From the book “The Rich and the Rest of Us – A Poverty Manifesto” by Cornel West and Tavis Smiley, I gleaned the following quote which provides some context for a huge challenge that workers, in general, but especially uneducated workers face in the job marketplace.
“American business is about maximizing shareholder value,” said Allen Sinai, chief economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”
I wanted to begin my discussion on this timely and impactful book with this business context. The first sentence is the primary motivation for business existence. Absent that goal, there is no need to be in business, unless you have a charitable bent. The next two sentences are important, as businesses have always tried to do more with less. The key problem these statements run up against is we are more than machines and we need to deploy our skills and hard work for a greater good, which in turn will let us live decent lives. Plus, innovation occurs when people meet opportunity, so our ability to leap to new products and services hinges upon human involvement.
This book is a must read as it talks about how that used to be the America that many knew, yet it is not the America of today for many. We live in two Americas – I have used the phrase “the haves and have-nots.” Smiley and West use the title to tell the story in a more pronounced way – “the rich and the rest of us.” In essence, it is difficult for the those who have what they need (the rich) to understand the needs of those who do not (the rest of us). They will point to how the income disparity has gotten worse over time and can be traced in large part to the post-1970s period beginning with signficant changes to tax rates on the upper class. This problem evolved over time, has been exacerbated by the recession and cannot easily be fixed.
To try to summarize this book is difficult, so I thought I would use their conclusion section and paraphrase their words.
Ten Lies About Poverty that America Can No Longer Afford
1. Poverty is a character flaw. False. Poverty is the lack of money – period. The 150 million Americans in or near poverty are the result of unemployment, war, the recession, corporate greed and income inequality.
2. American manufacturing is going to bounce back. False. Per Steve Jobs, those jobs are gone and are not coming back. China is not about to give up its claim to “the world’s top manufacturer.” I think there will be some manufacturing that comes back, but we will never get close to where it was.
3. The Great Recession has ended. Not really. Most of the new jobs created since the economic recovery began have been low-wage occupations. Since the book was published, there has been continued, slow improvement month by month on jobs, but their point is valid.
4. Minorities receive the majority of governmental entitlements. False. Nearly half of all Americans live in a household that received some type of government benefit. Seventy percent of food stamp recipients are white.
5. No one goes hungry in America. False. 50 million Americans go to bed hungry and have no idea where their next meal will come from.
6. America takes care of its veterans. False. 67,000 veterans are homeless and another 1.5 million are considered at risk due to poverty, lack of support networks, or dismal or substandard living conditions.
7. Government handouts created the nation’s deficit. False. The dominant factors were Bush-era tax cuts, wars in Iraq and Afghanistan, the trade deficit, the mortgage crisis, and the great recession.. Discretionary spending is roughly 15% of the nation’s budget.
8. America’s wealthiest pay more taxes because they earn more. Partially true. The wealthiest wage earners pay about 21.5% in taxes relative to their personal income, but not on capital gains earnings. Under the Bush-era tax cuts, the wealthy pay on average 5.5% on capital gains from assets. This is a key reason Governor Romney’s tax rate is so low.
9. Medicaid takes care of our seniors’ health-care needs. Partially true. Health-care costs for those between 55 – 64 are twice those for those between 35 – 44. Rising health-care costs are the major contributor to bankruptcy among the elderly.
10. Poverty does not exist in the suburbs. False. The number of poor people living in the suburbs rose 24% from about 14 million to 18 million between 2006 and 2010. The number of poor in urban areas rose by only 20% during this time.
The book also speaks of 12 poverty changing ideas. I will save these for the next post, as my first thrust was to get the message out. I want these “Ten Lies” to resonate and ferment in people’s minds. With the work I try to do with homeless families and my wife does with the hungry, we witness these issues routinely. I found their statistics and data points to be very compelling, but the story can be told without the data. I would encourage you to get the book. For such a complex topic it is a quick read. Yet, it is one where I have dog-eared many pages and continue to refer to as I did for this post.
This is an important topic for America and is one that does not get talked about enough. We are too content to focus on the middle class, yet the middle class decline unfortunately has increased the numbers near or in poverty. Several of my fellow bloggers have been highlighting these issues of late, so please check them out. There is an excellent piece at www.newsofthetimes.wordpress.com entitled “Is income inequality the tide that will sink all boats” which is a must read. Another blogger, www.hughcurtler.wordpress.com has written several pieces in the past few months as well.Thanks for reading this first post on “The Rich and the Rest of Us” and would welcome your comments or other blog must reads on the topic.