POVERTY AND THE FALLACY OF LONG-TERM ECONOMIC GREATNESS
The first week of July produced a somewhat positive Employment Situation report. While the unemployment rate ticked up just a bit, about 224,000 new jobs were created, nearly three times as many as were created in the tepid previous month. There was, of course, the Administration crowing about the strength of the economy, and with wage growth on the rise, an impassioned outsider might agree that the US economy is doing well.
But too many aren't doing as well as they might, and too many, even with wage growth, aren't making enough money to lie on. Rev. William Barber's Poor People's Campaign says that more than 140 million people are living in poverty or near-poverty, nearly 100 million more than the Census suggests. Indeed, the very existence of a Poor People's Campaign, 51 years after Dr. Martin Luther King, Jr. launched his initial assault on poverty, speaks volumes about the status of our economy.
Poor people have been the volleyball in a partisan net game, with some simply ignoring the realities of poverty, and others vilifying the poor for their poverty. These are the folks who will tell you that the economy has never been better, ignoring the fact that at least 40 percent (and perhaps as many as 60 percent) have not benefitted from economic expansion. The average family has yet to recover from the Great Recession. Many have financed their survival with credit cards, and between student loans and consumer credit, our nation's households are $13.7 trillion in debt. According to the Federal Reserve Bank, 40 percent of our nation's families can't manage a $400 emergency.
Half of all jobs in this country pay $18.58 per hour or less. How stable is an economy that pays people so little? Fully a third of all jobs pay less than the $15 an hour, many legislators want to pay all workers. The minimum wage, at $7.25, has not increased in a decade, even as the economy expanded, productivity has risen, stock market indices are at an all-time high, and we have a President who crows about economic expansion without paying attention to those on the bottom.
Macroeconomic indicators suggest the economy is healthy, but for how long? How long, can we expect our decades-long economic expansion, to continue? A minor blip, an extended trade war or, heaven forbid another kind of war could have devastating effects. This is why our 45th President keeps picking fights with the Federal Reserve Bank, urging them to cut already low interest rates to fuel economic expansion. Our nation can't thrive when nearly half of its citizens are on the outside looking in. And poverty can be a drag on economic expansion.
The people who are doing well in our economy have a stake in it. They own their homes. They own stocks and bonds. They have retirement accounts and investment accounts. They've seen their asset base soar as the economy has expanded. But the Great Recession cause African American people collectively to lose a third of our wealth. Black homeownership rates grew for thirty years after the passage of the Fair Housing Act. Those gains were wiped out mostly during the Great Recession, and today Black homeownership is as low – 41.2 percent – as it was in 1968 when discrimination was legal. In contrast, the overall homeownership rate in 2016 was 63 percent overall and 72 percent for whites.
If this is a stakeholder economy, African Americans have fewer stakes, but we don't occupy the economic periphery alone. Latinos and whites also experience poverty, but not at the disproportionate rate that African Americans do. Racism makes it possible for excessive poverty to exist! As long as some see poverty as a personal, not structural failure, it is easy (and acceptable) to demonize the poor, and even to criminalize them for their poverty. Thanks to folks like Rev. William Barber, some Americans are awakening to the fact that one person's poverty is another person's profit center, that the prison industrial complex needs to be dismantled, and that a restructured, less militarized (and dare I say green) economy might offer more opportunity for all!
The folks who earn $18.58 an hour or less aren't benefitting from the expanding economy, but some of them support a wealthy huckster who lies with the same ease that he rises in the morning! He spins economic confusion in jingoistic and confusing terms so that an unemployed manufacturing worker in Ohio will passionately argue that he'd be working if it weren't for illegal immigrants!
Will we buy into the fallacy and let increasing poverty imperil long-term economic expansion? Or will we develop a more inclusive and expansionary economic model? The Presidential campaign offers the opportunity for a dynamic exchange of ideas. What's next?
Julianne Malveaux is an author and economist. Her latest project MALVEAUX! On UDCTV is available on youtube.com. For booking, wholesale inquiries or for more info visit www.juliannemalveaux.com