‘Burying’ the Death Spiral of the American Dream

August 1st, 2013 · No Comments · economy, journalism, Uncategorized

By Denise Tessier

On a slower news day, this story might have been – should have been – on the front page of the Albuquerque Journal:

Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.  . . .

“Poverty is no longer an issue of ‘them’; it’s an issue of ‘us’,” says Mark Rank, a professor at Washington University in St. Louis who calculated the numbers. “Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need.”

These lines are lifted from “Signs of Declining Economic Security,” an Associated Press story trumpeted on AP’s website as “The Big Story” and an AP “exclusive.” The Journal, an AP subscriber, buried it Tuesday (July 30) on page C10, behind the real estate classifieds.

The story extensively quoted from “survey data exclusive to The Associated Press,” which backed up its conclusion that an astounding four out of five adults in the U.S. have struggled with poverty, or “economic insecurity,” in their lives, and that the gap between rich and poor continues to widen.

Instead of achieving a vision of raising the American standard of living for non-whites,  the nation is seeing its standard of living dropping for the shrinking “majority”:

Economic insecurity among whites . . . is more pervasive than is shown in government data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press. . . .

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation’s destitute, nearly double the number of poor blacks.

The prognosis for the future is not good, according to the story:

By 2030, based on the current trend of widening income inequality, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity.

The AP story by reporter Hope Yen summarizes and substantiates the evidence of what Americans see every day in U.S. communities – chronic joblessness, underemployment, reduced wages, bankruptcies, foreclosures, crippling student loan debt, declining university enrollment, homelessness and food bank lines. The American dream is not only “becoming elusive”, as the Journal headline on the AP story said, but is a near-unobtainable fantasy for many.

To be fair, it would have been a tough call to bump any of the stories that appeared on Page One of Tuesday’s Journal to make way for the AP “four in five adults” story about economic insecurity, important as it was.

The stories that did run were all A1-worthy: Dan McKay’s look at “legislation through petition drive” as the new “political weapon” at City Hall; Attorney General Gary King’s refusal on Monday to release the bulk of the audit that has led to the closing down or takeover of some of New Mexico’s behavioral health providers; the cattle feud between two brothers that resulted in one brother being shot and injuries to an 11-year-old girl; and the decision by the chairman of the Albuquerque Metro Crime Stoppers to step down after a DWI charge.

Rounding out the page was an exceptionally good UpFront column by John Fleck illustrating a New Mexico farmer’s dilemma of “alternately using the water and fighting with it.” In “Farming against the odds on the Rio Grande,” Fleck profiled Corky Herkenhoff and his San Acacia farm, where much-needed rain came just as it was time to dry the alfalfa in the fields. As Fleck wrote:

You can trace the history of human presence in what we now call New Mexico by the geography of water. We go where the water is, then live with it in a state of perpetual frustration. Few spots on the landscape illustrate this better than San Acacia and the ebb and flow of Indian Hill Farms.

I digress to include this bit because Paul Gessing, director of the conservative think tank the Rio Grande Foundation – never one to shy away from telling a New Mexican (or the state itself) how to conduct its business – took to Twitter to tell the fourth-generation farmer to “take the hint” and get out of farming. Fleck valiantly disagreed with Gessing in the conversation stream that resulted.

Speaking of conservative think tankers: The American Enterprise Institute is challenging income inequality as hokum via the works of its “adjunct scholar,” Cornell University Public Policy Professor Richard V. Burkhauser.

Thomas Edsall, writing in The New York Times, said Burkhauser’s “A ‘Second Opinion’ on the Economic Health of the American Middle Class” in 2011 was used by the American Enterprise Institute to counter President Obama saying that the middle class is shrinking because America’s profits are going to the top 1 percent.

As Edsall wrote:

The 2011 Burkhauser paper found less inequality than other measures, but did not claim that income inequality did not exist: from 1979 to 2007, Burkhauser argued, those in the bottom quintile saw incomes increase by 26.4 percent, but those in the top quintile saw their incomes grow 52.6 percent. Those in the top 5 percent saw a 63 percent increase in their income.

Now Burkhauser and his allies have returned with a new paper, “Levels and Trends in United States Income and Its Distribution,” which was published earlier this month. In the 2013 paper, written with (Jeff) Larrimore and Philip Armour, Burkhauser has come up with statistical findings that not only wipe out inequality trends altogether but also purport to show that over the past 18 years, the poor and middle classes have done better, on a percentage basis, than the rich. (My emphasis added.)

Release of information like this makes it all the more important that the AP story on economic insecurity reach readers. But the AP story about the death spiral of the America dream might have been too “buried” in the back for Journal readers to notice.

Those who missed it also, then, missed the AP story that ran below it, “Fast-food workers stage one-day strike across New York,” which supported the findings of the AP exclusive by illustrating the plight of the working poor. Workers at McDonald’s, Burger King and Wendy’s restaurants across New York had walked out in a one-day strike to demand better pay and the right to unionize, “calling for the minimum wage to more than double from $7.25 to $15 an hour and the end to what activists called ‘abusive labor practices’.”

From the story:

“It’s noisy. It’s really hot, fast, they rush you. Sometimes you don’t even get breaks. All for $7.25? It’s crazy,” said Nathalia Sepulveda, who works at a McDonald’s opposite Yankee Stadium in the Bronx.

Hundreds took part in the strikes which, according to the story, are a prelude to similar actions scheduled for the rest of the country this week.  At the Manhattan event, the Democrat who represents the district, U.S. Rep. Jerrold Nadler, said the fast food industry is worth $200 billion a year and yet many of its employees rely on food stamps and Medicaid.

At the least, the Journal could have included a lead-in box to the C10 economic insecurity story at the top of Page One.

To its credit, it did run on the same day Leonard Pitts’ column, “Poor people do not needs lessons in how to be poor,” in which Pitts blasts McDonald’s for its “McBudget” – the fast-food chain’s advice to workers on how to live on the wages they make:

(The McBudget) envisions monthly take home pay of $2,060 from working two (!) jobs. Out of that, you pay $600 for rent, $150 for a car note, $100 for insurance (home and auto), $100 for cable and phone, $90 for the electric bill, $20 for health insurance, etc. You save $100 a month and have $750 to play with – if, by “play,” you mean pay for clothing, child care and water. Also, gasoline, maintenance and repair for the 1997 junkmobile you’re able to buy for $150 a month.

Oh, and food. Can’t forget food.

. . .ThinkProgress, the left-leaning website, called the budget “laughably inaccurate.” Stephen Colbert skewered the company, saying a $20 health insurance premium will buy you “a tourniquet, a bottle of Night Train and a bite stick.”

As Pitts noted, even the Wall Street Journal was skeptical, with columnist Al Lewis suggesting that McDonald’s CEO try living on the McBudget. From Lewis’ column:

Put Chief Executive Don Thompson on the McBudget. Show the world how to live like a CEO on less than $25,000 a year.

Last year, McDonald’s gave Mr. Thompson a compensation package worth $13.8 million, or more than 558 times what McDonald’s expects employees to make from two jobs.

By adopting a McBudget, Mr. Thompson could end the debate over President Barack Obama’s plan to raise the federal minimum wage from $7.25 to $9 an hour. Adjusted for inflation, the minimum wage is currently 20% less than it was in 1967—which is why so many people still eat at McDonald’s.

. . .I would feel more comfortable knowing that a top corporate executive can live on a McBudget, too. Besides, if the minimum wage goes up, McDonald’s stock will go down, and we can’t have stocks that make up the Dow Jones Industrial Average going down. That’s just un-American.


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