Want to flee poverty? Don’t be American

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?


Do you fear falling (further) into poverty?

Any thoughts on how to fix this mess?

28 thoughts on “Want to flee poverty? Don’t be American

  1. I think putting more regulations on corporations and giving incentives to companies that hire more workers in-country than out would hep a lot. Since that doesn’t seem likely even if Obama gets in office, I suggest moving to a country where the poor are cared for by the community because it’s considered the communal responsibility.

      1. It just means the good of the community. In the U.S. the rights of the individual (which, ironically, make up the community) are always and (to my mind selfishly) in opposition to the needs of the rest of us. Gun “rights” (the subject of my first book) also come with gun “responsibilities” — but we never hear about them.

  2. I think the remedy is that we really need to band together instead of fighting each other. The incredible polarization in this country serves only the interests of the one percent. An active citizenry can begin the process of reversing these gross inequities.

  3. No solutions but I was just talking to my mum about this yesterday. My dad retired to a house and 40 acres in RURAL Virginia and they went from moderately well off, but supporting three children still at home and at university to suddenly being considered wealthy! They quickly got tapped in the local congregation to leadership and heavy work load jobs that have really taken a toll on them because they are often faced with people crippled by poverty and they have no idea how to help without enabling, patronizing, or making some situations worse.

    My dad is ridiculously WASP and declares that anybody can work their way out of any difficulty, and this has always puzzled me because we’ve lived poor places several times in his career, but he’s held on to this idea where neither my mum and I buy into it in the slightest. Poverty isn’t (usually) the result of laziness, it’s a cycle of being STUCK.

    Both my mum and I were talking about how this area they live in will probably always be poor. There is no industry, no education, and nowhere to go. You need traction of some kind to push yourselves out of it and poverty equals no social traction of any kind, nothing to push yourself up from. The only solution I can think of is investment in poor communities of education, skill trade, and gainful employment, but even with those things it takes at least two generations (from what I’ve seen) to turn chronic poverty around. And who or what can invest in seeming worthless areas?

    1. Interesting.

      I edited this post many, many, many times…and took out something very relevant to what you’ve shared here — the feeling of being nonplussed when confronted with serious, 2nd or 3rd or 4th generation poverty. It is like hitting a brick wall. I was a Big Sister to a 13 yr old girl in 1999 for about 18 highly instructive months, and it left me bitter and dismayed by a whole pile of things: how much her family was cheating the system (the one my hard work and taxes pay for); how ingrained behaviors were another obstacle….I could go on, but you know the drill.

      One thing I saw, as you are seeing, is an ingrained lassitude. Why try when you are persuaded it will have no positive result?

      But I can see your Dad’s WASP attitude. I used to think that way and I generally still do….but it’s also the POV of someone who has so many advantages already — even being able to articulate a thought clearly and persuasively is a real skill that many impoverished kids or teens do not learn, yet we (i.e. you and I and your Dad) probably grew up taking for granted. The gaps between what poor kids know/learn and what we think “normal” behavior can be huge.

    1. My first book is about gun use in the U.S. That correlation is not accurate, nor do I accept the 40x figure. There is a lot of propaganda about gun use from both sides of the issue. Poor people own guns (not the poorest — guns and ammo cost money) as well as some of the nation’s wealthiest.

  4. Now there is some blogging with purpose.

    I don’t have a ton of experience with the US political system so I am going to make this remark. My “opinion” is that capitalism is the culprit or the American Dream. Now, don’t get me wrong, I believe in being able to make your own way but I also believe in a higher tax base in order to support the truly impoverished. The issue in the US is that this type of system is unacceptable to their way of thinking (kill or be killed mentality) so the likelihood that something like this will change at a government level doesn’t seem possible.

    Grass roots is not enough and the “rich” corporations got that way by keeping their money (read – tax loopholes hence why the corporate tax legal system seems so strong). Is the US heading in the direction of Italy or Greece? And if so, who is going to bail them out?

