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Posts Tagged ‘Economic inequality’

Want to flee poverty? Don’t be American

In behavior, business, culture, life, Money, politics, urban life, US, work on July 24, 2012 at 1:56 am
Gini_Coefficient_World_Human_Development_Repor...

Gini_Coefficient_World_Human_Development_Report_2007-2008 (Photo credit: jiruan)

Depressing, lucid and infuriating, this recent piece in Bloomberg Businessweek lays out a stark analysis of American income inequality, now at its worst level in decades:

A recent finding nicknamed the Great Gatsby Curve may be the most controversial of all. With it, University of Ottawa economist Miles Corak makes the strongest case yet that inequality and mobility are intertwined—the more unequal a society is, the greater the likelihood that children will remain in the same economic standing as their parents. His research comes as the country—and the presidential candidates—debate inequality and what, if anything, government should do to slow or reverse its trajectory. According to the Pew Charitable Trusts’ Economic Mobility Project, Americans believe more ardently than their global counterparts that “people are rewarded for intelligence and skill.” And yet, according to Corak, it’s as simple as this: “More inequality means less opportunity.”

The reporter only had to travel an hour out of New York City, where the magazine is published, to find extraordinary wealth — Greewnwich, Darien, New Canaan, Connecticut, home to billionaires — right next to grinding poverty, in towns like Bridgeport.

If the region were a country, it’d be the world’s 12th-most unequal, ranking just below Guatemala. Economists measure income disparity using the Gini coefficient: A measure of 0 means all money is evenly distributed; 1 means one person has it all. The U.S. had a Gini of .467 in 2010, up 2 percent since 2000, census data show. (With the exception of Chile and Mexico, it has the highest level of disparity of the 34 countries that belong to the Organization for Economic Cooperation and Development.) The Bridgeport region’s Gini grew 17 percent during this time, to .537, making this 625-square-mile swath home to the biggest income divide of any metropolitan area in the U.S.

I live a 20-minute drive from these towns, so I see these disparities in my own life.

They are increasingly common here, and increasingly intractable.

– If you can prepare sufficiently to get into college, can you handle the work and graduate?

-- Can you even afford college? How?

– Can you get a job that pays your bills and your student loans?

– Can you save any money?

– Can you afford to acquire, if necessary, even further educational credentials?

– Do you have the requisite social skill and emotional intelligence to take advantage  of — and create for yourself — every possible connection and opportunity?

The leap from poverty to even relative affluence seems unimaginably large now for too many.

My husband grew up in a moderate-income family, his father a Baptist minister of a very small congregation in a small city. Thanks to his father’s service, Jose was able to attend college on full scholarship and graduate debt-free.

Armed with talent and drive, my husband won a secure job at The New York Times in his mid-20s. Today, I wonder how many could replicate that leap.

I came to the U.S. from Canada in June 1989, seeking better work opportunities. I had several clear advantages: no children; serious savings; a demanding liberal arts education and college degree, no debt; fluent English; competence in two other foreign languages.

Plus, perhaps most crucially, confidence in my abilities and the (ugh) willingness to cold-call more than 150 strangers to land my first New York City job.

Today, full-time freelance, earning about that same staff salary 24 years ago, I probably look like a downwardly-mobile failure, which is pretty ironic, given my initial ambitions for immigrating. But I still have short and long-term savings, thanks to a combination of extreme frugality, a lucky lawsuit settlement and a husband with a decent, union-protected income.

A low-wage job, part-time with no health insurance, is no way out out of poverty. In the United States, in 2012, the word “job” is now about as meaningless as the word ‘blue” to describe the sky. 

Millions of working-class and middle-class Americans are being totally knee-capped by crappy wages, part-time work, no union protection, (7 percent unioized in the private sector, 12 percent in the public), chronic unemployment or underemployment — and no one who really gives a damn whether things get better for them.

Yesterday, The New York Times ran a story about how many older Americans are now losing their homes, even those who lived frugally. The cost of living here is crazily rising while many home values have plummeted:

Once viewed as the most fiscally stable age group, older people are flailing…while people under 50 are the group most likely to face foreclosure, the risk of “serious delinquency” on mortgages has grown fastest for people over 50…

Among people over 75, the foreclosure rate grew more than eightfold from 2007 to 2011, to 3 percent of that group of homeowners…

Older Americans are losing their homes because of pension cuts, rising medical costs, shrinking stock portfolios and falling property values, according to Debra Whitman, AARP’s executive vice president for policy. They are also not saving enough money.

Half of households whose head is between 65 and 74 have no money in retirement accounts, according to the Federal Reserve.

I’ve put that last sentence in boldface because it is so deeply shocking and depressing. Fifty percent of Americans facing the traditional age for retirement have no money at all beyond their Social Security benefits?

So, even if you flee poverty in your teens or early adulthood, you’ve got a 50 percent chance of hitting the skids in your golden years?

Nice.

Do you fear falling (further) into poverty?

Any thoughts on how to fix this mess?

The American Dream? Really?

In business, History, life, news, politics, US on October 13, 2011 at 12:03 am
Differences in national income equality around...

Map of the Gini coefficient...purple countries are a mess! Image via Wikipedia

Great essay in the Canadian national newspaper, The Globe and Mail:

For many Americans, the recession began well before 2007, and it’s far from over. It’s become a lost decade of fading opportunity for workers, longer and more frequent bouts of joblessness and declining family incomes.

