Wealth and Poverty in US - Essay Example

Wealth and Poverty American life has become a mythology of success in which opportunity is buzzing around every corner ready to swarm a person if they just choose the right corner to turn. The myths go on to suggest that everyone is likely to become rich and all of the advantages of being rich are just a heartbeat away where fate will take over and catapult the individual into endless resources that will leave them glutted, happy, and content. Whether through being discovered for unknown talents, creating the next big invention, or because of a lottery win that will fill the coffers, every American might become one of the lucky many who become over night sensations and bath in champagne every night, except for one small problem – there is no truth in the myth. The land of opportunity has become a land of obstacles, mostly thrown in front of the middle class by those who see that their own profits will suffer if they support legislation that will empower the middle class once again and begin the process of lifting the lower classes out of their struggle and poverty. There was a point in Western life where working a descent job was possible from merely a secondary education and from that job it was possible to have cars, a house, and a one income family. Somewhere in the disparities that have come between pay and the cost of living this is not possible anymore. The world turned from one in which the struggle of the worker was turned around by unions to one which was turned back on itself so that the disparity between the very wealthy and the worker once again left hard working people drowning in debt and despair. It is not clear exactly when this shift began. It is clear that somewhere along the way workers were taught they would not likely be workers for very long and that in supporting the wealthier 1% they were in effect protecting themselves for the time when they would become a member of that elite group. The worker of the 21st century is just on his or her stopping point before great wealth comes or a shot at celebrity will propel them to a point where tax incentives of the rich will be theirs to enjoy. The worker is no longer respected for their ethic but driven down by insinuations that they are just not trying as hard as the rest of their peers. The story from recent history that best describes the problem of believing in the dream of becoming rich is described by the emergence of the Republican supported character of Joe the Plumber from the 2008 Presidential Campaign. Wurzelbacher and Tabback wrote a book on Joe the Plumber about how he represented the average working class individual as he asked a question of President Obama before he won the race for President during his journey to Ohio. Joe the Plumber is described as “an American folk hero and the ultimate icon for the American class” (Wurzelbacher and Tabback 1). Joe created a scenario that padded his question with ideas about how the tax program that then Candidate Obama had in mind would affect him if he bought the company that he intended to buy. President Obama answered the question by showing him how the tax rates were intended to preserve the income of the workers, just like Joe, while providing for tax cuts for small businesses that made fewer than $250,000.00 per year. Joe felt this was not a good deal for him, despite how his realistic position was fully supported by the tax program. However, the question that he asked was predicated on the idea that he was going to purchase a company that would bring in between $250,000.00 and $280,000.00 per year. The fact was that ‘Joe’ was in no financial position to buy the company and as of the date of his question was not going to find the funds any time soon. While he was catapulted to fame and began to become a part of the political machine, in essence finding that pie in the sky dream, he was still one in a million. He was being used in order to create the idea that what is good for the wealthy is good for the working class and the poor because at any minute they could be one of them. Pumping the ‘American Dream’ as a way to placate the masses has been succeeding in allowing the very rich to continue to be rich while the lower middle class, working poor, and the absolute poor have watched as their income and benefits have had less and less value. Even worse than the idea that the ‘American Dream’ is threatened by taxes on the rich is the idea that to tax people and use the taxes for the benefit of the people is Socialism. This was the ‘slippery slope’ that Joe the Plumber feared should President Obama succeed in creating higher taxes for the rich and decrease the tax burden on the poor (Wurzelbacher and Tabback 28). The idea that people make it on their own is a fallacy that is perpetuated by the idea that to help those who are in need of a leg up is to create a Socialist state. Elizabeth Warren said it best when she gave a speech on the debt crisis and fair taxation before her victory that gave her a Senatorial seat. Elizabeth Warren was the department chair at Harvard University in economics and has done extensive research on income disparity and social issues. She discussed in this speech how no one creates success on their own without the support of government. Government provides roads, police protection, and infrastructure in order for business to succeed. Opportunity and success is a community effort and there is no such thing as a man or woman who has