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?