    1. You have it nailed.

      There is such vehement, rabid opposition to any form of government intervention (taxes, aid, subsidies, grants, tax breaks) that it leaves me — a native Canadian — aghast at the selfishness. Capitalism rules and anything other than that is seen with terror or suspicion. The assumption (which is patently absurd) is that everyone has the means and ability to boot-strap themselves out of poverty or tough times. They don’t…so it’s devil take the hindmost. I find the callousness toward the ill/poor/struggling truly shocking.

      No, the States won’t go the way of Italy and Greece. I can’t explain why, but I feel confident that isn’t going to happen. I think the back-room deals between the plutocrats and the politicians will ensure it doesn’t; the rich don’t want to lose their wealth.

  5. Well, that’s depressing. I feel like it’s a slippery slope between “middle class” and “poverty” and I could very well fall down that path. All my degrees and job experience don’t mean squat if employers aren’t hiring or aren’t willing to pay a liveable wage.

    As a recent grad, I’ve seen a lot of friends take jobs that just won’t pay the bills no matter how much they scrimp. I know everyone has to start somewhere but it’s not viable for those who can’t live off their parents or spouse (who may as well be in the same situation). And plenty of people stay in positions that barely cover transportation costs.

    This is incredibly backwards but a lot of traditional cultures (like mine) where there have been no social safety nets place a lot of value in saving up for the next generation. Based on rising prices, is that where we’re heading? Save for your children because they won’t be able to?

  6. I think you’re right.

    I wish I could be all cheery and perky, but why BS one another?

    The real question is how we’re each going to find well-paid work — and/or work that bears any resemblance to our own aptitiudes and interests or education. I wish I gave a damn about computer science, believe me! I wish I had the stomach, literally, to work in a hospital where I could (I know) probably find a good, steady job as a medical interpreter or advocate. I have the skills but I know I could not handle it emotionally.

    I hope to write my next book about work and how it just isn’t working for so many of us. I certainly wish I had smart(er) or wiser answers. I was lucky enough to get started early in a field that still actually paid OK, had very minimal living expenses to support, and found staff jobs in it for a while. But I will also say I hustled harder in my early 20s than I could ever imagine, (which cost me friends, boyfriends, leisure time) and STILL do, at 55. However frustrated younger workers are – and should be — imagine the sighs of those of us who thought, yeah, it’ll get easier.


    1. I second your thoughts about finding work that fits our interests and skills. My whole family is in programming and they’ve proved that there is money to be made there. But I just wouldn’t be any good at it. Is there money in being miserable? Not sure I want it.

      1. I think it’s really tough for people who don’t have the skills and aptitudes for Big Money jobs. You have to resign yourself to a life with much less income, and if your work becomes unsatisfying….then what? It’s good to be happy at work. and no one should (as many are) be miserable. But there is a sweet spot you have to locate where every job is going to present some sort of frustration to manage/ignore/accept/work around.

  7. Like you the US attitudes to the truly impoverished (in all senses) leave me bewildered. I’d rather risk having the “dole bludgers” as they’re called in Australia, than the attitude of “it’s all about me” that comes through in American philosophical underpinnings. The commonweal indeed…a strange inheritance from convict and pioneer origins of supporting each other rather than devil take the hindmost.

    1. It’s hard to fathom — and I’ve been here a long time. One difference I see between Canada and the US (which I am blogging about next) is that Americans are “real friendly” one on one — but not through their public policies. Canadians are more reserved and “unfriendly” one on one, but their social policies are far more generous to total strangers they will never meet…

  8. Unfortunately it’s only going to get worse here in the U.S. people are still divided over 30 second sound bites on issues divert their attention to what is going right in front of their faces. They scream over Obamacare and do nothing about the fact that everyday their rights get stripped away for them a piece a time and American corporations actively strip away employee benefits, wages and quality of working conditions and move every job possible out of the country all so that a few privileged individuals can control almost all the money. Sadly things will get much worse before anything starts to get better. Great post and comments! You guys have a better idea about whats going on than most Americans..

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s