done it all on their own. These provisions are not Socialism just as creating programs to help people out of poverty is not Socialism. Creating opportunity for hard working people has been at the backbone of American success. There was a time when land was given away for free. Land was attained by staking a claim and filing that claim in the lands office. Simpson writes “The land rush was the Homestead Act and the Land Ordinance. It was Jefferson, Benton, and Gilpin. It was the rampant speculation of the Ohio Company and the railroad” (114). It was unscrupulous, often illegally done, but also at the foundation of American development and the rise of capitalism and success. Free land was what drew people into the Mid-West and the West, giving them real hope and opportunity that sometimes had a high cost. Those dreams were based on a real chance for anyone willing to try, however. Today’s dreams are stunted with opportunity being rare and fleeting if available. The upper 1% has convinced the working people that if the government were to create opportunity for them it would end in Socialism even though the exact opposite is at the foundation of American success. The American worker has fallen victim to not only a disparity between the rich and the rest of the nation, but to an even more insidious disparity where the rich and the rest of the nation operate at different levels of economic effect. It used to be that if the workers were being affected by a poor economy so were the CEOs and leaders of industry. The economy rose and fell together, the rolling of an ocean of finance that would indicate poor performance through across the board successes and losses. Reich writes that this is no more the case as globalization sends jobs overseas and the economic success of a company may only mean the success of the top management and owners. In efforts to keep the workers in as poor a state as possible, wages are held low and the wealth of the owners outmatches that of the workers at an impossibly high difference (308). These differences in wealth have created problems that are deepening as the 21st century moves forward. Homelessness rates in the United States are high compared to most Western Nations and the United States has relatively few social benefits in comparison to European nations. Shinn writes that the state of homelessness for families is directly related to a lack of help for families who are in distress. A family must lose almost everything before they can qualify for help through hard times, but once everything is lost it is almost impossible to make their way out of the system (24). Furthermore, Shinn writes that in countries that have reductions in taxes and increased social benefits the inequality of income gap was reduced. In other words, more social programs lead to better employment and economic stability (24). Determining poverty is one of the problems with the current state of the discussion about being poor. Meyer and Sullivan write that “The official poverty rate in the United States is determined by comparing the pretax money income of a family or a single unrelated individual to poverty thresholds that vary by family size and composition. For example, in 2011, the poverty threshold for a one-parent, two-child family was $18,106” (113). Defining poverty is even more difficult. Some writers about poverty point out that in the United States being poor can mean that a person has air conditioning and a television set. They can have a wide number of economic advantages that might not be considered for the poor. According to Rector and Sheffield the average home of a family that is considered poor is in good repair and has more living space than the average non-poor family in Europe. They further report that the U. S. Census reports that there are 30 million Americans who are poor and that one out of every seven households is poor (Para. 10). What is it that can create consumer wealth in families that are considered under the poverty line? There are several factors that contribute to the consumer wealth in families that are under the poverty line. A sudden surge of income that comes from a non-employment resource can account for some of the material advantages of a poor family. Televisions can be purchased used or through pay here places that charge exorbitant interest rates. It is not that poverty is advantaged, but that resources that take advantage of the poor are more abundant. Offering low monthly payments that stretch out forever is one way in which a material advantage can be gained. As well, the numbers of used items that are available are far more abundant in a society that is more disposable and consumes items quickly in search of the next big thing. One more ‘advantage’ that the poor have is the earned income tax credit which can mean a much larger tax return, giving the disadvantaged a sudden surge of income that can be used for larger ticket items. Instead of ensuring that people who are struggling have better access to electricity, giving them a larger boost of income at one time inspires them to get that luxury that they might not otherwise have been able to purchase. It is not a good idea for the disadvantaged to hang onto that earned income tax credit either because while they are not penalized for their possessions, they are penalized should they need help down the line if they have any savings left at that point. For the poor, having cash can be a problem. Aknin et al argue that money is not