We present below our translation of an analysis from gazeta.ru with commentary by Vince Dhimos.
As I was editing this translation, I received a push notice from Haaretz to an article on Trump's speech in Orlando yesterday pointing out the untruths and exaggerations in the speech. It fits in nicely with today’s translation.
However, this is not about Trump. It is about a US economy that is less and less equitable and social problems that signal deep trouble.
Here is the saddest detail:
“A survey conducted by the World Economic Forum at the beginning of this year showed that poor Americans no longer believe in the opportunity to get out of poverty on their own – only 10% of respondents believe that they will be able to realize their “American dream” if they work hard. More than two thirds of the respondents are sure that it doesn’t matter whether you work well or poorly, because you still cannot achieve a high degree of well-being.”
Poverty and drugs: how Americans actually live
Americans do not have enough money, education and equality
Olga Timirchinskaya June 16, 2019
The US economy has demonstrated steady growth in recent years, overcoming external and internal difficulties without visible losses. However, impressive macroeconomic indicators do not mean that the country's population is booming – in this case, just the opposite is happening. According to official statistics, about 45 million Americans live in poverty, despite record-breaking low unemployment. And they also have other problems.
The US economy continues to show steady growth – the latest review of the International Monetary Fund (IMF) shows that according to the results of 2019, the real GDP of the United States will increase by 2.6%. Analysts say that the effect of fiscal actions taken in 2017-2018 (tax cuts and increased costs) will then pass, after which the US economy will stabilizes to about 2% per year, but even this figure exceeds the achievements of most countries of the world.
US President Donald Trump said at the end of May that he would pick up 70-75% of the votes in the next elections thanks to economic success alone (for example, “victory over poverty”) and would easily remain in the White House. However, these triumphant reports and vociferous statements also have a flip side, which people prefer not to speak about from high tribunes. In addition, politicians are prone to beautiful speeches that only partially reflect the reality that exists – for example, after Trump's February speech to Congress, the Washington Post found in his speech 26 false statements and exaggerations in various figures.
Then Trump said: “Salaries are rising, and blue-collar wages are growing faster than expected, and 5 million Americans have stopped receiving food stamps. The economy is growing twice as fast, unemployment has reached a low level since a quarter of a century. ”
And according to the same IMF survey, the US macroeconomic achievements over the past 10 years have not had a significant impact on the lives of ordinary Americans – on the contrary, a number of social indicators look depressing, and positive changes in this direction are not expected.
Life expectancy in the United States is falling and this indicator is significantly lower than other G7 countries, although in the 1980s the USA occupied a middle position among the largest economies in the world.
A significant contribution to the drop in this social indicator was made by the increased suicide and death from drug overdose.
As analysts of the IMF calculated, the income of the average American family, taking into account inflation since the 1990s, has increased by only 2.2% - and this despite the fact that over the same period, real GDP per capita increased 23%.
There is another problem: the distribution of incomes in the country is becoming increasingly polarized.
According to statistics, the net assets of 40% of the poorest households are now lower than they were in 1983, and a growing share of the population earns less than half of the average income in the country. As a result, the level of poverty remains close to what was observed immediately before the onset of the financial crisis.
Recent studies show that nearly 45 million Americans are currently living in poverty.
Similar data in April of this year were given by one of Donald Trump’s main competitors in the 2020 presidential election, Senator Bernie Sanders. “Some politicians say that the minimum wage of $ 15 per hour is “too radical.” Here's what's really radical: in the richest country in the world, 40 million people live in poverty, and 40% of our citizens cannot afford even the most necessary things,” the politician wrote on Twitter.
A survey conducted by the World Economic Forum at the beginning of this year showed that poor Americans no longer believe in the opportunity to get out of poverty on their own – only 10% of respondents believe that they will be able to realize their “American dream” if they work hard. More than two thirds of the respondents are sure that it doesn’t matter whether you work well or poorly, because you still cannot achieve a high degree of well-being.
As the IMF notes, over the past decades, socio-economic mobility has been destroyed in the USA – in particular, half of young professionals now earn less than their parents at the same age (40 years ago, this figure was only 10%).
Moreover, despite the fact that a substantial part of the state’s revenues is spent on education, this did not help to reverse the situation with the knowledge level of Americans - American students consistently receive a lower score in math and reading than their peers from other G7 countries, the report says. Many US residents drop out of college without having completed their studies, and as a result, less than half of Americans aged 25-34 have a bachelor's degree. In addition, due to a significant increase in the price of education, the amount of student loan debt also jumped.
Existing problems in late March were also acknowledged by US Secretary of Education Betsy Devos. The official said that spending on education over the past 40 years increased by 180%, reaching $ 1.2 trillion, but no progress in terms of its quality is observed.
“We are still 24th in reading, 25th in science and 40th in mathematics compared to the rest of the world. I am sure that new investments will not bring results either,” said the secretary.
Devos proposed to reduce the total amount of funding for educational programs by 10% ($7.1 billion), but at the same time allocate additional funds for the development of schools.
Experts note that a lot of effort will be required to bridge the growing gap between the achievements of the real US economy and the life style of the majority of Americans. In particular, the political tools that can help solve the problem are paid family leave, helping families in need care for children and patients, increasing the minimum wage and the availability of social support programs. In addition, according to the IMF report, it is necessary to develop the health care system, especially for the poor, by financing those programs that showed the best results at the federal or state level. A more targeted approach is to support education, in particular, to pay special attention to the early education of children, and to the development of programs in the field of science, technology and mathematics. Experts believe that these measures will help cope with the current situation in society that are of serious concern.