Billions in US federal rent assistance money withheld from millions facing eviction
Out of the $46.5 billion in funding provided for rental assistance under two bailouts enacted in December 2020 and March 2021, the vast majority has not been distributed, with only an estimated $3 billion of the funds being distributed as of August 3 according to CNBC, while millions are at risk of eviction or foreclosure.
According to the Eviction Lab, in the six states and 31 cities tracked by it, 480, 456 evictions have taken place during the pandemic. In just those areas alone, 6,108 evictions were filed in the last week. This is in spite of the announcement on August 3 by the Centers for Disease Control and Prevention (CDC) of the extension of the eviction moratorium to October 3 for counties “experiencing substantial and high levels of community transmission levels.”
The moratorium extension itself was only issued after Democrats allowed it to expire on July 31 and then after they washed their hands of it. The latest temporary version is a significant revision of the previous moratorium which, at least in letter, covered all renters. While CNN, citing a “source familiar with the effort” estimates it covers 90 percent of renters, which by no means should be taken at face value, that would still mean hundreds of thousands are now not covered who previously were, and can be thrown out of their homes amid a surge in the pandemic.
The extension itself has an uncertain legal future as attested to by the federal judge who allowed the Biden administration’s revised moratorium to remain in place, no doubt a veiled reference to a challenge by the extreme-right Supreme Court.
Approximately 1.6 million households reported being “very likely” to face eviction in the next two months according to the US Census Bureau’s July 21-August 2 Household Pulse Survey, while another 1.9 million where “somewhat likely.” Some 5.8 million were not at all confident in their ability to pay next month’s rent. Additionally, 238,000 homeowners were “very likely” to have to leave their house due to foreclosure, while another 826,000 were “somewhat likely” to have to leave.
For those seeking assistance, only 287,000 cited applying and receiving household rental assistance through state or local government, while 1.49 million were waiting for a response and 890,773 were denied assistance.
Only 15 states and the District of Columbia had spent 10 percent or more of the funds initially approved by Congress as of the end of June, according to the US Treasury, despite $25 billion of the funds for the Emergency Rental Assistance Program (ERAP) having been approved on December 27 of last year and $21.55 billion in March 11 of this year, under the Consolidated Appropriations Act and the “ American Rescue Plan Act ” bailouts, respectively.
According to a HuffPost analysis of Treasury Department data, “in roughly 40 states, counties and cities, not a single cent from ERAP made it out the door during that time.” This included some smaller counties, but also whole states such as New York, which received $801 million in funds, and Puerto Rico at $325 million, where nothing from ERAP was distributed.
Chicago hadn’t distributed any of its $80 million in ERAP funds either at the end of June, with the spokesperson for the Chicago Department of Housing saying that the department had been waiting on the City Council, which is ruled by Democrats, failing to allocate the funds since May when the applications opened.
Politicians for both parties have criticized local governments for the glacial pace that rental assistance was distributed.
Senate Minority Leader and coup plotter Mitch McConnell stated last week, “The problem has been with state governments who have been pathetically slow to get the money out.”
Senate Majority Leader Chuck Schumer criticized his own state of New York, stating he would send a letter to the state government to “immediately start disbursing those funds.”
Representative Bobby Rush, Democrat of Illinois, referring to the city of Chicago’s delay of $80 million in ERAP funds, stated that “Bureaucratic bungling is unacceptable,” and, “I am astounded and heartbroken that my constituents, who are suffering from horrendous economic woes in the midst of an ongoing pandemic, have not received the full financial relief that I voted for.”
New York City’s Mayor Bill de Blasio’s spokesperson Bill Neidhardt stated, referring to the unemployment benefits, “The main reason is that the application was fucking impossible.”
Neidhardt, saying perhaps more than he intended, stated, “I think it’s strategic incompetence. That’s why they delayed it, and that’s why they rolled out a mind-bogglingly unusable interface. Both those things show they didn’t want people to get the money.”
Sarah Saadian, vice president of public policy at the National Low Income Housing Coalition stated that while some places were distributing funds, many states and local governments were “putting in place their own documentation requirements or very lengthy application processes, which are getting in their own way of distributing aid.”
State governments undoubtedly played a role in holding up these funds through sheer incompetence and indifference. The central reason, though, has the same roots as the holding up of unemployment money, and that is the drive to shove workers back into low-paying jobs through economic blackmail so they can get back to producing profits for the financial oligarchy. As the WSWS wrote on April 29 of last year:
The unemployment benefits program included in the CARES Act has been, to a large extent, an elaborate exercise in deliberate mass deception. When Congress and the White House presented the additional 13 weeks of state-based unemployment insurance beyond the typical 26 weeks, plus an additional $600 weekly federal supplement through July 31, 2020, as a social safety net during the COVID-19 crisis, they knew very well that millions of unemployed workers would be unable to take advantage of it.
