USA 2000: Inequality, Poverty and the "New Prosperity"
Revolutionary Worker #1038, January 16, 2000
"Today, America bestrides the world. In strategic terms, it is the only superpower. Its economy is the most powerful. Its language, its popular culture (from jeans to burgers to films) and its preferred model of free-market democracy make new converts daily."
From "The Millennium," special section
in the New York Times, Jan. 1, 2000"They just took my stuff and dumped it in a dumpster. I had all my papers in there. I have AIDS, so I had to go fishing through the garbage to get my stuff back. I don't ask nobody for nothing. I clean floors at the corner store for my money. And everyone still sees me as dirt."
Tyrone Saunders, 35-year-old homeless
man in San Francisco, after the police
seized his possessionsAt the dawn of this new century, the United States stands as the wealthiest and most powerful country in the world. Its economy is bigger and more robust than the other imperialist economies of Japan and Europe. The stock market continues to reach new highs. Unemployment is at an all time low.
The politicians, businessmen and their opinion makers brag about America's "new prosperity" and promote it as a model for the rest of the world. They claim that the economic boom is "lifting all boats"--benefiting everyone in this country.
But one of the striking features of this "new prosperity" is the sharp inequality between the small numbers who are extremely wealthy and the many who are very poor. There has always been inequality in this country. But as new technologies fueled the boom in the last decade, the "digital divide" between the haves and the have nots has widened tremendously.
One out of eight people in the United States--about 35 million--live below the poverty line, which is defined by the government as $13,003 in annual income for a family of three and $8,316 for individuals. And two in five poor people are living in extreme poverty--less than half of the official poverty level. More than 1 in 10 children in the U.S. live in extreme poverty.
The situation is especially dire for families headed by single women, numbering about 2 million families or 6 million people. Between 1995 and 1997, this group's income fell by an average of almost 7 percent. And the drop was even bigger for the poorest single mother families--the bottom 10 percent saw their income fall by almost 15 percent.
At the other end of the scale, the top 1 percent of U.S. households own more wealth than the entire bottom 95 percent. The concentration of wealth gets more glaring the higher up you go. The richest one-half percent of households have 42 percent of the financial wealth in this country.
Bill Gates, head of the giant Microsoft Corporation, is a prime example of this super-concentration of wealth. By 1999, Gates had amassed a personal fortune of $85 billion. According to one study, this is equal to the combined annual gross national product (GNP) of all the countries in Central America--Nicaragua, Guatemala, El Salvador, Costa Rica, Honduras, Belize and Panama--plus the Dominican Republic, Haiti, Jamaica and Bolivia.
The news is filled every day with hype about investors "striking it rich" in the stock market. More people do own stocks--directly or indirectly--than ever before. But the "bull market" is yet another aspect of the widening inequality. Almost 90 percent of the unprecedented stock market gains of the 1990s went to just 10 percent of the wealthiest households.
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In the richest country in the world, millions of people lack the basic human needs of shelter and food.
A recently released study on homelessness in the U.S. found that on a typical night in February 1996, 470,000 homeless people were in shelters around the country. The study estimates that this is only a quarter of all the people who were homeless at any one time during the year. Other studies show that more than 4 million children and many millions of adults regularly don't get enough to eat. In all, about 35 million people in the United States suffer from varying degrees of hunger.
A new survey of cities across the country found that demand for emergency food aid grew 18 percent in 1999--the largest increase in seven years. Demand for emergency shelter grew by 12 percent in 1999. And because of cutbacks in government services and funding, almost a quarter of the requests for emergency food and shelter went unmet.
Some of the people who are homeless or go hungry have been poor for a long time or have major health problems. But a significant number are working poor--people who don't make enough on their jobs to afford decent housing and enough food. In 1998, one quarter of the U.S. labor force was made up of low-wage earners making less than $8 an hour. Large numbers of people are just a missed check away from losing the roof over their heads. Rising rents and cuts in housing subsidies have left 5.3 million families in housing that is unaffordable or substandard--a record number.
This system's spokesmen call the 1996 welfare "reform" law signed by Clinton a major "success." The number of people on welfare has plummeted, and employment among the poor has risen. But the reality is that many people are being moved from the welfare rolls to the ranks of the working poor. Former welfare recipients who find jobs typically earn between $8,000 and $10,800 a year--well below the poverty line for a family of three.
Poverty in America is closely connected with national oppression and white supremacy. The poverty rate among Black people is at 26 percent--more than three times the rate among white people. The poverty rate for Latinos is 25 percent. The median Black household had a net worth (including bank accounts, home equity and other assets) of $7,400--just 12 percent of the median white family. (Median means that half the households are above that figure and half are below.) The median Latino household had a net worth of only $5,000.
What about the large middle strata of this country? On paper, things seem to be going fairly well for this section of the people, as median income keeps on rising. But behind this is another dirty secret of the economic boom. Much of the rise in income is due to a huge increase in the number of hours spent at work. Middle class people in the U.S. are working an average of eight weeks more per year compared to 1979. According to the New York Times, "The main reason for the surge...is not so much that men are working longer hours but that women are--in large part to keep family incomes climbing while hourly wages, after accounting for inflation, have largely stagnated for the past 25 years."
So this is a snapshot of USA 2000 in a nutshell: The rich are getting richer, the poor are getting poorer, and the middle is scrambling to keep afloat.
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The power structure has no real solution to these problems of inequality and poverty. Instead, they are carrying out a program of more cruelty, more punishment, more police, more prisons.
Cities across the country are following lead of New York City Mayor "Adolph" Giuliani and his cold-hearted attacks on the homeless. In Sacramento, the downtown business association hires patrols to call police when they find someone sleeping on the street or panhandling. In Atlanta, a person who asks for money more than twice from the same passer-by can be arrested. In San Francisco, the police issued more than 20,000 citations last year for petty violations like trespassing, camping in public space, or carrying an open container. And people who hand out food to the homeless are arrested for "not having a permit."
And the lock-up boom shows no sign of letting up. By February 2000--when Clinton delivers his last State of the Union speech--the prison population will reach the 2 million mark. This is an increase of 70 percent from the start of the last decade. Black people account for more than 50 percent of inmates in state and federal prisons.
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As RCP Chairman Bob Avakian points out: "THE PROBLEM TODAY IS THAT, IN THE HANDS OF THE CAPITALIST CLASS THAT RULES OVER US AND STILL CONTROLS HUMANITY'S FATE, THE TREMENDOUS TECHNOLOGY AND KNOWLEDGE THAT IS CREATED CANNOT BE USED FOR THE BENEFIT OF HUMANITY AS A WHOLE AND INSTEAD CAN ONLY SUBJECT THE GREAT MAJORITY OF US TO AGONY AND OPPRESSION. This is a problem for us, yet it is also a problem for THEM, because it makes clear that THIS CLASS OF CAPITALIST EXPLOITERS CANNOT RUN SOCIETY IN THE INTERESTS OF THE PEOPLE."
This article is posted in English and Spanish on Revolutionary Worker Online
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