoric to argue that more and better
government policies are still needed to repair the economy. It is also unpopular
to argue that programs that have succeeded for decades in reducing poverty, like
Social Security, need to be preserved even as they are retooled for the 21st
century. To do otherwise is to deny the evidence.
President Obama must explain to the American people that the country needs to
continue relief and recovery efforts, especially programs to create jobs.
Without that, tens of millions of Americans stuck in poverty will have little
hope of climbing out — and many more could join their ranks.
The New York Times
By GERALDINE FABRIKANT
Kan. — Grateful to have found work in this tough economy, Nick Martin teaches
grape growing and winemaking each Saturday to a class of seven students in a
simple metal building here at a satellite campus of Highland Community College.
Then he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished
tract house that he rents for $900 a month on a dead-end street in McFarland, a
smaller town. Just across the backyard is a shed that a neighbor uses to make
cartridges for shooting the prairie dogs that infest the adjacent fields.
It is a far cry from the life that Mr. Martin and his family enjoyed until
recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage
held three stylish cars, including a yellow Aston Martin; they owned three
horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a
birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a
$7,000 mink coat.
That luxurious world was fueled by a check Mr. Martin received in 1998 for $14
million, his share of the $600 million sale of Martin Media, an outdoor
advertising business begun by his father in California in the 1950s. After
taxes, he kept about $10 million.
But as so often happens to those lucky enough to realize the American dream of
sudden riches, the money slipped through the Martins’ fingers faster than they
They faced temptations to indulge, with the complexities and pressures of new
wealth. And a pounding recession pummeled the value of their real estate and new
financial investments, rendering their properties unaffordable.
The fortune evaporated in little more than a decade.
While many millions of Americans have suffered through this recession with only
unemployment benefits to sustain them, Mr. Martin has reason to give thanks — he
has landed a job at 59, however far away. He also had assets to sell to help
tide his family over.
Still, Mr. Martin, a strapping man with a disarming bluntness, seemed dazed by
it all. “We are basically broke,” he said.
Though he faulted the conventional wisdom of investing in stocks and real estate
for some of his woes, along with poor financial advice, he accepted much of the
“We spent too much,” he conceded. “I have a fourth grader, an eighth grader and
a girl who just finished high school. I should have kept working and put the
money in bonds.”
Mrs. Martin recalled the summer night in 1998 when the family was having a
spaghetti dinner at home in Paso Robles, in central California, and a bank
representative called to ask where to wire the money. “It seemed like an
unbelievable amount,” she said regretfully.
Soon after the money arrived, the family decided to leave Paso Robles, amid some
lingering tensions that Mr. Martin felt with his brother and brother-in law, who
had run the business. Mr. Martin had never been in management at the billboard
company, though he had been on the board and worked at Martin Brothers Winery,
another family business.
First, the Martins bought a house in Somerset, England, near the home of Mrs.
Martin’s parents, and he decided to write a novel. At about the same time, they
spent $250,000 on the 3.5-acre camp with four structures on Tupper Lake, deep in
the Adirondacks, as a summer home. They began extensive renovations at the lake,
adding a stunning three-story boathouse and two other buildings.
Clouds gathered quickly. Life in England turned sour when Mr. Martin’s novel,
“Anthony: Conniver’s Lament,” did not sell, and the family’s living costs —
school fees, taxes and even advice for filing tax returns — swelled. In 2002,
fed up with England, the Martins chose a new base, Vermont, and plunked down
about $650,000 for a home there, as renovations continued on the Tupper Lake
By March 2007, the Martins were determined to move to the lake full time.
They managed their expenses for a while, but the costs mounted and mounted some
more as they worked at refurbishing the Adirondack property — eventually
totaling a staggering $5.3 million, Mr. Martin said. He poured another $600,000
into the Vermont property, he said.
He vacillates between blaming the builders and blaming himself for letting costs
get out of hand. “We should have built something quite modest,” he conceded.
Tensions rose in 2007 as summer came without any offers for the Vermont home.
“I thought that housing was going into a tailspin,” he said. “I had the feeling
that something bad was happening.”
So “we started selling cars, shotguns, antique furniture, whatever,” Mr. Martin
said. The Aston Martin fetched $395,000. With a big gap in his employment
history, he found a job teaching English at Paul Smith’s College near his home
in Tupper Lake for $14,000 a year. For an additional $7,000, he coached the
school’s cross-country runners.
Then came the financial crisis. The markets plunged, as did the value of the
Martins’ trust. By fall 2008, with much of the family’s net worth tied up in
housing, Mr. Martin faced a series of margin calls. He needed more cash in his
brokerage accounts because he had been tapping into a credit line with his
investments as collateral. In January 2009, he cashed in a retirement account
worth roughly $91,000.
The houses could not be sold quickly. Though if they had been, some of the
pressure would have lifted. “To maintain those things, you have to have a pretty
good cash flow,” Mr. Martin said.
The family ultimately put the Adirondacks property on the market for $4.9
million, then quickly slashed the price by half. Last month, the Martins got an
offer for just half of the latest $2.5 million asking price.
They have stopped making payments on their $1.1 million mortgage and their
$53,000 in annual property taxes in the Adirondacks as well as the mortgage and
taxes on their Vermont home. They cannot afford those obligations on Mr.
Martin’s current salary of $51,000. Their household income is down from $250,000
four years ago.
At the moment, they are working with a loan modification unit at their bank. The
lender proposed a new payment of $3,550 a month, reduced from $7,400. Given his
current status, Mr. Martin argued, that it does not make much sense. He predicts
that the house will ultimately be sold or taken over by the bank. Meanwhile, for
the Christmas holidays and some of next summer, the family has found renters for
the main house to help cover some of the costs.
Over lunch recently at Barleycorn’s Downtown Bar and Deli in Wamego, Mr. Martin
said he believed “the worst is behind us.”
Perhaps. But a forced restructuring can be difficult for children and spouses
even in longstanding marriages.
Sometimes he and his wife took it out on each other, he said. “She bought a
bunch of horses. I blamed her for the horses. I bought cars. She blamed me for
the cars — and the house being too big. We had a rough time,” he acknowledged.
“But I think we have gotten over that.”
Until Christmas, when she plans to join him, Mrs. Martin continues to work as a
substitute teacher with autistic children at an Adirondacks elementary school: a
$12,000-a-year job she loves in a place she says she is hesitant to leave. With
their younger daughter, she has moved into a smaller building on their big
A lively woman who loves bike riding and horses, she has built a close network
of friends. “What is the place in Kansas like?” she asked a reporter with some
trepidation before her first visit at Thanksgiving.
Mr. Martin, who moved to Kansas last April, brought the couple’s 13-year-old
son, Edward, to join him in the fall. He has been counting the days until his
wife and Sophia, 9, come permanently. The older daughter, Mrs. Martin’s from a
previous marriage, has found work in Florida after finishing high school.
In the meantime, Mr. Martin is also overseeing a one-acre vineyard beside the
Oregon Trail Road, drawing on his knowledge of the wine industry from his
He does what he can to lessen the family strains.
“I have a temper. I have to control my temper,” he said. “I could drink like a
fish, but if you have problems in your life, drinking does not help.”
And he recites a quotation he holds dear : “The measure of a man is not whether
he falls down, but whether he gets up again.” Still, Mr. Martin is prone to
ruminate over the loss of so much money. He is furious at the banks and the
bankers, who he thinks gave him bad advice, and he still sounds angry at his
brother and others who decided to sell the company and who he says gave him
little voice. Some of them got more than $100 million each, he said, while he
got $14 million, as did his father and his sister Ann, because they were all
His brother-in-law David Weyrich said that if Mr. Martin had objections to the
sale, he did not voice them.
Mrs. Martin says she believes the move from California was motivated in part
because he resented his brother and brother-in-law’s bigger role in the
She also speculates that the Adirondacks estate was alluring partly as a way of
keeping up. “I think he wanted to show his brother and brother-in-law that he
had a big home, too,” she said over dinner recently in Saratoga Springs, N.Y.
Mr. Martin disagreed. “We are Irish Catholics, and we thought it would be a
compound for our family over generations,” he said. After the cramped rooms at
their house in England, he liked the big rooms, he said. “Sometimes, things
don’t work out.”
September 28, 2010
The New York Times
By JOSEPH BERGER
The shopping carts are lined up hours early in Tompkins Square Park, not far
from the dog run, where the East Village’s more genteel residents are unleashing
retrievers and beagles and chatting animatedly. The poor or elderly waiting on
benches to get the free food that comes with a dose of the Gospel seem more lost
in their own thoughts, even though many meet every Tuesday.
A guard, Mike Luke, a powerhouse known as Big Mike who himself was a consumer at
church pantries until he found religion and decided to work for “the man
upstairs,” manages the crowd with crisp authority until the 11 a.m. service
starts across the street at the Tompkins Square Gospel Fellowship. There is
nervous tension because only the first 50 will get in, and suddenly two women
are squabbling over a black cart.
“How do you know that’s your cart?” Big Mike firmly asks one, a fair question
since the carts look alike. But the mystery is cleared up with the discovery of
an orphaned gray cart.
Inside the worship hall, the 50 men and women sit in neat rows in front of a
pulpit and a painting of a generic waterfall while a pianist softly plays hymns.
Their carts are reassembled in neat rows as well.
The room has the shopworn air of Sergeant Sarah Brown’s Save-a-Soul Mission in
“Guys and Dolls.” One almost expects Stubby Kaye to get up and sing “Sit Down,
You’re Rockin’ the Boat.” But people don’t mind having to sit through a sermon
as the price of admission, and few have jobs they need to run to. While they
wait, volunteers fill each cart with a couple of bread loaves — redolent of a
Gospel miracle, except these are ciabatta and 10-grain — a couple of bananas, a
couple of less-than-freshly-picked ears of corn, a box of eggs, a box of
blueberries, even an Asian pear.
The food is donated by Trader Joe’s, the gourmet and organic food purveyor,
which has a store nearby. It usually feeds the kinds of professionals who use
the dog run, but it provides the fellowship with a wealth of unsold baked goods,
fruit and vegetables.
The fellowship was started 115 years ago as a mission to the immigrant Jews of
the Lower East Side but now mostly serves the black, Latino and Asian poor. The
East Village has several other pantries that dispense food without sermons;
their food is government-financed and so must be religion-free. The fellowship
started its giveaways in January and now feeds 250 people during three services
on Tuesdays — one in Chinese — and a single evening service on Sundays and
The mission is run by the Rev. Bill Jones, a lively ordained Baptist minister
from the Blue Ridge Mountains of North Carolina.
“People are not only hungry for food, but hungry for the word of God,” Mr. Jones
said. “There’s not just a physical need but a spiritual need.”
Nevertheless, he is aware of the actual hunger. “If you wait for three hours to
get $25 worth of groceries,” he said, “you have a need.”
He affirms that thought to the waiting crowd in a stentorian drawl.
“You all get blueberries today,” he announces. “Some of you get eggs. If you
don’t get eggs, don’t be upset. You neighbor is getting eggs, so be grateful.”
The people who come include Rafael Mercado, 52, who lost his job as a mailroom
clerk four years ago.
“I don’t have the kind of money now to go shopping,” he said, “so I go to many
pantries.” Another is Asia Feliciano, 37, a single mother with a lush head of
cornrow braids. She and her sons, Trevor, 5, and Jordan, 3, live in a nearby
shelter, and they stumbled upon the mission in August while panhandling.
“It puts food on our plates every night,” she said.
Mr. Jones begins the service with a prayer — “Heavenly father, we are so
grateful for the provisions you have brought us for another day.” He then offers
a lesson from the Gospel of John, in which Jesus tells the disciples to love one
another. With ardor that is not quite brimstone, Mr. Jones urges listeners to
love one another as well, not give in to temptations and pray to remain faithful
Many among the 50 sit stone-faced. But some clearly listen. Though she comes
mostly for the food, Ms. Feliciano indicates that the worship has subversively
“When I have to sit through the service, it opens my eyes,” she said. “So I
started reading the Bible and I asked them for a Bible, and they gave me one.”
September 24, 2010
The New York Times
By BOB HERBERT
Marcus Vogt is 20 years old and homeless. Or, as he puts it, “I’m going through
a couch-surfing phase.”
Mr. Vogt is a Wal-Mart employee but he was injured in a car accident and was
unable to work for a couple of months. With no income and no health insurance,
he quickly found himself unable to pay the rent. Even meals were hard to come
(His situation is quite a statement about real life in the United States in the
21st century. On the same day that I spoke with Mr. Vogt, Forbes magazine came
out with its list of the 400 most outrageously rich Americans.)
I met Mr. Vogt at Master’s Manna, a food pantry and soup kitchen here that also
offers a variety of other services to individuals and families that have fallen
on hard times. He told me that his cellphone service has been cut off and he has
more than $3,000 in medical bills outstanding. But he was cheerful and happy to
report that he’s back at work, although it will take at least a few more
paychecks before he’ll have enough money to rent a room.