The Democrats and Republicans knew that many workers would not be able to get through to the antiquated systems in the state capitals across the country, which would be completely overwhelmed and unprepared for the number of people seeking to apply for benefits. They were counting on these systems being so backed up with delays and confusion that workers would give up and end up receiving little or nothing of the government money.
Just as before, both Republicans and Democrats are well aware that the distribution of such money would encounter significant caveats, yet they did nothing to address these.
“In most cases they couldn’t scale up an already-existing program, or if they could scale up an existing program, that program was tiny compared to the funding available now,” Ann Oliva, a housing policy expert at the Center on Budget and Policy Priorities told HuffPost. “That explains some of the lag.”
The glacial rate of the distribution of ERAP funds is in direct contrast to the lightning fast speed at which the continuous bailout by the Fed to Wall Street and large corporations is carried out. The justifications, evasions and blame game going on in D.C. and across the states are thoroughly unconvincing given that the Fed gives out over $120 billion per month, almost triple the total amount allocated to ERAP , to buy up corporate bonds and other financial assets, which are quickly used by Wall Street to fuel an orgy of speculation whose result can be seen in soaring stocks and soaring wealth of the billionaires. This contrast becomes even more evident when it’s considered that only a fraction of ERAP funds have been distributed, while the $120 billion is quickly put to use in speculative activities by Wall Street.
One could also point to the bailout of the airline industry, which, while being nominally allocated less money, in reality received far more than the $3 billion currently distributed. American Airlines received $5.81 billion through the CARES Act, while Delta received $5.4 billion, with both of their CEOs receiving millions while laying off tens of thousands of workers.
The failure to provide for housing, and the ongoing eviction and foreclosure crisis, is a testament to the bankruptcy of the capitalist system and to the necessity for its overthrow and replacement by socialism, reorganizing society to meet human need rather than private profit.
No, the rich aren't like the rest of us: Michael Mechanic on the secret worlds of wealth
Author Michael Mechanic explains that the super-rich aren't happy — and their greed is poisoning our society
By CHAUNCEY DEVEGA
PUBLISHED JULY 26, 2021 6:00AM (EDT)
Last Tuesday, Jeff Bezos, the world's richest man, soared into space in a rocket many observers compared to a penis. A week or so before that, Richard Branson also blasted himself to the edge of space in a "spaceplane" designed by his company, Virgin Galactic.
After his history-making feat, Jeff Bezos gave $100 million to CNN commentator Van Jones, and another $100 million to chef José Andrés, who has dedicated himself to providing free meals to frontline workers and others in need during the pandemic. They were asked by Bezos to use the money for charitable purposes. This beneficence was a type of "apology" for his grotesque act of hubris and ego: he and most others of his class have no sincere sense of social obligation.
In so many ways these billionaires and their space adventures, during a time of human misery and rising neofascism in America and the world, is like bad science fiction turned to life. It is as if Paul Verhoeven, Mike Judge and Roger Corman collaborated on a film and then found a way to replace reality as we once understood it with their elaborate simulation.
Bezos and Branson's antics are further evidence that America is a plutocratic pathocracy that is cannibalizing itself. In this new Gilded Age, millionaires and billionaires have enriched themselves through a political and economic system in which social parasitism and social Darwinism rule largely uncontested.
In this new world — that in many ways is an old world, with echoes of feudalism and debt peonage — neoliberalism means "socialism" for the rich and "free markets" for everyone else. Even worse, the poor, working classes and middle class directly subsidize the wealth and greed of the very rich, because the latter largely do not pay federal and state taxes.
With the billions of dollars Bezos and Branson collectively spent on their rocket rides to space, they could instead have chosen to provide vaccines for the poor around the world, rid the human race of a deadly disease, help uplift the poor and other vulnerable people worldwide, create a project to address the global climate emergency, or done other good works that would have simultaneously soothed their egos and desperate need for attention while also helping others.
With the money spent on his rocket ride and his gifts to Jones and Andrés, Bezos could have instead chosen to provide a true living wage for his employees (the very people who helped him to obtain his vast wealth) or given each of them a substantial cash bonus.
As seen with the Biden administration's new Child Tax Credit it does not take large sums of money to substantially improve the life chances of poor and working-class people in America. Bezos and Branson could easily choose to do the same.
In response to these billionaire space flights, Deepak Xavier, who heads Oxfam International's global inequality campaign, said this:
We've now reached stratospheric inequality. Billionaires burning into space, away from a world of pandemic, climate change and starvation. 11 people are likely now dying of hunger each minute while Bezos prepares for an 11-minute personal space flight. This is human folly, not human achievement.
The ultra-rich are being propped up by unfair tax systems and pitiful labor protections. US billionaires got around $1.8 trillion richer since the beginning of the pandemic and nine new billionaires were created by Big Pharma's monopoly on the COVID-19 vaccines. Bezos pays next to no US income tax but can spend $7.5 billion on his own aerospace adventure. Bezos' fortune has almost doubled during the COVID-19 pandemic. He could afford to pay for everyone on Earth to be vaccinated against COVID-19 and still be richer than he was when the pandemic began.
