How healthy is an economy where hourly employees performing many essential services earn so little that they have to go to work sick to keep their jobs?
Prices for basic foods soar in the US as pandemic disrupts supply chains
16 May 2020
Disruptions in global food supply chains have caused a shortage of many basic food products and a drastic increase in prices in the United States. The month of April saw the largest monthly increase in grocery prices since 1974, rising by 2.6 percent, according to the latest tally by the US Bureau of Labor Statistics reported Tuesday.
Data from the Department of Labor show price increases across the board. Shoppers paid 4.3 percent more in April for meats, poultry, fish and eggs. Fruits, vegetables and grain rose by 1.5 percent. This drastic increase in food prices comes as tens of millions of workers have lost their jobs or had their incomes slashed. The dire conditions facing workers has driven food insecurity to record highs, now affecting 1 in 5 households.
The on-going pandemic has caused sharp and drastic shifts in both supply and demand. Consumer demand for grocery store products saw a dramatic rise due to the closure of restaurants. Accordingly supply to restaurants has shut down in accordance with the stay at home orders.
The failure to readjust food distribution networks to make up for this shift in consumption patterns has had devastating results. Farmers have been forced to cull livestock, dump millions of gallons of milk and destroy fresh fruits and vegetables on a daily basis.
The US meat industry has been hit particularly hard. The slowdown in production and temporary closure of plants where hundreds of workers have been infected will translate to a mass culling of livestock as farmers struggle to find markets. An estimated 7 million pigs will have been euthanized from April through June alone, worth roughly $700 million.
Despite an executive order from the Trump administration ordering workers back to work at meat processing plants, production remains stunted. Both pork and beef production are down 35 percent from pre-pandemic output.
The giant corporations which own the meat packing plants have been ruthless in their drive to keep the plants open despite the lack of protections for workers. The multi-billion dollar transnational corporations are concerned above all with their bottom line. WH Group which owns meat packer Smithfield Inc., earned $1.374 billion in profit in 2019 alone a 32 percent increase from the previous year.
Over 5,000 meat packing workers have been infected with the virus so far and at least 20 have died. There is no doubt that these figures are a vast underestimation as meat packing workers are largely immigrants who avoid relying on health services out of fear of compromising their legal status. These brave workers and their families have continued to voice their opposition to working in unsafe conditions through protests, walkouts and sickouts.
With production slowed, meat prices are expected to rise by up to 20 percent according to reports from Business Insider. None of this inflation will go to compensating farmers for their losses as live animal prices plummet. The US government will not even allocate funds from its agricultural bailout to compensate farmers for culled livestock. Instead, the meatpackers, processors and retailers will reimburse themselves by passing higher costs onto workers.
Americans consume an average of more than 227 pounds of meat per capita each year, constituting about 17 percent of daily calories. According to the United States Department of Agriculture (USDA), annual food costs in the US average $2,641 per person. Of this, about $700 is spent on meat. Depending upon the stability of poultry prices, meat shortages could see an increase in food costs of four to five percent for the year.
For many of America’s poor, this is a cost that they cannot afford.
This is especially true for the more than 23 million Americans living in “food deserts.” Food deserts are urban areas in which a person without a car cannot reach a grocery store or food pantry with fresh produce within a one mile radius; for the 2.3 million people in rural food deserts it is a 10 mile radius. This number is likely a vast underestimate as the USDA considers convenience stores, which may only offer unhealthy packaged food, as grocery stores. The USDA provides an interactive map of food deserts throughout the United States.
For people living in food deserts there is no access to fresh food and a predominance of fast food chains, which serve mostly meat products. For the poorest Americans, access to fast food may be 2.5 times greater than in wealthier areas. As grocery stores go out of business, unable to compete with the cheap prices of these chains, poor Americans become increasingly reliant upon fast food to feed themselves and their families.
Of the 500,000 people in Chicago who live in food deserts, 400,000 live in areas with a predominance of fast food. In New York City 750,000 live in food deserts with three million having only sparse access to grocery stores.
The shortage of meat products is now reaching these fast food chains. Wendy’s is reporting that one in five of its restaurants have had to remove items from the menu and McDonald’s Canada has stated that it will begin importing beef due to a shortage in the country.