Other folks who make their way to Master’s Manna are not so upbeat. The Great
Recession has long since ended, according to the data zealots in their
windowless rooms. But it is still very real to the millions of men and women who
wake up each morning to the grim reality of empty pockets and empty cupboards.
Wallingford is nobody’s definition of a depressed community. It’s a middle-class
town on the Quinnipiac River. But the number of people seeking help at Master’s
Manna is rising, not falling. And when I asked Cheryl Bedore, who runs the
program, if she was seeing more clients from the middle class, she said: “Oh,
absolutely. We have people who were donors in the past coming to our doors now
in search of help.”
The political upheaval going on in the United States right now is being driven
by the economic upheaval. It’s sometimes hard to see this clearly amid the
craziness and ugliness stirred up by the professional exploiters. But the
essential issue is still the economy — the rising tide of poor people and the
decline of the middle class. The true extent of the pain has not been widely
“The minute you open the doors, it’s like a wave of desperation that’s hitting
you,” said Ms. Bedore. “People are depressed, despondent. They’re on the edge,
especially those who have never had to ask for help before.”
In recent weeks, a few homeless people with cars have been showing up at
Master’s Manna. Ms. Bedore has gotten permission from the local police
department for them to park behind her building and sleep in their cars
overnight. “We’ve been recognized as a safe haven,” she said.
In two of the cars, she said, were families with children.
It’s not just joblessness that’s driving people to the brink, although that’s a
big factor. It’s underemployment, as well. “For many of our families,” said Ms.
Bedore, “the 40-hour workweek is over, a thing of the past. They may still have
a job, but they’re trying to survive on reduced hours — with no benefits. Some
are on forced furloughs.
“Once you start losing the income and you’ve run through your savings, then your
car is up for repossession, or you’re looking at foreclosure or eviction. We’re
a food pantry, but hunger is only the tip of the iceberg. Life becomes a
constant juggling act when the money starts running out. Are you going to pay
for your medication? Or are you going to put gas in the car so you can go to
“Kids are going back to school now, so they need clothes and school supplies.
Where is the money for that to come from? The people we’re seeing never expected
things to turn out like this — not at this stage of their lives. Not in the
United States. The middle class is quickly slipping into a lower class.”
Similar stories — and worse — are unfolding throughout the country. There are
more people in poverty now — 43.6 million — than at any time since the
government began keeping accurate records. Nearly 15 million Americans are out
of work and home foreclosures are expected to surpass one million this year. The
Times had a chilling front-page article this week about the increasing fear
among jobless workers over 50 that they will never be employed again.
The politicians seem unable to grasp the immensity of the problem, which is why
the policy solutions are so woefully inadequate. During my conversations with
Ms. Bedore, she dismissed the very thought that the recession might be over.
“Whoever said that was sadly mistaken,” she said. “We haven’t even bottomed-out
September 17, 2010
The New York Times
By BOB HERBERT
I didn’t notice much when a terrific storm slammed into parts of New York
City on Thursday evening. I was working at my computer in a quiet apartment on
the Upper West Side of Manhattan. The skies darkened and it began to rain, and I
could hear thunder. But that’s all. I made a cup of coffee and kept working.
While I remained oblivious, the storm took a frightening toll in the boroughs of
Brooklyn, Queens and Staten Island. A woman who was trying to walk home with her
10-year-old daughter from Prospect Park in Brooklyn told me the next day that it
had been the most harrowing experience of her life. “With the wind and the rain,
it was like being trapped in a car wash,” she said. “And then a tree crashed
down on a car right in front of us.”
They ran soaking wet up the steps of a brownstone and the owner, a stranger, let
them come inside.
The winds reached tornadolike intensity. Trees were uprooted and blown into
electrical power lines. Roofs were blown from buildings. One woman was killed,
and several neighborhoods were devastated.
I eventually heard about it on the news.
The movers and shakers of our society seem similarly oblivious to the terrible
destruction wrought by the economic storm that has roared through America.
They’ve heard some thunder, perhaps, and seen some lightning, and maybe felt a
bit of the wind. But there is nothing that society’s leaders are doing — no
sense of urgency in their policies or attitudes — that suggests they understand
the extent of the economic devastation that has come crashing down like a plague
on the poor and much of the middle class.
The American economy is on its knees and the suffering has reached historic
levels. Nearly 44 million people were living in poverty last year, which is more
than 14 percent of the population. That is an increase of 4 million over the
previous year, the highest percentage in 15 years, and the highest number in
more than a half-century of record-keeping. Millions more are teetering on the
edge, poised to fall into poverty.
More than a quarter of all blacks and a similar percentage of Hispanics are
poor. More than 15 million children are poor.
The movers and shakers, including most of the mainstream media, have paid
precious little attention to this wide-scale economic disaster.
Meanwhile, the middle class, hobbled for years with the stagnant incomes that
accompany extreme employment insecurity, is now in retreat. Joblessness, home
foreclosures, personal bankruptcy — pick your poison. Median family incomes were
5 percent lower in 2009 than they were a decade earlier. The Harvard economist
Lawrence Katz told The Times, “This is the first time in memory that an entire
decade has produced essentially no economic growth for the typical American
I don’t know what it will take, maybe a full-blown depression, for policy makers
to decide that they need to take extraordinary additional steps to cope with
this drastic economic and employment emergency. Nothing currently on the table
will turn things around in a meaningful way. We’re facing a jobs deficit of
about 11 million, which is about how many new ones we’d have to create just to
get our heads above water. It will take years — years — just to get employment
back to where it was when the recession struck in December 2007.
If Republicans take over the policy levers, forget about it. The party of Palin,
Limbaugh and Boehner — with its tax cuts for the rich and obsession with the
deregulatory, free-market zealotry that brought us the Great Recession — will
only accelerate the mass march into poverty.
The G.O.P. wants to further shred the safety net, wants to give corporations
even greater clout over already debased workers, and wants to fatten the coffers
of the already obscenely rich.
While working people are suffering the torments of joblessness, underemployment
and dwindling compensation, corporate profits have rebounded and the financial
sector is once again living the high life. This helps to keep the people at the
top comfortably in denial about the extent of the carnage.
Millions of struggling voters have no idea which way to turn. They are suffering
under the status quo, but those with any memory at all are afraid of a rerun of
the catastrophic George W. Bush era. An Associated Press article, based on
recent polling, summed the matter up: “Glum and distrusting, a majority of
Americans today are very confident in — nobody.”
What is desperately needed is leadership that recognizes the depth and intensity
of the economic crisis facing so many ordinary Americans. It’s time for the
movers and shakers to lift the shroud of oblivion and reach out to those many
millions of Americans trapped in a world of hurt.
September 16, 2010
The New York Times
By ERIK ECKHOLM
The percentage of Americans struggling below the poverty line in 2009 was the
highest it has been in 15 years, the Census Bureau reported Thursday, and
interviews with poverty experts and aid groups said the increase appeared to be
continuing this year.
With the country in its worst economic crisis since the Great Depression, four
million additional Americans found themselves in poverty in 2009, with the total
reaching 44 million, or one in seven residents. Millions more were surviving
only because of expanded unemployment insurance and other assistance.
And the numbers could have climbed higher: One way embattled Americans have
gotten by is sharing homes with siblings, parents or even nonrelatives,
sometimes resulting in overused couches and frayed nerves but holding down the
rise in the national poverty rate, according to the report.
The share of residents in poverty climbed to 14.3 percent in 2009, the highest
level recorded since 1994. The rise was steepest for children, with one in five
affected, the bureau said.
The report provides the most detailed picture yet of the impact of the recession
and unemployment on incomes, especially at the bottom of the scale. It also
indicated that the temporary increases in aid provided in last year’s stimulus
bill eased the burdens on millions of families.
For a single adult in 2009, the poverty line was $10,830 in pretax cash income;
for a family of four, $22,050.
Given the depth of the recession, some economists had expected an even larger
jump in the poor.
“A lot of people would have been worse off if they didn’t have someone to move
in with,” said Timothy M. Smeeding, director of the Institute for Research on
Poverty at the University of Wisconsin.
Dr. Smeeding said that in a typical case, a struggling family, like a mother and
children who would be in poverty on their own, stays with more prosperous
parents or other relatives.
The Census study found an 11.6 percent increase in the number of such
multifamily households over the last two years. Included in that number was
James Davis, 22, of Chicago, who lost his job as a package handler for Fed Ex in
February 2009. As he ran out of money, he and his 2-year-old daughter moved in
with his mother about a year ago, avoiding destitution while he searched for
“I couldn’t afford rent,” he said.
Danise Sanders, 31, and her three children have been sleeping in the living room
of her mother and sister’s one-bedroom apartment in San Pablo, Calif., for the
last month, with no end in sight. They doubled up after the bank foreclosed on
her landlord, forcing her to move.
“It’s getting harder,” said Ms. Sanders, who makes a low income as a mail clerk.
“We’re all pitching in for rent and bills.”
There are strong signs that the high poverty numbers have continued into 2010
and are probably still rising, some experts said, as the recovery sputters and
unemployment remains near 10 percent.
“Historically, it takes time for poverty to recover after unemployment starts to
go down,” said LaDonna Pavetti, a welfare expert at the Center on Budget and
Policy Priorities, a liberal-leaning research group in Washington.
Dr. Smeeding said it seemed almost certain that poverty would further rise this
year. He noted that the increase in unemployment and poverty had been
concentrated among young adults without college educations and their children,
and that these people remained at the end of the line in their search for work.
One indirect sign of continuing hardship is the rise in food stamp recipients,
who now include nearly one in seven adults and an even greater share of the
nation’s children. While other factors as well as declining incomes have driven
the rise, by mid-2010 the number of recipients had reached 41.3 million,
compared with 39 million at the beginning of the year.
Food banks, too, report swelling demand.
“We’re seeing more younger people coming in that not only don’t have any food,
but nowhere to stay,” said Marla Goodwin, director of Jeremiah’s Food Pantry in
East St. Louis, Ill. The pantry was open one day a month when it opened in 2008
but expanded this year to five days a month.
And Texas food banks said they distributed 14 percent more food in the second
quarter of 2010 than in the same period last year.
The Census report showed increases in poverty for whites, blacks and Hispanic
Americans, with historic disparities continuing. The poverty rate for
non-Hispanic whites was 9.4 percent, for blacks 25.8 percent and for Hispanics
25.3 percent. The rate for Asians was unchanged at 12.5 percent.
The median income of all households stayed roughly the same from 2008 to 2009.
It had fallen sharply the year before, as the recession gained steam and remains
well below the levels of the late 1990s — a sign of the stagnating prospects for
the middle class.
The decline in incomes in 2008 had been greater than expected, and when the two
recession years are considered together, the decline since 2007 was 4.2 percent,
said Lawrence Katz, an economist at Harvard. Gains achieved earlier in the
decade were wiped out, and median family incomes in 2009 were 5 percent lower
than in 1999.
“This is the first time in memory that an entire decade has produced essentially
no economic growth for the typical American household,” Mr. Katz said.
The number of United States residents without health insurance climbed to 51
million in 2009, from 46 million in 2008, the Census said. Their ranks are
expected to shrink in coming years as the health care overhaul adopted by
Congress in March begins to take effect.
Government benefits like food stamps and tax credits, which can provide hundreds
or even thousands of dollars in extra income, are not included in calculating
whether a family’s income falls above or below the poverty line.
But rises in the cost of housing, medical care or energy and the large regional
differences in the cost of living are not taken into account either.
If food-stamp benefits and low-income tax credits were included as income, close
to 8 million of those labeled as poor in the report would instead be just above
the poverty line, the Census report estimated. At the same time, a person who
starts a job and receives the earned income tax credit could have new
work-related expenses like transportation and child care. Unemployment benefits,
which are considered cash income and included in the calculations, helped keep 3
million families above the line last year, the report said, with temporary
extensions and higher payments helping all the more.
The poverty line is a flawed measure, experts agree, but it remains the best
consistent long-term gauge of need available, and its ups and downs reflect
The federal government will issue an alternate calculation next year that will
include important noncash and after-tax income and also account for regional
differences in the cost of living.
But it will continue to calculate the rate in the old way as well, in part
because eligibility for many programs, from Medicaid to free school lunches, is
linked to the longstanding poverty line.
May 12, 2010
The New York Times
By STEPHANIE STROM
The Wal-Mart Corporation announced plans on Wednesday to contribute $2
billion in cash and food to the nation’s food banks, one of the largest
corporate gifts on record.
Over the next five years, the giant retail company will distribute some 1.1
billion pounds of food to food banks and provide $250 million to help those
organizations buy refrigerated trucks, improve storage and develop better
“Hunger is just a huge problem, and as the largest grocer in the country, we
need to be at the head of the pack in doing something about it,” said Margaret
McKenna, president of the Wal-Mart Foundation.
While the economy seems to be turning around, the number of people turning to
charities to help put food on their tables continues to grow. A recent survey by
Feeding America found that 37 million people a year now use its national network
of food banks, a 46 percent increase from 2006. The survey drew on interviews
with more than 61,000 people who use food banks, as well as reports from 37,000
food banks across the country.