Billionaires should pay their fair share of taxes for our hospitals, schools, roads and social care, too. Governments must adopt a much stronger global minimum tax on multinational corporations and look at new revenues. A wealth tax, for example of just 3 percent, would generate $6 billion a year from Bezos' $200 billion fortune alone ― a sixth of what the US spends on foreign aid. A COVID-19 profits tax on Amazon would yield $11 billion, enough to vaccinate nearly 600 million people.
What we need is a fair tax system that allows more investment into ending hunger and poverty, into education and healthcare, and into saving the planet from the growing climate crisis ―rather than leaving it.
Bezos and Branson command such vast financial resources and power that they can engage in acts of global spectacle for their own ego gratification. Why are the super-wealthy flying off to space? For reasons of personal glory, or perhaps out of collective narcissism and greed, and perhaps to flee a ruined planet — or just because they can.
In the final analysis we may all share planet Earth, but the very rich live in their own reality. Michael Mechanic, a senior editor at Mother Jones, knows this well. His new book "Jackpot: How the Super-Rich Really Live — and How Their Wealth Harms Us All" explores that private and exclusive world.
In this conversation, Mechanic explains what the wealthy and super-rich understand about money that other people do not. He shares how the lives of the wealthy and super-rich are indeed very much outside the lived experiences and reality of all other human beings. Mechanic also explains how the wealthy engage in sociopathic or antisocial behaviors, while suffering few consequences — other than their own rootlessness and unhappiness. He warns that no society with such extreme levels of wealth and income inequality is stable and that a healthy democracy needs a more balanced economy with a flourishing middle class.
This conversation has been edited, as usual, for length and clarity.
As the saying goes, there's a class war in America and the rich won. Why don't we see any mass resistance or pressure to change this unjust system?
This can partly be explained by an American ethos which emphasizes the myth of upward mobility. So many Americans actually believe, "We can be in the mansion someday, and when we get there, we don't want to be taxed too much." This pervasive wealth fantasy exists much more in America than in other countries. As compared to Europeans, for example, Americans are overly optimistic about the prospects for upward mobility. American politicians are constantly telling these rags-to-riches stories as well. Such stories ignore the structural realities of American society and the fact that upward mobility is more mythical than real. Family circumstances are the biggest predictor of a person's own economic circumstances, unfortunately.
What does the average American not understand about the very rich? What is their world like?
Here is one example. White men have much greater access to a network of people in the worlds of finance, venture capital and other lucrative industries that they can rely upon when they need a step up. If you have a friend who works in finance, you can use that relationship to get funding for your business. Even to get in the room with a venture capitalist you usually need to have a friend or other contact to arrange it. If you don't have access to that network, you are at an extreme disadvantage. Most women, in general, do not have such financial networks. Black people in America tend not to have access to those networks either. If you are a working-class Black person looking for funding for a company, good luck — whereas if you come from a wealthy white family, your dad likely knows somebody who can get you that access.
Wealth is intergenerational. There are many among the rich who actually believe that they "earned" their money through "hard work" as opposed to family money, luck and access to other resources. Donald Trump is one of the most notable examples: he received millions of dollars from his father yet brags about being a "self-made" man who got a "small loan" to start his business. Do the wealthy really believe such things?
It varies. Donald Trump is the least self-aware person on earth. He probably believes these myths about self-reliance and that he did it himself. I believe there are wealthy people who appreciate how lucky they are. When you come from a wealthy family it is easy to downplay all of the structural and institutional factors which helped you and your family and that hurt others in terms of accruing intergenerational wealth.
What is the average day like for one of the super-rich?
There are many different types of the super-rich. There are those people that don't work, who are just socialites and go around to events and so forth. There are people who are in industry and are workaholics. But either way, people tend to travel a great deal. They have massive social calendars and many things of that nature to plan. Super-rich families actually have something called a "family office." This is a private company that handles all their personal affairs and investments, and manages all the properties and household employees, and pays the bills. But mainly, the purpose of the family office is to make you richer and to protect your wealth. The family office also helps them to avoid taxes by whatever means necessary. These family offices just perpetuate a dynastic system.
What is it like to live a life without fears or worries about not having enough money?
Many of the super-rich still care about money a great deal, even though they have a ton of it. They don't need more of it, but they use money as a scorecard for their success. It becomes a big game, a competition when you can buy anything you want and have anything you want. That is a quite surreal experience. It is spending money on stupid things. It creates a mindset of "I don't care about money, I don't need it, I can just do what I want." I believe this hurts the children of the wealthy even more because it allows them to flounder through life, never having to stick with anything.
They just wander through life aimlessly. Many children of the wealthy end up getting into the family business or doing something else to maintain a lifestyle that they do not really care about – and that makes them unhappy. To me, that is a bad way to live.