This means that the only consistently available source of food for millions of Americans will begin seeing shortages a well.
People living in food deserts are also more susceptible to COVID-19. Food deserts have been heavily linked with higher rates of obesity, heart disease and diabetes, all of which have been associated with an increased risk of death from COVID-19.
Working class people suffering these conditions, which have been created by the capitalist system, are in dire need of healthy food. Instead, the invisible hand of the market has determined it more prudent to destroy tens of millions of pounds of food rather than distribute it to those most in need.
How China is buying up America's food supply
By Ziva Dahl
A
Sioux Falls meatpacking plant was forced to close when it became the epicenter
of COVID-19 in South Dakota. Three weeks after executives from its
Chinese owner, WH Group, visited
the plant, a month after President Trump's ban on
travel from China, nearly
600 of Smithfield Foods' 3,700 employees
tested positive for the virus, as have 135 additional people in close contact
with employees.
Smithfield
Foods was started in 1936 by a family in Virginia. Today, the
Chinese own Armour and the famous Smithfield hams, together with the most
quintessential American brand of all: Nathan's Famous hot dogs, with its iconic
annual eating contest.
In
2013, Smithfield Foods was bought
by the Shanghui Group, later rebranded as
the WH Group, for $4.7 billion. It remains the largest total
acquisition of a U.S. company by the Chinese. With that purchase,
the Chinese
owned one in four pigs raised in the U.S.
and, by adding 146,000 acres, continued to be the world's largest buyer of
American farmland.
The
purchase was underwritten with a $4-billion Bank of China loan facilitated by
the Chinese Communist Party. The deal was an integral part of the
CCP's 2011 five-year plan to improve the Chinese economy with purchases of
overseas farmland and food processing companies. Food is poised to
become the oil of the 21st century, with demand increasing for a scarce
resource. The CCP identified meat processing as a strategically
important industry, and, with the Smithfield acquisition, China gained access
to the world's most advanced animal processing technology. Former
Smithfield CEO Larry
Pope said, "In many respects, this is
carrying out the (Chinese) government's five-year plan, which is to improve the
quality and the security of their food supply."
The
Chinese consume half
of the world's pork production. Pork
supply is so important to them that, just as the U.S. government maintains a
strategic oil reserve, China stashes away vast amounts of frozen pork in case
of shortages, outbreaks of swine disease, or war. Smithfield has
retooled to give greater focus to the China market. "Down the
road, if this continues and we ship a lot of product to China, certainly I
think we (in America) could see shortages, particularly on hams and
bellies," admitted Smithfield's director of procurement.
Smithfield
is run by Wan
Long, a former foot soldier in Mao Zedong's
army. WH Group is the world's largest producer of packaged
meats. Wan's path to dominance was cleared by Li Keqiang, now a
member of the CCP's Politburo Standing Committee, the party's supreme
leadership circle.
Here
is why you should care.
For
decades, China has been fighting a stealth war against us with the objective of
replacing America as the dominant world power. "The removal of the United
States as what they call the hegemon is the most important thing" to them,
according to China expert
Michael Pillsbury. The Chinese would
prefer to win a 21st-century war involving acquisitions of strategic industries
like food and communications over a traditional military conflict.
In an
article in the Atlantic, H.R. McMaster,
President Trump's former national security adviser, notes that Chinese
president Xi Jinping told Trump in 2017 that the CCP is relentlessly pursuing
the "great rejuvenation of the Chinese nation" — the
"China dream." McMaster relates a conversation with Li
Keqiang, who indicates that the U.S. role in the future global economy will be
"to provide China with raw materials, agricultural products, and energy to
fuel its production of the world's cutting-edge industrial and consumer
products."
According
to McMaster, China's leaders believe they have a narrow window of opportunity
to revise the international order in their favor before other countries realize
that the party is pursuing national rejuvenation at their expense.
Our
response to the coronavirus pandemic has been severely impacted by Chinese
control over the manufacturing of strategic pharmaceuticals and essential
personal protective equipment — masks, surgical gowns, and
gloves. This should be the shot across our bow. The
Smithfield story is another reminder that Beijing's economic grab is strategic
and goes far beyond drugs and medical supplies. Chinese ownership of
our essential food producers generates a similar vulnerability to our national
security.
