Poverty in the U.S. in Recent Decades

The following is taken from Miguel A. De La Torre‘s book, Doing Christian Ethics from the Margins.  This is one of the texts we’re using right now in the Christian Ethics class I’m teaching.  What’s all the more impressive about this passage is that it was written in 2004, well before the financial crisis.  The class disparity in this country has only increased all the more since then, as recent events have made clear.  For a more recent account of the disproportionate income and capital distribution in the U.S., read here:

With economic policies put in place under Reagan, the income gap widened dramatically, while the middle class shrunk.  These new economic policies radically changed the distribution of wealth in this country.  During the 1980s, the top 10 percent of the population increased their family income by 16 percent, the top 5 percent increased theirs by 23 percent, while the top 1 percent increased their income by 50 percent.  By the end of the Reagan administration, the income of the top 1 percent was 115 times greater than the bottom 10 percent (Phillips 1990:12-17).

The economic policies of the New Deal were replaced by a supply-side philosophy that consisted of cutting, if not eliminating, social services and benefits for the poor while providing tax breaks for the wealthy.  The hope was that economic benefits given to the wealthy would “trickle down” to the less fortunate.  According to figures published by the Census Bureau, this led to the richest among us seeing their inflation-adjusted income rise by 30 percent from the late 1970’s to the mid-1990s, while the poorest aw their income decrease by 21 percent.

The so-called “Reaganomics” pushed unemployment to almost 10 percent, median family income dropped to 6 percent below pre-1973 levels, and poverty rose from 11.1 to 14.4 percent.  The bottom quintile received 4.7 percent of all income, a full percentage point below the 1973 level.  From 1947 through 1979, real income had risen from all segments of society.  Since 1980 income has risen only for the most affluent countries (Cooper 1998:338-54).

Throughout the 1990s, during the so-called economic boom, only the top quintile increased its share of the nation’s income.  From 1979 to 2000, the Congressional Budget Office reported that the gap between the rich and the poor more than doubled as the U.S. experienced the greatest growth of wage inequality throughout the Western world (Wilson 1999:27).  These radical economic changes within the United States have contributed to the smallest and fastest-shrinking middle class among all industrialized nations.

By the close of the century, the top 1 percent of taxpayers each had on average $862,700 after taxes, more than triple what they had in 1979.  Meanwhile, the bottom 40 percent had $21,118 each, up by 13 percent from their average $18,695 (adjusted for inflation) in 1979.  The year 2000 proved to have the greatest economic disparity since 1979, when the budget office began collecting such data.  The National Bureau of Economic Research, a nonpartisan, nonprofit research group, claims that the top 1 percent enjoys the largest share of before-tax income for any year since 1929.  By 2002, according to Census Bureau figures, 34.8 million individuals found themselves living in poverty compared to 25.4 million individuals in 1968), of which 12.2 million were children.  Further contributing to the widening income gap was the 1996 Welfare Reform Act, signed by President Bill Clinton.

It seems that, in general, no matter how hard the poor work, they often continue to slip into greater poverty.  The growing disparity of wealth between the poor and the rich leads us to question if it is a “work ethic” that is at stake or perhaps a “work ideology” that allows the wealthy and privileged to rationalize classicism.  Why is it so difficult of the poor to “get ahead”?  Is wealth really a reward for hard work, and poverty a punishment for laziness?  Or is there another explanation for the accumulation of uneven greater wealth by those at the top of the economic ladder?  Increase poverty directly affects the well-being of our society: it leads to a rise in crime, drug and alcohol addiction, family disintegration, child abuse, mental illness, and environmental abuse.  Instead of dealing with the causes of poverty and seeking a more equitable distribution of resources, those privileged with wealth seldom make the connection between the riches and the poverty of others.  More often the view their wealth as something earned, a blessing from God, or a combination of both.  They tend to seek to insulate themselves from the consequences of their riches, moving to gated communities and sending their children to private schools.

Ethicists from the margins argue that communities that ensure a just economic base must place the humanity of their members before economic development (the latter of which can be code language for increasing corporate profits).  Development today usually means short-term profit, and often at the expense of the marginalized.  Yet, true development, economic as well as socio-political, takes place when society’s treatment of its most vulnerable members enable them to pass from a less human existence to a more human condition.  Conditions faced by the poor are caused by oppressive structures that lead to the exploitation of workers and creating material want.  The ethical quest for more humane conditions requires a set of social actions – a praxis designed to overcome extreme poverty, raise consciousness of classicism, foster dignity for all people, develop an equitable distribution of the earth’s resources, and secure peace –to testify to one’s love for God and one’s neighbor, a love that binds God with neighbor.

Regardless of how we choose to define this more human condition, it remains threatened by increasing poverty. The so-called “work ethic” is debunked when the poor work, and many full-time, simply to survive; when there are few if any other options for work; and when the work is unrewarding and unfulfilling.  Some full-time workers receive the legal minimum hourly wage, but their income still falls short of the official poverty line.  Is it any wonder that in 2001 the top quintile, the most affluent fifth of the population, possessed half of all household income, while the lowest quintile, the poorest fifth, received 3.5 percent of the total household income.  Furthermore, 49 percent of those who live in poverty yet worked full-time during 2002 lacked any form of health insurance and were literally an illness away from financial ruin.

It is safe to conclude from this snapshot, I think, that whatever path voters and policymakers decide to take in the coming years, “going back” to old strategies like supply-side economic theory is simply not an option.  It would be a category-error and a very premature leap at this point, however, to say based on these observations that the question of who or what to vote for or care about has been answered.  It seems to me that yet another subject of great importance for responsible citizenship and Christian political engagement is the nature of the electoral process itself.  I will try to examine this next.

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