A US Odyssey – Poverty in America

A US Odyssey – Poverty in America

As has been pointed out to me by Americans, the State of Washington is poor. It seems that some states are poorer than others, something of a surprise to me but what do I know? That’s why I’m here after all, to learn. Now, I am not naïve, the idea that “all men are equal” never rang true for me but this is the wealthiest country in the world and we’re not talking about the high cost of caviar. I see grinding, endemic poverty, not just a lack of cash but homelessness, ignorance, poor health, massive addiction, the full package. Worse, some sections of the population seem divorced from choice almost as though they are excluded from the American dream.

When you start to investigate surprise soon turns to incredulity. The Federal minimum wage is $7.25 but each state has a great deal of autonomy. Some US states have a higher minimum wage but, significantly, some states have a lower minimum wage, or no minimum wage at all. If you Google it you will see that Wyoming is $5.15, South Carolina, Tennessee, Mississippi Louisiana and Alabama have no minimum wage while at the other end of the spectrum Washington DC is $9.50, New York is $8.75 and California is $9. The South seems to stand out for some reason? In Canada it’s $10.25 about the same as the UK. Interestingly, I recently had occasion to complain about a Samsung product and was put through to a customer services call centre. The lady had a beautiful southern accent, she was from South Carolina, not Mumbai or Manila. It seems those third world call centre jobs have come home.

The average American owes $15,600 in credit card debt, the most downright socially destructive money of all. Credit card debt is particularly crippling because the interest rates are scandalous. The victim never catches up because they are not supposed to catch up. It used to be called usury and it was illegal. Now the financial industry caters to poor people for that reason, they have to pay more for less because they are short of cash. Nowadays they are a valid target.

Ironically, poor people pay more for their products not less. They buy kitchen towel a roll at a time, or cigarettes one at a time. They may not have a bank account and have to cash their pay or benefit cheques at a high street money seller. As for housing, the average American owes $157,000 in mortgage debt, remember house prices vary wildly here. In this area you can buy a three bed, 2 bath rancher a short walk from pristine beaches for $85000! Prices have dropped alarmingly. In the last few years there have been over 4 million repossessions as the property market folded. 20% percent of all mortgages are in negative equity with 10.8% of mortgages in foreclosure or past due. The idea that you saved your money (and got interest!) waiting until you could afford what you wanted was killed off long ago, deliberately. The banks are no longer interested in your savings they are now mere money lenders. Debt has become a way of life for just about everybody, even the government. More people than ever depend on high interest money just to get by.

The vast majority of Americans rent their homes but there is trouble here too. Officially, anyone paying more than 30% of their income on rent is financially “distressed”. On that basis in Washington State, on average, a minimum wage worker needs $18.92 per hour to be able to afford a one bedroom apartment. Clearly the numbers do not add up. Many people are paying much more than 30% of their income on rent i.e. their income is low, their rent high. They are officially distressed and believe me, they know.

The middle class has all but been wiped out. In an admittedly rather outdated definition of middle class one of the qualifying parameters was to have a years salary in the bank. How quaint. Those days are gone with most Americans a mere one or perhaps two pay cheques from disaster. The economy is improving but the gap between the poor and the wealthy is widening at a frightening rate.

The amount Americans spend on food has declined with 46 million Americans on government food stamps. Levels of obesity increase exponentially as a result. It seems many Americans can’t eat and pay their rent so the government came up with SNAPS, Supplemental Nutrition Assistance Program, food stamps. For many Americans the slippery slope to homelessness looms large.

In Seattle, Washington State, Mayor Murray recently presented plans to city council for 3 new tent encampments (see photo inset) to accommodate homeless people. Every major city in the US has tented encampments. (YouTube – tent city USA) Many cities refuse to acknowledge the homeless problem and just send in the bulldozers and move the problem somewhere else.

Tent City 3 Seattle Washington

Tent City 3 Seattle (Seattle Tower in background)

It all seems hard to believe, America is after all the last super power. How can such grinding poverty exist in the land of opportunity? America is huge, there is real wealth here make no mistake. I am focusing on poverty here because it took me by surprise, I just wasn’t expecting it to be so, obvious. As a tourist you rarely see this side of Uncle Sam and that’s no accident. Nothing is allowed to interfere with the flow of tourist dollars, customer perception is carefully controlled. It’s only when you dig a little deeper that the dark side comes out but hey, every country has poverty and a dark side so let’s keep things in perspective.

America can handle a large economic underclass, no doubt, because it always has. Poverty is a fact of life here and it’s not going away. The simple truth is the country needs poor people, illegal immigrants for example, people to do the jobs that no one else will do. Illegal immigrants however, send much of their hard earned cash abroad, much of it tax free. It leaves the American economy forever, a  fact that has not been overlooked.

America’s growing underclass hearkens back to the days of the great depression in some ways but in others it seems a little more sinister. The simple fact is resources are finite and equality, a myth. Millions of Americans have lost their life savings, through no real fault of their own. They have been well and truly  fleeced and are now vulnerable to exploitation. These days the person who cleans your toilets or cuts your grass is more likely to be a real live American.

About dmccaughey

dmccaughey.com
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