Poverty Exists Because the Rich Cannot Be Satisfied

As well meaning was the intent of the anonymous source who coined the aforementioned phrase, it reads rather redundantly, in my view.

The ruling class has far too long defined the parameters of poverty and its causes, a view that has mostly penetrated the consciousness middle- and working classes. The kind of claptrap statements the wealthy make about the poor inevitably nestle in the consciousness of rank and file civilians. The poors are a self-perpetuating caste. They should only blame themselves for the deprivations they endure. Such reasoning cannot survive a simple interrogation.

The very fact that the poor do not set economic policy and have very little say in how a nation allocates its resources, should suffice to illustrate the ruling class’s complicity in the conditions that lead to, and perpetuate, poverty. Otherwise, the ethic of self interest from the poor would produce otherworldly different outcomes for their class. In the case of the United States, self interest would prompt the poor- and working classes to vote against legally-bribed candidates for public office — the very legislators who approve such policies.

What other indications are there of the inverse, and mutually linked, economic conditions of the very rich and desperately poor? The last fifty years of labor statistics, along with the reemergence of child labor in the United States, bear witness to a ruling class bent on asset extraction from the have nots.

Hourly wage salaries have mostly flatlined over the last fifty years, beginning in the early 1970s. The chart below illustrates that as productivity improved, hourly wage earners ceased enjoying the benefits

Source: EPI analysis of Bureau of Labor Statistics and Bureau of Economic Analysis data. Chart by Bureau of Labor Statistics

of a increased economic output. While 1968 marked the last time Congress approved a minimum wage increase that kept pace with the cost of living, 1973 reveals the beginning of split trajectories between nation-wide productivity and hourly compensation. The chart below, comprised of research provided by Lawrence Mishel and Lori Kandra, reveals CEO-to-worker compensation, beginning in the late 1960s until 2020. In the late

Source: Authors’ analysis of data from Compustat’s ExecuComp database, the Bureau of Labor Statistics’ Current Employment Statistics data sePhoto byEconomic Policy Institute

1960s, CEO compensation enjoyed a 21x multiple relative to working income. The trajectory that CEO compensation shares with the rise of productivity in the first chart, offers compelling evidence that the CEO class benefited from productivity gains. By the year 2000, CEO compensa-tion has reached a multiple of well over 360x compared to rank and file worker pay. Recall, again, that hourly salaries have remained flat until very recently.

Additional research provided by journalist David Cay Johnstone, illustrates the astounding income disparity between elite incomes and hourly wage earners. Sixty million American low-wage earners brought home less pay than the top 237,000 high incomes. That breaks down to one person earning more than 253 hourly workers.

As for the return child labor — what we thought was a relic of the Robber Barron era — there have been de facto and de juris examples of exploiting this nation’s underage. A recent 60 Minutes feature reported the investigation into an industrial cleaning company that had employed 102 underage workers around the United States.

Across the country, there are efforts within various red state legislatures to unwind or undermine child labor laws. The New Yorker reports that incidents of unlawful underage labor have risen 37% from 2021 to 2022 (also up 283% from 2015). Among the specious and cynical justifications for diluting child labor protections are: increasing work hours for children will decrease screen time; eliminating parental consent for employment will eliminate needless paperwork for parents and eliminate schools from the chain of accountability that prevents employers’ ease of access to underage labor.

While the think tank pushing these changes to child labor laws admit they’re motivated to backfill unoccupied jobs with underage workers, they convey an insidious half-truth about an adult workforce refusing to fill low-pay, high-hazard occupations.

Yes, Covid-era increases to welfare and food stamps have exposed the substandard living wages paid in such jobs. Exploiting employers would never admit the impoverishing wage rate they pay. Better to attract underage employees whose households already hold three or more jobs. Just as in the Robber Baron era, tapping child labor underwrites ruling-class enrichment and working-class economic deprivation.

That this obscene income disparity prevails is no validation of Adam Smith’s “Invisible Hand” economics. There have been real, consequential economic policy decisions made over the last 50 years — choices that did not take into account how wage suppression and cost-of-living increases would wield a vice-like squeeze of the middle- and working classes. We’re seeing the results of those policy decisions in the swelling ranks of unhoused citizens across the nation.

To achieve economic justice would require a public policy shift that reduces or eliminates the wealth concentration. If it means raising taxes on sky-scraping incomes and shifting federal budget imperatives away from defense contractor interests and toward Urban and Housing Development, then we should be prepared to ignore (or ridicule) the braying and howling objections of special interests that have been eating everyone’s cake.

They should take comfort that no member of the elite income class will ever spend a night homeless and hungry as a result of rebalancing our nation’s economic priorities in the interest of humane and just living standards.

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This post was previously published on incenDIARY.

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