Put another way, 1 in every 8 Americans uses a food bank to make ends meet, the
More than one-third of those surveyed said they would not have been able to pay
for basics like rent, utilities and medical care without relying on food banks
to offset the cost of their meals — and more than a third said at least one
person in their household was working.
“It is not just the unemployed that are going hungry,” said Vicki B. Escarra,
chief executive of Feeding America.
Wal-Mart began taking on hunger as a cause in 2005, when it distributed 9.9
million pounds of food to food banks; last year, it provided 116.1 million
pounds of food. The company also has donated the services of its staff to help
food banks improve lighting and refrigeration, and develop ways to increase the
amount of fresh food on their shelves.
“We’ve learned a lot about this problem and the kinds of things we can do to
help,” Ms. McKenna said. “We’ve learned, for instance, that there is a huge gap
in terms of the protein and fresh produce that food banks can deliver, so we’ve
learned how to fast-freeze things like meat and dairy. You can’t put 100 pounds
of bananas on a truck that isn’t refrigerated and expect them to be edible for
Almost one-third of the food Wal-Mart is donating this year will be fresh, and
one of the first cash gifts out of the new grant will go to increasing the
number of refrigerated trucks delivering food to food banks. “These are the
types of resources we don’t get much from other sources,” Ms. Escarra said.
Wal-Mart and other companies currently are focused on how to get food to
children to expose them to fruits, vegetables and meats that traditionally have
not been available to poor families because of limited supplies or high cost.
For instance, the Target Corporation on Tuesday announced a $2.3 million program
to create pantries in schools that can be used to teach children about good
nutrition at the same time they are fed.
Target provided an additional $1.2 million to Feeding America to support other
school-based feeding programs.
Ms. McKenna said she was concerned about getting food during the summer to
children who rely on school breakfast and lunch programs. “We know about sending
kids home with backpacks of food for the weekends,” she said, “but what do we do
to feed them when they aren’t going to school?”
BUENA PARK, Calif. — Even as the American economy shows
tentative signs of a rebound, the human toll of the recession continues to
mount, with millions of Americans remaining out of work, out of savings and
nearing the end of their unemployment benefits.
Economists fear that the nascent recovery will leave more people behind than in
past recessions, failing to create jobs in sufficient numbers to absorb the
record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of middle-class
life who are now relying on public assistance for the first time in their lives
— potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7 million
jobless people will lose their unemployment check before the end of April unless
Congress approves the Obama administration’s proposal to extend the payments,
according to the Labor Department.
Here in Southern California, Jean Eisen has been without work since she lost her
job selling beauty salon equipment more than two years ago. In the several
months she has endured with neither a paycheck nor an unemployment check, she
has relied on local food banks for her groceries.
She has learned to live without the prescription medications she is supposed to
take for high blood pressure and cholesterol. She has become effusively
religious — an unexpected turn for this onetime standup comic with X-rated
material — finding in Christianity her only form of health insurance.
“I pray for healing,” says Ms. Eisen, 57. “When you’ve got nothing, you’ve got
to go with what you know.”
Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her life.
Now, she is one of 6.3 million Americans who have been unemployed for six months
or longer, the largest number since the government began keeping track in 1948.
That is more than double the toll in the next-worst period, in the early 1980s.
Men have suffered the largest numbers of job losses in this recession. But Ms.
Eisen has the unfortunate distinction of being among a group — women from 45 to
64 years of age — whose long-term unemployment rate has grown rapidly.
In 1983, after a deep recession, women in that range made up only 7 percent of
those who had been out of work for six months or longer, according to the Labor
Department. Last year, they made up 14 percent.
Twice, Ms. Eisen exhausted her unemployment benefits before her check was
restored by a federal extension. Last week, her check ran out again. She and her
husband now settle their bills with only his $1,595 monthly disability check.
The rent on their apartment is $1,380.
“We’re looking at the very real possibility of being homeless,” she said.
Every downturn pushes some people out of the middle class before the economy
resumes expanding. Most recover. Many prosper. But some economists worry that
this time could be different. An unusual constellation of forces — some embedded
in the modern-day economy, others unique to this wrenching recession — might
make it especially difficult for those out of work to find their way back to
their middle-class lives.
Labor experts say the economy needs 100,000 new jobs a month just to absorb
entrants to the labor force. With more than 15 million people officially
jobless, even a vigorous recovery is likely to leave an enormous number out of
work for years.
Some labor experts note that severe economic downturns are generally followed by
powerful expansions, suggesting that aggressive hiring will soon resume. But
doubts remain about whether such hiring can last long enough to absorb anywhere
close to the millions of unemployed.
A New Scarcity of Jobs
Some labor experts say the basic functioning of the American economy has changed
in ways that make jobs scarce — particularly for older, less-educated people
like Ms. Eisen, who has only a high school diploma.
Large companies are increasingly owned by institutional investors who crave
swift profits, a feat often achieved by cutting payroll. The declining influence
of unions has made it easier for employers to shift work to part-time and
temporary employees. Factory work and even white-collar jobs have moved in
recent years to low-cost countries in Asia and Latin America. Automation has
helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that
once provided lower-skilled workers with middle-class paychecks.
“American business is about maximizing shareholder value,” said Allen Sinai,
chief global economist at the research firm Decision Economics. “You basically
don’t want workers. You hire less, and you try to find capital equipment to
During periods of American economic expansion in the 1950s, ’60s and ’70s, the
number of private-sector jobs increased about 3.5 percent a year, according to
an analysis of Labor Department data by Lakshman Achuthan, managing director of
the Economic Cycle Research Institute, a research firm. During expansions in the
1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade,
job growth fell to 0.9 percent annually.
“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan
said. “There is no indication that this pattern is about to change.”
Before 1990, it took an average of 21 months for the economy to regain the jobs
shed during a recession, according to an analysis of Labor Department data by
the National Employment Law Project and the Economic Policy Institute, a
labor-oriented research group in Washington.
After the recessions in 1990 and in 2001, 31 and 46 months passed before
employment returned to its previous peaks. The economy was growing, but
companies remained conservative in their hiring.
Some 34 million people were hired into new and existing private-sector jobs in
2000, at the tail end of an expansion, according to Labor Department data. A
year later, in the midst of recession, hiring had fallen off to 31.6 million.
And as late as 2003, with the economy again growing, hiring in the private
sector continued to slip, to 29.8 million.
It was a jobless recovery: Business was picking up, but it simply did not
translate into more work. This time, hiring may be especially subdued, labor
Traditionally, three sectors have led the way out of recession: automobiles,
home building and banking. But auto companies have been shrinking because
strapped households have less buying power. Home building is limited by fears
about a glut of foreclosed properties. Banking is expanding, but this seems
largely a function of government support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped the
flow of money to small businesses and new ventures, which tend to be major
sources of new jobs.
All of which helps explain why Ms. Eisen — who has never before struggled to
find work — feels a familiar pain each time she scans job listings on her
computer: There are positions in health care, most requiring experience she
lacks. Office jobs demand familiarity with software she has never used. Jobs at
fast food restaurants are mostly secured by young people and immigrants.
If, as Mr. Sinai expects, the economy again expands without adding many jobs,
millions of people like Ms. Eisen will be dependent on an unemployment insurance
already being severely tested.
“The system was ill prepared for the reality of long-term unemployment,” said
Maurice Emsellem, a policy director for the National Employment Law Project.
“Now, you add a severe recession, and you have created a crisis of historic
Some poverty experts say the broader social safety net is not up to cushioning
the impact of the worst downturn since the Great Depression. Social services are
less extensive than during the last period of double-digit unemployment, in the
On average, only two-thirds of unemployed people received state-provided
unemployment checks last year, according to the Labor Department. The rest
either exhausted their benefits, fell short of requirements or did not apply.
“You have very large sets of people who have no social protections,” said Randy
Albelda, an economist at the University of Massachusetts in Boston. “They are
landing in this netherworld.”
When Ms. Eisen and her husband, Jeff, applied for food stamps, they were turned
away for having too much monthly income. The cutoff was $1,570 a month — $25
less than her husband’s disability check.
Reforms in the mid-1990s imposed time limits on cash assistance for poor single
mothers, a change predicated on the assumption that women would trade welfare
checks for paychecks.
Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut
off anyone with a household income totaling 75 percent of the poverty level —
then limited to $1,383 a month for a family of three — according to an analysis
by Ms. Albelda.
“We have a work-based safety net without any work,” said Timothy M. Smeeding,
director of the Institute for Research on Poverty at the University of
Wisconsin, Madison. “People with more education and skills will probably figure
something out once the economy picks up. It’s the ones with less education and
skills: that’s the new poor.”
Here in Orange County, the expanse of suburbia stretching south from Los
Angeles, long-term unemployment reaches even those who once had six-figure
salaries. A center of the national mortgage industry, the area prospered in the
real estate boom and suffered with the bust.
Until she was laid off two years ago, Janine Booth, 41, brought home roughly
$10,000 a month in commissions from her job selling electronics to retailers. A
single mother of three, she has been living lately on $2,000 a month in child
support and about $450 a week in unemployment insurance — a stream of checks
that ran out last week.
For Ms. Booth, work has been a constant since her teenage years, when she
cleaned houses under pressure from her mother to earn pocket money. Today, Ms.
Booth pays her $1,500 monthly mortgage with help from her mother, who is herself
living off savings after being laid off.
“I don’t want to take money from her,” Ms. Booth said. “I just want to find a
Ms. Booth, with a résumé full of well-paid sales jobs, seems the sort of person
who would have little difficulty getting work. Yet two years of looking have
yielded little but anxiety.
She sends out dozens of résumés a week and rarely hears back. She responds to
online ads, only to learn they are seeking operators for telephone sex lines or
people willing to send mysterious packages from their homes.
She spends weekdays in a classroom in Anaheim, in a state-financed training
program that is supposed to land her a job in medical administration. Even if
she does find a job, she will be lucky if it pays $15 an hour.
“What is going to happen?” she asked plaintively. “I worry about my kids. I just
don’t want them to think I’m a failure.”
On a recent weekend, she was running errands with her 18-year-old son when they
stopped at an A.T.M. and he saw her checking account balance: $50.
“He says, ‘Is that all you have?’ ” she recalled. “ ‘Are we going to be O.K.?’ ”
Yes, she replied — and not only for his benefit.
“I have to keep telling myself it’s going to be O.K.,” she said. “Otherwise, I’d
go into a deep depression.”
Last week, she made up fliers advertising her eagerness to clean houses — the
same activity that provided her with spending money in high school, and now the
only way she sees fit to provide for her kids. She plans to place the fliers on
porches in some other neighborhood.
“I don’t want to clean my neighbors’ houses,” she said. “I know I’m going to
come out of this. There’s no way I’m going to be homeless and poverty-stricken.
But I am scared. I have a lot of sleepless nights.”
For the Eisens, poverty is already here. In the two years Ms. Eisen has been
without work, they have exhausted their savings of about $24,000. Their credit
card balances have grown to $15,000.
“I don’t know how we’re still indoors,” she said.
Her 1994 Dodge Caravan broke down in January, leaving her to ask for rides to an
She does not have the money to move to a cheaper apartment.
“You have to have money for first and last month’s rent, and to open utility
accounts,” she said.
What she has is personality and presence — two traits that used to seem enough.
She narrates her life in a stream of self-deprecating wisecracks, her punch
lines tinged with desperation.
“See that,” she said, spotting a man dressed as the Statue of Liberty. Standing
on a sidewalk, he waved at passing cars with a sign advertising a tax
preparation business. “That will be me next week. Do you think this guy ever
thought he’d be doing this?”
And yet, she would gladly do this. She would do nearly anything.
“There are no bad jobs now,” she says. “Any job is a good job.”
She has applied everywhere she can think of — at offices, at gas stations.
“I’m being seen as a person who is no longer viable,” she said. “I’m chalking it
up to my age and my weight. Blame it on your most prominent insecurity.”
Two Incomes, Then None
Ms. Eisen grew up poor, in Flatbush in Brooklyn. Her father was in maintenance.
Her mother worked part time at a company that made window blinds.
She married Jeff when she was 19, and they soon moved to California, where he
had grown up. He worked in sales for a chemical company. They rented an
apartment in Buena Park, a growing spread of houses filling out former orange
groves. She stayed home and took care of their daughter.
“I never asked him how much he earned,” Ms. Eisen said. “I was of the mentality
that the husband took care of everything. But we never wanted.”
By the early 1980s, gas and rent strained their finances. So she took a job as a
quality assurance clerk at a factory that made aircraft parts. It paid $13.50 an
hour and had health insurance.
When the company moved to Mexico in the early 1990s, Ms. Eisen quickly found a
job at a travel agency. When online booking killed that business, she got the
job at the beauty salon equipment company. It paid $13.25 an hour, with an
annual bonus — enough for presents under the Christmas tree.