Because they travel so much, the wealthy are often away from their kids for long periods of time. These very wealthy families outsource everything. There are people who do the cooking, the cleaning, the yard work, who take care of the children, etc. There are also consultants for everything. As one of my sources told me, "I meet these super-wealthy people and they don't do anything. They just sort of live in this bubble where everything's being done for them." I believe this explains why we see the super-wealthy engaging in crazy, high-risk, high-priced adventure activities.
There is much research which suggests that the rich, especially the super-rich and the plutocrats, are more likely to be sociopaths than the average person. Did you encounter any people who fit that profile?
Psychologists have studied these questions and have shown that wealthier people, on average, are less empathetic. They are more prone to antisocial behaviors. They are less socially oriented. On the other hand, there's no data that shows the same person before and after getting these large sums of money. Thus, the question: Is it more that these types of personalities are the ones that pursue wealth, or that wealth actually has these negative impacts on a person's behavior?
Does money change people? I asked that question of many people who are sources for the book. Some of them said, "If you have $50 million and you were a jerk, you're going to be a bigger jerk. And if you are a great person, you'll have opportunity to do greater." Essentially, it amplifies your personality. One thing we do know is that children of wealthy families are at high risk for drug addiction and low-level criminal behavior. The risk is similar for very poor kids. People who are from middle-income families are at much lower risk of such behavior.
What of the children of the very rich? Do they just learn that there are no rules for people like them? Poor and working-class people can't claim that they are sick with "affluenza" when they get drunk and run over people, for example.
I do believe that is the case. There is a sense of entitlement that the rules don't apply. We see this among those who are rich but not super-wealthy as well. It is just the idea, "Oh, I can just do this thing and who cares, right? I can cut in line, whatever." It manifests across a range of small behaviors.
What do we know about new money versus old money?
Professional athletes are a classic example. It's actually getting harder and harder for poor kids to make it into the NFL and the NBA. But there is still a pretty sizable number of people who make it in professional sports and come from financially challenging circumstances. They are extremely talented and have focused like a laser beam on being successful in their sport. Then, all of a sudden, they are getting paid $2 million a month. These are crazy amounts of money. I talked with a business manager whose clients are mostly MLB and NBA players. He told me about the following: "This one kid, he's making a million or two a month. He had to hire a housekeeper. Someone to go fold his clothes, do his laundry. Because this kid had never done his own laundry. He never folded his own clothes."
Many of these professional athletes do not know how to function in normal life. They have lived in a bubble. There are all these hangers-on and others in their orbit who are trying to get money from them. It can be the coaches from before they went pro, family members and others who are trying to get these young athletes to take care of them financially.
There are a lot of athletes who fall victim to that. And if you're a big superstar like a Pat Mahomes or Steph Curry, then you can afford to behave in such a way. But as my contact told me, "If you're a backup point guard for the Grizzlies, you can't support a bunch of family members for very long or you are going to go broke." It happens. They get in serious financial trouble. If you come into all those millions of dollars without any sophisticated knowledge about what to do with it, the whole thing can be really disconcerting.
Many people fantasize about wealth. But when you get that wealth, especially all of a sudden, it really changes your relationships with people – including old friends, your middle-class friends. You want to enjoy the money, and you may also want your friends to enjoy it too. "Can I invite my middle-class friends on this fancy trip where I'm going to pay for everything?" Sure, maybe you can do it once. But what's it going to be like if you keep treating your old friends to these super high-end things? It's going to get weird. Pride's going to get in the way, or maybe you'll feel like they are freeloaders. All that money can create very weird dynamics. Family tensions get involved. Children squabble about inheritances. It can become a total mess.
What are the informal rules about wealth that old money understands and new money does not?
Put that money away to make it last. Preserve it, and do not do what the young athletes do. You do not want to be flashy. Old money? it wants nobody to know it exists. The big wealth dynasties with their family offices generally do not want to be big public figures.
Some years ago, I was acquainted with a husband and wife who won the Lotto. It was a modest sum after taxes, perhaps only $150,000. Everyone knew about it because their names were in the newspaper. I asked them a few years later about what they spent the money on. The husband told me he wished they had never won the money, because all they did was pay off some bills and buy a new pickup truck. That was it. But everyone in their family, friends, the neighborhood, their co-workers, all thought they were rich. He told me it was so much stress with everyone asking him and his wife for money that they wished they had never won it to begin with. Is that a common experience?
Yes it is. The conventional wisdom about winning the lottery is that it ruins your life. And in some cases, it really does. I interviewed a guy who was a hedge fund manager. He had a house on Lake Tahoe right next to Larry Ellison's house. And the neighbor on the other side, it was this young guy in his 20s. It turned out, the guy had won a big lottery and bought this $4 million house on Lake Tahoe. He was always up there, just partying with his friends. He didn't seem to have anything else going on in his life. One day the rich guy pulls up in his driveway and he sees the coroner's van next door. He goes over there and asks, "What happened?" They told him, "The person is deceased. This young guy killed himself."