It's
time to counter the "China dream" with an American wakeup
call. The alarm is ringing.
Ziva Dahl is a senior fellow with the news
and public policy group Haym Salomon Center.
World Food Programme warns: COVID-19 pandemic
will cause “famines of biblical proportions”
The United Nations’ World Food Programme (WFP) warned Tuesday
that without urgent action and funding, hundreds of millions of people will
face starvation and millions could die as a result of the COVID-19 pandemic.
WFP Executive Director David Beasley told the UN Security
Council that in addition to the threat to health posed by the virus, the world
faces “multiple famines of biblical proportions within a few short months,”
which could result in 300,000 deaths per day—a “hunger pandemic.”
Beasley said that even before the outbreak, the world was “facing
the worst humanitarian crisis since World War II” this year due to many
factors. He cited the wars in Syria and Yemen, the crisis in South Sudan and
locust swarms across East Africa. He said that coupled with the coronavirus
outbreak, famine threatened about three dozen nations.
According to the WFP’s “2020 Global Report on Food Crises”
released Monday, 135 million people around the world were already threatened
with starvation. Beasley said that as the virus spreads, “an additional 130
million people could be pushed to the brink of starvation by the end of 2020.
That’s a total of 265 million people.”
The regions suffering the most in 2019 were Africa (73 million
people “in crisis or worse”) and the Middle East and Asia (43 million people),
beset not only with poverty, but also with conflicts and the impact of natural
disasters, economic crises and climate change, with the worst locust swarms in
decades in East Africa putting 70 million people at risk.
Beasley pointed out that there are already 821 million
food-insecure people in the world, a record number. “If we don’t prepare and
act now to secure access, avoid funding shortfalls and disruptions to trade,”
he warned, the result could be a “humanitarian catastrophe.”
The 10 worst affected countries are Yemen (15.9 million people
“in crisis or worse”), Democratic Republic of the Congo (15.6 million),
Afghanistan (11.3 million), Venezuela (9.3 million), Ethiopia (8 million),
South Sudan (7 million), Syria (6.6 million), Sudan (5.9 million) northeast
Nigeria (5 million) and Haiti (3.7 million). All of these countries are the victims
of more than a century of imperialist oppression and exploitation that
continues to the present. Most, if not all, continue to suffer from US-led
military interventions, economic sanctions or political intrigues that have had
devastating social consequences.
In the 55 food-crisis countries that are the focus of the
report, a staggering 75 million children are stunted and 17 million suffer from
wasting. Beasley said, “Millions of civilians living in conflict-scarred
nations, including many women and children, face being pushed to the brink of
starvation, with the spectre of famine a very real and dangerous possibility.”
African countries affected by conflicts are particularly at
risk, including the Central African Republic, Chad, Nigeria and South Sudan, as
well as countries hosting large numbers of refugees such as Lebanon and Uganda.
More than half the population of Yemen and South Sudan, which
have endured years of wars, already face acute food shortages even before the
virus reaches them. At least 14 million Yemenis are on the brink of famine,
while 80 percent of the country’s 24 million people rely on food aid.
Save the Children estimated last year that at least 75,000
Yemeni children under the age of five have starved to death since the onset of
the Saudi-led and US-backed war. Nearly 3.6 million people have been displaced
by the conflict.
In South Sudan, there are more than five million people facing
starvation and reliant on food aid to survive, and 1.7 million women and
children are acutely malnourished.
More than 30 of the world’s poorest countries could experience
widespread famine and in 10 of these countries, there are already more than one
million people on the brink of starvation.
The WFP said that lockdown measures in the poorest countries,
with fragile health care systems and crowded and unsanitary living conditions,
would not suffice to prevent the spread of the coronavirus, while depriving
millions of workers of an already meagre livelihood and leading to an economic
and humanitarian disaster. The near global restrictions on all but essential
work and travel are affecting farm workers and disrupting supply chains.
Millions of farmers in Africa and other low-income countries,
already facing high levels of food insecurity, are at risk of not being able to
work their land and produce food. Of the 257 million hungry people in Africa,
most live in rural areas.