But six years ago, her husband took a fall at work and then succumbed to various
ailments — diabetes, liver disease, high blood pressure — leaving him confined
to the couch. Not until 2008 did he secure his disability check.
And now they find themselves in this desert of joblessness, her paycheck
replaced by a $702 unemployment check every other week. She received 14 weeks of
benefits after she lost her job, and then a seven-week extension.
For most of October through December 2008, she received nothing, as she waited
for another extension. The checks came again, then ran out in September 2009.
They were restored by an extension right before Christmas.
Their daughter has back problems and is living on disability checks, making the
church their ultimate safety net.
“I never thought I’d be in the position where I had to go to a food bank,” Ms.
Eisen said. But there she is, standing in the parking lot of the Calvary Chapel
church, chatting with a half-dozen women, all waiting to enter the Bread of Life
When her name is called, she steps into a windowless alcove, where a smiling
woman hands her three bags of groceries: carrots, potatoes, bread, cheese and a
hunk of frozen meat.
“Haven’t we got a lot to be thankful for?” Ms. Eisen asks.
For one thing, no pinto beans.
“I’ve got 10 bags of pinto beans,” she says. “And I have no clue how to cook a
Local job listings are just as mysterious. On a bulletin board at the
county-financed ProPath Business and Career Services Center, many are written in
jargon hinting of accounting or computers.
“Nothing I’m qualified for,” Ms. Eisen says. “When you can’t define what it is,
that’s a pretty good indication.”
Her counselor has a couple of possibilities — a cashier at a supermarket and a
night desk job at a motel.
“I’ll e-mail them,” Ms. Eisen promises. “I’ll tell them what a shining example
of humanity I am.”
October 11, 2009
The New York Times
By KATIE ZEZIMA
Coroners and medical examiners across the country are
reporting spikes in the number of unclaimed bodies and indigent burials, with
states, counties and private funeral homes having to foot the bill when families
The increase comes as governments short on cash are cutting other social service
programs, with some municipalities dipping into emergency and reserve funds to
help cover the costs of burials or cremations.
Oregon, for example, has seen a 50 percent increase in the number of unclaimed
bodies over the past few years, the majority left by families who say they
cannot afford services. “There are more people in our cooler for a longer period
of time,” said Dr. Karen Gunson, the state’s medical examiner. “It’s not that
we’re not finding families, but that the families are having a harder time
coming up with funds to cover burial or cremation costs.”
About a dozen states now subsidize the burial or cremation of unclaimed bodies,
including Illinois, Massachusetts, West Virginia and Wisconsin. Most of the
state programs provide disposition services to people on Medicaid, a cost that
has grown along with Medicaid rolls.
Financing in Oregon comes from fees paid to register the deaths with the state.
The state legislature in June voted to raise the filing fee for death
certificates to $20 from $7, to help offset the increased costs of state
cremations, which cost $450.
“I’ve been here for 24 years, and I can’t remember something like this happening
before,” Dr. Gunson said.
Already in 2009, Wisconsin has paid for 15 percent more cremations than it did
last year, as the number of Medicaid recipients grew by more than 95,000 people
since the end of January, said Stephanie Smiley, a spokeswoman for the Wisconsin
Department of Health Services.
In Illinois, Gov. Pat Quinn tried to end the state’s indigent burial program
this year, shifting the financing to counties and funeral homes, but the state
eventually found $12 million to continue the program when funeral directors
The majority of burials and cremations, however, are handled on the city,
county, town or township level, an added economic stress as many places face
down wide budget gaps.
Boone County, Mo., hit its $3,000 burial budget cap last month, and took $1,500
out of a reserve fund to cover the rest of the year. While the sum is relatively
low, it comes as the county is facing a $2 million budget shortfall, tax
collections are down 5 percent and the number of residents needing help is
expected to grow.
“We’ve had a significant increase in unemployment, wages are dropping,
industrial manufacturing jobs go away and companies scaled back or even closed
their doors,” said Skip Elkin, the county commissioner. “But we feel an
obligation to help families who don’t have any assets.”
The medical examiner of Wayne County, Mich., Dr. Carl Schmidt, bought a
refrigerated truck after the morgue ran out of space. The truck, which holds 35
bodies, is currently full, Dr. Schmidt said. “We’ll buy another truck if we have
to,” he said.
Many places are turning to cremation, which averages a third to half the price
of a burial. However, they will accommodate families’ requests for burial.
Clyde Gibbs, the chief medical examiner in Chapel Hill, N.C., said the office
typically averaged 25 to 30 unclaimed bodies each year. At the end of the 2008
fiscal year there were at least 60, Dr. Gibbs said. The office cremates about
three-quarters of the remains, and scatters the ashes at sea every few years.
In Tennessee, medical examiner and coroners’ offices donate unclaimed remains to
the Forensic Anthropological Research Center, known as the “Body Farm,” where
students study decomposition at the University of Tennessee. The facility had to
briefly halt donations because it had received so many this year, said its
spokesman, Jay Mayfield.
The increase in indigent burials and cremations is also taking a toll on funeral
homes, which are losing money as more people choose cremation over burial. In
2003, 29.5 percent of remains were cremated; by 2008 the number had grown to 36
percent, according to the Cremation Association of North America, and it is
expected to soar to 46 percent by 2015, according to the association’s
projection of current trends.
Don Catchen, owner of Don Catchen & Son Funeral Homes in Elsmere, Ky., who
handles cremations of the poor in Kenton County, said the $831 county
reimbursement for cremations was “just enough to cover the cost of what I do — I
donate my time.”
In Florida, where counties switched to cremation a few years ago to save on
costs, Prudencio Vallejo, general manager of the Unclaimed Bodies Unit of the
Hillsborough County Medical Examiner’s Office, said cremations were $425,
compared with $1,500 for a burial. They have risen about 10 percent this year,
Mr. Vallejo said.
“Most people, the first thing that they say is ‘We wouldn’t be coming to you if
we could afford to do it ourselves,’ ” he said.
Broward County, Fla., paid for the cremation of Renata Richardson’s daughter,
Jazmyn Rose, who was born stillborn on Sept. 25, 2008. Ms. Richardson, 26, lost
her job at an advertising agency in July and could not afford to pay.
The county spent about $1,000 on a cremation and pink urn, engraved with the
baby’s birth and death date, and a Bible passage. It now sits in the bassinette
where she was to sleep.
“I was strapped for cash, I was in mourning, and I didn’t know what they were
going to do with her,” Ms. Richardson, of Davie, Fla., said. “I was honored that
they went that far to help me.”
It is sadly predictable that in a recession, the poor get poorer and the
middle class loses ground. But even a downturn as deep and prolonged as this one
cannot fully account for the desperate straits of so many Americans.
The Census Bureau reported last week that the nation’s poverty rate rose to 13.2
percent in 2008, the highest level since 1997 and a significant increase from
12.5 percent in 2007. That means that some 40 million people in this country are
living below the poverty line, defined as an income of $22,205 for a family of
The middle class also took a major hit. Median household income fell in 2008 to
$50,300 from $52,200 in 2007. That is the steepest year-to-year drop since the
government began keeping track four decades ago; adjusted for inflation, median
income was lower in 2008 than in 1998 and every year since then.
Clearly, the recession has been brutal. But even before the recession, far too
many Americans were already living far too close to the edge.
As is now painfully evident, the economic growth of the Bush era was largely an
illusion. Poverty worsened during most of the boom years and middle-class pay
stagnated, as most gains flowed to the top. In a recent update of their
groundbreaking series on income trends, the economists Thomas Piketty and
Emmanuel Saez found that from 2002 to 2007, the top 1 percent of households —
those making more than $400,000 a year — received two-thirds of the nation’s
total income gains, their largest share of the spoils since the 1920s.
Because many if not most Americans gained little to nothing from the Bush
“growth” years, they have found themselves especially vulnerable to the
Federal stimulus spending has helped cushion the blow. The question going
forward is whether an economic recovery, when it comes, will help the poor and
middle class or whether the top-heavy favoritism of the previous expansion will
The answer depends on how policy makers foster and manage a recovery. Economic
growth alone does not guarantee job growth. Congress and the Obama
administration must extend certain components of the stimulus package until
employment does revive, including unemployment benefits, food stamps, tax breaks
for working families with children and fiscal aid to states.
Policy makers must also resist the reassuring but false notion that renewed
economic growth can, by itself, raise living standards broadly. Government
policies are needed to ensure that growth is shared. Reforming health care so
that illness is not bankrupting — for families or for the federal budget — would
be a major step in the right direction.
The administration has also said that it would let the Bush-era tax cuts for the
rich expire as scheduled at the end of 2010. More progressive taxation needs to
be accompanied by more progressive spending, on public education and on job
training and job creation. Support for unions and enforcement of labor standards
would also help to ensure that in the next economic expansion, a fair share of
profits would find its way into wages.
As the Bush era showed, the economy can grow without any of that happening. But
it also showed that such growth is neither defensible nor sustainable. With half
the population falling behind or struggling to keep up, the economy cannot
generate secure and adequate spending, investing or upward mobility for the
country to truly prosper.
John Cobb, 59, a former commercial fisherman who is disabled with cirrhosis
of the liver and emphysema, lives in a studio apartment in Greensboro, N.C., on
a fixed monthly income of $674. He has been hoping to receive more government
assistance, and in February, he did.
It came in the form of a free cellphone and free service.
Mr. Cobb became one of a small but rapidly growing number of low-income
Americans benefiting from a new wrinkle to a decades-old federal law that
provided them with subsidized landline telephone service.
In a twist, wireless carriers are receiving subsidies to provide people like Mr.
Cobb with a phone and typically 68 minutes of talk time each month. It is a form
of wireless welfare that puts a societal stamp on the central role played by the
Mr. Cobb’s cellphone is a Motorola 175. “I feel so much safer when I drive. If I
get sick, I can call someone. If I break down, I can call someone,” Mr. Cobb
said. “It’s a necessity.”
The users are not the only ones receiving government assistance.
Telecommunications industry analysts said the program, while in its infancy,
could benefit mobile phone carriers, who face a steep challenge of their own:
most Americans already own a cellphone, so the poor represent a last untapped
“The low hanging fruit is gone, and the wireless companies are going after the
nooks and crannies,” said Roger Entner, a wireless industry analyst with
Nielsen. “Oh, the poor: How can we sign them up?”
Carriers can receive up to $10 a month in government subsidies, sufficient to
cover what amounts to about $3 in service, Mr. Entner said.
Since November, the number of customers receiving free or subsidized wireless
service has doubled to 1.4 million, he said. To be eligible for the program,
known as Lifeline, a person must meet federal low-income guidelines or qualify
for one of a handful of social service programs, including food stamps or
The opportunity has prompted interest from the nation’s biggest carriers,
including Sprint Nextel and AT&T. But at the forefront is a much smaller
company, Tracfone, a Florida provider of prepaid mobile service that has become
the face of the fledgling subsidized cellphone.
Tracfone began providing its service, called SafeLink, in Tennessee in August
and now does so in 16 states, including New York, North Carolina and
Pennsylvania, and the District of Columbia, according to its Web site. Each time
it enters a market — which generally requires state approval — it runs
television ads telling people how easy it is to get a free Motorola phone, like
The company says the economy makes the audience particularly receptive. “We’ll
read that more people are signing up for food stamps and look at our numbers and
see volume rising,” said Jose Fuentes, director of government relations for
Tracfone. “It’s not scientific proof,” he added. “But we know times are tough.”
He declined to say how many subscribers have signed up. But he said Tracfone,
whose paid service has 10 million subscribers, sees the Lifeline service as an
opportunity to make some money but, more pointedly, to eventually convert the
subsidized customers into paying ones if their fortunes turn around and they no
longer qualify for a free phone.
“It could make for a good business,” Mr. Fuentes said.
According to Nielsen, 90 percent of Americans have at least one cellphone. That
leaves 32 million, including the infirm, still up for grabs. “And the race is on
to get them,” Mr. Entner said.
He said the overwhelming majority of Americans with subsidized wireless service
receive it through Tracfone.
One of them is Leon Simmons, 52, of the Bronx, N.Y., who did stints in the Navy,
at the Post Office and as a security guard before becoming disabled with
emphysema. His wife, who works a minimum wage job at a laundry, heard about the
Tracfone service and he got a phone in April.
The free phone is not, as it is for some others in the program, their sole form
of telecommunications. Out of the roughly $1,600 they make each month after
taxes, they pay $159 for a landline telephone, high-speed Internet and cable
television. But the cellphone, Mr. Simmons says, gives him the flexibility to
tell his wife or daughter his comings and goings or to stay in touch when he is
at the doctor.
According to the Federal Communications Commission, Lifeline service was started
in 1984 to ensure that everyone had telephone service for emergencies. The
Telecommunications Act of 1996 opened competition to new wireline and wireless
More recently, companies, particularly Tracfone, have started pursuing the
wireless opportunity. Still, most of the $800 million in subsidies last year
went for landline service even as more Americans cut the cord in favor of
exclusively using a mobile phone.