When you have a lot of money there are issues with trusting other people. You do not know who's coming at you. There are going to be people trying to get you involved in business partnerships, pitching ideas to you or trying to become your friend. But you don't really know whether they're there for some other reason. This includes potential romantic partners.
There was a documentary a few years back about lottery winners, that showed how they got all this money and moved into a new neighborhood, and the people there did not accept them. The interviewer asked one of the Powerball winners, an older Black man who came from a working-class neighborhood, what it was like to have all this money. The man was miserable. He and his wife almost started crying. He told the interviewer, "Look around. All we have is a house full of stuff. I don't want to buy anything because I got everything. The neighbors here don't talk to us because they don't think we belong. We were poor in the projects but now we don't trust anyone. We don't have those friendships or family relationships anymore. All we got is a whole bunch of money and a house full of stuff." Then the interviewer asked the obvious follow-up and the man said, "You know what? I was happier when I was poor."
It's true. If you don't have something to give your life meaning, and if you think money is the meaning of life and you pursue that path, forget it. You are going to be miserable.
So what's the magic number in terms of income and happiness?
There is research that looked at millions of people and their self-reported happiness. Positive emotions peak at incomes over 65 grand. Your negative emotions are minimized at about 95 grand. And then there is what is known as "life satisfaction," which is a type of measure of how you view yourself relative to your peers. That maxes out at $105,000, a modest amount of money.
Once you get above the satiation point where a person knows that their needs are met, it is all just creature comforts and other bonuses in life. As you go past the satiation point, your life satisfaction starts to decrease in wealthy nations. We still do not know why that is. But one of the speculations is that in order to maintain this high-end lifestyle, a person has to work all the time and they lose their social connections. If you take a high-paying job and you're just on-call all the time and have too many responsibilities, there is less time to enjoy your life and your relationships. What good is it, right? You have a large bank account and no friends.
We know a great deal about the poor and the "underclass," but we know very little about the very rich. They are under-researched because as a rule they do not talk to outsiders. How did you get access to them?
It was a very laborious process. I had many rejections. In fact, the billionaires wouldn't talk to me at all. They'll talk to you about other things. But they are not going to talk to you regarding their feelings about wealth. But the wealthy also have lots of middlemen, the PR people and the like, who said no. I got a lot more rejections than I got acceptances, I would say. So I had to fill in the gaps by talking to people who are on the periphery of the billionaire class, people who work with them closely, in financial management, of course, but also in such varied roles as building safe rooms for hedge funders, for example. I spoke to a woman who works security for billionaires and trains their nannies in physical combat. I also spent time hanging out with luxury realtors and luxury car dealers and all manner of people who interact with these incredibly wealthy clients.
What do you want the American people to understand about the super-rich?
By and large they are not bad people. The point of writing "Jackpot" was not to disparage the wealthy, but to point out how flawed our system is in America that allows people to amass such wealth at the expense of others. The policies that enable such an outcome is driving us apart as a society. It's really tearing at the social fabric, because as the rungs of the economic ladder get wider and wider apart, we are losing empathy for the people on the other side. There is now a situation where we are a society of extreme winners versus extreme losers. A healthy society has a thriving middle class. That's what really lifts all boats.
CHAUNCEY DEVEGA
Chauncey DeVega is a politics staff writer for Salon. His essays can also be found at Chaunceydevega.com. He also hosts a weekly podcast, The Chauncey DeVega Show. Chauncey can be followed on Twitter and Facebook.
Why Americans hate and fear the poor: Joanne Samuel Goldblum on the price of inequality
Another side effect of the pandemic: Many more Americans are aware how stressful and exhausting it is to be poor
By CHAUNCEY DEVEGA
PUBLISHED AUGUST 23, 2021 6:00AM (EDT)
It is expensive to be poor in America. These costs are both small and large. Together they accumulate into a sum that is almost insurmountable.
For example, people in poor and working-class communities often pay more for the same goods and services — which are subpar by comparison — than people who live in more affluent communities. There are fewer opportunities for wealth accrual, because homes in working class and poor communities appreciate in value much more slowly (if they do at all), even when adjusting for the ways that racial segregation exacerbates that dynamic.
There is also a largely unregulated financial services sector that targets poor and working-class people, including check-cashing services, "payday loans," rent-to-own furniture and electronics companies and high-interest auto lenders.
People in poor and working-class communities often lack access to reliable public transit, meaning that getting to work or school is inordinately expensive. Lack of affordable child care services is another "hidden" cost that limits the upward mobility of poor and working-class people.
Poverty and other forms of material deprivation also inflict a type of mental and emotional trauma on their victims. Navigating America's labyrinthine and threadbare social safety net programs is like a job in and of itself, one that is very time-consuming, frustrating, exhausting and all too often humiliating.
