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Posts Tagged ‘middle class’

The Mismeasurement of Poverty in America-How the Numbers are Skewed

September 13, 2011 11 comments

 

Is This All?

 

The official poverty rate nationwide has risen to 15.1%, a rate high enough to generate some mainstream ink. According to various news agencies, this is the highest rate since 1983. But, if the poverty rate were known, it would be closer to one in three than one in six, and be the highest since the last depression ended with the entry of the United States into the Second World War.

The poverty rate is set as a multiplier of a “thrifty food basket”, a method implemented in 1962. The method has not changed since then, but everything else has. The poverty line for a family of four is $22,314. For a single person it is $10,830. It is on this basis that I make my claim that the poverty line is set too low, and that the poverty rate is grossly understated.

Let’s look more closely at these figures. For a single person, the official figure breaks down to $902.50 per month. A room in a house is at least $350 in most areas, and closer to $550 in larger urban areas that may have more income opportunities.  So let’s say $450. Food costs to meet the most basic need for sustenance is about $200. That leaves $350 to cover transportation, phone, medical expenses, utilities, clothing, laundry, and sundries. It is clear that meeting even these basic needs cannot be done on this budget. The situation is equally dire for a family of four, whose poverty level income amounts to $1859.50 a month. A family of four must rent a house for about $1000 a month. It will take about $400 to feed the family at a basic level of nutrition. This leaves about $400 dollars for all other expenses. Again, it can’t be done. The food cost may be mitigated by food stamps, but the calculation for the amount is deeply skewed. If an applicant has any income at all the amount of assistance goes down precipitously. Some states also have low income medical care available but these programs are getting squeezed as tax revenues drop. And, they too only provide the bare bones in care. Many have died for lack of decent medical care.

So, how much does it take to live a basic life in America, and where should the poverty line be set to reflect reality? For one person, it should be at about $1800 a month, or $21600. About what it is four a family of four today. And for the family, it should be in the neighborhood of $70,000 a year just to make ends meet, and to provide the children in the family with a basic foundation of good health.

So, what is the true poverty rate? The median income for a family of four was $67,000, which means that half of all families fell below that level.  Using that figure alone, my estimate of one in three is reasonable. This is the story that should be shouted from the rooftops throughout the land. The reason why it is not is grossly political and is tied to the powerful elite class that dominates the public discourse. That is the subject for a later post.These are the numbers. The actual human misery concealed in the numbers is immeasurable.

My Adventure in the “Rich World”

July 20, 2011 5 comments

It’s been awhile since I posted, and here is why: The first stop on my latest journey was New York City’s Upper East Side, where I visited certain people who are close to me and whom I will not mention by name. It was a difficult trip, but an enlightening one. The Upper East Side is like a little village where nothing much ever happens, the atmosphere is sterile, and most of the human interaction is between the very rich and their servants.

My hosts live on the thirty forth floor of a building that overlooks the east river. Because many diplomats live in the building all residents must be vetted before they move in. Dry-cleaning is picked up and delivered. The building has it’s own water system and security force. In case of “civil unrest” it will become a fortress.

We sat at one of the many small, luxuries, and entirely predictable little bistros that dot the neighborhood. Over a lovely salmon and a glass of Pinot my hosts confessed their dismay at the thought that I advocate wealth and income redistribution, an economic policy usually associated with the communist revolution. What I wanted to say, but didn’t, is that I too am against the redistribution of wealth as it has actually occurred. Since the “Reagan Revolution” of the 1980s the redistribution of wealth UPWARDS has been extreme and unrelenting, and we (the middle class) would like our money back.

The conversation turned to taxes, particularly the theory behind taxing or failing to tax the uber-rich at an appropriate rate. My host asked me what income level I thought of as being “rich”. As in, rich enough to pay more. I replied that most people in this country, all of the millions that make around twenty thousand a year, if they are “lucky” enough to still be working, would like say that $250,000 a year is the cut. But, I said, I understand that a person of this income feels themselves to be only comfortably middle class. I understand that people in this demographic have big expenses, that they feel inferior to the “truly rich” whose shadow they live under. So, could we agree that a person making ONE MILLION a year was rich enough to pay a larger share in a system of progressive taxation? I got no real answer as the conversation trailed off in the stifling summer air.