The Ebola epidemic in West Africa provides a stark example of
what is at stake. Small farmers were unable to work their land, sell their
products or buy seeds and other essential inputs, leaving more than 40 percent
of the agricultural land uncultivated.
The WFP also noted that many of the poorest countries have been
hard hit by the collapse of the travel and tourism sectors, with villages in
the Atlas Mountains in Morocco, for example, almost entirely dependent on
tourists and hikers for survival. Others will suffer from the catastrophic fall
in remittances (up to 20 percent, according to the World Bank), as migrant
workers are furloughed or laid off.
This will affect conflict-torn states such as Somalia, Haiti and
South Sudan, and small island nations such as Tonga, with remittances sometimes
accounting for more than 30 percent of gross domestic product, as well as
larger states such as India, Pakistan, Egypt, Nigeria and the Philippines,
where remittances have become a crucial source of external financing. Flows to
sub-Saharan Africa are predicted to fall by 23 percent.
Those particularly at risk include refugees and displaced people
living in camps and settlements in cities, as well as the elderly, young
children, pregnant and lactating women, and the disabled.
For those whose lives already hang by a thread, the economic
impact of the pandemic will push them over the edge. Already there have been
reports of food hoarding and price gouging in several sub-Saharan African countries,
making food both scarce and unaffordable for those most in need. Anger over
food shortages has triggered violent protests across South Africa in the last
two weeks, while protests have also started in Lebanon.
In northeast Nigeria, almost three million people are already
facing hunger and 440,000 children under five are severely malnourished due to
the ongoing Boko Haram insurgency. The risk of hunger is already high in India,
Bangladesh and Myanmar, while in the Philippines police are enforcing lockdowns
at the point of a gun and the government is preparing for a military lockdown
as unrest mounts.
In the face of this global catastrophe, Beasley urged the UN
Security Council to come forward with a measly $2 billion of aid already
pledged but not delivered. He warned that another $350 million was needed just
to set up the logistics network to get food and medical supplies—including
personal protective equipment—to where it was needed.
This pathetic plea will fall on deaf ears. These sums are a tiny
fraction of the trillions the US, the European and other imperialist powers are
pouring into tax-dodging corporations and financial institutions to keep them
afloat. The only spending the major powers will allocate in relation to the
oppressed nations will be to strengthen their military forces for
colonial-style interventions to rob these countries of their natural resources
and police rising social discontent among workers and poor farmers.
If millions of lives are to be saved in the poorest countries of
the world, workers everywhere must take up the struggle to end capitalism and
establish a global socialist system based on planned production for need. The
development of a socialist political movement of the working class directed
against the ruling classes in the imperialist centres and their local agents in
the oppressed nations is the only way that the world’s most vulnerable people
can be protected against the terrible impact of the pandemic.
'Overwhelming
in so many different ways': Food pantries face exhaustion and infection along
with huge demand
Food bank workers
responsible for collecting and distributing food to hunger relief sites are
struggling with exhaustion as huge spikes in demand from the coronavirus
pandemic have created seven-day workweeks.
“We’ve been very
fortunate to have a majority of our staff, 90%, come to work every single day,”
said Paule Pachter, CEO of Long Island Cares. “I would be lying if I said we
weren’t getting exhausted.”
Pachter’s organization
delivers food to seven distribution sites and has 60 employees. Since the coronavirus
crisis, demand for food has increased 64%.
“Of that 64%, 30% are
people who have never come to Long Island Cares before. They are victims of
COVID-19,” he said.
Carlos Rodriguez,
president and CEO of the Community Food Bank of New Jersey, served roughly
700,000 people a year in his state before the pandemic. That number has jumped
nearly 45% since the crisis began, an increase of over 300,000 people over the
course of a year, which has taken a toll on his employees.
“It would be
disingenuous not to say you’re overwhelmed, but there are so many aspects to
this; it’s not just food distribution but the complexity of operating in a
pandemic like this,” he said. “We literally have team members who are losing
family members and friends and colleagues to the pandemic as they respond to
their duties. It’s overwhelming in so many different ways.”
