Sources of Poverty in the US – Matthew Desmond article – Updated

Original posting – 3.6.2023

Matthew Desmond, author of Evicted: Poverty and Profit in the American City¹, has a new book Poverty, by America set to be released shortly. He has written a piece for the NYTimes, “Why Poverty Persists in America”² that is worth a read.

He poses this question early on, “Why, then, when it comes to poverty reduction, have we had 50 years of nothing?” He cites a ton of statistics to prove this claim of no progress. Unfortunately, too believable. He writes the politics and governing of the last fifty years out as a source of the problem. According to Desmond ““Neoliberalism” is now part of the left’s lexicon, but I looked in vain to find it in the plain print of federal budgets, at least as far as aid to the poor was concerned.” He then goes into a discussion of the exploitation of the poor. Globalization, the decline in labor unions, predatory financial services, changes in the structure of work (“As the sociologist Gerald Davis has put it: Our grandparents had careers. Our parents had jobs. We complete tasks.”), and the predatory housing industry.

To cast aside the role of neoliberal ideology in this phenomenon because he couldn’t find it in the Federal budget suggests that Desmond has a very faulty grasp of this ideology, the most significant force in world politics in the past 50 years. The decline in unions, predatory finance sector, housing run amuck, globalization, and more. These are all central to the neoliberal playbook. These are the results of small government, anti-regulation, free-market ideologues. The built-in features of modern capitalism in action. The rich and corporations own the government and set the rules to their advantage. Thus, exploitation.

Desmond ends his essay on a rather flat note:

“Living our daily lives in ways that express solidarity with the poor could mean we pay more; anti-exploitative investing could dampen our stock portfolios. By acknowledging those costs, we acknowledge our complicity. Unwinding ourselves from our neighbors’ deprivation and refusing to live as enemies of the poor will require us to pay a price. It’s the price of our restored humanity and renewed country.”

If you need to be persuaded that we have persistent poverty in the US, this essay is worth a read. However, the larger issue is the fate of the bottom 80% of the population. What has happened to the vaunted American middle class? Three charts suggest the scope of the broader situation.

Where has the money produced by the yawning gap between productivity(ratio between dollars of output of products and services per dollar of labor input)? it has ended up in the pockets of the top 20%. Most attention is paid to the top 1%, the real story is that we now have an economy in which the top 20% are continuing to flourish while the rest of the population languishes at best.

This chart from a David Leonhardt article in the NYTimes “How the Upper Middle Class Is Really Doing”³ sums it up.

“Since 1980, the incomes of the very rich have grown faster than the economy. The upper middle class has kept pace with the economy, while the middle class and poor have fallen behind.”⁴

Further evidence here:

The Maddening Takeaway

Desmond makes many useful suggestions for changes in policy and law that would be useful to poor people as well as the vast majority of Americans. But given his 50 year timeline of no progress in overcoming poverty in the richest country on earth, it seems that what is needed is a more fundamental movement to take the economy and society back from the overlordship of the rich and corporations. This will be no simple task. Our two parties are thoroughly beholden to the overlords and show no signs of becoming agents of a democratic government.

Update 3.17.2023

Desmond has published another opinion piece in the NYTimes: “America Is in a Disgraced Class of Its Own“

1. Matthew Desmond, Evicted: Poverty and Profit in the American City (Penguin Books, 2016)
2. https://www.nytimes.com/2023/03/09/magazine/poverty-by-america-matthew-desmond.html
3. https://www.nytimes.com/2019/02/24/opinion/income-inequality-upper-middle-class.html
4. There is variation amongst the analyses of whther the upper class is the top 20% or 10% of the population. In anyt event it is clear that the vast bulk of the population is in the loser column.