Growing up in a poor or working-class community also has a negative impact across one's adult life: Social scientists and other researchers have repeatedly shown that access to economic resources and other social capital early in life is directly correlated to a person's future health, job opportunities and overall life chances.
Poor and working-class communities also have substandard public services and experience violent, repressive and sometimes deadly policing tactics. In a striking example of inequality in action, poor and working-class people do not receive a fair return on their taxes in terms of public goods and services. As perverse as this seems, America's poor and working class actually subsidize wealthier people, including the ultra-rich and large corporations, who often benefit greatly from American society while paying dramatically less in federal and state taxes to help support it.
The Institute for Policy Studies recently reported on how the world's richest people have profited from the human misery of the coronavirus pandemic while returning little if anything to the common good:
The world's billionaires have seen their wealth surge by over $5.5 trillion since the beginning of the pandemic in March 2020, a gain of over 68 percent. The world's 2,690 global billionaires saw their combined wealth rise from $8 trillion on March 18, 2020 to $13.5 trillion as of July 31, 2021, drawing on data from Forbes.
Global billionaire total wealth has increased more over the past 17 months of the pandemic than it did in the 15 years prior to the pandemic. Between 2006 and 2020, global billionaire wealth increased from $2.65 trillion to $8 trillion, a gain of $5.35 trillion.
Billionaires have reaped an unseemly windfall at a time when millions have lost their lives and livelihoods. The pandemic has supercharged existing global inequalities, with the wealthy profiteering from the shuttering of the main street economies around the world….
At least nine people have become new billionaires since the beginning of the pandemic, thanks to the excessive profits pharmaceutical corporations with monopolies on COVID-19 vaccines are making.
The COVID-19 pandemic has pushed over 200 million people into poverty, according to estimates by World Bank researchers.
What of the "working poor"? They occupy a type of liminal space in America's social hierarchy, often holding down multiple jobs that do not pay a living wage.
During the coronavirus pandemic, the working poor were temporarily elevated by the mainstream news media, the plutocrats and the death-cult Republicans to the status of "essential workers." In practice, this fake honorific was used to disguise the reality that the working poor were being asked to die for capitalism while being underpaid and otherwise exploited. To make matters even more dystopian, many of the working poor are employed by some of the world's largest and most profitable companies — whose rank-and-file employees sometimes must seek out food stamps and other public aid in order to survive.
In a new essay at the Conversation, social scientists Jeffrey Kucik and Don Leonard analyze the plight of the working poor in America, starting with the baseline income required to survive in America. They say that's about $30,000 a year for one person with no dependents, but much more for families and anyone who lives in a major city:
But we estimate that at least 27 million U.S. workers don't earn enough to hit that very low threshold of $30,000, based on the latest occupation wage data from the Bureau of Labor Statistics, a government agency, from May 2020. We believe this is a conservative estimate and that the number of people with jobs who earn less than what's necessary to afford the necessities of life is likely much higher.
Low-income occupations encompass a wide range of jobs, from bus drivers to cleaners to administrative assistants. However, the majority of those 27 million workers are concentrated in two industries: retail trade and leisure and hospitality. These two industries are among America's largest employers and pay the lowest average wages.
For example, the median salary for cashiers was $28,850 in early 2020, with 2.5 million of the nation's 5 million cashiers earning less than that. Or take retail sales. There, 75% of workers — about 1.8 million — were earning less than $27,080 a year.
It's the same story for leisure and hospitality, the industry that took the hardest hit from the COVID-19 pandemic, hemorrhaging 6 million jobs in April 2020 as much of the U.S. economy shut down. At the time, close to a million waiters and waitresses were earning less than the median income of $23,740. ...
To us, these figures should cause policymakers to redefine who counts among the "working poor." A 2021 Bureau of Labor Statistics report estimated that in 2019 about 6.3 million workers earned less than the poverty rate.
In a 2018 essay for the New York Time Magazine, Matthew Desmond offered further insights on the cultural myths and propaganda that distort the American people's understanding of the working poor:
Americans often assume that the poor do not work. According to a 2016 survey conducted by the American Enterprise Institute, nearly two-thirds of respondents did not think most poor people held a steady job; in reality, that year a majority of nondisabled working-age adults were part of the labor force. Slightly over one-third of respondents in the survey believed that most welfare recipients would prefer to stay on welfare rather than earn a living. These sorts of assumptions about the poor are an American phenomenon. A 2013 study by the sociologist Ofer Sharone found that unemployed workers in the United States blame themselves, while unemployed workers in Israel blame the hiring system. When Americans see a homeless man cocooned in blankets, we often wonder how he failed. When the French see the same man, they wonder how the state failed him.
If you believe that people are poor because they are not working, then the solution is not to make work pay but to make the poor work — to force them to clock in somewhere, anywhere, and log as many hours as they can. ... In recent decades, America has witnessed the rise of bad jobs offering low pay, no benefits and little certainty. When it comes to poverty, a willingness to work is not the problem, and work itself is no longer the solution.
