It begins with the statement,
The article goes on to talk about the large group of "near-poor" in America -- the 60 million people who are "just one notch above the official poverty line," with incomes that range from $20,000 to $40,000 for a family of four.
We have always gotten a distorted picture of how well Americans were doing from politicians and the media. The U.S. has a population of 300 million. Thirty-seven million, many of them children, live in poverty. Close to 60 million are just one notch above the official poverty line. These near-poor Americans live in households with annual incomes that range from $20,000 to $40,000 for a family of four.
It is disgraceful that in a nation as wealthy as the United States, nearly a third of the people are poor or near-poor.
You can read the statistics, expressed in terms of income multiples of the Federal Poverty Guideline here. I think you'll find them moving.
It isn't that I don't agree there is a problem -- readers of this blog likely know that -- but must point out that defining the problem this way, as the authors of "The Missing Class" do, misses the point that $20,000 or $40,000 for a family of 4 in rural Alabama is very different from $20,000 to $40,000 in New York City or San Francisco, or any of our other major metropolitan areas, where the vast majority of us live. [See data about the cost of living in America's low-cost counties, and in America's major cities.]
Rents in Wilcox County, Alabama, for a 2 bedroom apartment are much lower than rents in the Bronx. For comparison sake, we'll use the HUD 2008 "Fair Market Rents" which generally represent the 40th percentile of the rental market.
Quick and dirty, we'll use the once-standard "30% for housing" rule of thumb. In Wilcox County, a 2BR apartment -- or perhaps it is a house, given the rural character of the area -- has a HUD FMR of $481. That $481 ($5,772 per year) is 30% of an annual income of $19,240 -- and we haven't yet considered utilities or other housing costs. (One could deduce from this that a family of 4 living in Wilcox County at the 2008 Federal Poverty Guideline of $21,200 could afford to rent a 2BR home.) In NYC itself, the HUD FMR of $1,318 ($15,816 per year for rent alone) is 30% of $52,720 (and NYC's aren't the highest FMRs in the area; Long Island, Westchester, parts of New Jersey, and nearby Connecticut are higher). According to the USDA, the "thrifty" food plan for a family of 4 with 2 young children (January 2008) is nearly $6,000 per year (that allows $1.36 per person per meal) nationwide. (For a family with two young teens, $7,314 -- $1.68 per person per meal.) Housing and food, then, at NYC's 2BR FMR would total $21,816 for the younger family, and $23,130 for the older family -- both more than the Federal Poverty Guideline.
So defining the "near poor" as $20,000 to $40,000 everywhere in the US, as the authors of The Missing Class do, leads to some misunderstandings. [TMC focuses on about 6 families in New York city whose incomes fall in that range; I think a fair case could be made that the descriptions are really those of people who, on the wages their jobs would pay elsewhere, would be acknowledged as in official poverty.]
I think it is quite legitimate to define someone living in a rural area at $20,000 to $40,000 for a family of four as "near-poor." But the definition of "near-poor" in most of our cities must encompass incomes significantly higher than that, particularly when children under 12 or so are part of the family and childcare is a necessity.
Someone whose entire living experience is in a "red" area is likely to say that $40,000 is plenty for a family of 4 to live on; those in "blue" counties are likely to consider $40,000 insufficient -- and wonder how their compatriots could see it so differently. They are "seeing" different parts of the elephant. No wonder their perspectives are different!
Herbert goes on to say,
The American dream is on life support because men and women by the millions who want very much to work — who still have in their heads the ideal of a thriving family in a nice home with maybe a picket fence — are unable to find a decent job.
For years, families have been fighting weakness on the employment front with every other option imaginable.
- Wives and mothers have gone to work.
- People have been putting in more hours and working additional jobs.
- And Americans have plunged like Olympic diving champions into every form of debt they could find.
Who has gotten the benefits of women spending many more years and many more hours per year in the workplace? Who has benefited from Americans carrying more and more debt? How does this relate to the run-up in the price of housing? I'll write about that in another post.
But I will say here that while I think many people have dreams of owning a single family home with a bit of lawn, many of them would be willing to forego the lawn if they could simply find a comfortable, affordable, technologically current home within a reasonable distance of a job that pays well and schools to which they would be confident sending their children. I don't think this is too much to ask, or too much to promise. We can do it if we undertake some simple tax reform.
Without an educated and empowered work force, without sustained investment in the infrastructure and technologies that foster long-term employment, and without a system of taxation that can actually pay for the services provided by government, the American dream as we know it will expire.
Bob Herbert rightly ties together education, infrastructure, employment and taxation. But if I had to guess from the rest of his writing, he doesn't know any better than the other columnists I read how to connect those dots to show a cat.(*)
* "Seeing the cat" is Georgist shorthand for the "aha!" moment most of us experienced when we saw how these things fit together -- an experience we seek to provide for others! Google it, and you'll find more information about the etymology.