Places where
Rodriguez's organization delivers have seen long lines of drivers waiting to
pick up food, creating the kinds of images that have drawn notice on social
media.
"We have long
lines of cars in our programs. We have long lines going around the block in
some of our urban environments," he said.
Pachter's organization
had a bad experience in the aftermath of Hurricane Sandy with people lining up
in cars to receive food. His organization now delivers the food to many of its
recipients.
Workers also contend
with the possibility of becoming infected by the virus. To lower anxieties,
social distancing is strictly enforced.
“We spent a lot of
money on masks, gloves, hand sanitizer, and other PPE,” Pachter said. “We just
got the building professionally sanitized last week. We’ll be doing that
quarterly. We’re trying to make our staff as comfortable as we possibly can
about coming to work.”
Jeremiah Huston,
assistant director of communications for the Arlington Food Assistance Center,
said his organization augmented how people receive food to lower the odds of
people becoming infected.
“We have modified our
own food distribution; we hand out pre-made food bags with our normal
assortment of food to speed up and to reduce the amount of time that a family
is here to make sure that everyone is safe,” he said.
The Capital Area Food
Bank, which is the largest food bank in the Washington, D.C., area, normally
serves 450 nonprofit organizations. Right now, about 50% of them are closed
during the pandemic because many of the volunteers who work at these
organizations are older or have underlying health conditions that put them at
risk of infection.
One issue that social
distancing can’t fix is the fact that many of these organizations are running
low on food donations and have to rely on new channels that prove to be
expensive.
Nearly 60% of food banks in
the Feeding America network face reduced inventory levels amid rising demand as
food donations decline. The organization estimated that $1.4 billion in
additional resources will be needed over the next six months to provide enough
food for people who depend on it.
Donations at the
Capital Area Food Bank are also lower, with retail food donations down by over
75%, according to a spokesperson for the organization.
“The food bank is
purchasing millions of dollars worth of food just to keep our inventory levels
steady. In April, we have now purchased nearly 90 truckloads of food, more than
double the amount we would normally purchase in a full year, in order to have
enough food on hand to meet the need this month into June,” the spokesperson
for the organization told the Washington Examiner.
Rodriguez said his
organization is feeling strained when it comes to food supplies.
“The supplies are
stretched. We are able to provide food throughout the state, but they are
stretched. And we are having to make up the loss in donated food that we
normally rely on with purchasing,” he said.
Pachter isn’t sure what
his food supply will be six months from now.
“I think right now
we’re getting by OK,” he said. “What the next two, three months — six months
will be, I don’t know.”
Thousands Line Up for Donated Food in Texas’ Largest City
179Photo:
Houston Independent School District
19 Apr 2020540
3:12
HOUSTON, Texas —
Thousands of people lined up for hours to receive donated food collected by the
Houston Independent School District and the Houston Food Bank. Lines grew so
far in advance that organizers opened the event three hours early.
Houston ISD and the
Houston Food Bank teamed up to provide enough food to last a family for two
weeks and organized the delivery of the food at Harris County’s NRG Stadium
complex, KTRK ABC 13 reported. More than 4,000 cars lined up in a mile-long
caravan to receive the gifts that are meant to curb “food insecurity.”
Over 4,000 vehicles full of Houstonians showed up at NRG
Park Saturday afternoon where 90,000 pounds of food were distributed by Houston
ISD with the Houston Food Bank. It was a site I would not have imagined just
one month ago. Full story @nkhensley: https://www.houstonchronicle.com/news/houston-texas/houston/article/Houston-ISD-hands-out-food-to-more-than-4-000-15210655.php#photo-19314380 …
Drivers lined up
for hours in advance and the vehicles stretched along the roadway for more than
a mile. Officials decided to open the even three hours earlier to relieve
traffic and help volunteers avoid approaching thunderstorms.
One recipient of
the food donations said the event was extremely well organized.
Workers distributed
more than 90,000 pounds of food in what organizers called the first “mass food
distribution site” in the city’s history, the Houston Chronicle reported. As each car
approached in the multiple lanes of distribution, volunteers put bags of
potatoes, meat, and milk in each vehicle.