Intergenerational wealth reinforces social inequality: Over time the more affluent classes accrue even more extreme amounts of wealth and income, while the poor and working classes are anchored in place and losing ground. One reason this is happening is because the tax code and other laws are written by the moneyed classes and their agents, with the express intention of furthering their own interests.
Where wealth, income and the color line intersect, these divergent outcomes are even more extreme. New research from the Brookings Institution shows that intergenerational poverty and a resulting lack of other economic opportunities and resources are much more likely to impact Black Americans than other groups:
In other words, experiencing poverty for three generations straight is almost uniquely a Black experience. Black adults in their 30s are over 16 times more likely than white adults to be in the third generation of poverty in a row. In fact, Black Americans are 41 percent more likely to be in third-generation poverty than white Americans are to be poor. …
Black Americans make up 44 percent of those experiencing one generation of poverty (even though poverty rates are higher among Black families, they make up a smaller share of the overall population). For two and three generations of poverty, the shares rise to 64 and 83 percent, respectively.
We find that half of Black adults in the bottom fifth today (51 percent) had both a parent and a grandparent in the bottom fifth, but only eight percent of white adults in the bottom fifth had poor parents and grandparents.
Ultimately, social inequality in America is the predictable (if not intentional) result of a political and economic system that is anything but meritocratic. America may not have kings and queens and titled nobility, but it has a plutocracy and a system of dynastic wealth that operates much the same way.
Discussions about income and wealth inequality are at their root a debate about the value of human life and the meanings of human dignity and freedom. I explored such questions of justice and economics in a recent conversation with Joanne Samuel Goldblum, CEO of the nonprofit organization the National Diaper Bank Network (NDBN). She is also director of the Alliance for Period Supplies, an organization focused on addressing "period poverty" in the United States.
Goldblum is co-author (with Colleen Shaddox) of the recent book "Broke in America: Seeing, Understanding, and Ending U.S. Poverty."
In this conversation, Goldblum discusses what it means to be poor in America, and how members of the middle and upper classes — who often perceive themselves as "struggling" financially — are privileged and advantaged in day-to-day life, compared to the poor. We also talked about how hostility and indifference to the poor have become normalized in American society, and the ways that the coronavirus pandemic and its economic destruction has exposed foundational myths about American capitalism.
Toward the end of this conversation, Goldblum reflects on what a truly humane American society might look like if the country's leaders and the public as a whole decided to ensure fair and equal opportunities for all.
Extremely wealthy white men are rocketing off into space while there is great poverty and suffering in the United States and around the world — poverty that predated the coronavirus pandemic but has certainly gotten worse. How do you make sense of such a juxtaposition?
I do not believe that wealth in a capitalist country is inherently a bad thing. However, what is wrong is how many Americans are not paying their fair share of taxes. Jeff Bezos likely could have paid much more in taxes and still launched himself up into outer space. He would still be incredibly wealthy. It is very hard for many people to even comprehend being that selfish.
I recently received an email from a reader who recycled almost every tedious myth about income and wealth inequality in the United States. The email had all the right-wing talking points about how we shouldn't "hate the rich" for "working hard," claiming that most rich people worked their way up from poverty and that "being poor in America is a choice." How do you respond to that kind of rhetoric?
People say things like that to me all the time. What I actually hear the most is some version of "They shouldn't have a baby if they can't afford it." I am never the only woman in a room who's been pregnant when they didn't expect to be. That's life! Such responses are also a function of an American mythology that anybody can make it if they just try hard enough. To accept the fact that is not true would be devastating to many Americans.
The American dream really is that a person can achieve anything, and even if it hasn't happened yet perhaps it will in the future. This translates into a desire for wealth even if you don't have it — and wanting the rules to benefit you when you get to that destination.
How are so many people able to ignore the poor, the homeless and other people in need — and in some cases literally willing to walk over them?
I believe that poverty is largely hidden because we as Americans consider it shameful. Many people who are poor do not want others to know it. We look down on people who are poor, which means that people who are poor don't want to tell other people.
I like helping people in need get diapers for their babies and children because when someone says something to me about how people should not have babies if they can't afford them, I know that we have nothing to discuss. If a person feels like it is OK for their neighbor's child to sit in filth all day, there is no middle ground between us.
The need for diapers is a window into poverty. When a person walks past someone on the street who is street-homeless, they can make up stories to explain it all. But folks who need diapers for their children and can't afford them are living paycheck to paycheck, or maybe they do not have stable housing. You don't often see them on the street. I try to remind people that if you want something good for your own child, you should want the same thing for any other child in the world.
Where did your humane vision for society come from?
I grew up in New Jersey. I'm Jewish. We went to a Reform synagogue and modern Reform Jewry tends to be very focused on social action and social justice. I'm a social worker. My mom is a social worker. My dad was an attorney who did pro bono work for the ACLU and similar causes. It was part of who we were.