Obscured by the housing bubble and cheap credit, the well-being of working Americans was already threatened by powerful structural forces when the Great Recession hit. Technology supplanted routine work of all kinds, leaving millions with skills that employers no longer need. Offshoring of work to China and India destroyed millions of labour-intensive factory jobs. Low interest rates artificially pumped up wealth and consumption, but didn’t steer enough investment into the roots of the economy.

Now, more than eight million jobs are gone, and the country is looking at the stark prospect of several more years of unusually high unemployment. Roughly half of the 14 million unemployed Americans have now been out of work for more than six months.

And for the first time on record, family incomes are actually falling. New figures this week from the U.S. Census Bureau show that the median income for working-age households fell 10 per cent between 2000 and 2010, even as women worked more hours.

In 1912, an Italian statistician and sociologist named Corrado Gini created the Gini coefficient to measure differences in income.

Here’s a recent piece from The Atlantic on income inequality:

The U.S., in purple with a Gini coefficient of 0.450, ranks near the extreme end of the inequality scale. Looking for the other countries marked in purple gives you a quick sense of countries with comparable income inequality, and it’s an unflattering list: Cameroon, Madagascar, Rwanda, Uganda, Ecuador. A number are currently embroiled in or just emerging from deeply destabilizing conflicts, some of them linked to income inequality: Mexico, Côte d’Ivoire, Sri Lanka, Nepal, Serbia.

Canadians never had a “Canadian dream” so we/they don’t do a lot of hand-wringing over the loss of it. They’re used to higher taxes and lower salaries. They don’t have a constitution offering the promise — or the tantalizing lure of — happiness.

Here’s a powerful blog post about how utterly unequal salaries and wages have become in the U.S.

Here’s a lucid blog post from Open Salon on why Americans, still, remain shockingly docile in the face of this insanity.

I loved this post from The Washington Post:

But this is why I’m taking Occupy Wall Street — or, perhaps more specifically, the ‘We Are The 99 Percent’ movement — seriously. There are a lot of people who are getting an unusually raw deal right now. There is a small group of people who are getting an unusually good deal right now. That doesn’t sound to me like a stable equilibrium.

The organizers of Occupy Wall Street are fighting to upend the system. But what gives their movement the potential for power and potency is the masses who just want the system to work the way they were promised it would work. It’s not that 99 percent of Americans are really struggling. It’s not that 99 percent of Americans want a revolution. It’s that 99 percent of Americans sense that the fundamental bargain of our economy — work hard, play by the rules, get ahead — has been broken, and they want to see it restored.

As for the Wall Street protestors, writes William Rivers Pitt:

They’re staying put, with many more on the way – to New York as well as every major city from sea to shining sea –  and none of them are going anywhere else until people like you are taken from your citadels in handcuffs and made to pay for the ongoing rape of what was once quaintly called the American Dream…a dream that used to be something other than a dated metaphor, and can be something true and real and genuine once again, but only after we pave you under, and walk over you, on our way to a better, brighter future.

And here’s one of the smartest pieces I have ever read, originally published in a magazine written by academics, on how Americans keeping choosing to focus on gender as a safe(r) proxy for class when discussing the fallout of each recession. History matters!

Here are some photos of the protest on Wall Street, chosen for Freshly Pressed.

How do you feel about the American dream these days?

How’s it working for you?

Why Do The Wealthy So Fascinate Us?

In behavior, business, culture, domestic life, entertainment, film, life, Media, Money, movies, television on January 17, 2011 at 2:24 pm
The Breakers, the summer home of Cornelius Van...

A Newport, RI, "cottage." Image via Wikipedia

I’ve been watching, and enjoying, Downton Abbey on television the past few weeks, the story of an impossibly wealthy British family trying to protect their home and inheritance.

Why do we care?

Sure, the production values are high — the home lovely, the clothing meticulously re-creating Edwardian elegance. The servants’ intrigues and gossip mimic that of their employers, but still, what do we find so fascinating about the wealthy?

In an era today that has come to resemble the Gilded Age in its income inequality, where CEOs outearn their lowest-paid minions by 400 percent, it’s so much less…annoying…to stare in awe and envy at their gleaming motorcars, 20,000 square foot homes, billion dollar yachts, jewels and furs and nannies and neuroses than face our own frustrations and challenges.

As the U.S. recession drags into another year, now its third and with no definitive end anywhere in sight, the rest of us seem to take perverse pleasure in gawping at the rich, with television shows like “The Housewives Of...” ever-popular. Not to mention this show, in which spoiled brat daughters suddenly have to…gasp!…work for their money.

One aspect of Downtown Abbey is its timelessness — the family who own it are patrons of a local hospital that bears their name; I live a 10-minute drive from a hospital also endowed by the Rockefellers, whose enormous estate covers thousands of acres just up the road from where I live.

Their wishes have so altered this suburban New York landscape that my apartment building was re-designed — to be lower and flatter — so as not to spoil their magnificent Hudson River views. They even managed to shut down a local train line because it was…too noisy.

I worked retail from 2007-2009, the subject of my forthcoming book, “Malled: My Unintentional Career in Retail” (Portfolio, April 2011).

My greatest challenge? The sense of entitlement the worst of the wealthy carry with them, like some separate form of life support. They slap down their AmEx black cards, snap their fingers in your face, pout and whine when you say “No” to them.

No one says no to them!

Better we should focus our energy and our attention on less amusing sights — like our own work, families and income. After the necessities are covered, our real wealth isn’t material.

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