Glitz and poverty. Why Americans suffer from horrendous poverty

The following is our translation of an article from RIA Novosti.
 

 
MOSCOW, Feb 4 - RIA Novosti, Marat Seleznev. The problems of poverty in developing countries and third world countries are obvious. But the most prosperous states also suffer from social ills. Forty million Americans live below the poverty line, several million barely make ends meet, and most of the benefits of civilization are becoming less accessible to them. Economists are coming to a paradoxical conclusion: it turns out that being a beggar is much worse in a rich country than in a poor one. Calls to think seriously about revising social policy are getting louder. How the American dream turns into an American illusion is discussed at RIA Novosti.
 
Every eighth
 
“During these two weeks I saw and heard a lot,” - this is how the voluminous report on the visit of the UN Special Rapporteur on extreme poverty Philip Alston to the United States begins.
 
During an American tour, he looked into downtown Los Angeles and was surprised that hundreds of people in the Skid Row area were on the verge of survival. He witnessed a policeman in San Francisco trying to drive a group of homeless people off the street. The law enforcement officer froze and fell silent after the question: "Where can we go?" Alston saw completely toothless people - insurance did not cover dental services. Now they have no opportunity to get a normal job. He was shocked by storm drains filled with sewage in those states where the authorities do not deal with such communal problems.
 
"The United States is one of the richest, strongest and most technologically advanced countries. But neither wealth, nor strength, nor technology is used to solve the problem of poverty. Forty million Americans live in poverty," says Alston. Forty million people are one in eight United States citizens. Almost 13 percent of the country's population.
 
The poverty line for one adult in the United States, according to January 13, is $ 12,140 per year. $16,460 for two people, $20,780for three. The average annual salary in the country is 29 thousand dollars for a cashier, and 62 thousand fora policeman. Forty million Americans receive less than the official "living wage." Moreover, 18.5 million of them have incomes half that threshold, the UN said.
 
The vice of poverty
 
In the USA, it is customary to think (and the authorities are trying to support this idea) that the rich are definitely hardworking patriots, the main driving force of the economy. Poor people, by contrast, are considered losers and dependents, people who do not want to work hard. “Reality, however, is at odds with these views,” Alston points out.
 
In fact, the richest Americans are trying to pay less taxes, withdraw funds to offshore accounts and profit not from hard work, but from speculation. The poor either were born poor or were marginalized under the pressure of circumstances - illness, old age, discrimination in the labour market, family breakdown or the like.
 
"In the current economy, only a small percentage of the population is protected from impoverishment caused by a combination of adverse circumstances. The American dream is quickly turning into an American illusion: the mobility of the population in the United States is the lowest among wealthy countries," writes Philip Alston.
 
The UN spokesman also urges not to replicate racist stereotypes, according to which the majority of the poor in the United States are black or Hispanic. In reality, the army of white poor people is eight million more.
 
A separate problem is child poverty. In 2016, 18 percent of children in the United States — about 13 million — lived in poverty. Thirty-two and a half percent of the American poor are children, 21 percent of the homeless are children. However, not everything is so terrible. Yes, 95 percent of young Americans now have health insurance thanks to the expansion of Medicaid and the launch of the Children’s Health Insurance Program in 1997. However, according to the Stanford Centre for the Study of Poverty and Inequality, the United States ranks first among wealthy countries in terms of child poverty.
 
At the bottom
 
“The misery and poverty of millions of Americans is the same as in Africa or Asia. Maybe even worse than theirs,” Angus Deaton, Nobel Laureate in Economics, sounds the alarm. For many years he has been studying the problems of welfare in different countries. In an article for The New York Times, "The United States Can No longer Ignore the Problem of Deep Poverty," he tries to answer the question of whether the United States has the same kind of beggars as, for example, Ethiopia and Nepal.
 
Deaton's answer is not very optimistic. Americans, despite the country's economic power, suffer extreme poverty. And there are more poor people who have sunk to the very bottom than is commonly thought.
 
According to the World Bank, in 2013 there were 769 million beggars on the planet. In this report, the term “world’s very poorest” is used - meaning deep poverty, the worst level of welfare. Such people survive on $1.9 a day. Of the extremely poor 3.3 million are Americans.
 
