As I was surfing through the dark world of Ayn Rand fanatics on Facebook, I came across a comment that embodies the much-touted myth behind success in America. When I see comments like this, I can’t help but feel a paroxysm of anger because it misconstrues how poverty and wealth work. It’s the same trope over and over again: “Rich people worked hard to get where they are; poor people are poor because they are lazy! If poor people had just done things x way, they wouldn’t be in this situation!”
It’s not a small portion of the population that has this problematic viewpoint, either. In “Gated Communities for Rich and Poor,” Zaine Zenit Dinzey Flores notes that the problem of poverty is often seen through a lens of individual pathology. Additionally, she shows that this viewpoint reflects and reinforces myths and ideals of the American Dream. It is this very mindset that influences attitudes toward the poor in both social policy and academic work.
These statements are false; they are myopic—they do not take into account what is happening at a structural level. America isn’t randomly the wealthiest country on Earth with the highest rates of poverty in the developed world. That is not an accident. So beyond these myths, what’s actually true?
The violent gap between the rich and the poor in the United States is far greater than in any other Western Industrialized Nation.
In December 2014, the Pew Research Center released a study which found the wealth gap between the top 20% of earners and everyone else to be the widest on record. What does this mean for us? It means that we spend more money on problems associated with poverty, health, family, and the work force. Harry Holzer, a professor of Public Policy at Georgetown University, estimates that child poverty costs us approximately $500 billion a year. His work published in the Journal of Children and Poverty in 2008 also found that this is approximately 4% of our GDP. Social policies of the past have been ineffective in reducing poverty because we’ve focused on the wrong thing. We have the left the structure untouched.
There is a mismatch between the number of decent paying jobs and the pool of labor.
Why is this? For the past thirty years, the United States has been producing more and more low-paying jobs, part-time jobs, and jobs with virtually no benefits. Are you frustrated because you graduated with a Master’s degree and can’t find a job? There’s a reason that this happens frequently, and it is because of this mismatch. I’ve seen people argue that if people just waited, just worked this job or the other, that they will eventually get to the job that they desire. Now, I’m not denying that this is a possibility. But such a mindset ignores the root of the problem: Wealth concentration. The reason people can’t find jobs isn’t because they aren’t looking for them, it’s because the jobs aren’t there. One of the scariest trends researchers have come across is students going back home after college. Whereas before, students would graduate from college and help their parents, the trend is reversing. Previously, students would help their parents out financially. Now, students are returning home with crippling debt and their parents have to house them and provide for them financially. And this debt itself is barring students from becoming independent. It is this same debt that makes the possibility of owning a home unreachable. These students are leaving college with debts that will follow them for the rest of their lives.
Our social policies do little to support families compared to other industrialized countries.
What is the most idealized thing in America besides money? Probably the family. We love to talk about building families, centering our lives around the family but this ideology is in sharp contrast with our social policies, which do little to support families. Unemployment in tandem with lack of comprehensive child care makes living strenuous for families. It makes kids go hungry. In America, we do not have affordable healthcare, and we do not have affordable housing, and the lethal combination leaves families vulnerable. In 1996, President Clinton reformed welfare despite the fact that poverty was not improving. He reformed welfare with the Personal Responsibility and Work Opportunity and Reconciliatory Act (PROWRA), an act of legislation that he claimed would “end welfare as we know it.” What’s alarming about this rhetoric concerning the poor is that, like the commenters mentioned at the beginning of this article, it completely negates what is happening at a structural level. Families aren’t on assistance because they’re lazy.
Could it be that these families can’t provide because of the growing inaccessibility of education, the proliferation of low-paying jobs, the lack of childcare affordability and availability? Could it be that it’s difficult to survive when wages have gone down while the cost of living has gone up, especially when American wages are growing at the slowest rate since 1965, at a rate of 2% a year? What is mind-boggling is that modern work life emphasizes greater productivity; it asks parents–both men and women–to spend more time at their job if they want to support their family, but then demonizes the same parents for not spending time with their children. What exactly do people want? Our modern work life demands a culture of facetime–that is, it demands that you spend your life at the office because it is unimaginable that people could work outside of the office. And what exactly does this lack of support do besides enact state violence against low-income families? It contributes to the very thing that pro-family supporters hate: The destruction of the family. The thing that is changing the family structure above all else is our economy, it is not in fact, the rise of secularization as many conservatives want to claim.
CEOs’ wealth vis-a-vis their workers.
Flores notes that in 1980, the average CEO of a corporation earned 42 times that of the average worker. In 2014, the average CEO earned 400 times as much. What’s especially troubling is that over the past thirty years, a growing number of companies have demanded concessions from their employees. Companies have taken various steps to keep labor costs down such as pay cuts, and elimination of health benefits. Just look at some basic facts about CEO pay in relation to worker pay straight from the Economic Policy Institute:
- Average CEO compensation was $15.2 million in 2013, a 2.8% rise from 2013, and a 21.7% rise since 2010.
- The CEO-to-worker compensation ratio was 20-to-1 in 1965 and 29.9-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 295.9-to-1 in 2013, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.
- From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period.
As sociologist Hebert Gans once said, some people benefit socially, politically, and economically by keeping the poor at a disadvantage. Think of wealth in America as a game of musical chairs. There are two seats, and three people dancing around them. The operators of the game have designed it this way, knowing full well that someone has to lose. Now take this game and scale it up: The two seats are the 1% and the one who loses is everyone else.
(Title image via).