Experience tells me that nobody wants to hear about the poor. Not even DOTE readers want to hear about the poor, unless they themselves are poor. To paraphrase Mark's gospel, the poor are always with us, so taking them for granted is easy to do, especially in so far as their very existence reminds us of our contining failures. It is far easier to look the other way.
But shouldn't we celebrate the poor? They are far and away America's biggest product since the Great Recession began (graphs below). Borrowed money spent to keep the poor alive adds to GDP, which grows and grows as a result.
A closer look post-recession. Source for both graphs
One in seven Americans receive food stamps, and an even higher proportion of American children do, but you are far more likely to hear about the relatively small amount of supplemental food assistance fraud than you are about these disturbing and embarrassing facts.
But the truth is that the poor are defenseless. They have no recourse. As a result, and especially here in the Greatest Country on Earth, the poor are the target of predators who want to steal what little wealth they have. That is the subject of Barbara Ehrenreich's recent column How Corporations and Local Governments Rob the Poor Blind.
The trick is to rob them in ways that are systematic, impersonal, and almost impossible to trace to individual perpetrators.
Individually the poor are not too tempting to thieves, for obvious reasons. Mug a banker and you might score a wallet containing a month’s rent. Mug a janitor and you will be lucky to get away with bus fare to flee the crime scene. But as Business Week helpfully pointed out in 2007, the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them.
The trick is to rob them in ways that are systematic, impersonal, and almost impossible to trace to individual perpetrators. Employers, for example, can simply program their computers to shave a few dollars off each paycheck, or they can require workers to show up 30 minutes or more before the time clock starts ticking.
Lenders, including major credit companies as well as payday lenders, have taken over the traditional role of the street-corner loan shark, charging the poor insanely high rates of interest. When supplemented with late fees (themselves subject to interest), the resulting effective interest rate can be as high as 600% a year, which is perfectly legal in many states.
I guess that's what pundits mean when they say America is still The Land of Opportunity. I couldn't quite grasp what they were getting at before, but now I think I understand it. And as Barbara points out, there's no reason governments can't get in on the action.
It’s not just the private sector that’s preying on the poor. Local governments are discovering that they can partially make up for declining tax revenues through fines, fees, and other costs imposed on indigent defendants, often for crimes no more dastardly than driving with a suspended license. And if that seems like an inefficient way to make money, given the high cost of locking people up, a growing number of jurisdictions have taken to charging defendants for their court costs and even the price of occupying a jail cell...
Once you have been deemed a criminal, you can pretty much kiss your remaining assets goodbye. Not only will you face the aforementioned court costs, but you’ll have a hard timeever finding a job again once you’ve acquired a criminal record. And then of course, the poorer you become, the more likely you are to get in fresh trouble with the law, making this less like a “cycle” and more like [a] waterslide to hell. The further you descend, the faster you fall — until you eventually end up on the streets and get busted for an offense like urinating in public or sleeping on a sidewalk.
Paying for your own bogus incarceration. Don't tell me the American Dream is dead! It's simply been redefined. I guess that's why no one cares about the poor. You might think...
Government Joins the Looters of the Poor
You might think that policymakers would take a keen interest in the amounts that are stolen, coerced, or extorted from the poor, but there are no official efforts to track such figures.
Instead, we have to turn to independent investigators, like Kim Bobo, author of Wage Theft in America, who estimates that wage theft nets employers at least $100 billion a year and possibly twice that.
As for the profits extracted by the lending industry, Gary Rivlin, who wrote Broke USA: From Pawnshops to Poverty, Inc. — How the Working Poor Became Big Business, says the poor pay an effective surcharge of about $30 billion a year for the financial products they consume and more than twice that if you include subprime credit cards, subprime auto loans, and subprime mortgages.
These are not, of course, trivial amounts. They are on the same order of magnitude as major public programs for the poor. The government distributes about $55 billion a year, for example, through the largest single cash-transfer program for the poor, the Earned Income Tax Credit; at the same time, employers are siphoning off twice that amount, if not more, through wage theft
Barbara Ehrenreich is no dummy. She's a smart cookie, and surely knows that none of this is going to change anytime soon, so when she started using the word "should" in the last paragraph, it was surely a result of a strong sense of social and moral obligation, as opposed to delusional obligatory hope.
I could propose all kinds of policies to curb the ongoing predation on the poor. Limits on usury should be reinstated. Theft should be taken seriously even when it’s committed by millionaire employers. No one should be incarcerated for debt or squeezed for money they have no chance of getting their hands on. These are no-brainers, and should take precedence over any long term talk about generating jobs or strengthening the safety net. Before we can “do something” for the poor, there are some things we need to stop doing to them.
The truth is that America is a country that can not and does not even want to give each of its citizens dignified, well-compensated labor which allows those people to stand on their own two feet. America has always had a substantial number of poor people, but some of us can remember a time when this country wanted to become a place where each citizen had an opportunity to make their lives work. But the desire to do the Right Thing disappeared sometime in the 1970s, and it's been fading from sight ever since. And now here we are.
Preying on the poor has replaced honest work and government, and that's never going to change, not ever again. That's just the way it is.
Bonus Video — Barbara Ehrenreich on the Big Questions