For Richer or Poorer

It's been uncomfortable for most of us with wages being stagnant and the middle class in decline.  The GAP widens. Coping has been difficult as jobs move overseas, skill requirements change, and folks are sidelined from the workforce.

For most of us, things haven't gone well.  90% of U.S. households

have lost income, but the top 10% has soared.

As difficult as it has been for us and our families, it's worse in many of the countries we've affected.  Like here, the middle class has crashed in most African countries.

   Between 2000 and 2007 Africa added 11.5 million to their middle class ranks, coinciding with the boom years of “Africa Rising”, and doing its part in adding to the massive global expansion of that period. In just two years, however, it shed 7.5 million of these. It was 2007-08, the recession Wall Street caused.  In the eight years since, Africa’s middle class has fallen by a further 3.2 million.   Ref: Credit Suisse Global Wealth Databook 2015

The years 2007-08 were the brunt of the global financial crisis Wall Street gave the world; it squeezed the middle class and sent it scrambling for debt. The world and the middle class have yet to recover.  

The run-up to the recession was filled with purchased government decisions. Unethical and illegal practices followed along with failures of regulatory oversight and fraudulent securities classification, all things we now know.  If I farm the land, but I cheat my neighbor and he goes under, that makes me a crook.  If he starves, I'm culpable. I'm wrong, regardless of what excuses I might make.

Realistically, since what we do as a nation affects the world, we carry a measure of responsibility.  In the first year of the Great Recession, more than a million died.  For the poorest, when the price of corn meal doubled, they starved.  

Is there a way forward for us that at least doesn't do harm?  What kind of leadership would that require?  

For so many reasons, we have hope for a better world.  As annoying as change might be, it brings opportunity for improvement, does it not.

Quibbling

Let's quit quibbling about the dollar figure and remember why we have a minimum wage in the first place.  If it isn't doing what we intended, we've failed. We've failed our friends, our neighbors, our families, and our citizenry.

Workers who make the minimum wage or less are just 2% of the workforce.*

And the fix is easy.

Leaving it at half-mast (doing nothing) however, is like sending your kids to school with only half their lunch money.




So moving on to the question of what happens if we raise it ...

"But doing so means prices go up!"  Yes they will in some market venues.  Each of us will pay our fair share of the price for service.  Businesses will adjust; more self-service, perhaps, and so on.

"But corporate profits will be threatened!"  Perhaps.  (1) Corporate profits are higher today than ever before in U.S. history.  (2) Most corporation do not have a significant percentage of employees at minimum wage, but some do; e.g., Walmart, McDonalds, Burger King, etc.  Others like Costco and Target pay reasonable wages for all employees with development and advancement opportunities.

"But small businesses will fail!"  Perhaps.  If their survival is based on employees living in poverty, then perhaps they need to grow, change, or close.  Rules do not apply to all small businesses.

And laws may need to change.  The intent is a reasonable wage for the health and well-being of the worker.  Should we have a different standard for teens entering the workforce but still living at home?  Do our child labor laws cover it adequately?  Should we have a classification of skilled vs. unskilled labor?  Anything more needed in dealing with dynamic hours and benefits?

"Raising the minimum wage doesn't affect the poverty rate."  It does, and the context is larger than just the individuals.  Raising the minimum wage would move hundreds of thousands off of federal assistance programs.  Walmart alone costs taxpayers $6.2 billion annually in public assistance for low-wage employees.   McDonald's costs us $1.2 billion each year.

Our 10 biggest fast food corporations are responsible for more than half of the funds required in 2012 federal assistance for low-wage workers in that industry. These same 10 companies together declared $7.4 billion in net profits, and they paid $7.7 billion to shareholders.

In other words, the rich get richer off the labor of the poorest who are themselves supported by welfare the bottom 90% pays for.  Funny how that works out.

U.S. poverty numbers have increased since this analysis in 2010.

Poverty and associated inequality numbers are high in the U.S., and have been rising since the 70's.

Approximately 52 million folks in the U.S. were recipients in government assistance programs, according to the U.S. Census Bureau. (report)  Among employed folks, 18% of part-time workers, and 7% of full-time workers were recipients.  About one-third participate for one year or less, and another half participate for 48 months or less.

*In 2015, 78 million workers age 16 and older were paid at hourly rates.  That is 58% of workers. Among hourly workers, 2,570,000 earned the federal minimum wage of $7.25 per hour or less. Together, these workers with wages at or below the minimum made up 3% of hourly workers and less than 2% of the total work force.

Trickling ...

Interestingly, no one has admitted supporting 'trickle down' economic theory.  The actual category is 'supply side economics'.   There's been discussion and accusation for more than a century about such practices, but the critical concern through it all is policy and regulation favoring the wealthy and corporate interests.  Particularly since the 1970's, wealth has flowed to the top 10% at the expense of the bottom 90%.

The result of those decades, the GAP, the deadly end-product of it.  It has spread like a plague through the developed and developing world.

All's fair in love and football.

Football!
Play to win.
  Winning is good.
    That's competition.

As long as you don't underinflate the ball or have too many guys on the field ... you know how it works; it's fair, and losing is just a disappointment.  No big deal; nobody dies.