But one important circumstance is missing in these calculations. The needs of the poor in different countries are very different. A peasant in the tropics does not need a lot of money for clothing or transport services. A villager in India is not burdened with house rents and does not waste money on utility bills. Even within one country, beggars have different needs: in Los Angeles they are warm and the homeless sleep on the streets, while in New York they have to look for an overnight shelter with a roof.
 
American economist Robert Allen proposes to improve the poverty assessment system. According to him, the cut-off line of $1.9, which defers to the World Bank, is suitable for poor countries. For prosperous states, you need to use the four dollar mark.
 
As a result, Deaton writes, 5.3 million Americans can be called absolutely poor, that is, 66 percent more than is commonly believed. For comparison: 3.2 million beggars in Sierra Leone, 2.5 million in Nepal and the same 5.3 million in Senegal.
 
White despair
 
Of course, people live longer in rich countries. With rare exceptions, everyone has access to clean water, normal food, and at least some medical services. But Deaton notes that the benefits of civilization are increasingly bypassing the poorest Americans. And life expectancy in the country (80 years, 43rd place on the CIA list is worse than Greece, Puerto Rico and Spain) is lower than it could be given the total wealth of the United States. In some regions, such as the Mississippi Delta or the Appalachian Mountains, life expectancy is even lower than in Bangladesh or Vietnam.
 
Many Americans face poor health. A joint study by Angus Deaton and economics professor at Princeton University, Anna Keyes, said that this problem most often affects white Americans with secondary education. Among them, the so-called mortality from despair - suicides, alcohol and drugs - is increasing.
 
The authors of the study suggest that the increase in the number of "deaths from despair" is associated with a deterioration in the economic and social situation of citizens - mainly representatives of the white working class. It is noteworthy that according to the results of 2015, mortality in this category was 30 percent higher than that of African Americans. In 1999, the opposite picture was observed. This is another confirmation of the fallacy of racial stereotypes: the level of well-being depends on many factors, but certainly not on skin colour.
 
“Fighting inequality requires significant changes in taxation nationally and globally. Many countries will have to rethink education and wage policies, as well as corporate governance,” according to the 2018 World Inequality Report.
 
Among the authors of the document are economists specializing in the problem of stratification of society and poverty: Tom Picketti and Emmanuel Saez. They believe that developed countries should radically change their social structure.
 
Poverty alleviation is proposed in three areas. The first is the application of progressive taxation. This discourages the rich from accumulating money and raising their own wealth. The second is the compilation of a global registry of financial assets. This will help identify capital owners and strike a blow at tax evasion and money laundering. Thirdly, ensuring equal access to education and work.
 
Finally, the authors’ general wish is that governments should invest in education, health, and the environment. And the main problem here is that the richest countries are actually impoverished. States have little free money, even the most prosperous of them being burdened with high sovereign debts; they can’t expand social programs indefinitely.
 
Angus Deaton does not call for a radical change in the tax system and the sharing of the wealth of billionaires. He asks the world governments and, in particular, the US authorities to pay a little more attention to internal problems. “Stop thinking that only non-Americans are truly poor,” the Nobel laureate addresses the American elite.
 
Shocked by a trip to the United States, Philip Alston wrote his report not only in dark tones. He saw a lot of good and spoke about examples of true mercy and mutual assistance. One of the Catholic churches in San Francisco, among services, provides the homeless with a roof over their heads. Volunteer doctors in Charleston (West Virginia) provide free services to thousands of patients, including dental services. Many municipalities are in favour of expanding social support for 20 percent of the poorest and most disadvantaged people. But all this is an initiative from below.
 
From above, according to Alston, inefficient social and tax policies are imposed on the American community. And the situation is only getting worse.
 
The World Inequality Report says that in 1980 in Europe and the United States, one percent of the adult population owned 10 percent of national wealth. By 2016, the situation in the United States had changed a lot. If one percent of the wealthiest Europeans accounted for 12 percent of the national wealth, then the American elite have “gobbled up” 20 percent.
 
According to a UN spokesman, the United States is at risk of becoming a world leader in extreme inequality. Tax reform is to blame. Among other things, a serious reduction in corporate income tax is expected, from 35 to 21 percent. "When calculating tax benefits, the Treasury directly says that one of the sources of income may be social security reform," he said. This means that social programs will go under the knife, because money for their implementation will become less due to a smaller influx of taxes from corporations.
 
“The consequences can be fatal for both the overloaded and inadequate American social protection system, and for those who rely on it,” warns Alston.