Thursday, 3 February 2011

Perpetuating the US Underclass

There are many ways of accomplishing this, of making sure there is a constant pool of cheap, unskilled labour. To shine your shoes, or wait at tables, to open doors or deliver pizzas.

One way is to criminalise behaviours used by the underclass to enjoy themselves. Not too much - just enough so they get a criminal record. Just enough so that few in the underclass have respect for the majesty of the law. Just enough so that doing time in jail is not seen as a big deal, it's something most everyone does at one time or another.

Enough to make sure that predators on the poor are indistinguishable from their prey - predators who will keep them from rising above their station, and stop them from saving. Because any savings will soon be stolen, and wasted.



Another way is to arrange any taxation and social security net so that there are positive financial penalties for being "uppity". That unless you earn more than the average wage, you're actually better off in monetary terms earning minimum wage, and not a cent more. Ideally, if you earn in-between minimum and average wage, you should be financially worse off than earning nothing at all.

Consider these figures for a family of four in Mississippi:



See what I mean?

Note that the actual disposable income of the lowest earners, after food, shelter, and healthcare are paid for, is less than $2 a day per person. For books, for additional education, for clothing, for telecommunications. For school outings, and savings for higher education costs. For Holidays.

Not exactly a life of ease and luxury, is it?

For those who are on an average wage, they actually get less in the way of raw monetary terms. The difference is though, that they have choices in the way the money they're benefiting from is disbursed, and that shouldn't be under-estimated. Not having to shop at places which accept food-stamps. Being able to have more choice over diet. Not being compelled to have their children served meals where "ketchup is a vegetable" at schools.

Not being reminded in a myriad of ways that they're the underclass.

No, I've not turned Lefty in my old age. Or if I have, it's because the Right has moved away from me, not me from it. I still despise the demagogues that "mobilise the vote", using a combination of racism and the politics of envy. Neither do I buy in to the idea that this is all the product of some vast, malign conspiracy. Like Topsy, I think it "just growed".

But from an outsider's viewpoint, any society where such a vast proportion of the population is in jail, or recently released from jail, that society has a problem, no matter what the cause.

It doesn't have to be like this. It's not like this in most places, though there are positive advantages for those living "in the middle" in the USA. Paying less for meals - because the kitchen staff are paid peanuts. Having a gaggle of servants and bellhops, where in other western societies, there's far more automation as those on the bottom are so much more expensive. Rents being cheap, as houses are cheap, because building labour is so cheap. Even in rural Australia, $4350 will pay for 6 months rent, not more. Less in most capitals.

Canberra House and Unit (Apartment) prices:



The houses aren't exactly mansions either.

From TheBlogProf, a graph showing relative tax burden :


This is always a bad sign. It means one of two things: either a welfare state out of control, doing a Robin Hood act. Robbing the Rich to feed the, well, not exactly poor, but the State Bureaucracy that paternalistically manages the poor (for their own good of course)... or it means that income inequality has become pathological. The place now has a 3rd world income demographic, a few obscenely rich oligarchical families owning and controlling the country's wealth - with the politicians owned in fee simple to maintain the status quo.

Both are perversions of the Free Market that has proven so successful in wealth generation in comparison with un-Free systems.

I'm good at diagnosis, but cure, that's another matter. That's up to the US voting public. The discontent has given rise to the "Tea Party", but that can easily be co-opted into expending its strength in unproductive directions. It's not certain that less regulation is the answer - because that will just give the oligarchs free rein to distort the market further. More regulation though is even more dangerous, as it allows the Big Players to raise barriers against entry, and to drive lesser ones to extinction by fixed costs, independent of revenue.

What's needed is for an investigation of what existing regulations have been flouted with impunity, by whom, and how. The Rangel case is a perfect example - the man in charge of the IRS (US Tax Department) cheating on his taxes with no criminal or financial penalty, other than having to give back some of what he stole.

When Laws are only to be obeyed by the Little People - then you have a problem. When you have businesses too big to fail, when you have the very, very wealthiest paying no taxes to speak of, shifting the burden onto the merely rich.. then the problem's bigger still.

15 comments:

Lucrece said...

Not to mention that cashiers become janitors and stock supervisors and pseudo-managers all for an $7.25/hr wage. Why hire people when you can exploit the financial situation in which workers desperate for employment are ripe for being taken advantage of by employers.

Or that I have had to stop my education thanks to a shortage of financial aid that has ended in an outstanding balance that in turn prevents my transcripts from being released-- thus being barred from even attending a community college.

When university administrators are lining up their pockets while entangling students with hype until it's too late to realize the racket of a system that changed (i.e. increased) tuitions from a $3000 a year value tenfold for the cheaper universities (if we want metropolitan universities like, say, Boston University; be prepared to shell out 54,000 a year).

That paired with an environment which now even requires 2-4 year degress for previously even menial jobs-- let alone any job that isn't subsistence pay-- translates into an easily preyed upon contingent with little political power (rich students' parents won't care to lift a finger after all, since they can afford it) that can be kept in financial bondage.

Economic depression? Don't tell that to Sallie Mae or the Department of Education. Only loans bankruptcy won't liberate you from!

Anonymous said...

With 6.8 billion people there is a surplus of human captial, and a shortage of resources. What is your plan for the future of earth?

MCM

Anonymous said...

Ah, yes, the right moving away ... I know the feeling well.

It's worse in the USA, as two recent events point out:

1. Some conservative groups are boycotting a major conservative meeting because of the presence of a gay conservative group.

2. The Speaker of the Texas House is a guy by the name of Strauss. He's a Republican ... and a Jew. There was a campaign to remove him by people who wanted a 'conservative christian'. Mr Strauss was re-elected despite that shameful campaign.