“The goal is to
accommodate working families who are unable to visit HISD-sponsored
distribution sites during the weekday,” Houston ISD officials said in a written
statement. “The site is expected to distribute 3,000 food bags — or 90,000
pounds of food — in three hours.” The organization exceeded that goal by a
great margin.
The school district
said that 120 workers gathered to organize the lines and place the tons of
collected food bags into the waiting cars. The Houston Texans NFL franchise not
only donated the space for the event, but provided a catered lunch for the
volunteers. Exxon also donated $50 gift cards to the volunteers.
“Schools are more
than just centers for education, they are the heart of every community, with
strong connections and relationships with students and families,” said Brian
Greene, president and chief executive officer of the Houston Food Bank in the
joint statement with HISD. “Houston Food Bank is working with HISD to
supplement their efforts to ensure children who rely on school meals are still
receiving access to nutritious food during this unprecedented time.”
Bob Price serves as associate
editor and senior news contributor for the Breitbart Texas-Border team. He is an original member
of the Breitbart Texas team. Price is a regular panelist on Fox 26
Houston’s What’s Your Point? Sunday-morning talk
show. Follow
him on Twitter @BobPriceBBTX and Facebook.
Hundreds line up to receive free food outside
of Washington, D.C. area supermarkets
While national news media outlets have sought to focus on the
handful of right-wing protests which have called for a re-opening of the United
States’ economy, a social catastrophe for the working population continues to
develop in neighborhoods and communities across the country.
On Friday, hundreds of people from Maryland and Virginia lined
up outside of local MegaMart supermarkets with the hope of obtaining free
baskets of groceries to feed their families. The giveaways, held at four of the
Latino-owned stores in the Washington, D.C. area, led to massively long lines
which wound around the buildings and disrupted traffic.
Yoni Lopez, owner of the local supermarket chain, told press
outlets that his stores quickly ran out of to-go food baskets. Lopez explained
that staff began handing out $35 gift coupons to people in line. Anarel Mejia,
who was waiting in line, told Fox News: “I don’t want to come out because I
worry. I take care of my life. I take care of my son, that’s why… he’s not with
me… but I need food… now I think everybody needs help.” Mejia is also an
employee of the store.
Like food pantries all across the country, Washington, D.C.-area
food banks have reported a sharp increase in demand. According to the local CBS
affiliate, the Capital Area Food Bank, which is the largest regional hub for
food distribution to the needy, reports a “30%-400%” increase in demand for
assistance. The food bank relies on shipments from local supermarkets. Since
the onset of the pandemic it has seen a 75 percent drop in such deliveries.
News media outlets were quick to leap on store-goers for
violating social distancing procedures. Such acts of desperation, repeatedly
seen in cities throughout the country, are an indictment of capitalism’s failure to properly care for
the fundamental needs of working people during the COVID-19 pandemic.
Likewise, those suggesting that such conditions indicate the
need for a speedy “re-opening” of the US economy, without proper protections in
place for workers in grocery stores and other essential locations, will only hasten
the spread of COVID-19.
According to Fox, over 400 people showed up Friday morning at
MegaMart’s Takoma Park location. The working class suburb is situated on the
northeast border of Washington, D.C. and houses a sizable immigrant population.
The Washington Post wrote last week that the pandemic is proving to be
“particularly devastating” in neighboring Langley Park, which has an 80
percent-immigrant population, a large number of whom are undocumented.
“Here, countless cooks, construction workers and cleaners are
suddenly out of a job without any chance of unemployment benefits or federal
stimulus checks. Those who still work often do so in close quarters and at high
risk of infection,” the Post states. The publication cites a note given to
leasers in a local apartment complex, informing them “that, although the
coronavirus had closed the leasing office, it had not canceled rent payments,
which should be dropped through a slot in a metal box.”
Other nearby jurisdictions, such as neighboring Washington, D.C.,
have also excluded undocumented and informal workers from receiving rent assistance and other basic help during
the pandemic.
While the Washington, D.C. metropolitan region and its
surrounding jurisdictions have reported lower numbers than other major
population centers in the US, it is expected that the capital area will see a
spike in coronavirus infections in the coming weeks. According to the
University of Virginia, it is predicted that the commonwealth will see a
“surge” in infections in late April or early May, reports WUSA9 .