The subsidy money comes from a tax applied to phone bills. Carriers seeking
eligibility for it apply to state utility commissions, though several states
have ceded their jurisdiction in the matter to the F.C.C.
The issue has created controversy in some states over how and even whether to
subsidize wireless service. In California, for example, the public utilities
commission plans to debate on Thursday a proposal to extend Lifeline services to
wireless — a matter backed by companies like AT&T and Sprint and T-Mobile.
The Greenlining Coalition, a nonprofit advocacy group for low-income residents,
has lobbied the state to “move the California Lifeline program into the 21st
century,” according to public documents provided for the hearing on Thursday.
But State Assemblyman Felipe Fuentes, who represents a district in Los Angeles,
says the California legislature should ask some tough questions before moving
ahead — particularly if people contemplate making wireless their only form of
communication. Chiefly, he wants to know whether wireless service satisfies
crucial aspects needed in lifeline, like reliability in an emergency.
“What if the phone isn’t charged, or junior doesn’t know how to use it?” Mr.
Across the country, Mr. Simmons from the Bronx says he likes being able to
communicate when he is on the go. And he does not see what all the fuss is about
when it comes to cellphones.
“People walk around with their head stuck into these things, not paying
attention to what’s going on around them,” he said. Even though he thinks these
people look silly, he said, he is going to use his cellphone.
June 14, 2009
The New York Times
By BARBARA EHRENREICH
THE human side of the recession, in the new media genre that’s been called
“recession porn,” is the story of an incremental descent from excess to
frugality, from ease to austerity. The super-rich give up their personal jets;
the upper middle class cut back on private Pilates classes; the merely middle
class forgo vacations and evenings at Applebee’s. In some accounts, the
recession is even described as the “great leveler,” smudging the dizzying levels
of inequality that characterized the last couple of decades and squeezing
everyone into a single great class, the Nouveau Poor, in which we will all drive
tiny fuel-efficient cars and grow tomatoes on our porches.
But the outlook is not so cozy when we look at the effects of the recession on a
group generally omitted from all the vivid narratives of downward mobility — the
already poor, the estimated 20 percent to 30 percent of the population who
struggle to get by in the best of times. This demographic, the working poor,
have already been living in an economic depression of their own. From their
point of view “the economy,” as a shared condition, is a fiction.
This spring, I tracked down a couple of the people I had met while working on my
2001 book, “Nickel and Dimed,” in which I worked in low-wage jobs like
waitressing and housecleaning, and I found them no more gripped by the recession
than by “American Idol”; things were pretty much “same old.” The woman I called
Melissa in the book was still working at Wal-Mart, though in nine years, her
wages had risen to $10 an hour from $7. “Caroline,” who is increasingly disabled
by diabetes and heart disease, now lives with a grown son and subsists on
occasional cleaning and catering jobs. We chatted about grandchildren and
church, without any mention of exceptional hardship.
As with Denise Smith, whom I recently met through the Virginia Organizing
Project and whose bachelor’s degree in history qualifies her for seasonal
$10-an-hour work at a tourist site, the recession is largely an abstraction. “We
were poor,” Ms. Smith told me cheerfully, “and we’re still poor.”
But then, at least if you inhabit a large, multiclass extended family like my
own, there comes that e-mail message with the subject line “Need your help,” and
you realize that bad is often just the stage before worse. The note was from one
of my nephews, and it reported that his mother-in-law, Peg, was, like several
million other Americans, about to lose her home to foreclosure.
It was the back story that got to me: Peg, who is 55 and lives in rural
Missouri, had been working three part-time jobs to support her disabled daughter
and two grandchildren, who had moved in with her. Then, last winter, she had a
heart attack, missed work and fell behind in her mortgage payments. If I
couldn’t help, all four would have to move into the cramped apartment in
Minneapolis already occupied by my nephew and his wife.
Only after I’d sent the money did I learn that the mortgage was not a subprime
one and the home was not a house but a dilapidated single-wide trailer that, as
a “used vehicle,” commands a 12-percent mortgage interest rate. You could argue,
without any shortage of compassion, that “Low-Wage Worker Loses Job, Home” is
nobody’s idea of news.
In late May I traveled to Los Angeles — where the real unemployment rate,
including underemployed people and those who have given up on looking for a job,
is estimated at 20 percent — to meet with a half-dozen community organizers.
They are members of a profession, derided last summer by Sarah Palin, that helps
low-income people renegotiate mortgages, deal with eviction when their landlords
are foreclosed and, when necessary, organize to confront landlords and bosses.
The question I put to this rainbow group was: “Has the recession made a
significant difference in the low-income communities where you work, or are
things pretty much the same?” My informants — from Koreatown, South Central,
Maywood, Artesia and the area around Skid Row — took pains to explain that
things were already bad before the recession, and in ways that are disconnected
from the larger economy. One of them told me, for example, that the boom of the
’90s and early 2000s had been “basically devastating” for the urban poor. Rents
skyrocketed; public housing disappeared to make way for gentrification.
But yes, the recession has made things palpably worse, largely because of job
losses. With no paychecks coming in, people fall behind on their rent and, since
there can be as long as a six-year wait for federal housing subsidies, they
often have no alternative but to move in with relatives. “People are calling me
all the time,” said Preeti Sharma of the South Asian Network, “They think I have
some sort of magic.”
The organizers even expressed a certain impatience with the Nouveau Poor, once I
introduced the phrase. If there’s a symbol for the recession in Los Angeles,
Davin Corona of Strategic Actions for a Just Economy said, it’s “the policeman
facing foreclosure in the suburbs.” The already poor, he said — the undocumented
immigrants, the sweatshop workers, the janitors, maids and security guards — had
all but “disappeared” from both the news media and public policy discussions.
Disappearing with them is what may be the most distinctive and compelling story
of this recession. When I got back home, I started calling up experts, like
Sharon Parrott, a policy analyst at the Center on Budget and Policy Priorities,
who told me, “There’s rising unemployment among all demographic groups, but
vastly more among the so-called unskilled.”
How much more? Larry Mishel, the president of the Economic Policy Institute,
offers data showing that blue-collar unemployment is increasing three times as
fast as white-collar unemployment. The last two recessions — in the early ’90s
and in 2001 — produced mass white-collar layoffs, and while the current one has
seen plenty of downsized real-estate agents and financial analysts, the brunt is
being borne by the blue-collar working class, which has been sliding downward
since deindustrialization began in the ’80s.
When I called food banks and homeless shelters around the country, most staff
members and directors seemed poised to offer press-pleasing tales of formerly
middle-class families brought low. But some, like Toni Muhammad at Gateway
Homeless Services in St. Louis, admitted that mostly they see “the long-term
poor,” who become even poorer when they lose the kind of low-wage jobs that had
been so easy for me to find from 1998 to 2000. As Candy Hill, a vice president
of Catholic Charities U.S.A., put it, “All the focus is on the middle class — on
Wall Street and Main Street — but it’s the people on the back streets who are
What are the stations between poverty and destitution? Like the Nouveau Poor,
the already poor descend through a series of deprivations, though these are less
likely to involve forgone vacations than missed meals and medications. The Times
reported earlier this month that one-third of Americans can no longer afford to
comply with their prescriptions.
There are other, less life-threatening, ways to try to make ends meet. The
Associated Press has reported that more women from all social classes are
resorting to stripping, although “gentlemen’s clubs,” too, have been hard-hit by
the recession. The rural poor are turning increasingly to “food auctions,” which
offer items that may be past their sell-by dates.
And for those who like their meat fresh, there’s the option of urban hunting. In
Racine, Wis., a 51-year-old laid-off mechanic told me he’s supplementing his
diet by “shooting squirrels and rabbits and eating them stewed, baked and
grilled.” In Detroit, where the wildlife population has mounted as the human
population ebbs, a retired truck driver is doing a brisk business in raccoon
carcasses, which he recommends marinating with vinegar and spices.
The most common coping strategy, though, is simply to increase the number of
paying people per square foot of dwelling space — by doubling up or renting to
couch-surfers. It’s hard to get firm numbers on overcrowding, because no one
likes to acknowledge it to census-takers, journalists or anyone else who might
be remotely connected to the authorities. At the legal level, this includes Peg
taking in her daughter and two grandchildren in a trailer with barely room for
two, or my nephew and his wife preparing to squeeze all four of them into what
is essentially a one-bedroom apartment. But stories of Dickensian living
In Los Angeles, Prof. Peter Dreier, a housing policy expert at Occidental
College, says that “people who’ve lost their jobs, or at least their second
jobs, cope by doubling or tripling up in overcrowded apartments, or by paying 50
or 60 or even 70 percent of their incomes in rent.” Thelmy Perez, an organizer
with Strategic Actions for a Just Economy, is trying to help an elderly couple
who could no longer afford the $600 a month rent on their two-bedroom apartment,
so they took in six unrelated subtenants and are now facing eviction. According
to a community organizer in my own city, Alexandria, Va., the standard apartment
in a complex occupied largely by day laborers contains two bedrooms, each
housing a family of up to five people, plus an additional person laying claim to
Overcrowding — rural, suburban and urban — renders the mounting numbers of the
poor invisible, especially when the perpetrators have no telltale cars to park
on the street. But if this is sometimes a crime against zoning laws, it’s not
exactly a victimless one. At best, it leads to interrupted sleep and long waits
for the bathroom; at worst, to explosions of violence. Catholic Charities is
reporting a spike in domestic violence in many parts of the country, which Candy
Hill attributes to the combination of unemployment and overcrowding.
And doubling up is seldom a stable solution. According to Toni Muhammad, about
70 percent of the people seeking emergency shelter in St. Louis report they had
been living with relatives “but the place was too small.” When I asked Peg what
it was like to share her trailer with her daughter’s family, she said bleakly,
“I just stay in my bedroom.”
The deprivations of the formerly affluent Nouveau Poor are real enough, but the
situation of the already poor suggests that they do not necessarily presage a
greener, more harmonious future with a flatter distribution of wealth. There are
no data yet on the effects of the recession on measures of inequality, but
historically the effect of downturns is to increase, not decrease, class
The recession of the ’80s transformed the working class into the working poor,
as manufacturing jobs fled to the third world, forcing American workers into the
low-paying service and retail sector. The current recession is knocking the
working poor down another notch — from low-wage employment and inadequate
housing toward erratic employment and no housing at all. Comfortable people have
long imagined that American poverty is far more luxurious than the third world
variety, but the difference is rapidly narrowing.
Maybe “the economy,” as depicted on CNBC, will revive again, restoring the kinds
of jobs that sustained the working poor, however inadequately, before the
recession. Chances are, though, that they still won’t pay enough to live on, at
least not at any level of safety and dignity. In fact, hourly wage growth, which
had been running at about 4 percent a year, has undergone what the Economic
Policy Institute calls a “dramatic collapse” in the last six months alone. In
good times and grim ones, the misery at the bottom just keeps piling up, like a
bad debt that will eventually come due.
April 2, 2009
The New York Times
By SUSAN SAULNY and KAREN ANN CULLOTTA
ARLINGTON HEIGHTS, Ill. — The public library here had just closed its doors
one evening in December when two homeless men who had been using the stacks as
shelter from the cold got into a fight on the outside steps.
What began as bickering took a violent turn when one of the men pulled out a
knife and stabbed the other six times, leaving him bleeding beside the book
Like libraries across the country, Arlington Heights Memorial had strived to
keep pace with the changing times, ensuring its relevance in the digital age by
becoming something of an indoor town square, and emphasizing that its
money-saving services catered to the community’s needs.
These days, however, community need reaches far beyond reference help — and in
many libraries, it is turning a normally tranquil place into an emotional and
As the national economic crisis has deepened and social services have become
casualties of budget cuts, libraries have come to fill a void for more people,
particularly job-seekers and those who have fallen on hard times. Libraries
across the country are seeing double-digit increases in patronage, often from 10
percent to 30 percent, over previous years.
But in some cities, this new popularity — some would call it overtaxing — is
pushing libraries in directions not seen before, with librarians dealing with
stresses that go far beyond overdue fines and misshelved books. Many say they
feel ill-equipped for the newfound demands of the job, the result of working
with anxious and often depressed patrons who say they have nowhere else to go.
The stresses have become so significant here that a therapist will soon be
counseling library employees.
“I guess I’m not really used to people with tears in their eyes,” said Rosalie
Bork, a reference librarian in Arlington Heights, a well-to-do suburb of
Chicago. “It has been unexpectedly stressful. We feel so anxious to help these
people, and it’s been so emotional for them.”
Urban ills like homelessness have affected libraries in many cities for years,
but librarians here and elsewhere say they are seeing new challenges. They find
people asleep more often at cubicles. Patrons who cannot read or write ask for
help filling out job applications. Some people sit at computers trying to use
the Internet, even though they have no idea what the Internet is.
“A lot of people who would not normally be here are coming in to use the
computers,” said Cynthia Jones, a regional branch manager in St. Louis.