On house prices, I am tending more to the view that taxing economic rents (e.g. taxes on property, radio frequency spectrum, etc.) instead of income is the way to go. Those Georgists might have had a good point. Canberra's housing used to be cheap under that system.

E.

Zimbel said...

I still despise the demagogues that "mobilise the vote", using a combination of racism and the politics of envy.
- at least in the U.S.A., every political party mobilizes the vote. They just try to mobilize their voters more than the other ones. I'd say, though, that the nastiest ones are those that de-mobilize the opposition's vote (giving incorrect dates or addresses for voting, implying that legal voters can't, etc.)

I'm curious as to what the "politics of envy" are; I've never heard the term before. A quick google search shows a couple articles, one of which appears confused in its economic background, and the other appears to ignore the forest for one particular tree. From the second article, it appears to mean that they think that the rich shouldn't be taxed (on a percentage basis) as much as the middle class - but I'm not clear what that has to do with envy.

Neither do I buy in to the idea that this is all the product of some vast, malign conspiracy. Like Topsy, I think it "just growed".

After the "slaves were freed" in the 1860s, we had something between formal slavery and long-term imprisonment for being Black and male for another roughly 80 years.

We have had towns, where, until recently, being Black and there after sunset was a crime (See Sundown Towns). And, yes, in some of those towns, other groups were excluded - Orientals, Jews, Native Americans, and Hispanics are other common groups to discriminate against, if the details differ.

Personally, I think one can trace a large percentage of post 1850s politics in the U.S.A. pretty much by which party was relatively pro-Black at the time. From its inception through roughly the 1890s, that was the Republican party. From roughly the 1930s on, that was the Democratic party. For evidence, look up African Americans in the United States Congress - before 1935 every Black person in congress was Republican. Since 1935, there have been only 6, versus over 100 Democratic Black Congress members.

@Lucrece-

Bankruptcy law changed relatively recently; credit card debt, for example, is now difficult if possible to absolve through bankruptcy in many cases; see Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Zimbel said...

I still despise the demagogues that "mobilise the vote", using a combination of racism and the politics of envy.
- at least in the U.S.A., every political party mobilizes the vote. They just try to mobilize their voters more than the other ones. I'd say, though, that the nastiest ones are those that de-mobilize the opposition's vote (giving incorrect dates or addresses for voting, implying that legal voters can't, etc.)

I'm curious as to what the "politics of envy" are; I've never heard the term before. A quick google search shows a couple articles, one of which appears confused in its economic background, and the other appears to ignore the forest for one particular tree. From the second article, I think it means that they think that the rich shouldn't be taxed (on a percentage basis) as much as the middle class - but I'm not clear what that has to do with envy.

Zimbel said...

Neither do I buy in to the idea that this is all the product of some vast, malign conspiracy. Like Topsy, I think it "just growed".

After the "slaves were freed" in the 1860s, we had something between formal slavery and long-term imprisonment for being Black and male for another roughly 80 years.

We have had towns, where, until recently, being Black and there after sunset was a crime (See Sundown Towns). And, yes, in some of those towns, other groups were excluded - Orientals, Jews, Native Americans, and Hispanics are other common groups to discriminate against, if the details differ.

Personally, I think a useful lens for U.S.A. post 1850s politics is which party was relatively pro-Black at the time. From its inception through roughly the 1890s, that was the Republican party. From roughly the 1930s on, that was the Democratic party. For evidence, look up African Americans in the United States Congress - before 1935 every Black person in congress was Republican. Since 1935, there have been only 6, versus over 100 Democratic Black Congress members.

Zimbel said...

@Lucrece-

Bankruptcy law changed relatively recently; credit card debt, for example, is now difficult if possible to absolve through bankruptcy in many cases; see Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Joseph said...

It's worth pointing out that much of the inequality inside the U.S. in imported. (A land boundary with a third-world nation will do that.) Nobody is actually worse off---the imported lower class is better off here than if sent home---but we're deprived of equality bragging rights.

Zimbel said...

@Joeseph-

Undocumented immigrants (and, as for every such group, those that look like them) are just one of a number of classes that are discriminated against, although they may be the predominate one in your area. Look, for example, at INJUSTICE AT EVERY TURN:
A REPORT OF THE NATIONAL TRANSGENDER DISCRIMINATION SURVEY


Mexico isn't a significant source of either Native Americans or Blacks, yet both have a significantly higher chance of loosing their job when they transition(36%/32% vs 26% for the sample), to be unemployed (24%/28% versus 14% for the sample), to be denied housing (47%/38% versus 19% for the sample), and to be currently homeless (8.0%/13.0% versus 1.7% for the sample).

Anonymous said...

i'm lost. why is the tax burden when the top 1% pay more tax than the bottom 95% a bad thing ?

shouldnt the rich be the ones who pay more tax ?

din

Zoe Brain said...

The Rich don't pay Tax. Taxes are for the little people - those not wealthy enough to reduce their tax burden by family trusts etc.

Zimbel said...

@Zoe Brain - I think you're exaggerating the point (sales taxes on perishables, for example, are hard to avoid), but yes, the rich both have the ability to get exemptions/deductions in for people like them, and the ability to use those exemptions. So they tend to pay a lower percentage than you'd the middle class (since their base rate isn't much higher in the first place) - this is even true if you aren't trying to reduce your taxes, since others have done the work for you. a recent example:

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.

Why was this the case? Because Buffett's secretary makes most of their money through salary. Mr. Buffett makes most of his money through other means (such as capital gains), which are at much lower base tax rates. Needless to say, capitol gains are typically only a significant percentage of income for the wealthy. And note that someone who's wealthy and trying to game the tax code would likely pay less.

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