The Post reported that known COVID-19 cases in the Washington
region doubled from around 10,000 to over 20,000 in the week ending Friday.
Maryland, which on Friday surpassed 10,000 known cases of the virus, Sunday
reported that it had 12,830 confirmed cases and 23 deaths overnight.
What
Makes a “Healthy” Economy?
The coronavirus pandemic shows that we don’t have one.
Wikimedia Commons
Last week, Janet Yellin, former chair of the Federal Reserve,
gave an upbeat assessment of the pre-pandemic U.S. economy. “Very fortunately we
started with an economy that was healthy before this hit,” she told the PBS
NewsHour. “The banks were in good shape, the financial system was sound,
Americans at least overall on average had relatively low debt burdens.”
But how “healthy” was that economy, really? How healthy is an
economy whose workers have so little savings that they can’t make the rent
after missing just a couple of paychecks? How healthy is an economy whose small
businesses have so little cushion that they face almost instant obliteration
when their cash flow is disrupted? How healthy is
an economy where hourly employees performing many essential services earn so
little that they have to go to work sick to keep their jobs? And how healthy is an economy whose housing costs force millions
to cram into overcrowded homes in polluted slums replete with high stress,
malnutrition, asthma, diabetes, heart problems, and other chronic disease?
“There’s nothing fundamentally wrong with our economy,” said Fed
chairman Jerome Powell in March. It was “resilient,” he said in February.
Yellin concurred, citing the old good news in her hope that the “economy will
recover much more speedily than it did from any past downturn.”
Recover for whom? The experts look at conventional measurements,
which painted a picture of prosperity before COVID-19. The unemployment rate
last September hit a fifty-year low, at 3.5 percent, and the rate for people
without a high school diploma dropped to a new low of 4.8 percent. The GDP had
been growing within the range considered ideal—two to three percent—and Powell
reported a rising willingness of employers to hire low-skilled workers and
train them.
But alongside the bright figures on unemployment and job
creation, consider a competing set of numbers from before the
pandemic: The poverty-level wages for those who harvest our vegetables,
cut our Christmas trees, wash our cars, cook and serve our food in restaurants,
deliver groceries to our doors, clean our offices, and even drive our
ambulances. The 14.3 million households (11.1 percent) uncertain that they could afford enough
food, and the 5.6 million families (4.3 percent) where at least one person has
had to cut back on eating during the year. The 14.3 percent of black
children with asthma, double the rate in the population overall. The 20 percent of children living in crowded homes shared with other
families or three generations of their own, and the 50 percent of urban
children who have lived in those conditions by age nine.
A pernicious dynamic of financial stress is the unexpected link
between housing costs and malnutrition. For many low-wage families without
access to such government subsidies as Section 8 vouchers or affordable
housing, rent can soak up 40 to 60 percent of income, which can leave too
little for other necessities. You have to pay the rent. You have to pay the
electricity, phone, and fuel bills. If you need a car to get to work, which the
vast majority of employees do, you have to make the car payments. Those are not
optional. The category that can be squeezed is for food, and that’s what many
poor families have to do.
A result is childhood malnutrition. It sometimes manifests itself in obesity resulting from cheap,
bad food, which in turn can promote diabetes. It compromises the immune system.
Even more seriously, deprivation of nutrients such as iron during key periods
of brain development, both before and after birth, can lead to lifelong
cognitive impairment. Studies show that children who suffered iron deficiency
as infants, even if they’re fed properly later, still suffer as adolescents,
scoring lower in math, written expression, and selective recall. Their teachers
see them displaying “more anxiety or depression, social problems, and attention
problems,” according to a National Academy of Sciences report.
So when federal and state governments are stingy with housing
subsidies, as they always are, they are effectively, perhaps unwittingly,
damaging children’s brain development and life opportunities.
The booming economy since the Great Recession
of 2008, amplified by Republican tax cuts that
gave corporations huge benefits, has begun to
raise hourly wages, but not significantly.