“Adults complain a lot about kids just playing games and you know, ‘I need to do
a résumé, or ‘I need to write, I need some help,’ ” Ms. Jones said. “There’s a
bit of frustration.”
Ms. Jones instructed her staff to tread carefully. “You don’t want to upset
people,” she said. “You don’t know what might set somebody off.”
Paul LeClerc, president of the New York Public Library, said résumé writing had
become a major use of library computers, and every librarian in the system had
received training in how to better assist patrons conduct job searches. The 40
million visits to New York libraries over the past year, he said, is the
greatest ever in a 12-month period.
Here in Arlington Heights, newly homeless patrons are showing up in their
business suits, said Paula Moore, the library’s director.
“They are living in their cars after losing a job they had for a number of
years,” Ms. Moore said.
The American Library Association does not keep statistics on incidents in and
around libraries, but anecdotal evidence from around the country suggests that
some libraries are struggling with their newfound popularity and the social ills
that can come along with it.
In Los Angeles, the police say the Central Public Library has become a magnet
for thieves, and that, excluding shoplifting at stores, there were more thefts
of personal property at the library last year than any other location in central
“We hope things get better,” said Lt. Paul Vernon, a spokesman for the Los
Angeles Police Department, noting the difficulty of policing libraries. “The
library is a place where people tend to congregate, and from a public and
government standpoint, you can’t really restrict people.”
In Sacramento this year, two branches of the public library temporarily stopped
accepting cash as fines for overdue books, after thieves struck three times
since June — in one instance, taking off with a safe filled with money.
In Lynchburg, Va., a gunman shot a man outside the public library on a Monday
afternoon in late January. The victim, who survived, staggered into the library
bleeding and looking for help. Since then, an off-duty police officer has been
hired by the library for extra security.
And in Quincy, Mass., where a man was recently arrested in the library and
charged with assault and battery with a dangerous weapon, among other offenses,
a police officer on beat patrol now walks through the library during operating
Though homelessness is not new to Arlington Heights, security at the library has
been tightened since the stabbing. (The man was charged with attempted murder,
and the victim survived.) Although such violence is unusual, a library patron,
Judi Crawford, said the scene around the building still made her uncomfortable.
“I don’t like my 16-year-old son to study at the library at night anymore,” Ms.
Crawford said. “If he is studying here, I make sure he stays inside until he
sees me pull up, and he can just run out and get in the car.”
Other things have changed at the library here, too.
It has tried to anticipate the new needs of its neighborhood. Next to its
welcome desk, it created a job-search desk, and it has recruited volunteer
professionals to review résumés, set up a support and networking group for the
unemployed, and assembled a Web site offering the best of its online resources.
Officials said the library was experiencing double-digit increases in the
circulation of DVDs, CDs and books on tape. The library’s many children’s
programs and cultural arts events are also filled to capacity, reflecting a
growing demand, linked to the economy, for free entertainment.
With an estimated 2,500 patrons visiting the library every day, employees must
now park at a parking lot at a nearby church.
“When you walk by our new job-search desk, you see people in line and even
waiting on the benches for assistance,” said Ms. Moore, the director of the
Arlington Heights Memorial Library.
A therapist is planning to give a workshop at the library called “Finding Hope
After Losing a Job,” while also offering advice to library employees who are
increasingly being thrust into the role of first responder to emotionally
distraught patrons who view them as confidantes.
“I’ve had people come in and talk for hours,” said Barbara Vlk, a librarian
specializing in business at Arlington Heights. “More and more people are in need
of help and direction.”
March 26, 2009
The New York Times
By JESSE McKINLEY
FRESNO, Calif. — As the operations manager of an outreach
center for the homeless here, Paul Stack is used to seeing people down on their
luck. What he had never seen before was people living in tents and lean-tos on
the railroad lot across from the center.
“They just popped up about 18 months ago,” Mr. Stack said. “One day it was
empty. The next day, there were people living there.”
Like a dozen or so other cities across the nation, Fresno is dealing with an
unhappy déjà vu: the arrival of modern-day Hoovervilles, illegal encampments of
homeless people that are reminiscent, on a far smaller scale, of Depression-era
shantytowns. At his news conference on Tuesday night, President Obama was asked
directly about the tent cities and responded by saying that it was “not
acceptable for children and families to be without a roof over their heads in a
country as wealthy as ours.”
While encampments and street living have always been a part of the landscape in
big cities like Los Angeles and New York, these new tent cities have taken root
— or grown from smaller enclaves of the homeless as more people lose jobs and
housing — in such disparate places as Nashville, Olympia, Wash., and St.
In Seattle, homeless residents in the city’s 100-person encampment call it
Nickelsville, an unflattering reference to the mayor, Greg Nickels. A tent city
in Sacramento prompted Gov. Arnold Schwarzenegger to announce a plan Wednesday
to shift the entire 125-person encampment to a nearby fairground. That came
after a recent visit by “The Oprah Winfrey Show” set off such a news media
stampede that some fed-up homeless people complained of overexposure and said
they just wanted to be left alone.
The problem in Fresno is different in that it is both chronic and largely
outside the national limelight. Homelessness here has long been fed by the ups
and downs in seasonal and subsistence jobs in agriculture, but now the recession
has cast a wider net and drawn in hundreds of the newly homeless — from
hitchhikers to truck drivers to electricians.
“These are able-bodied folks that did day labor, at minimum wage or better, who
were previously able to house themselves based on their income,” said Michael
Stoops, the executive director of the National Coalition for the Homeless, an
advocacy group based in Washington.
The surging number of homeless people in Fresno, a city of 500,000 people, has
been a surprise. City officials say they have three major encampments near
downtown and smaller settlements along two highways. All told, as many 2,000
people are homeless here, according to Gregory Barfield, the city’s homeless
prevention and policy manager, who said that drug use, prostitution and violence
were all too common in the encampments.
“That’s all part of that underground economy,” Mr. Barfield said. “It’s what
happens when a person is trying to survive.”
He said the city planned to begin “triage” on the encampments in the next
several weeks, to determine how many people needed services and permanent
housing. “We’re treating it like any other disaster area,” Mr. Barfield said.
Mr. Barfield took over his newly created position in January, after the county
and city adopted a 10-year plan to address homelessness. A class-action lawsuit
brought on behalf of homeless people against the city and the California
Department of Transportation led to a $2.35 million settlement in 2008, making
money available to about 350 residents who had had their belongings discarded in
sweeps by the city.
The growing encampments led the city to place portable toilets and security
guards near one area known as New Jack City, named after a dark and drug-filled
1991 movie. But that just attracted more homeless people.
“It was just kind of an invitation to move in,” said Mr. Stack, the outreach
On a recent afternoon, nobody seemed thrilled to be living in New Jack City, a
filthy collection of rain- and wind-battered tents in a garbage-strewn lot.
Several weary-looking residents sat on decaying sofas as a pair of pit bulls
chained to a fence howled.
Northwest of New Jack City sits a somewhat less grim encampment. It is sometimes
called Taco Flats or Little Tijuana because of the large number of Latino
residents, many of whom were drawn to Fresno on the promise of agricultural
jobs, which have dried up in the face of the poor economy and a three-year
Guillermo Flores, 32, said he had looked for work in the fields and in fast
food, but had found nothing. For the last eight months, he has collected cans,
recycling them for $5 to $10 a day, and lived in a hand-built, three-room shack,
a home that he takes pride in, with a door, clean sheets on his bed and a bowl
full of fresh apples in his propane-powered kitchen area.
“I just built it because I need it,” said Mr. Flores, as he cooked a dinner of
chili peppers, eggs and onions over a fire. “The only problem I have is the
Dozens of homeless men and women here have found more organized shelter at the
Village of Hope, a collection of 8-by-10-foot storage sheds built by the
nonprofit group Poverello House and overseen by Mr. Stack. Planted in a former
junkyard behind a chain-link fence, each unit contains two cots, sleeping bags
and a solar-powered light.
Doug Brown, a freelance electrical engineer, said he had discovered the Village
of Hope while unemployed a few years back and had returned after losing his job
in October. Mr. Stoops, of the homeless coalition, predicted that the population
at such new Hoovervilles could grow as those without places to live slowly
burned through their options and joined the ranks of the chronically homeless,
many of whom are indigent as a result of illiteracy, alcoholism, mental illness
and drug abuse.
That mix is already evident in a walk around Taco Flats, where Sean Langer, 42,
who lost a trucking job in December and could pass for a soccer dad, lives in
his car in front of a sturdy shanty that is home to Barbara Smith, 41, a crack
addict with a wild cackle for a laugh.
“This is a one-bedroom house,” said Ms. Smith, proudly taking a visitor through
her home built with scrap wood and scavenged two-by-fours. “We got a roof, and
it does not leak.”
During the day, the camp can seem peaceful. American flags fly over some
shanties, and neighbors greet one another. Some feed pets, while others build
fires and chat.
Daniel Kent, a clean-shaven 27-year-old from Oregon, has been living in Taco
Flats for three months after running out of money on a planned hitchhiking trip
to Florida. He did manage to earn $35 a day holding up a going-out-of-business
sign for Mervyn’s until the department store actually went of out business.
Mr. Kent planned to attend a job fair soon, but said he did not completely mind
“We got veterans out here; we got people with heart, proud to be who they are,”
Mr. Kent said. “Regardless of living situations, it doesn’t change the heart.
There’s some good people out here, really good people.”
But the danger after dark is real. Ms. Smith, who lost an eye after being shot
in the face years ago, said she had seen two people killed in New Jack City,
prompting her to move to Taco Flats and try to quit drugs. Her companion, Willie
Mac, 53, a self-described youth minister, said he was “waiting on her to get
herself right with the Lord.”
Ms. Smith said her dream was simple: “To get out of here, get off the street,
have our own home.”
EXTON, Pa. — Casualties of the economic downturn include easy credit, rising
home values, stable retirement investment accounts and 4.4 million jobs.
Some fear that the American dream may be in peril as well.
The aspirations that have defined the American experience — that those who work
hard and play by the rules can get ahead, and that the next generation will have
a better life than this one — have been battered by a devastating recession that
shows few signs of having hit bottom.
"Maybe we were dreaming the American dream, you know what I mean?" says David
McLimans, a steelworker. The mill he works for in suburban Philadelphia
temporarily shut down last week amid the credit crunch. "I'm 63, so I'm not
dreaming it anymore. I have what I have and I hope I can keep what I have, but
my kids, I worry about. They're struggling."
His four grown children have a lot of company. More than 24 million Americans
shifted in 2008 from lives that were "thriving" to ones that were "struggling,"
according to a massive study by Gallup and Healthways, a Tennessee health
management company. Results from its Well-Being Index — including physical and
mental health as well as personal finances and job satisfaction — are being
For the project, Gallup has been surveying about 1,000 people every day except
major holidays since January 2008.
At the start of 2008, as the recession was beginning, slightly more people were
"thriving" than "struggling." By the end of the year, after an economic meltdown
that began with the subprime mortgage crisis, Americans by an overwhelming 20
percentage points were "struggling" rather than "thriving," 58%-38%.
The remaining 4% were "suffering," in more dire straits.
The index categorizes respondents based on how they rate their current lives as
well as their expectations of where they will be in five years. Among those
showing the steepest drop were African Americans, business owners and
executives, and people who were 35-39 years old — a stage in life when many are
building careers, expanding families and buying homes.
Among those with the smallest decline were Hispanics, seniors 65 and older, and
repair workers, whose skills suddenly may be more in demand as Americans try to
make do with what they have.
No group was immune, however. High levels of education and income have protected
many workers during previous downturns, but the Well-Being Index shows declines
in 2008 across all age groups and income levels, among both men and women and in
every major racial and ethnic group.
In Chester County, south of Philadelphia, the downturn has been felt not only by
steelworkers in Coatesville but also investment bankers in Exton and among
immigrants who toil on the mushroom farms in Kennett Square.
"People have lost their jobs and they're in the unemployment lines," says James
Kennedy, the 91-year-old mayor of South Coatesville. Even so, he recalls, the
Great Depression was worse.
"The current recession hits everyone and spares no one," says Andrew Dinniman,
the local state senator and a professor of global studies at West Chester
University of Pennsylvania. "The bottom line is: industrial worker, professional
worker — we're all in this together."
The wide reach of hard times has made it difficult for Americans to use some
traditional strategies to cope.
Get training for a new job? The index shows declines in every occupation, from
business managers and professionals to clerical staff and service workers. Move
to a different part of the country? The percentage of those "thriving" fell by
double digits in the West, South and Midwest and by more than 9 percentage
points in the East.
The findings underscore the enormous task the United States faces in pulling out
of the worst downturn since the Depression and in maintaining the sense of
possibility that has marked the nation since its founding.
Optimism that individuals could reach better days ahead fueled the westward
expansion, waves of innovation and the country's continued draw for immigrants
from around the world.
The concept of the American dream reflects aspirations for the long term that
have endured through good times and bad, but it is not indestructible, says
Claudia Goldin, an economic historian at Harvard.