I then tackled share holder primacy and the fact that Wall Street doesn’t actually produce any wealth after the first offering of stock, but is rather a large liquid pool of wealth that allows the “owners” to skim the cream from the top in the form of profits, profits gained by stepping on the backs of all other people, other species, and the health of the earth itself. That dog didn’t hunt either, not in that company.

I put off writing about this for months. Publishing it will not increase my popularity in my family. Finally I decided that if I am going to go forth with this project, which I believe in more ever day as I watch the depression deepen around me, I just have to stand in my truth. I didn’t make this world, I just write about it with as much clarity as I can find. So, dear reader, expect the rest of the story soon, now that the log jam in my mind has been broken.

The Depression is Lumpy

May 16, 2011 4 comments

Depression? It Depends on Where you Live

Most of the time, when we speak of the economy, our language seems to represent it as a sort of national monolith. As if we all experienced the current situation the same way. Nothing could be further from the truth. In fact there are several economies in America, and which one you are a member of will determine whether you are living through a depression, a recovery, or the one of the biggest booms of all time.

The Recovery

For a certain group of people in the upper middle and upper class, there was a fairly steep recession, a terrible scare in the market, and then, for the last couple of years, a slow but steady recovery as stock market prices climbed back to their pre-crash condition. Though this group still suffers from the general malaise of the real estate market, in general they are out there buying things again.

Let the Good Times Roll

Another very small group of 1%ers made obscene profits from the housing and market crashes. These self-styled “masters of the universe” have grown fat on fraud and the misery of others, and have no intention of stopping now. Paying no taxes and avoiding the prison sentences they justly deserve, they are, at this very moment, engaging in further speculation of the type that fuels inflation that none of the rest of us can afford, and causes grave harm to society.

Main Street

For the rest of us, it depends on where you live. When we see articles in print and online touting the “recovery” it is this fact that they rely on. Statistics are easy enough to skew. What we focus on determines what we see. That is why the employment numbers posted by the government are so confusing and at times misleading. It is common knowledge that the official definition of the word “unemployed” serves to skew the figures right from the start. Add to that the excitement whipped up over the job creation figures when many of these new jobs are not at all comparable to the old (lost) jobs, and we have a very murky picture.  It is true that if you happen to live in a state with comparatively low unemployment you probably aren’t catching the worst of the depression. But what would happen if we all moved to these few states?

The Rest of Us

For all of us regular citizens that have the bad luck to be denizens of the more unlucky regions of the country, such as the south, the rust belt, or the whole state of California, the depression is an obvious daily fact of life. In fact, sinse I began using the term “depression” about three years ago, not one person from any of these places has challenged me. I think of this every time I see a headline once again proclaiming that we are in “recovery” from the “great recession”.

The Poor

This final group has been living in depressed conditions forever. The reasons that a certain number of Americans have always lived in poverty are complex, but with enough will on our part it would be possible to reduce these numbers to near zero. Instead, under the flawed logic of supply side economics, that great and cruel experiment in social engineering brought to you by Ronald Reagan and the billionaires club, the number living in misery is actually growing. Soon it won’t matter what state you live in.

The Inflation

April 26, 2011 1 comment

The Inflation Special

I’ve been taking a break from the road for the last three weeks and plan on another ten days or so. The rhythm of life is very different here, but the constant concern with controlling expenses remains the same. I have this in common with at least eighty percent of my fellow citizens. No one but the very rich feel secure in the current economic climate. And the inflation is making it much worse.

During the last depression there was no inflation. But now the price of crude oil is driving up the cost of everything, especially fuel and food. This is tantamount to a very regressive tax, levied not by government, which would presumably give us back the money in the form of programs, but rather by private companies. And, to add insult to injury, the runaway price of oil is being driven not by the invisible hand of the market responding to a shortage but instead by un-regulated Wall Street speculators.

I call it a regressive tax because strong inflation, especially in gasoline, heating fuel, and food, always hurts the poor much more than the rich. A year ago I could buy three bags of basic groceries for about thirty dollars in my local (somewhat upscale but competitive if I shop right) market. Now the same three bags is about forty five dollars. If I don’t have it I must buy less food. The beans and potatoes stay in cart, but the fresh strawberries are traded for a can of pears. A whole chicken will make three meals for two people. The white eggs are a dollar cheaper than the favored brown eggs. I really must get chickens again. I could go to a known discount outlet, but I would have to drive further. Gas is over four dollars a gallon. This cruel calculus is my constant companion. Usually there isn’t quite enough and sometimes there is a dangerous shortfall. And I am lucky because I live in a semi-rural county with a ten month growing season. In the wastelands of the inner city and the rust belt it is so much worse…

