Shake a Stick in Post-Financial Collapse America, and One Hits Poverty

by Sasha Abramsky

Shake a stick in post–financial collapse America, and one hits poverty. It’s everywhere: tent cities in municipal parks, under freeway overpasses, along river walks. Food lines stretching down city blocks. Foreclosure signs dotting suburban landscapes. Overstretched free clinics providing a modicum of healthcare to people no longer insured. Elderly people whose pensions have vanished and whose hopes for a decent old age have evaporated. Unemployed men and women looking for clothes for their kids at thrift stores and food for their families at pantries. Mothers begging for free turkeys from churches so they can at least partially partake in the national ritual of Thanksgiving.
By the end of 2010, according to the U.S. Census Bureau, 15.1 percent of Americans were living below the federally defined poverty line, an increase of approximately fifteen million people since the start of the century. Fully 34.2 percent of single mothers and their children were in poverty, up from 28.5 percent in 2000. Some of the poor lived in traditionally deprived communities; many others lived in the suburbs. In fact, according to Georgetown University’s Peter Edelman, in his book So Rich, So Poor, in the first decade of the twenty-first century, suburban poverty increased by fully 53 percent. Much of that was due to an extraordinary collapse in the worth of assets owned by middle-class African American and Hispanic families.
In 1984, the median value of household asset ownership for African American families was $6,679. By 2009, as the recession destroyed the worth of homes, that number had declined to a mere $4,900—thirty years of asset accumulation vanished. White households, despite suffering during the recession, by contrast still had a median net worth of $92,000.
The disparate impact of the crisis could be measured in soaring regional unemployment numbers and age- and race-specific poverty data. In Imperial County, California, for example, residents were experiencing a collapse on a scale that most of the country didn’t witness even at the height of the Great Depression. Nearly one in three workers were unemployed, and for the 68 percent of the working population in the county who had jobs, average income was abysmally low, hovering not far above the poverty line.
In Detroit, more than one-third of the total population was in poverty, and upward of two-thirds of children were in families living below the poverty line. New Orleans fared almost as badly: there, more than four in ten kids were in poverty, and, in the African
American community, fully 65 percent of children five and under lived below the poverty line. These numbers were so extraordinary that they made Philadelphia’s abysmal data look almost good in comparison: there, a mere one in three children lived at or below the poverty line. In Indiana, nearly one in ten kids lived in “extreme poverty,” meaning their family incomes didn’t even reach half of the poverty line threshold.10 In northern St. Louis in 2010, the poverty rate for kids stood at a dispiriting 30 percent.
Not surprisingly, in May 2012, UNICEF reported that of the world’s developed countries, the United States had the second highest rate of child poverty, with more than 23 percent of its kids officially poor. Only Romania, still struggling to shed itself of the awful legacy left by Nicolae Ceauşescu’s dictatorship, had worse numbers.
We look at the scale of misery unleashed; shake our heads; listen to that inner voice saying sadly, “What a tragedy”; and then, assuming we’re fortunate enough not to be poor ourselves, we try to get on with our lives. Yet, if we thought a little harder, we’d realize that what we’re witnessing isn’t so much a tragedy as a scandal.
It’s a subtle difference, but an important one. What turns poverty into a scandal rather than a tragedy is the political landscape out of which it bubbles. “It makes a difference if we treat it as a bug or a feature,” argued longtime community organizer and Harvard Kennedy School of Government senior lecturer Marshall Ganz. “Is it a bug in the system for which we provide a safety net, or a feature of the system? It’s a moral, political, and economic crisis. It’s a process of suicide. When countries stratify themselves into a wealthy few and an impoverished many, they go down the tubes.”
For Ganz, poverty was akin to the “miners’ canary.” It was the warning signal of a more general malaise—of school systems in disrepair, healthcare delivery mechanisms that were no longer delivering healthcare to large swaths of the population, a degraded environment, and more. “As long as people think poverty is the problem,” Ganz explained, “they’re missing the whole point. Poverty is evidence of a problem; it’s not the source of the problem. They’re all based on the weakening of collective institutions—the decline of labor, of common interests. The core question is not about poverty, it’s really about democracy. The galloping poverty in the United States is evidence of a retreat from democratic beliefs and practices.”
When people go hungry because of, say, drought or a plague of locusts; when thousands die in an epidemic; when natural disasters convert whole countries into wastelands, religious people say these are acts of God—the less religious might say they are acts of nature. But the process of casting around for someone to blame takes a back seat. Tragedy is, somehow, beyond the realm of the deliberate, the product not so much of malign decisions as of confounded bad luck, of happenstance.
By contrast, when poverty flourishes as a direct result of decisions taken, or not taken, by political and economic leaders, and, either tacitly or explicitly, endorsed by large sectors of the voting population, then it acquires the rancid aroma of scandal. It is a corrosive brew, capable of eating away at the underpinnings of democratic life itself.
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This isn’t a story only about those without work. In fact, America’s scandalous poverty numbers also include a stunning number of people who actually have jobs. They are author David Shipler’s “working poor,” men and women who work long hours, often at physically grueling labor, yet routinely find they can’t make ends meet, can’t save money, and can’t get ahead in the current economy.
