Americans Are Just Poor

My iPad died recently. Sprint couldn’t help me so it was off to the Apple store. I ended up going to Alderwood mall. It’s nicer and more expensive than the mall near my home, slated to be redeveloped. Even poor people don’t get malls anymore. The mall near my home is a bit more welcoming and it’s easy to fit in there. However, the mall with the Apple store had more expensive stores and somehow, though nicer, doesn’t seem as welcoming.

As the Christmas season passes financial analysts will be busy seeing if our consumption was sufficient to keep the economy going. Things look good so far, Americans spent 858 billion in the past 6 weeks. That number seems mind boggling and what’s more is I wonder where does all the money come from? Wages are stagnate, benefits are down and our labor force participation rate is still stubborningly low. I walk past these expensive shops and just sigh. At one time in my life I thought my biggest problem would be what engagement ring to buy or what speciality foods to get. Instead, I wonder what I can throw together to eat tonight. Millions of Americans face the same problems.

It’s a different sort of crisis. The homeless crisis is blunt. There are panhandlers, tents, and other signs. The subtle signs of precarious poverty are harder to notice. I lived with an older couple in this very situation. Despite a good job and military retirement, an unfortunate bout of unemployment cost them their house and now they live in an RV. They have worked hard all their lives. They’ve contributed and kept the country going. The husband reskilled himself to take advantage of new jobs. They still weren’t able to keep a slice of the American dream. Americans are more poor than most folks realize.

Pay and the Government Shutdown

As I started this article, the government entered its 3rd shutdown of the Trump Presidency. The shutdown has stretched into its 3rd week and federal workers will be begin missing paychecks. Government contractors and businesses who depend government contracts are not getting paid and staff crucial to air travel like FAA inspectors and TSA workers aren’t showing up to work because they have been furloughed.

The Federal Government of the United States is the largest corporation in the world. It is one of the nation’s largest employers and right now, it can’t pay its workers.

The shutdown has revealed something that many Americans and others have known for awhile: most people live paycheck to paycheck. Missing a paycheck causes a cascade of problems that can end in losing a house, credit score, car, or even a marriage.

Poor? Not Me

However, many Americans don’t really think of themselves as poor. Unless you’re on welfare, most people don’t really think of themselves as poor. “Poor” people don’t have a job. “Poor” people didn’t go to school. “Poor” people don’t have cellphones or a place to live. “Poor” people don’t have a car. When most people have these things they don’t think of themselves as poor, even though their ability to have any of these things depends entirely on consistent pay and that pay getting slowly better over time.

Even having a job isn’t enough these days. Many people work 2 jobs and possibly a side gig in order to afford the basics of life or just try to get ahead. There are many times where I have ordered something on Uber Eats or Door Dash and a whole family is in the car delivering my food!

Many of us are just as guilty. I’ve had several side-gigs including food delivery. I trade for car repairs and other services. When I need some extra cash I clean out closets and see what I can sell. Sometimes people give me things to sell on eBay if I cut them in on the deal. It’s normalized but it shouldn’t have to be. For those that aren’t spending 16 hours a day working, the next best option is debt.

Many people also finance their lives entirely on debt. Most people finance cars, homes, and consumer goods. Most Christmas shopping goes on a credit card hopefully to be paid down by the next holiday only to be charged up again the following season. This means that most people are not building savings and wealth from the earnings of their labor. They are not securing their future. They are one paycheck away from pitching a tent at their local homeless encampment.

Poor? Not us, we’re just waiting for things to improve or to win the lottery.

Wages Don’t Grow

Millennials, now in their 30s, have found that the only way to get a better wage is to go to a new job paying more. Younger workers get criticized for not having loyalty and sometimes just “ghosting” out of jobs entirely. However, for a generation that has fallen behind due to the financial crisis, staying at company for 5 years and getting a single digit wage increase (if that) and seeing your wages eaten away by cost of living does not help you get ahead. For those with an idea of getting ahead and actually making a livable salary, anyone offering a job with better pay means you can move out on your own, get married, or have a child.

If People Realized….

If Americans got used to the uncomfortable truth that they have been chasing after a dream and that our entire national economic policy has been based on the myth of the American dream, then Americans might be more amenable to programs and tax incentives for working-class people. However, it’s obvious that many Americans don’t realize just how actually poor they are. It’s not obvious until you miss that paycheck. It’s not obvious until you get a health diagnosis and lose your job and health insurance. It’s not obvious until a huge household emergency comes along. However, it is obvious that most Americans are just poor. With wealth flowing into the hands of the already-well-to-do and a tax system that keeps it that way, Americans will continue to have this problem. The only problem is that fewer and fewer people will get by.

On Twitter today, CNBC suggested that if you wanted to make more money you have to get a side hustle, ask for a raise, or start a business. Is that the only solution to personal wealth? Is that the only solution we can offer to wages that haven’t moved since 1977?

How Do We Fix A Nation of Poor People?

The best way to fix a national of poor people is simple: pay people more. Incentivize it through taxes, create programs that help people train into new jobs. Change the rules on bankruptcy and tackle inequality head-on. The solutions are clear and they are not new, they merely lack the political will to make them happen and that is something we can only fix at the ballot box.