Detroit is Misunderstood

April 12, 2011 3 comments



The Spirit of Detroit

When I arrived in Detroit I had, like most Americans, many misconceptions. The first thing I noticed as my cousin drove me through the downtown area, then along Jefferson Avenue, and then out to her suburb, was what a beautiful old city Detroit is. It was founded by the French in 1701 and is the second oldest city in the United States, after Saint Augustine in Florida. Many of the buildings now standing were built in the 1920s and 1930s and have gorgeous art deco architecture. Once the fourth largest city in the nation, Detroit had a storied history during prohibition due to its proximity to Canada. As the auto industry grew the people of Detroit became prosperous. Midwestern money, mostly from Chicago and Detroit built the Los Angeles we know today. The Big Three were very important in creating the American Middle Class, which is now on life support.

Yes, there are ruins, and yes, the city has been hit hard once in the sixties and seventies and again in this most recent

Some Ruins

economic crisis and the ensuing depression. But, there is also much reason to love Detroit and to work for a renewal and a return to prosperity. Long stretches of wasteland and ruins are punctuated by thriving areas where the more well-heeled Detroiters watch sports, dine on fine food, and drink at their favorite watering holes. And even in the wasteland there are signs of life. I plan on returning to the area in June to see the gardens that are being cultivated in those beleaguered areas.

What happened here in the time span from 2004 to 2008 should have been a wake-up call to members of the middle class everywhere. But not many saw what any of this had to do with them. Very few connected the dots until those weeks at the end of 2008 when we all watched in horror as Wall Street went tumbling down. Of course Wall Street was bailed out by our tax dollars and is back to business as usual, while Main Street sags under the weight of what appears to be just the beginning of a long depression.

Most people love the place they were raised in and that they call home. Detroit is no exception. There has been no poison rain, no salted earth, no nuclear disaster here. Just a string of economic decisions, by companies, governments and private citizens that have caused an entire region to lose economic viability. If this slow motion catastrophe has happened here, in this beautiful, old, once prosperous city, how can any of us feel truly secure?

 

Madison Wisconsin- The Protest Continues

March 22, 2011 3 comments

Capitol Square

I arrived in Madison WI on Saturday March 19th. When I got to Capital Square there were several hundred protesters walking around the Capitol Building. This is a small number compared to the week before, when at least 200,000 people had descended upon the capitol to welcome the 14 senators who had fled the state several weeks earlier to prevent Governor Walker’s union busting bill from being passed. They left because the GOP dominated senate still need them to create the necessary quorum for a vote on any bill that is primarily fiscal in nature. In the end, Walker had tried to do an end run by saying that the “Budget Repair Bill” had nothing to do with money. So the senate passed the bill without the 14 and without the required 24 hour notice. There was an immediate legal challenge which the governor lost and has now appealed. Now focus is on recalling him and his cronies.

But, even with fewer numbers the signs of protest were everywhere, and the protesters themselves were filling up every café and bar as they ended their day with some hard earned refreshment.

At that point I had checked into the local hostel, and though I no longer had three days of road grime on me I still had not slept in some time. The moon was full that night, and I decided to go find some food. The first people I met were a couple of local progressives that had been here for the whole thing. I will never forget sitting there at the Old Fashioned across from the capitol as the sun went down. They bought me a couple of beers and shared their dinner with me as they explained some of the fine points of Wisconsin politics. I can’t remember everything we discussed, but I do remember feeling so much better after a hard three day ride. Also, I learned that the place I needed to go was Williams Street (Willy to the locals) and there I would find a great thrift store, a food co-op, and plenty of good coffee.

Everywhere I go in this town people are talking about this. I asked a woman in a bar what her favorite thing was about the protests. She replied that it was the amazing sense of community. For several weeks there had been a little city

Everywhere There Are Signs

within a city in Capitol Square. People from all over the world, including Egypt, were sending food for the protesters. An amazing gift economy sprang up. For her, it was the community. But her friend had a different idea. He said he loved it that no matter where you went in town, everyone was taking part, even as they went about the mundane business of living. If you saw someone taking out the trash, they would be wearing a recall Walker t-Shirt. A baby stroller passing you miles from the square would be sporting a Kill the Bill sign. There were and are signs everywhere.