what matters and that having it is not the route to happiness. As well, Rector and Sheffield argue that being poor in the United States is not like being poor in other nations because the poverty line represents families who have enough advantages that they should be grateful. The condition of poverty, they claim, is not all that bad in the United States. However, the perceived advantages of being poor in the United States are not advantages at all. While living in a house that has air conditioning is an advantage, it is not an advantage when there is no money for the electric bill or for food this next week because it was a choice between food and the electric bill. The choices for housing is either more than one can afford or none at all. Through combining households and creating ways in which to survive the poor live, but homelessness is always just around the next corner. Surviving is not the same as thriving and it is a perpetuating condition that children of those who are living on the line are more often destined to continue. At the core of the entire problem of the economy and the disparity in wealth is consumerism. Without consumerism the whole economic system will continue to fold. For the economy, the earned income tax credit is a boost in the spring when those who receive the benefit can go out and buy that luxury item they have been wanting. For the rest of the year, however, the problem with the income of most working Americans is that it all goes to debt. The debt cycle which is the obtaining of debt and increasing of material goods only to lose more disposable income is not how the economy thrives. The economy thrives when there is enough disposable income to keep buying, not just paying off old debts. Now, however, Reich writes that there are no more constraints on the income of top executives like their used to be and workers are no longer able to spend their money on the items that producers are making. This means that they are either going into debt or they are going without, which does not stimulate the economy (315). In addition, Liberto reports that the average CEO makes 380 times what their workers make. Liberto writes that “All employees create value. CEO pay levels should be more in line with the rest of the company's employee pay structure," said Richard Trumka, AFL-CIO president. "CEOs should be paid as a member of a team, not as a superstar."(Para. 4). The desire for pay that is extreme at the expense of workers means that the worker is being devalued. With the current climate of admiration for the wealthy and the dissemination of the mythology that wealth is right around the corner for the average worker, political cures and unionization to promote workers’ rights have not been the current trend. There is a belief that to regulate or constrain the wealthy in any way is going to constrain the next lucky person to catapult to stardom. Spin doctors have been creating a mythology that has supported this disparity for decades and changing the culture of work back to a worker focused bases may seem an impossible task at this point. The inequality of income levels in the United States has been accompanied by myths about poverty and wealth that have created a hope that is not founded in a realistic expectation. The environment of opportunity has been oppressed by a lack of resources and a population that has been convinced that to provide opportunity is somehow a road to Socialism. Poverty and the circumstances of being poor is not understood by those in power and the consumerist society has created a type of poverty that benefits from some of its forms, such as the availability of used items, but also exploits poverty by offering items at exorbitant rates of exchange. The evidence of the disparity in pay between the CEOs of companies and the workers shows that there is a problem at the corporate level. Without a reformed set of values and the concept of community opportunity returning to the United States, the inequality in income will continue and the fall of the economy from a lack of the ability to participate in the consumer culture will lead to bigger problems. Works Cited Aknin, Lara B., Michael I. Norton, and Elizabeth W. Dunn. "From Wealth to Well-Being? Money Matters, but Less than People Think." The Journal of positive psychology 4.6 (2009): 523-527. Liberto, Jennifer. “CEO pay is 380 times average worker – AFL-CIO. CNN Money. 19 April 2012. Web. 12 May 2013. Meyer, Bruce D., and James X. Sullivan. "Identifying the Disadvantaged: Official Poverty, Consumption Poverty, And The New Supplemental Poverty Measure." Journal Of Economic Perspectives 26.3 (2012): 111-136. Rector, Robert and Rachel Sheffield. “Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?” The Heritage Foundation. 19 July 2011. Web. 12 May 2013. Reich, Richard. R. “Why the Rich are Getting Richer and the Poor are Getting Poorer” in Richard R. Reich (ed). The Works of Nations. New York: Albert A. Knopf, 1991. Print. Shinn, Marybeth. "Homelessness, poverty, and social exclusion in the United States and Europe." European Journal on Homelessness 4 (2010): 21-44. Simpson, John W. Visions of Paradise: Glimpses of Our Landscape's Legacy. Berkeley: Univ. of California Press, 1999. Print. Wurzelbacher, Samuel J, and Thomas N. Tabback. Joe the Plumber: Fighting for the American Dream. Austin, TX: PearlGate Publ, 2008. Print. You Tube. “Elizabeth Warren on Debt Crisis, Fair Taxation”. 18 September 2011. Web. 11 May 2013. Read More