For these men and women with no rainy-day funds to fall back on, income volatility too often results in instant deprivation. Agricultural laborer Laurentino Loera, a middle-aged man whose life possessions could be carried in a few plastic bags, and who slept nights on the floor of a community center in El Paso, quietly mentioned how a few weeks without being picked by the contractors to work the fields meant having to pawn his one consumer durable item: a small, portable, black-and-white television. For oyster fisherman Byron Encelade, collapsed income meant that he couldn’t buy his grandkids Christmas presents. For 30-year-old massage therapist Lauren Kostelnick, meager earnings meant no health insurance and only being able to shop in thrift stores. For Walmart worker Aubretia Edick, low hourly wages combined with her manager allotting her fewer hours each week meant skipping meals and keeping her upstate New York house thermostat on low throughout the long winter months.
No period since that surrounding the 1929 stock market crash has produced such a vast disparity between rich and poor, a vivid example of Michael Harrington’s argument that, in America, poverty exists hidden in plain sight within the crevices and cracks of the affluent society.
As tens of millions more Americans have come to rely on food stamps to avoid hunger and malnutrition, political figures such as Newt Gingrich and Rick Santorum have accused those on food stamps of no longer possessing the American will to success, of having become permanent charity cases. Barack Obama, Gingrich told audiences around America during the early months of 2012 was a “food stamp president.” In 2011, Tea Party activists, energized by the 2010 midterm elections, proposed cutting a startling $9 trillion from federal spending during a ten-year period.
Absent from all of these discussions were the voices of the poor themselves. What would it mean to cut food stamps?
For 35-year-old Maribel Diaz, a onetime employee of a California-run nutritional program for low-income residents who lost her job when the recession eviscerated the state’s budget, it would mean that she and her three young children would no longer be able to afford fresh fruit and vegetables.
Something that’s fresh, from the farmers’ market, it’s something everyone would want access to. If you are consuming your fruits and vegetables on a daily basis, it’ll prevent you from getting sick. It’s very important to have access to fruits and vegetables. I receive for myself and my kids, Cal-Fresh. If we didn’t have those benefits, we’d basically be hungry. I wouldn’t be able to feed them. We don’t have a lot of access to fruits and vegetables, but we do have some access. If the programs were cut, we’d be hungry, we’d be at food pantries. And they don’t give you no protein. They give you two, three, four cans of canned goods, with a box of cereal. We’d be hungry.I don’t know what we’d do.
For Marcy Glickman, a widow from Los Angeles’s chic West Side whose upper-middle-class lifestyle was destroyed by the medical bills accrued during her late husband’s battle with cancer and by the loss of income after they lost his business, the disappearance of food stamps would push her toward outright hunger. As the family’s finances imploded, with their income declining from more than $10,000 a month to less than $1,000, “I started collecting coupons for groceries, and I remember cutting down our spending on groceries,” said Glickman. Then she began frequenting food pantries, her lean steak and salmon diet replaced by noodles, canned tuna, and beans. “We had to get food stamps. At first I felt embarrassed. But after a while I realized at least we’re eating. At least we’re able to eat; we just have to cut down on everything.”
What would it mean to reduce the services provided by Medicaid? Ask Patty Poole, a Medicaid recipient in the upstate New York town of Endicott, who explained how she underwent surgery to reduce severe swelling in her leg caused by a nasty disease called lymphedema, spent weeks in the hospital, and came out to find that Medicaid in New York would no longer pay for the compression stockings that she needed to keep the swelling from re-emerging. Despite having already been measured for the specialized garment, she was told that due to budget cuts the state was only authorizing the purchase of these stockings for pregnant women or lymphedema sufferers whose skin was so wounded that it had actually broken out in ulcers.
“It made no sense. It would be more expensive to wait till a patient had ulcers,” Poole recalled thinking. Desperate to prevent her recently-operated-on leg from filling up again with fluid, Poole embarked on an odyssey of visits to patients’ rights advocates and doctors. But she couldn’t find a way to get the garment without paying full price, and that price—$900—was quite simply out of her reach. And so, without access to the needed stockings, Poole—who was born with spina bifida and had been disabled her whole life—was reduced to improvisation: spending hours each day carefully covering her own leg with an array of bandages, cotton wraps, and stockings. Some days, it took Poole and her roommate two hours each time her leg needed to be wrapped, and on occasion it would need to be rewrapped three times in a day.
What would it mean to restrict access to Medicaid? Listen to Megan Roberts, whose family ceased to qualify for Medicaid after her husband received a $1 an hour pay raise from the truck mechanics’ company that he worked for. The young couple with four children had recently moved from Albuquerque, New Mexico, to a small, impoverished community in California’s Central Valley so that her husband could take up a new job with the company. His health benefits were due to begin in January. But, a few weeks beforehand, Megan’s appendix ruptured; lacking medical insurance, the family was bankrupted by close to $100,000 in medical bills. Their credit shattered, they resorted to borrowing from one payday loan company after another:
"Five or six days after I was home from the hospital, I got my first hospital bill. About two weeks after that, I got my first failure to pay notice, saying that “you have not paid your $96,000 hospital bill.” The dollar pay raise had knocked us off housing benefits; we went from $612 rent to $1,030 rent. Knocked us off food stamps, so we didn’t get any food assistance. We had no Medicaid, because the dollar pay raise knocked us off that. He was going to get private health insurance through his work in January. But I got sick. We were left with this bill. On April 16 [2007], we filed for bankruptcy."
Reduce Medicaid services, you get more Patty Pooles. Reduce Medicaid access, you get more Megan Robertses.