It can be the best of times or the worst of times, but
whether in prosperity or recession, there is one constant in the United States
economy–the richest country in the world has maintained a permanent class of
Americans who are poor. That is not an accident. It is maintained by official
action as deliberate as Alan Greenspan’s protection of the prosperity of banks
and stock markets. In this case it is the scandalous maintenance by new laws and
regulations, new tax codes, and special multi-billion tax waivers for favored
giant corporations. Those in this permanent class are not the momentarily
unemployed. Most of them shift jobs. Or alcoholics, addicts and the handicapped.
Most of them work. Neither are they inevitable as temporarily unlucky in a world
of global economic change. Long before the "new economy" and after it, none of
our Western European peers of affluent nations has sustained a permanent class
of the poor like one in the U.S. Those other countries have social policies that
with persistent poverty in the world’s richest country, the American mainstream
print and electronic media seem to take as their mandate the biblical words from
Matthew, "The poor ye will have always." They do this with little concern that
poverty in the midst of plenty in the world’s richest country is an American
exception among all advanced societies. (The U.S. is the richest in Gross
Domestic Product and in per capita income is second only to Luxembourg.)
The news media
may protest that they do cover the poor. And in one sense, they do. But these
are typically isolated stories about a hard-luck family in a disaster area, or
profile of the plucky Midwest downsized manager flipping burgers at McDonald’s
—sympathetic features but depicted as isolated cases. Reported only rarely and
obscurely is why the United States, among all its affluent peer countries,
retains a poor class year in and year out.
symbiotic relationship between our national politicians and the main news media,
that media failure has consequences. What the main media ignore, political
leaders know they can safely ignore. The needy appear only at election time in
stereotyped rhetoric and campaign photo ops. The empty rhetoric without
subsequent media follow-up has deepened the comfortable assumption that in
America poverty is an unavoidable act of God. When a government report documents
one element in permanent poverty, like the 1997 HUD 1997 document on the
unrelenting rental housing crisis, it passes out of print in one day, not
followed up with emphatic subsequent stories, which is the process that produces
political pressures for action. Or the mainstream news relates it to the
"millionaire-market" housing scene in San Francisco Bay or midtown Manhattan,
not the same crisis for average families in suburbs of Chicago and rural Kansas
and thousands of other cities and towns.
may have been inexorable in biblical times, when there really was inadequate
food, inefficient use of arable land, rigid class systems, slavery and serfdom.
But today’s world has enough food for everyone, and affluent countries like the
United States have enough rich resources to guarantee their populations enough
decent food, housing, universal health care, jobs and pensions. Most of our peer
countries do exactly that. Only the United States has chosen not to rid itself
of a permanent poor.
The United States
is unique among the world’s advanced industrial societies-France, Germany, the
United Kingdom, for example. It has retained this dubious exception s for so
long – almost half century —- that a poverty class in this country is now seen
as normal, inevitable, and, with parallel media unconcern, consequently
Who are "the
American poor" and are they really poor?
statistics periodically adjust the poverty level in the country to reflect
changes in the cost of living. In 1999, for example, a family of three with a
household income of $13,880 or less was classified as living in poverty. Of the
32 million Americans in poverty, 72 percent were in families. These include one
of every five American children. These are not poor because they lack Cuisinarts
and BMWs. They are poor because they lack enough food, shelter, and access to
other elementary living conditions in any modern society.
Why do we permit
this when our peer nations do not? The answers are not mysterious: official
housing policies, deliberate shifting of national wealth to the top through
destruction of the national progressive income tax, mammoth special favors for
corporations, and cynical treatment of the national minimum wage.
Why do the
mainstream news media share the blame?
demonstration of media’s guilty involvement occurred thirty years ago. When,
suddenly, as though from nowhere, we had homeless families living in the
streets. For national civic life it was the dead canary in the coal mine. We
know why the canaries die in the mines: it is a warning of methane gas kills
sensitive canaries before it kills human beings. The dead canary of structural
American poverty was the sudden appearance of the homeless in the early 1980s.
In the 1980s, the
number of poor Americans began climbing noticeably. By 1998-1999, the average
poor child was further below the poverty line than he or she was in 1979.
change tells something crucial. By the mid-1980s, seemingly out of nowhere, for
the first time since the Great Depression, large numbers of individuals and
families were living in the streets. "The homeless," is a social phenomenon
usually associated with countries like Bangladesh, but has now survived as a
visible urban fixture in this richest of countries.
