Evicted, Matthew Desmond’s Pulitzer Prize winning study of the American housing market was personal. He lived the life. A cri de couer. Poverty by America is a step away from that immiserating experience. His gut was telling him it was wrong. He wasn’t a cultural tourist. This is a more cognitive and rational approach to explain why so many people in America are poor and likely to remain so.
His solution seems pretty straightforward. Stop taking money from the poor and giving it to the rich. Take money from the rich and give it to the poor. His reasoning is not straightforward, but wavy. The working class lost the propaganda war. By health or wealth, we became poorer in every way, and this shows in simple measures like we have less children.
He begins with the obvious. Outlining the scale of the problem.
‘The richest country on earth with more poverty than any other advanced democracy.’
‘Almost one in nine Americans—including one in eight children—lives in poverty. There are more than 38 million people living in the United States who cannot afford basic necessities, and more than 108 million getting by on $55 000 a year or less, many stuck in the gap between poverty and security.
More than a million of our public schoolchildren are homeless, living in motels, cars, shelters and abandoned buildings.’
‘Why Haven’t We Made Progress?’ he asks in the second chapter. I’ll simply this chapter. The war on welfare succeeded. Government money did not reach the poor and those in poverty. It went to the middle-classes and the rich. What worked for the latter group was demonising those they were ostensibly helping. Blame game is as old as ‘The Chinese as a class are detriment and curse to our country.’ A quote from a newspaper column from 1877.
Can we pin it on the family? The broken home argument. You wouldn’t be reading this book if you didn’t know this is hokum.
‘In America, marriage had become something of a luxury good. It comes after a couple believes they have achieved a level of financial stability.’
‘The real question about single-parent families isn’t why so many poor families are single, but why so many of them remain poor.’
How We Undercut Workers (and blame workers for being poor, while not paying them enough). It’s all the fault of deindustrialisation. Factories closed. China became the workshop of the world. Jobs did go abroad. But it didn’t stop the 1% getting richer and richer and richer as these things happened, while the working class become poorer and poorer. Waged labour reached its peak in the 1970s.
He offers the typical case of Julio Peyes, who in 2014, worked two jobs in a 80 hour week.
‘I felt like a zombie,’ Peyes claimed.
‘It wasn’t always this bad. Between the late 1940s and the late 1970s, the American economy expanded and shared its bounty. Honest work delivered a solid paycheck, and a big reason for that was union power’.
I’ll give you a clue what happened here. Thatcher and Reagan the ‘let the poppies grow tall’. Part of the neoliberal deal of letting the filthy rich get even richer was destroying the unions, and, disengaging from government oversight. Thatcher destroyed the coalmining union. Unions of workers in any form were given notice to cease and desist. The party of low or no regulation made union’s action liable to bureaucratic quicksand and all other actions illegal, much like we see with refugees applying for asylum. Reagan took our aircraft controllers. Deregulation meant no regulation for the rich (think of the Big Bang before 2008. Sewerage dumped by privatised water companies into our rivers, and the paltry fines that follow the logic of seemingly doing something), while giving the biggest tax cut in history to the richest. Even the moron’s moron Trump didn’t give the rich more money than Reagan (although he tried).
‘Are poor-paying jobs simple the result of people not getting enough education?’ Desmond is reframing then American Dream argument here and suggesting it’s a meritocracy, while knowing it’s not.
‘But the spread of bad jobs in America is not primarily the results of the so-called skills mismatch involving too many people lacking the right credentials or training for good jobs.’
Other rich economies such as the Netherlands, Switzerland and France, he suggests, have far less poverty. Germany, for example, has only 35% of its citizen educated to Bachelor degree level, while America’s cohort is around 50%. Yet child poverty is around half what it is in the United States. He doesn’t include Britain, of course, because we follow the American model, and have swallowed down their neoliberal bullshit ideology. We’re moving in the wrong direction and have been since Thatcherism. We all work in the gig economy now. The irony is that government subsidises wages by, for example, paying part or whole rents for workers to an increasing rentier class that demands more and more, whilst also claiming to want to shrink their general paymaster—the government. While labour costs fall, the ability of the corporate bosses to spy on labour and penalise so-called infringements, has never been greater. Shareholders (rich people) benefit from the poor having little or no power, while keeping them anonymous and replacement parts for greater profits (dividends). This is true for books, groceries or care homes.
Amazon, for example, is regarded as one of the most trustworthy institutions, but also the most exploitative and most intrusive in measuring and metering each labour task. Jeff Bezos is one of the richest men in the world, because everyone that works for him works in the gig economy (especially me and other writers). Keeping down costs is pretty easy, just atomise workers, exploit them and pay the legal minimum. They don’t know better. They can’t expect better. Where have we heard that before? They don’t deserve more.
Break things and move, Royal Mail used to pay a decent wage and provide its workers with pensions, it did all of the things Amazon does or did. It still does, but we’d much rather go cheaper and enrich Jeff Bezos.
‘How We Force The Poor to Pay More,’ is obvious. When you have nothing, you expect nothing but blows. Desmond returns to familiar territory here, the rental house market. We need more housing. That’s true in Britain as America. Simple economics dictates that many people chasing few houses pushes the price up. One way of dealing with that is to make houses smaller. Britain, for example, has the smallest and most expensive houses in Europe. Another trick is to subdivide what we already have. Rackman, for example, evicted existing tenants, further subdivided his properties and rented to the Windrush generation. Racism and exploitation in a vicious circle, which is mirrored in different ways in different parts of the world. Seven in ten black men in the US, who do not finish ‘school’ end up in prison. Education doesn’t buy freedom, but it gets you a prison cell, run by corporations—for profit . What we are increasingly finding is poor people don’t have a choice.