As a social worker I assisted families whose kids were more or less the same age as my kids. And I could never stop thinking about how hard it was for me — and I had everything I needed. I was also always struck by how, as a privileged woman, I could complain bitterly about how stressful my life was. How do I do it? How do I get meals? How do I get my kids to school on time, and work, and all of that?
That was with never worrying about my bills. That was with a partner who was supportive. We had cars and phones. I'd work with families who had none of those things. Society expects so much more of poor people than they do of wealthy people. I was just really struck by that. I would drop my kids off at a great school. I would then go work with families who didn't have heat and hot water.
I just couldn't ever stop thinking about how horribly unfair it was. I hadn't done anything so special in my life, and we have everything we need. My parents might have made some good decisions. My husband and I might have made some good decisions, but we've also made bad ones. They just didn't happen to be bad financial decisions. When you don't have to worry financially, I think it gets easier to convince yourself that your life is how everybody else lives as well.
Privilege is the ability to insulate oneself from consequences. An upperclass or rich person can make bad decisions, but their financial and other resources protect them. Poor and working-class people struggle against a system that is designed to punish them.
I have thought a great deal about buying my way out of problems. I always talk about how every time you forget lunch for your kids and you go and buy sandwiches, or you don't have a charger for your phone and you buy a new one, or you pay your parking tickets online with a $2 fee — you are buying your way out of something in those moments. What would I do if I didn't have that money? America's social systems are created by people who have that extra money, and most of those people do not consider the alternative.
What does it mean to be poor in America?
You're poor when you can't afford your basic needs. Certainly, the U.S. poverty guidelines are horrifically outdated. There are people who are poor who live at well above the federal poverty level, because the federal poverty level is so low. That is a major way that America defines its way out of poverty. Because poverty looks so different in many other countries, looking from the outside it seems like Americans have so much money. To say that a family making $40,000 a year is poor is very hard for many people to understand.
We also know that if you're not getting any kinds of government subsidies and you are making $40,000 a year, and it's two adults and two children, and you're in an apartment that's livable, it's going to cost you much more than that. We are willfully blind to how much our systems hurt our fellow Americans.
The coronavirus pandemic damaged the economic lives of tens of millions of Americans. Many of the lost jobs will never return. There are many formerly middle- or even upper-class people who lost everything to the economic destruction and are now living in cars or moving between friends and relatives or living in extended-stay hotels. What are the different types of homelessness?
For me, "family homelessness" is so challenging to think about. When most Americans think about homelessness, they imagine someone on the street who has all their belongings with them. Our country really, really doesn't see family homelessness because for most people, when they think about homeless, they think of street homeless. They think of the people that you pass on the street who have all of their belongings next to them.
That's not what most homelessness in the United States looks like. In the case of family homelessness, you're dealing with people who are by and large either in cars or living with family or doubled up. Children are often given to relatives to raise and then the parent becomes street-homeless.
Again, it goes back to the whole idea of seeing. If you don't see it, it's not a problem. Because of the reality of what life as a person who is homeless on the street is, people have a narrative that those people are drug addicts, those people are mentally ill, they're making a choice to live like this. You read it all the time: No one chooses to be poor; nobody chooses to be homeless.
What has the coronavirus pandemic exposed about American society?
For the first time in many years, Americans found themselves going to the store and not being able to get what they wanted. It was incredibly stressful for people. I think that because Americans tend to need to experience something themselves to have empathy, they were like, "Oh my God, is that what it is like to be poor?" Such experiences were eye-opening for a certain segment of the population.
What has also happened is that during the pandemic the government is giving cash payments to people who need them. This feels unprecedented. This support is changing people's lives. The $300 child tax credit is going to make an enormous difference for people. If we as a country are ever going to get to a point where there are sustained cash transfer programs, it is now. COVID has laid bare how close to the edge so many Americans are living financially.
What about the people who weren't poor to begin with, and during COVID lost everything? The fact that in a year you could go from being wealthy or upper middle class to living in your car shows that we don't have a social safety net in this country. More and more Americans who never expected to need a social safety net are now, in some cases personally, very aware of that problem
We've created a society where it's embarrassing to ask for help. What we saw during COVID was that there are diaper banks which saw a 700% increase in the number of people who needed their services. In America, there was a shutdown of businesses and people were left to largely fend for themselves. In most other developed countries, people were paid. There really is an insane disconnect between our policies and the reality of our lives in this country.
What would our society look like if people weren't ashamed to ask for help? If people didn't feel that shame and stigma?
We would be a much kinder society. We would also have much more diversity in the leadership of our country. We would have a democracy that truly reflects our society.
Everybody should start at the same place. I believe that if there wasn't so much shame around poverty, and if there was a robust social safety net in the United States, that's what we would have. We would have good schools in every zip code. People in poverty lose out — and the rest of us lose out as well. Because who knows what that child might have been if he or she had great nutrition, didn't have lead in their water and had a really great education?
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