Emblematic is the
failure of the big newspapers and broadcasters to search out the source of the
new homeless when they first appeared in the 1980s. Most often, the media refer
to the homeless who are alcoholics, drug addicted, or mentally ill. But we
always had alcoholics, addicts and the mentally ill before without large numbers
of families living in the streets. Something radical had changed.
A hint of what’s
changed is that the homeless-a minority of the total poor – are homeless even
though, according to the Bureau of Labor Statistics, 64 percent of them have
jobs, some of them two jobs, but they are still poor by government standards.
democracy has been able to house its low-wage families by depending on the
private real estate industry. Government-subsidized low-cost housing has been
found indispensable if all are to be housed in minimally decent homes and
apartments. Before 1979, the United States subsidized 200,000 such low-income
units a year. In the early 1980s, in the new fervor for shifting everything
possible to the free market, subsidized low-cost housing subsidies were cut by
92 percent. That is the central reason we suddenly had a permanent beggar class
and families living in the streets. Few readers or TV news watchers were ever
told the basic reasons why our homeless happened "out of nowhere."
Why the media’s
strange lack of curiosity? It was part of the main media’s gingerly treatment of
basic causes of social ills whose remedies might involve an increase in taxes.
On the contrary, the media generally celebrate the opposite-whatever reduces
taxes. Explaining the "dead canary" of the suddenly homeless might have
stimulated renewed appropriations for subsidized low-cost housing-taxes for the
benefit of the most politically powerless group in the electorate.
There are other
contributing forces to persistent homelessness. Earlier it had been found that
most of the institutionalized mentally ill were improved if they were released
to local treatment centers in their home cities and received counseling at local
treatment centers. So mental hospitals were effectively emptied, saving millions
of tax dollars. But even more taxes were saved by reneging on the promise to
shift the saved money to local treatment centers.
The majority of
the poor are not mentally ill. They are mentally sound, non-addicted individuals
and families. But they remain poor. According to the Department of Housing and
Urban Affairs (HUD), from 1985 to 1993 the private market for affordable housing
dropped another 20 percent, and, according to the Journal of Housing and
Community Development, only 33 percent of Americans eligible by law for federal
housing actually can find such housing.
December, 1997 issue reported, "With affordable housing out of reach for growing
numbers of low-income Americans, the housing crisis can only be expected to
worsen…the recent actions by Congress have further disenfranchised an already
disadvantaged segment of the American family." In 1995, there were 1.3 million
low-cost housing units available for 2.6 million low-income renters, as shown by
a survey by the Center on Budget and Policy Priorities. Yet, in that same time
period, according to the National Association of Realtors, the median price for
a single family house rose 45 percent. With low-cost rental apartments
unattractive to the real estate industry and failure of the needed government
subsidies for what the private market prefers to reject, the "mystery" of both
the homeless and the impoverished 32,000,000 Americans is not very mysterious.
In addition, the
poor have been paying steadily higher percentages of their income on rent-more
than 50 percent of their disposable income. In a Catch-22, from the remaining
half or less must come other indispensable human needs, like food, clothing and
payment of their unfair burden of the most regressive taxes.
issue is the shameful phenomenon of a radical shift of national personal wealth
from the bottom 80 percent of the population to the top 20 percent, with the
lion’s share of that going to the top 1 percent. The fact that such a gap exists
gets into American news occasionally, but as a routine statistic, like the corn
crop in Kansas.
The United States
has the widest gap in the world between its very rich and its unrich. The gap
has grown year after year, neither by accident nor by talent and hard work by
the super-rich. American workers are unique in their low share of their
employers’ revenues compared to our counterpart countries. The typical American
CEO receives 34 times the typical American factory worker who now earns less (in
absolute dollar terms) than hourly workers in Japan, Germany, or Switzerland.
The multi-million- and billion-dollar executive compensations show no
relationship to the performance of those corporate executives, according to our
most prominent authority on executive compensation, Graef Crystal, formerly of
the University of California at Berkeley and now with Bloomberg News. He has
said, "It gets worse and worse…It’s absolutely sick."
The massive shift
of American wealth to the top has been reported in the media, but without the
sense of outrage and alarm that would puzzle a Lincoln Steffens, Ida Tarbell,
Franklin Roosevelt, or any number of political and media leaders of past eras.