A bartender at a brew-pub across the street from the hostel told me about the day Walker pulled the skullduggery. Everyone was getting ready to go collect signatures for the recall effort when he got a tweet to get to the square right away. By the time he arrived there were 10,000 people. The capitol building is supposed to be the people’s house. It is supposed to be open to the public. In the first several weeks of the protest people had been sleeping inside the building. Then the governor had ordered the building cleared for “cleaning” and pushed everyone out. Now, people were pushing back in again. The police, whose sympathies were clearly with the protesters, would leave one entrance unguarded as they rushed to another. Many officers would change in to protest t-shirts as soon as they got off shift. Now, all but one entrance to the building is nailed shut.

Don't Mess with the Badger

Yesterday I walked up to Willy Street and finally got completely full at the salad bar at the food co-op. I got into a conversation with a substitute teacher who filled me in on the process for doing a recall. As the conversation developed we began to get into the psychological and philosophical problems presented by the dirty politics of the 21st century. She said she believed that Scott Walker is a sociopath, and I concur. When it comes to voting, people on the left are so often left with voting for an ineffectual or corrupt representative to keep a patently insane candidate from winning. But I have come to understand that though the candidate may be insane, and the citizens who vote for the candidate may be duped, the ones financing the whole thing are neither crazy nor stupid. They are just plain evil, and they have a well thought out plan that they have been in the process of implementing it for a long time. The great instability we are experiencing now is the end game. As we discussed this we began to wonder aloud-What makes a multi-billionaires so discontent with their lives that they have to go after even more of the available resources in the world? Why can’t they be happy and gracious and pay their fair share gladly? Why do they need ever more power and money, grabbed at the expense of those less fortunate? Why do they want to consign the entire world but themselves to slavery or starvation? And that, my friend, is the very definition of an imponderable.

 

Sonoma County in the Twenty-first Century Depression

March 6, 2011 6 comments

A Sign in a Cafe Window in Santa Rosa, CA

This evening I’ll be on a bus from my home in Sonoma County to San Francisco and from there, the rest of California. But today I want to talk about my home county, which is Sonoma. This beautiful little gem sits between the ocean and a string of mountains. It has a varied landscape, including redwood forests, a fertile central plain and breathtaking coastline. The climate is Mediterranean, but around here we just call it great.

But, for all that, Sonoma County is in the world, and the world is in big trouble. As I began to talk about this project with my acquaintances and with passers-by, a different Sonoma began to emerge. First, in the beginning of the melt-down of 2008, there was the mortgage broker I knew from a business net-working group who was losing her own home. As I began to focus on this subject it became more and more visible to me. In a popular Thai spot I was unintentionally eavesdropping on a table full of high-tech employees from a “downsizing” company. The lucky ones who had kept their jobs “for now” were treating their former colleagues to lunch and commiseration.

Then, some of the bigger storefronts began to go dark. Mervyn’s closed but Macy’s remained. Tourism is down all over as people everywhere down-shift their spending habits. The only group that has not down-shifted is the uber-rich. Lucky for Sonoma County, there are features here that are attractive to that demographic. There is a slice of Sonoma County tourism that is doing very well.  As a playground for the wealthy, Sonoma County offers high end restaurants, always full, wineries, quaint little inns, and beautiful scenery. If you can figure out how to be of service to these people you will stay employed.

As I write the official unemployment rate for Sonoma County is 10.5%, which means that if we include 99ers and self-employed people that have closed their doors it is more like 22%. I went down to the food stamp office at the beginning of last year and saw that the line was peppered with the newly impoverished. You can tell the ex-middle class by their dress and demeanor. The demographic that day appeared to be older and female.

Of the people lucky enough to have a job, some really aren’t so lucky after all. I have several friends that lost a job in the last two years only to get another one many months later with longer hours, less pay, and worse working conditions. But, if you want to keep your house you just suck it up. I met a woman the other day who was working a counter at a downtown store. She pointed to her name –tag and said “my father told me, if your name is on a building you are rich. If your name is on a plaque on your desk you are middle class. And if your name is on your shirt—well, you are poor” It turned out that she and her husband had lost a business that had thrived for twenty years in the crash, and then they had lost their house when the bubble burst. She told me that their house had dropped from $900,000 to $500,000. They were willing and able to restructure the debt, but the bank refused. Later the bank sold the property for $250,000 which is half what they were willing to pay. Now a speculator will snap up the house, and she is working retail for $12 an hour. Her husband remains unemployed.