Desmond notes a small number of predatory—and very rich— landlords (I’m not including King Charles III here or his relatives, such as the Duke of Westminster, the biggest landlords in Britain) are responsible for a large proportion of houses that make their tenants ill and take years off their lives. But even the better class of landlords are still making a killing. The housing game is rigged against the poor to keep them poor and indebted. For every sucker, there’s another sucker. That’s the way the banks and markets work.
‘Every year: over $11 billion in overdraft fees, $1.6 billion in check cashing fees, and up to $9.8 billion in payday loan fees. That’s over $61 million in fees collected predominantly from low-income Americans each day—not even counting the annual revenues collected by pawnshops and title loan services and rent-to-own schemes.’
Different worlds and different banking sectors for the rich and poor. ‘How We Rely on Welfare,’ is a lie the rich love to keep recycling. During COVID-19 stimulus checks (welfare payments) that went directly to the poor meant that roughly ’16 million American fewer Americans in poverty in 2018 than in 2021’. Child poverty was halved. The business as usual model meant these numbers began to climb. The short sharp shock of taking away the stimulus would encourage those lazy people that relied on government help back into work. That’s the argument our government used when taking away the £20 extra a fortnight given to those on benefits was made by the then Chancellor of the Exchequer, and current Prime Minister, Rishi Sunak, to make him look tougher. We already use a punitive approach. Tory Party Conference loves nothing more than hearing of using the state’s bureaucracy to beat the poor, with ever-increasing sanctions for all. The language is prettified, of course, to sound like helping rather than a hindrance. A refusal to publish an independent report of whether sanctions worked was par for the course. We expected nothing more.
Desmond found in his snapshot that the five states with the lowest unemployment weren’t those that stopped giving government money to the poorest (use of the stick) but those continuing with existing payments.
‘Perhaps it’s because we’ve been trained since the earliest day of capitalism to see the poor as idle and unmotivated. The world’s first capitalists faced a problem that the titans of industry still face today: how to get the titans of industry to file into their mills and slaughterhouses to work for as little pay as the law and market allow. Hunger was the capitalist’s solution to the labor question.’
Desmond found the idea of welfare dependency that dominated public debate, especially in the 1980s and 90s was ideological posturing. Most young mothers on welfare, even at its peak, leaned on it after a divorce, for example, or losing a job.
Digging into the data, Desmond reaches a surprising conclusion for the neoliberal elite. The problem wasn’t dependency, but welfare avoidance. Poor people didn’t claim what they were entitled to. Only a quarter of people who qualified for Temporary Assistance for Needy Families, for example, applied for it. Less than half of elderly citizens who qualify for food stamps get them. He tells us there is no official data of how much government aid goes unclaimed by low-income Americans. But he uses a rough rule of thumb to suggest 7 million collectively pass up the opportunity to claim $17.3 billion. Food stamps unclaimed, around $13.4 billion. Government health insurance unclaimed, $62.2 billion. Unemployment insurance, $9.9 billion. Supplementary Security Income $38.9 billion. Roughly around $142 billion in unclaimed benefits.
Desmond contrasts this with the lie we always hear about not being able to afford to feed the poor, to build proper homes, to create a fairer society. He contrasts the Gilded Age lampooned by, among others, Mark Twain, with the pre-banking era of America before the cataclysmic banking crisis of 2008.
Shitting money, gold-plated manhole covers featured in The New York Times Magazine. In 2020, Americans bought more than 310 000 powerboats. Spent over $100 billion on our pets. Over $550 billion on leisure and travel. Down from $723 billion the previous year due to Covid 19. Our cars are bigger than everyone else’s… Our homes are too. You could fit three newly built English homes into the average new American home. [More I’d guess as our housing became more expensive and hence smaller]. More than one in eight American families own properties beside their primary residence.
Desmond noted that during the Gilded Age those with riches flaunted both their wealth and their indifference to work. Why work when your money works for you? But the new American aristocracy claims being overworked is a mark of class. Here we get to the nub of it. Fast and cheap, rag-and-bone Americans don’t do real work. They’re just another resource to be exploited. Here the Gilded Age and the modern age meet with the notion of a different type of animal. The welfare queen. The drug addicts. Those with their hands out for welfare. Those that are rotten to the core and depended on public services and public goods, such as schools or hospitals. As Margaret Thatcher said, ‘there’s no such thing as society’.
Private opulence lives on top of public squalor and feeds on it.
Over the past 50 years, personal income in the United States has increased by 317 %.
Federal Revenue has increased by 252%.
In 1955, government spending accounted for roughly 22% of GDP.
In the twentieth century government spending declined to 17.6% of GDP. That included the biggest defence budget in the world, transport, health and welfare.
Personal consumption (motorboats et al are us,) grew from about 60% of GDP to 69% over the same period. Each percentage point decline is worth around $1trillon. A major driver of the trend was tax cuts for the rich. Everyone loves Trumpian tax cuts but the poor. And we’re made not to count. Public squalor is uneven. Private opulence hidden away in offshore tax havens.
Desmond makes the reasonable assumption that we need to invest in ending poverty. He reiterates what we already know. Even Tony Blair’s Labour government of 1997 started with that premise. They invested in childcare (Sure Start), schools and hospitals. They re-invented the idea of tax credits. We know what happened next. The Laurel and Hardy of British politics, David Cameron and George Osborne, shredded the social contract. They invested in the rich, while shrinking the state for the poor. The evidence is in. Brexit has proven to be economic disaster. Yet one of the chief liars, Boris Johnson was elected Prime Minister. We lost the propaganda war. I’m not sure Mathew Desmond solutions are really solution, more like great ideas. Without power, we’re powerless. I can’t see that changing. What is to be done in a world that burns?