If median hourly wages in certain jobs are
put next to the official poverty line—currently $25,750 a year for a family of
four—it’s clear why so many people are in desperate trouble so soon after the
economy’s lockdown. Most poor families have only one wage earner, so assuming a
full-time, 40-hour week, that person would have to be paid $12.38 an hour just
to reach the poverty line. As of May 2019, according to the Bureau of Labor
Statistics, the median hourly wage for ambulance drivers and assistants was
just $12.45; for workers in retail sails, $11.37 to $12.14; for building cleaners,
$12.68; for parking attendants, $12.11; and for fast-food and restaurant cooks
and servers (some of whom also get tips), $11.00 to $12.45.
The lesson is to look beyond the unemployment rate and number of
new jobs and examine how well those jobs pay. The “healthy” economy did little
to narrow the wealth gap. The most recent Federal Reserve figures, from before
the pandemic, showed the top 10 percent of households with a median net worth
of $2,387,500 and the bottom 10 percent with minus $962—that is, they owed more
than they owned.
Adding assets and subtracting liabilities as of the fourth
quarter of 2019, the wealthiest 10 percent had 70 percent ($78.5 trillion) of
the country’s total household net worth, and the bottom 50 percent had just 1.5
percent ($1.7 trillion). The top had miniscule debt, and the bottom half had
miniscule financial assets alongside huge mortgage and consumer debt.
So, Janet Yellin was only partially right when she said that
Americans had low debt burdens. Consumer debt reached a record high in 2019 of
more than $14 trillion, according to Experian, the credit agency. But it was lower as a
portion of income. And defaults and late payments were low enough to drive the
average FICO score—a person’s credit rating—to a high of 703, up from 689 in
2010 at the end of the Great Recession. (A perfect score is 850.) Given the
high credit card and other debt among the unwealthy, however, delinquency rates
can now be expected to soar, pushing credit ratings down.
In that prospering economy, then, the glass was either half full
or half empty, depending on whether you were looking from the top or from the
bottom. There was no need to exaggerate the hardships at the bottom, as some
Democratic candidates did with one misstated statistic.
BLOG: INTERESTINGLY HARRIS, WARREN AND SANDERS ALL WANT AMNESTY
SO 40 MILLION ILLEGALS CAN BRING UP THE REST OF MEXICO. NOW DO THE MATH ON
JOBS, HOUSING AND THE HOMELESS CRISIS
Senators Kamala Harris, Elizabeth Warren, and Bernie Sanders
all said last year that 40
percent of Americans could not come up with the money to pay a $400 emergency
expense. In fact, the contrary was the case, according to the Federal Reserve’s
annual survey, “Report on the
Economic Well-Being of U.S. Households.”
Asked to check all the ways they could pay for a $400 emergency,
only 12 percent said they could not pay right now, 45 percent checked “with the
money currently in my checking/savings account or with cash,” and 33 percent
said they’d use a credit card and pay it off entirely at the next statement. To
a follow-up question, 85 percent said that making the unexpected payment would
not prevent their paying other bills.
On the other hand, 25 percent told the Federal Reserve that they
were just getting by or finding it difficult to get by. That number is
troubling enough, one bound to spike as stay-at-home orders continue. The
economy was not “healthy” for those folks in the first place, and will not be
so for many more.
Improvements will come not from the stalemate of left and right,
or from their manipulating statistics, but from a new ideology of practical
realism that honors the complex facts, without distortion. The free-market
system is the one we have, and it can work for virtually everyone if everyone
in government and business works for everyone. Too idealistic? Naïve? Probably.
|
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Nearly 1 out of every 3 renters did
not pay their April rent.
The coronavirus tore apart the U.S. economy, leaving many people unemployed or furloughed for the time being. The ripple effects of those firings left many landlords without a check on the first of the month.According to data from the National Multifamily Housing Council and a consortium of real-estate data distributors, 69% of renters paid their landlords for April compared with 81% who paid for March. For an annual comparison, 82% of renters paid their landlords in April 2019. The rental statistics included renters who had issued partial payments in the data. Some renters who are waiting on a paycheck may still make their rent payment before the end of April. The data set included only data from those who rent apartments and did not include single-family homes or low-income housing facilities. In total, data from more than 13.4 million renters was included in the report. |
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