"What people mean by the 'American dream' is something that is not a snapshot;
it's something that is played out over time and not just in their lifetime, but
the lifetimes of their children," she says.
"It may be impervious to a short-term job loss, to a short-run health problem,
but it's not going to be impervious to a slowdown of the entire economy that
lasts for a very long period of time," especially if traditional gains in
education are stalled.
In a USA TODAY/Gallup Poll taken last week, Americans by about 3-to-1 said they
believed that with hard work they could achieve the American dream. Even so, one
tenet of that dream — faith that the next generation will have a better life
than their parents — is eroding.
Ten years ago, during an economic boom, 71% of Americans said it was likely that
those in the next generation would be better off than their parents.
One year ago, 66% agreed.
Now, 59% do.
The pursuit of happiness
The groundbreaking Gallup-Healthways index makes clear how intertwined
individual lives are with the nation's well-being. Dramatic shifts in the stock
market and the jobless rate often correlated with changes in Americans'
assessments of where their lives stood now and where they would be in the
Consider the Declaration of Independence's assertion of a natural-born right to
The survey lists several emotions, including happiness, and asks if respondents
experienced them the previous day. Weekends tended to have the highest
percentage of those reporting happiness or enjoyment without much stress or
worry — no surprise there — and Thanksgiving was the happiest day of the year,
when 68% were upbeat.
The five days with the lowest levels of happiness all coincided with awful
Just 37% of Americans said they felt a lot of happiness and not a lot of stress
on four downbeat days: Sept. 17, when the Dow fell 449 points; Sept. 29, when
the Dow dropped 778 points and the House rejected President Bush's Wall Street
bailout plan; Nov. 20, when new jobless claims hit the highest level since 1992;
and Dec. 2, one day after the nation officially was declared in recession,
pushing down the Dow by 680 points.
The unhappiest day of all was Dec. 11, when new jobless claims reached a 26-year
high. A record-low 35% of Americans reported that day as a happy one.
For Amy Beers, the past year has been trying.
The 36-year-old woman from Perkasie, in Bucks County, had been on a fast track.
She built a career in direct marketing, worked with an inventor who had
developed a handheld device that could neutralize land mines without detonation,
attended a land-mine conference in Croatia to promote it, then started her own
firm to help local companies develop customer loyalty.
Last year, her business dried up. She tends bar at night to help pay the bills
for her and her 7-year-old son, Zack, while she looks for a job in her field by
"I've gone from corporate America to the top of Comcast's shut-off list," she
says ruefully. "It's been a truly humbling experience, and for a very long time
I was embarrassed not to have a job. You go through the emotional loss. In some
ways, it's like mourning. I've had those doubts and depression: 'Oh my goodness,
my life is falling apart in front of my eyes!'
"But at the end of the day, I know who I am. I know that this isn't permanent,
and I really have belief that things are going to get better."
Even Beers' job at a Bennigan's restaurant in Montgomeryville is an opportunity,
she says. The traveling business executives who stay in the adjoining hotel and
come in for a nightcap might have a job at their companies.
Her pitch: "Hi, is anyone out there looking for an employee?"
Obama: Keep 'the dream alive'
President Obama regularly talks about the American dream as threatened and its
restoration as a central goal. "We have begun the essential work of keeping the
American dream alive in our time," he said when he signed the $787 billion
White House press secretary Robert Gibbs ticks off what the White House sees as
elements of the American dream: "That you could get a job that pays a living
wage, that if you got sick you wouldn't go bankrupt, that you don't have to be
rich to send your kids to college, that you could have a secure retirement."
Safire's New Political Dictionary puts it this way: "The American System is
considered the skeleton and the American Dream the soul of the American body
politic." Author William Safire adds that the phrase "defies definition as much
as it invites discussion."
Karen Beltran's family epitomizes one classic version of the American dream.
Her father came to southern Pennsylvania from Mexico to work on the mushroom
farms and as a dishwasher, eventually bringing his wife and their two young
daughters here. At first illegal immigrants, Jose and Martha Beltran eventually
gained legal status and last month became U.S. citizens.
An organization in Kennett Square called La Comunidad Hispana helped them gain
their high-school equivalency diplomas. They own their home now — he is a
mechanic; she is employed at a potato-chip factory — and have sent their two
older daughters to college.
Karen, 25, who graduated from Penn State in 2005, now works as a social worker
at the same community center that helped them.
The downturn has postponed her father's hopes of moving to a new job and reduced
their ability to contribute toward college expenses for their youngest,
American-born daughter, who is now in high school. Still, ask Karen Beltran
about the American dream and she plays down financial strains to boast about how
close-knit her family remains: "We're still together."
In the face of a faltering economy, some analysts say, Americans may be
redefining some fundamental ambitions. A study sponsored by Northwestern Mutual
and being released today asked Americans to define "success." Topping the list
were spending time with family, having a good relationship with a spouse or
partner, being healthy and maintaining a good work/life balance.
Ranked near the bottom were such material goals as owning "the home of your
dreams" and earning a high income.
Still, three of four in the nationwide poll ranked financial security as
important — and only 12% said they felt secure in their finances these days.
Chris Connell, 50, owner of the Pig & Whistle Deli in Havertown, in
Pennsylvania's Delaware County, has cut back on hours for his employees and
stopped drawing a salary for himself as he struggles to deal with a cash-flow
His wife's paycheck as an emergency-room nurse is keeping the family afloat for
Connell feels confident the economy will be better by the time his 11-year-old
twin daughters, head into the workforce, but he worries about his three older
children, including two who are now in college.
"The twins, we don't want to scare them. We don't want them to think someone is
going to come along and take the house away," he says. "But we at least want to
let them know that things are very, very tight and we have to work at this
"I do still want the same things for them. Never going to stop the dream,
absolutely. Never lower my standard of dreaming."
December 25, 2008
The New York Times
By STEVEN GREENHOUSE
Al Meyerhoff, a leading labor, environmental and civil rights lawyer who
brought a landmark case to stop sweatshop conditions for 30,000 workers on the
Pacific island of Saipan, died on Sunday in Los Angeles, where he lived. He was
The cause was complications of leukemia, his wife, Marcia Brandwynne, said.
Mr. Meyerhoff, a loud, friendly bear of a man with a thick mane of tousled hair,
rose to prominence in several legal fields. As a civil rights litigator, he
successfully challenged a California law that prevented illegal immigrant
children from attending public school. As an environmental lawyer — he worked
for the Natural Resources Defense Council for 17 years — he challenged the
continued use of cancer-causing pesticides.
As a labor lawyer, he was co-lead counsel in suing Gap, Nordstrom, Ralph Lauren
and 20 other retailers, accused of obtaining garments from Saipan factories that
used guard dogs and had barbed-wire fences. Many of the workers, some of whom
Mr. Meyerhoff said were indentured servants, were immigrants from China who had
paid several thousand dollars to work in Saipan and were forced to toil 12 hours
a day, seven days a week, often without overtime pay.
“Saipan is America’s worst sweatshop,” Mr. Meyerhoff said in an interview with
The New York Times in 1999, referring to the island in the Northern Marianas
Islands, an American commonwealth near the Philippines. The lawsuit was one of
the most ambitious ever brought against sweatshops, sending a signal to
sweatshop owners in dozens of countries to improve conditions.
As part of the $20 million settlement, the apparel companies agreed to pay back
wages, follow a code of workplace conduct and pay for an independent monitor to
inspect the Saipan factories. Mr. Meyerhoff waived any fees.
Over the decades, Mr. Meyerhoff produced numerous op-ed articles for The Los
Angeles Times and The Huffington Post Web site, many letters in The New York
Times and The Washington Post and articles in law journals and environmental
magazines. He also testified 50 times before Congressional committees.
“I was meant to do this work,” Mr. Meyerhoff told online magazine of the Cornell
University Law School this year.
Albert Henry Meyerhoff Jr. was born in Ellington, Conn., on Sept. 20, 1947. He
told the Cornell Web magazine that as a boy he was harassed by bullies and that
as a result he developed “an active dislike of the abuse of power.”
Mr. Meyerhoff graduated from the University of Connecticut in 1969 and from the
Cornell law school in 1972. After law school, he turned down a high-paying
corporate law job to take a $60-a-week position with California Rural Legal
Assistance, which represented migrant workers and the rural poor. In one
lawsuit, he challenged the University of California over its underwriting of
research on farm mechanization, saying it hurt farm workers and family farms.
In 1981 Mr. Meyerhoff joined the Natural Resources Defense Council and became
director of its public health program. He helped pressure the chemical industry
to adopt tougher standards on pesticides by invoking a rarely used amendment
under the Food, Drug and Cosmetic Act that prohibited the use of animal
carcinogens in processed foods. His litigation helped persuade the industry to
ban several dozen carcinogenic pesticides.
In 1988, he joined Coughlin Stoia, a class action law firm, from which he
brought the Saipan lawsuit, sued Enron and challenged Mexican cross-border
trucking, asserting that it violated United States health and safety standards.
Besides his wife, he is survived by his daughter, Leah, of New York City, his
mother, Ruth, of Ellington, Conn., and his brothers, George of Van Nuys, Calif.,
and Alan of Panama City, Fla.
“He was a warrior against the chemical industry,” Frances Beinecke, president of
the N.R.D.C., said of Mr. Meyerhoff. “He was a champion of the underserved. He
fought long and hard to make the world a safer place for farm workers, for kids,
for people working in factories and for people living in poverty who couldn’t
Largely missing from the discussion about the faltering economy is the
recession’s impact on the 37 million Americans who are already living at or
below the poverty line — and the millions more who will inevitably join their
ranks as the downturn worsens.
Poverty and joblessness go hand in hand. If unemployment rises in the coming
year from today’s 6.5 percent to 9 percent, as some analysts predict, another
7.5 million to 10.3 million people could become poor, according to a new study
by the Center on Budget and Policy Priorities.
The prospect of nearly 50 million Americans in poverty is even more daunting
when one considers the holes that have been punched in the safety net over the
last quarter-century. Since the Reagan administration, the federal government
has steadily reduced its role in curtailing poverty, or even in coordinating
state and local efforts to help alleviate it.
Meanwhile, most states reduced or eliminated cash assistance for single poor
adults and limited access to food stamps. Stricter eligibility requirements keep
thousands of people from collecting jobless benefits. Facing budget deficits,
cash-strapped states will be tempted to cut social programs even more. The
experience of being poor in America, never easy, will soon become even more
difficult for more people — unless Congress boosts food stamps, modernizes the
unemployment compensation system and takes other steps to strengthen the ability
of the federal and state governments to help the millions who will need
This is all the more important since the current poverty statistics
significantly understate reality. The federal yardstick used to gauge poverty is
severely outdated, giving too much weight to some factors in a typical family
budget, like the cost of food, and not counting others, like the cost of child
care and out-of-pocket medical costs. It also doesn’t consider regional
differences in the cost of living and doesn’t include the cost of child care,
taxes or the value of noncash benefits such as food stamps or tax credits.
The National Academy of Sciences years ago recommended a new measure of poverty
that takes such variables into account. But the revised framework has never been
adopted because, among other reasons, it would add several million more people
to the ranks of the poor.
If there was ever a time for more precise measurements, it is now. Better
numbers will produce a better understanding of poverty, and will enhance
Washington’s ability to respond in the difficult days ahead.
height of the Great Depression, industry convinced President Franklin Roosevelt
and Congress to enact a law allowing companies to collude to drive up prices. To
balance out this giveaway to big business, the law gave workers something that
they had long been fighting for: the first federal minimum wage.
This week marks the 75th anniversary of the National Industrial Recovery Act —
which Roosevelt signed June 16, 1933, at the end of his famous first 100 days —
and of the federal minimum wage. It was a grudging, almost accidental win, and
the road since then has been rocky. Advocates for low-income workers have had a
hard time keeping the minimum wage at a reasonable level and passing other laws
necessary to fulfill the original goal: ensuring that people who work hard can
achieve a reasonable standard of living.
When progressives set out to establish a national minimum wage, they faced stiff
opposition. Industry insisted that government should not interfere with its
relations with its employees. Organized labor was also opposed. (“If you give
them something for nothing,” one labor leader objected, “they won’t join the
union.”) The pro-business Supreme Court presented the biggest obstacle, ruling
that minimum wages were unconstitutional.
The Depression provided an opening. Progressives injected minimum-wage and
maximum-hours provisions into the NIRA. These provisions were technically
voluntary, but if companies wanted the government to approve the minimum prices
and production limits they desperately wanted, they had to agree to minimum
wages. Most industries adopted a minimum hourly wage of at least 40 cents.
The Supreme Court declared the NIRA unconstitutional, but the idea of a federal
minimum wage had taken hold. In 1938, Congress passed the Fair Labor Standards
Act — which a more progressive Supreme Court upheld — creating a mandatory
federal minimum wage.
The new law was enormously effective: within a year, it brought millions of
low-paid workers up to a wage of 30 cents an hour. It also had major weaknesses,
notably that it was not indexed to inflation. Congress has to raise it, which
leaves low-income workers at the mercy of politics.