But what if they did?  What if life depended on winning the game?

What if all the players on the winning team got jobs and homes in a nice neighborhood, and what if the losers never got a fulltime job or a decent place to live ... would that still be fair? Depends on the rules, doesn't it.  If the rules say it's okay, well, that's fair.  That's the way it works.

Ever wonder about competition?  It's a centerpiece in our economy and culture, but sometimes it starts doing damage.  And people die.

It two farmers sell corn competitively, the lower priced stuff will sell first.  That's fair.
But what if one farmer got subsidies and the other one didn't?    That's NAFTA, and more than a million Mexican family farms went broke; they couldn't compete.  The families abandoned their homes and migrated elsewhere, usually to the cities, looking for work and survival.  It hasn't gone well.

In a small country near the equator with rich soil and good rain, people struggle for food because competition has dedicated their land to producing mostly exports, and competitive fishing has depleted their territorial waters.  Foreigners own much of their land, and the income generated by productivity goes to corporations outside the country.

So then, playing by the rules, is that good enough?

International finance and trade are troublesome today.  Since about 1980, business competition has escalated radically in the pursuit of profit to the detriment of both employees and customers.  When it crosses country boundaries, it's even more volatile. At the core, it's a competition for resource extraction and profit by corporations that are bigger than countries.  Unintended consequences happen on a large scale and continuously.    

One example among many, national attempts (World Bank) (Vox.Eu) at dealing with price spikes in the real food markets do as much harm as good.  They're trying to minimize the impact of price fluctuations on the poor, but the folks at the bottom of the income ladder are the ones who are the most adversely affected by the results, of course.

Do your own inquiry.

Samantha Powers, before she was nominated to be U.S. Ambassador to the U.N., asserted that "we're neither the shining example, or even competent meddlers.  It's going to take a generation or so to reclaim American exceptionalism..."  A generation?  Or do we perhaps need a better goal and a better plan.

As things change which they must, what might we do as individuals?  There are plenty of opportunities to make a difference, are there not?




You might appreciate Humanomics 101
All are created equal, but few are treated equally.
If we're to love one another, can we do this degree of competition?

Fit in.

Fit in.  That's the pressure point 
  in most venues 
    on most issues 
      for most folks 
        most of the time.  
It's the right path, perhaps. 
Cooperation, collaboration, careful compromise ... it's a fragile world, a vulnerable culture, and difficult times for us all.

Hogwash.  Life is filled with opportunity, end to end, wall to wall, and as far as the eye can see.    Be the person you know you should be, not the one you squash into some corner.  


Every life moment needs a hero, does it not? 

Say what's right, always, and with a good heart ...
 º  it might help you see the way forward,
   º   it might turn a friend to the right path,
     º    it might turn a business down a better road,
       º     and it might change something really big into
                  something really great.     

Turn on your best light. :) 
  
(and don't be a butthead about it, but that's an entirely different subject.)

And here's a perhaps refreshing way to start the day.
Notice the full engagement by the young folks.
Encouraging stuff. 

Care for an example? You might appreciate Recent Past Remembered
Or an ancient understanding which As a youngster, I was told with a smile ...

Curious how poverty works?

In a report published this month by the Brookings institute, we're offered a look at American poverty for adults aged 25 to 61.

Let's consider how certain disadvantages might combine to make life more difficult. How do those play out across racial categories? Not surprisingly, such impediments tend to afflict blacks and hispanics more than whites. Here's the list:

1.                 Low household income 

(Less than 1.5 x the poverty line)

2.               Limited education 

(Less than a high school)

3.               Lack of health insurance

4.               Low income area 

(Area poverty rate 20+ percent)

5.                Household unemployment

About half of us in America encountered at least one of these disadvantages in the inquiry year, 2014. But, if you are black or hispanic, you were about twice as likely to face that disadvantage as your white acquaintance.

Moving on to those occasions of dealing with two or more such obstacles to upward progress, the racial gap widens.  Most white adults don't face any of the five difficulties, most black and hispanic adults do.

Black residents are more likely to live in a poor area and perhaps in a jobless family.   Hispanics are more likely to lack a high school education and perhaps health insurance as well.  Why is that?  Are they welcomed differently or treated differently?

If we're going to understand and deal with inequality and with poverty, understanding the difficulties a family might face will help us know how to help with government and organizational assistance efforts.  And individual efforts as well will benefit from understanding.  Change makers and help bringers must be knowledgeable and skilled.

America measures poverty with an income-only yardstick.  Are they missing some important details?  Of course.  

"A more multifaceted approach to measuring poverty, like the one offered here, reveals some of the insights that can be gained in the U.S. by framing the issue more broadly—from revealing the deep racial and ethnic disparities that exist to shedding light on the differing dimensions of disadvantage experienced from one group to the next." ~Brookings, Richard V. Reeves, Edward Rodrigue and Elizabeth Kneebone | April 14, 2016

Helping without hurting isn't simply a money handout, is it.  The most extraordinarily counterproductive attempt to help might be just giving money without plan or goal.  The only less informed position would be to just tell them to get a job.