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A Family Experiencing Homelessness, and Two Questions

Rise of the Super Rich

Some Americans are comfortably situated and equipped to handle an unpleasant surprise. But many are on the brink of disaster. After an adverse incident, if a person or family can’t recover fast enough before the next crisis looms, the whole house of cards can collapse.

Many people think they know what homelessness is all about. But they don’t, which is why reporters like Eric Wahlgren are so valuable and why publications like DailyFinance must be thanked for devoting energy and space to profiles of people experiencing homelessness, reminding us that just about any life has the negative potential to go off the rails.

In a series called “The New Homeless,” a young fellow named Mike is interviewed. Having worked as a chef for years, Mike wanted a new career, and pursued it by returning to school to study software engineering. But his employer reduced his schedule drastically, and although Mike was able to hang in there long enough to get a bachelor’s degree, the domino effect had started.

No one would hire Mike as a Web developer because he had no experience in that field. In the lousy economy, restaurants were cutting back, not hiring. Mike and his wife and two children moved to California’s San Francisco Bay area, where tech jobs supposedly abounded, and Mike would certainly prosper.

The family stayed in a series of cheap lodgings while Mike hunted jobs. Then, his unemployment insurance ran out and they were really up the creek. As a last resort, they asked for and were promised a loan from a relative — which never arrived. Mike and his wife and their two kids were officially homeless.

How can this happen to a young man ambitious enough to improve himself through higher education, enterprising and courageous enough to transplant his family to a new place with better prospects, and able and willing to hold a steady job? Mike did everything right, all the steps we were taught would lead to security and success. What is wrong with an America where that formula no longer applies? So, that’s one question.

Mike’s longtime employer, before the move, was in the business of preparing food for private jet flights, and Wahlgren says,

In February, the catering company Mike worked for dramatically cut his hours. Thanks to the Great Recession, people just weren’t flying in private jets much anymore.

Okay, now the other question: What’s going on here? Somehow, it doesn’t add up, especially when you see an article like this one by staff reporter Annalyn Censky for CNN, that traces the different pathways taken by the fortunes of the very rich, and the rest of us, over the past few decades. Behold, the most in-your-face graphic ever, a chart that is cartoonlike in its obviousness, its zigzag lines diverging so emphatically to define the ever-widening gap between the “haves” and the “have-nots.”

The piece is called, “How the middle class became the underclass.” Censky writes,

Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed… the richest 1% of Americans — those making $380,000 or more — have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust.

Censky discusses the various reasons for the death of the middle class, like greatly weakened labor unions, deregulation of banks, jobs outsourced to other countries, tax cuts for the wealthiest, and hanky-panky in the stock market.

The chart that illustrates Censky’s article comes from economists Thomas Piketty and Emmanuel Saez, and is apparently the very thing that caused President Obama to decide that raising taxes on the super rich is the right thing to do. Apparently, that chart was a game-changer, but according to certain people, such as Daniel Henninger in The Wall Street Journal, not in a good way. He wrote:

Messrs. Piketty and Saez have produced the most politically potent squiggle along an axis since Arthur Laffer drew his famous curve on a napkin in the mid-1970s. Laffer’s was an economic argument for lowering tax rates for everyone. Piketty-Saez is a moral argument for raising taxes on the rich… Whatever its merits, their ‘Top 1%’ chart has become a totemic obsession in progressive policy circles.

Dan Ariely of Duke University says that 20% of the American population controls 84% of our country’s wealth. A Mother Jones article by Dave Gilson and Carolyn Perot makes an even more astonishing claim:

A huge share of the nation’s economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.

Imagine that! The top .01% of Americans, a tiny minority, controls a mind-boggling amount of financial resources. The entire top 1% are doing pretty good, too — much better, by comparison, than the rest of us, who are scrounging around under the sofa cushions for lost pocket change. The top 1% of Americans controls about 40% of the nation’s wealth.

The richest 1% are also the private-jet-owning demographic, and they’re not hurting. That stuff about how nobody can afford private jets any more doesn’t make sense. Something else must be going on, something they aren’t telling us about. The people who run everything treat the 99% like mushrooms: They keep us in the dark and feed us manure. What are they keeping us in the dark about, now?

We are not begrudging the rich, no one is calling for tar and feathers for the people of Wall Street. We are not even calling for equity but we are calling for a little bit of fairness: living wages. As a moral question, it is only right. “Pay me what my labor is worth… at least enough, so as a laborer I can afford basic food clothing and shelter.” From a business perspective, it only makes sense. With 64% of all small businesses failing in the first four years, it would be a great business practice to stabilize your workforce.  Support the Universal Living Wage. We are the change.

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Source: “The New Homeless: Aspiring Web Developer Ends Up on San Francisco’s Streets,” DailyFinance, 12/28/09
Source: “How the middle class became the underclass,” CNN Money, 02/16/11
Source: “The Obama Rosetta Stone,” The Wall Street Journal, 03/12/09
Source: “How Rich are the Super Rich?,” Mother Jones, 02/11
Image of Rise of the Super Rich is used under Fair Use: Reporting.