The minimum wage continues to have powerful enemies. Businesses that pay low
wages lobby strongly against increases, arguing that they cause jobs to
disappear. The Bush administration has been hostile. When Elaine Chao was
nominated to be the next labor secretary, she called for states to be able to
opt out of the federal minimum wage — which would destroy the whole idea of a
national minimum wage.
Last year, the new Democratic-controlled Congress raised the minimum wage for
the first time in 10 years. The increase was a real victory. But even with it,
the minimum wage — which reaches $7.25 an hour in 2009 — is still far below
where it was in the 1960s, in real dollars. A family of three earning the 2009
minimum wage would still be well below the federal poverty line. And because the
minimum wage remains unindexed, low-wage workers will fall even further behind
before Congress rouses itself to grant another increase.
Economists, who are more sophisticated today than they were in 1933, now place
more emphasis on raising the Earned Income Tax Credit. Because it is tied to
family income rather than wage levels, the tax credit can be targeted precisely
at workers who need it most. There has also, understandably, been considerable
focus this year on trying to provide the working poor — and everyone else — with
affordable health care.
In this year’s “change” election, more attention should be paid to the working
poor, who were hit especially hard by the economic policies of the last eight
years. There should be talk of tax credits and health care — and the minimum
wage. Advocates for the working poor argue for a better raise than the one
Congress passed last year — perhaps one set at half the national average hourly
wage, which would bring it roughly to where it was in the 1960s, and tie it to
the rate of inflation.
The minimum wage can play a vital role in lifting hard-working families above
the poverty line. But as Roosevelt understood, it is also about something
larger: what kind of country America wants to be. “A self-supporting and
self-respecting democracy,” he said in the Congressional message that
accompanied the Fair Labor Standards Act, can plead “no economic reason for
chiseling workers’ wages.”
WASHINGTON (Reuters) - The gap between rich and poor in many states has
broadened at a quickening pace since the last U.S. recession, which could make
it difficult for low-income families to weather the current economic downturn,
according to a report issued Wednesday.
Since the late 1990's average incomes have declined 2.5 percent for families on
the bottom fifth of the country's economic ladder, while incomes have increased
9.1 percent for families on the top fifth, said the report from the
liberal-leaning Center on Budget and Policy Priorities and Economic Policy
The result is that the average incomes of the top five percent of families are
12 times the average incomes of the bottom 20 percent.
"The report's bottom line is that since the late 1980's income gaps widened in
37 states and have not narrowed in any states," said Jared Bernstein, one of the
report's authors. "In fact, we've found that the trend toward growing inequality
has accelerated during this decade."
Meanwhile, the middle class has remained virtually stagnant, with average
incomes growing by just 1.3 percent in nearly eight years, the report said.
The report drew from 20 years of U.S. Census Bureau data collected from 1987
through 2006 on post-federal tax changes in real incomes, and is one of the few
to record income inequality on a state-by-state basis. It did not include
capital gains and losses in its calculations.
The technology boom and economic expansion of the late 1990's put many
lower-income families in better positions at the start of the 2001 economic
downturn than they are in now, when many economists say a downturn has begun,
Elizabeth McNichol, another author of the report, said wages grew before the
2001 recession, but they did not increase much during the past several years of
recovery. In a conference call with reporters, she pointed to Connecticut, which
has had the greatest increase in income inequality since the 1980's, according
to the report.
In Connecticut, incomes of the wealthiest 20 percent are eight times those of
the poorest 20 percent, according to the report. New York has the greatest
disparity, with incomes of the top 20 percent 8.7 times the bottom ones,
followed by Alabama, where the top are 8.5 times the bottom.
Only recently has Connecticut begun recovering from the downturn of six years
ago, according to Douglas Hall, associate director of research for Connecticut
Voices for Children, who participated in the call. By August 2007 the state
gained enough jobs to make up for those lost in the last recession, he said, but
now it is losing them again.
Even though the study did not include capital gains, Bernstein said the effects
of booming wealth on Wall Street for most of this decade did contribute to the
spread between incomes, showing up as higher salaries.
Some have criticized income inequality studies. Writing for the conservative
Cato Institute last year, Alan Reynolds said tax law changes skew the numbers.
For example, executives once took stock options that were taxed as capital gains
but now take nonqualified stock options that are taxed as salaries.
Bernstein said that if the report had considered capital gains, the disparities
would have likely been greater, as capital gains generally affect higher-income
(Reporting by Lisa Lambert, Editing by Chizu Nomiyama)
NAPLES, Fla. — In the luxurious neighborhood
of Port Royal, home to the likes of mystery writer Janet Evanovich and mutual
fund magnate John Donahue, homeowners are insulated from many of life's daily
cares — including the real estate slump. This year, 15 estates in the country
club community have sold for $5 million to $16 million. But in the rest of
Collier County, home sales have plunged a gut-wrenching 50%.
Elsewhere across the USA, the megarich are
still snapping up homes in such enclaves as Vail, Colo., and Beverly Hills, and
often paying cash. Sales of homes above $5 million are up 11% this year and are
on track to break another record, according to an analysis by DataQuick
Information Systems for USA TODAY. As for the national average, by contrast,
sales are off about 8%. Prices fell in September for a second-consecutive month,
partly because they'd soared beyond the reach of many.
The divergent housing trends are a sign of how a widening wealth gap is
reshaping U.S. neighborhoods. In Naples, as in other areas, the consequences of
the growing divide between rich and working class are increasingly visible.
Residents here face "Not in My Backyard" resistance to affordable housing, so
workers live in distant suburbs and towns, roads are jammed, and labor shortages
unsettle the economy.
In Naples, about 130 homes over $5 million are for sale. That's more homes than
the county will let Habitat for Humanity build this year.
"There's the rich, and then there's everything else, in terms of the economy but
also in terms of social class," says Edward Wolff, a New York University
professor and expert on the wealth gap. He likens it to the social divisions of
the 1890s, adding: "If you don't counteract the extreme inequality trends, I see
some social upheaval coming. That's my worst fear."
The disparity in wealth could draw the scrutiny of the new Congress, now led by
Democrats. Rep. Barney Frank, D-Mass., who will head the House Financial
Services Committee, has said that addressing affordable housing is a top
Residents in Naples will tell you there's little friction between the haves and
have-nots. But if you want to draw 500 people to a public meeting, just put
affordable housing on the agenda, says Cormac Giblin, manager of the county's
housing and grants office.
Bill Earls, a real estate broker who lives in Port Royal, knows the area needs
affordable housing but says, "In the real high-end part of Naples, we don't want
to see those 10,000 rooftops going in. We don't want to see our streets clogged.
... I don't want to see the Chevy Spectrums and Ford Focuses on our highways. I
know we need them, but there's got to be a balance."
That attitude is not lost on Ezequiel Quiroz, a 27-year-old tow truck driver.
Quiroz works six days a week to keep up with his mortgage in the working-class
neighborhood of Golden Gate, 35 miles from the chic section of Naples.
'They make you feel like you're nothing'
Asked if he's frustrated by the growing gap between rich and poor, he says: "No,
but sometimes it bothers me that a lot of rich people look at you like you're
nothing because you're not driving a BMW or expensive car. They make you feel
like you're nothing."
He's not the only one who feels shunned.
"Unfortunately, (rich residents) don't want people like me, a working-class
person, living in their backyard," says Brian Settle, who works for NCH health
care System, which runs the two hospitals in Naples. "They don't want
firefighters, teachers. I don't understand that, because we are the
Settle says more than two dozen people have turned down jobs at the hospitals in
the past year because they couldn't afford to live in the area, and 140
employees have moved out of the area.
The company rents 200 apartments for the nurses who work between October and
May, when the population of Naples swells by nearly 50% with the addition of
"snowbirds," who live up North in summer.
"Naples is a beautiful place," Settle says, "but we have to provide
reasonable-priced workforce housing, or the infrastructure of our community will
The state of Florida estimates that Collier County, which includes Naples, has a
shortage of at least 35,000 affordable homes. That's the estimated number of
residents who spend 30% or more of their income on housing. It doesn't include
the thousands who commute from the surrounding counties because they can't
afford to live in Naples.
The lack of affordable housing in Naples has been magnified by growth —
population has doubled in the past 15 years, to about 300,000 — and the real
estate boom. Investors and vacation-home buyers helped drive up the median home
price to $446,900, second-highest in Florida after the Keys. Though prices are
falling a little, they're still too high for most people in the area. More than
80% of the workforce is employed in the four lowest-paying industries:
construction, retail, agriculture and services (pool cleaners, for instance, and
golf instructors). Median income for a family of four: $66,100. That would
qualify you for only about a $350,000 house, nearly $100,000 below the median.
House rich, cash poor
Homeownership is the No. 1 source of wealth-building for middle and lower
classes, and the housing boom made millions of homeowners "house rich." But over
the past five years, once you account for inflation, incomes for these groups
are actually down. Many low- and moderate-income families are spending home
equity just to maintain their lifestyles.
Nationwide, nearly 90% of homeowners who refinanced homes from July through
September took cash out of their property — the highest level in 16 years,
according to Freddie Mac.
And while rising home prices mean rising wealth, they also mean larger
mortgages. For the middle class, the ratio of debt to net worth has nearly
doubled since 2001 and is now in dangerous territory.
"The figures are astonishing," says Wolff, the NYU professor.
The number of homeowners who spend 30% or more of their income on housing has
jumped to 35%, up from 27% in 2000, leaving little or nothing left to save. By
contrast, incomes for the rich are rising, protecting them from the downsides of
real estate cycles.
"We've seen the prestige market go up when the rest of the market is going down,
and we've seen that market decline when the rest of the market was cooking,"
says John Karevoll, analyst with DataQuick. "These people are trying to figure
out the best place to park their assets. They are evaluating tax considerations,
capital gains considerations and return on investment. They are not exposed to
the normal real estate cycle like the rest of us."
There are three homes for sale in the USA for $100 million or more: Donald
Trump's estate ($125 million) in Palm Beach, Fla.; one near Aspen, Colo., owned
by Saudi Arabian diplomat Prince Bandar bin Sultan ($135 million); and a third
in Lake Tahoe, Calif. ($100 million), owned by Joel Horowitz, co-founder of
And in 24 states and the District of Columbia, the top 20 properties on the
market are all priced at $5 million or higher, according to the recently
published magazine Unique Homes: State by State.
"We've had probably one of the strongest high-end runs we've ever had," says
Stephen Shapiro of the Westside Estate Agency in Beverly Hills. He laments that
there aren't enough homes over $7.5 million for sale. "There's a dramatic lack
of inventory being chased by a lot of people with money."
'Not in my backyard' politics
Each year, Habitat for Humanity in Collier County is inundated by about 1,500
applications from low-income families seeking the American dream. The non-profit
has built about 100 homes a year in the area for the past five years, more than
in any other county in the USA.
"The biggest impediment is the local politics," says Sam Durso, CEO of the local
chapter of Habitat for Humanity. "The 'not in my backyard' attitude is what
keeps people from building more affordable housing. We could build two to three
times what we do, but we can't get enough land rezoned."
Dee Proehl, her longtime partner and their two children will move in January
into a Habitat home, six miles from Port Royal, where she cleans several
mansions. Her partner, George Cervantes, 41, is a forklift driver and dock
master at Cedar Bay Yacht Club. Together, they make under $42,000 a year, and
she has no health insurance.
"There's people who own businesses and own homes, and there's the people who
work for them — there's no in between," says Proehl, 42. "It's frustrating. They
want us here. They want us to do the work, but they don't want us to live here."
Yet some wealthier residents are starting to feel that the lack of affordable
housing is eroding their quality of life. Roads at rush hour look like parking
lots. Restaurant service is slower. Checkout lines are longer because businesses
can't find enough people willing to work here. And companies that raise wages to
lure job candidates usually pass the cost on to customers.
"For years it's been, 'Yeah, there's a problem, but it doesn't affect me
personally,' " says Giblin, of the county's housing and grants office. "What
we're finding now is, it's starting to affect the normal routines of the people
who live in Naples and Collier County in terms of getting quality services."
Efforts to encourage the building of affordable housing have had limited
success. The county lets developers build more homes per acre if they include
affordable housing as part of the project. Over five years, Collier County has
added 5,000 affordably priced homes, including about 500 homes built by Habitat
County planners are considering changing the zoning to force developers to
include some portion of workforce housing. That's likely to meet with fierce
opposition from builders and residents.
Homeowners in Collier County pay the lowest property taxes in Florida. They want
new residents to cover the cost burden that new homes impose on existing
schools, roads and other facilities. So the county hits builders with a one-time
charge of $30,000 in "impact fees" per house — the highest in the state. Those
extra costs make it all but impossible for a traditional developer to build a
home at a price a working-class family could afford.
"When you go to Kmart, and you've got 20 cash registers but only two are open,
it's not because Kmart wants to have the line 15-people deep," Giblin says.
"It's because they can't find people to work. It's starting to hit people in the