Though the main media attitude toward the poor seems to take comfort from the
Book of Matthew’s resignation to their plight, the media seem less interested in
another biblical reference, "It is easier for a camel to pass through the eye of
a needle, than for a rich man to enter into the Kingdom of God.."
countries lack the size and causes of the permanent American poor. The answer is
simple. The other rich countries have housing, employment, pension, and tax
policies that prevent it. The overall answer is an inexcusable fantasy aided and
abetted by our major media, newspapers that, for example, have "Correction
Columns" for errors like printing the wrong middle initial of a politicians. The
media fantasy, aided and abetted by politicians, have convinced the people of
the United States of a falsehood, namely, that we are a brutally over-taxed
country. The truth is that of all the affluent democracies, Americans are the
lowest taxed in the world, including the sum of all local, state, and national
taxes. Consequently, when this fantasy is shrill in every political campaign –
promising lower taxes as a dire necessity— it is accepted as an urgently
needed rescue of that beleaguered population, the very rich. Though the main
media love to find culprits in social problems, on this they practice selective
amnesia. For more than half a century, the share of federal taxes paid by
corporations has been dropping radically and shifted onto families and
individuals. In 1940, corporations paid 40 percent of federal revenues. By 2000
it had dropped to 12 percent. Guess who pays for that shift.
Even though money
supply and national wealth have grown, in 1955 corporate taxes paid for 6
percent of our Gross Domestic Product but now pay only 2.5 percent. Except for
Japan, U.S. income taxes as 34 percent of GDP are lowest among industrialized
nations. The rate in Canada is 36 percent, Germany 39 percent, Switzerland 50
percent. It is not coincidental that most of those other countries have
universal health care, guaranteed housing and more generous social benefits than
The top federal
income tax rate for the richest Americans was once 70 percent, though people
that rich hired the best accountants and tax shelters, so few paid anything like
the top bracket. The top rate in 2000 had dropped to 39 percent, and in practice
it is closer to 33 percent, and few in that theoretical bracket pay that much
for the same reasons. Now the Bush Administration wishes to drop it to 25. The
country’s progressive income tax is now close to dead.
taxes do go up. The loss of our federal progressive income tax has year-by-year
shifted basic American taxes to the most regressive kind in which the poor pay
more of their income than do the rich. In the resulting shift of taxes from
Washington income tax responsibilities to states, counties and cities, these
jurisdictions have resorted to sales taxes, the most regressive kind. Here, of
course, the poor pay the most in terms of disposable income. In 1995, according
to Citizens for Tax Justice and The Institute on Taxation and Economic Policy,
the lowest 20 percent of family incomes paid 12.5 percent of all state and local
taxes (property, sales, and fees) while the top 20 percent of families paid 8.5
percent of their family incomes.
A 7.5 percent
sales tax on a minimum wage worker represents a significant percentage of that
person’s income. The same percentage sales tax on a millionaire is a negligible
percentage of total income, which is why, in the need for revenues, corporations
and the rich insist on sales taxes instead of higher federal income taxes.
The final insult
to the poor is the minimum wage. Corporations and the rich fight every move for
an increase, the way they fought against creation of the minimum wage in the
first place. In 1970 the minimum wage was worth 29 percent more in real terms
than it was in 2000. According to the Economic Policy Institute, in 1970 minimum
wage workers were living above the poverty level. In 1998, only 19 percent were.
objection that it will reduce the number of jobs available, or force small
businesses into failure has no basis in reality. The Institute says a raised
minimum wage has never resulted in significant reductions in jobs or closed
Minimum Wage have always raised the image of denying the after-school teen-ager
learning how to be productive. But in 1999, 71 percent of people earning the
minimum wage were adults.
If the Dow Jones
Industrial Average dropped steadily for twenty years it would be front page and
leading broadcast news day after day until government took action. That 32
million of our population have their housing, food, and clothing "index" drop
steadily for more than 30 years is worth only an occasional feature story about
an individual or statistical fragments in back pages of our most influential
news organizations. An unnecessary poverty class is shameful in "the leader of
the free world" and the richest one at that. A fraction of the media’s daily
attention to the Dow, the media’ role in creating the myth of overtaxed
Americans and the notion of an inexorable American poor class, make our
mainstream papers and broadcasters a party to a cruel and unnecessary flaw in
our society. Corporations and Washington legislators may point with helpless
resignation to the biblical assertion that the poor will always be with us, but
the experience of other rich countries like Germany, France, Canada, and Britain
suggests that the answer lies less in Book of Matthew, and more in The
Ben H. Bagdikian
is the author of In the Midst of Plenty: The Poor in America (Beacon Press,
1963), The Media Monopoly (6th Ed., 2000), other books. He is the former Dean of
the Graduate School of Journalism at the University of California at Berkeley.