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Friday, July 25, 2014
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    Southern Poverty

    It’s not necessarily bad to be poor

    by | Sep 29, 2011

    Balled up dollar billI don’t say that because poverty used to be a virtue (and, as far as I’m concerned, still is) but because the definition of poor depends to a large extent who’s counting what. If people don’t report their income to the tax man, there’s no way for our government to know how much or little they earn, unless somebody who’s holding a lot of unearned income for them files a report. Most of the country is still on the honor system. Which is, of course, why a whole lot of banksters got away with cooking the books.

    But, that’s neither here nor there. What I’ve been interested in is when some of our brilliant economists are going to follow up on the work of that Austrian fellow, Friederich Schneider who

    pegged the U.S. shadow economy at 4 percent of GDP in 1970 and 9 percent in 2000. Others have concluded that the informal economy has been growing at a rate of 5 to 6 percent a year since the early 1990s — faster than the “regular” economy.

    That’s a quote from the online magazine Salon, which, lo and behold, is announcing a regular series of articles on the “shadow” or “underground” economy, perhaps because some fellow out in California disputes the Austrian as to the cause of the growth (up to $1.4 trillion by now?).

    What’s really going on, says Joassart, is that there has been “a restructuring of the economy which, in order to promote flexibility and global competitiveness, has led to greater reliance on part-time and contingent labor.”

    “This includes a large informal sector made up primarily of lower-skilled workers who are required to work (such as former welfare recipients) and immigrants who have limited protections,” he says. “I would argue that it is a deregulation of the economy, including a decline in welfare programs and an increase in free trade and global competition, that has led to an increase in informal work in industrialized nations.”

    OK. So, people aren’t getting paid as much and they’re taking whatever they can get any which way. But, what I want to point out is the typical lingo of the economist. “Flexibility and global competitiveness” are to blame for people not getting paid enough to hold body and soul together; not corporate employers who can’t resist cheating workers out of what their labor earns. To Salon’s credit, the article does provide a link to a recent study which provides some first-hand evidence for how poverty is spread. For example:

    * Almost 30 percent of the L.A. workers sampled were paid less than the minimum wage in the work week preceding the survey, a higher violation rate than in New York City, but with no statistically significant difference from Chicago.

    * Among all L.A. respondents, 21.3 percent worked more than forty hours for a single employer during the previous work week and were therefore at risk for an overtime violation. Over three-fourths (79.2 percent) of these at-risk workers were not paid the legally required overtime rate by their employers.

    So, when we read that nationally one in four children is living in poverty and we know that’s despite the fact that both parents are working for a wage, here’s one reason why. But, again, note the verbiage, the people who worked were “at risk for an overtime violation.” The verbiage calls the reader’s attention to the victims and the law. The cheating employers are an after-thought. Sympathy, even compassion, are psychologically satisfying, but they don’t make abused workers whole. Presenting the workers as threatened by “an overtime violation” depersonalizes them, in addition to the deprived situation in which they already find themselves. Might as well be talking about traffic violations.

    It is, no doubt, significant that between

    “1980 and 2007, the number of minimum wage and overtime inspectors declined by 31 percent.”

    However, that doesn’t really account for the fact that 99% of the country’s population has been rendered less affluent in the last three decades and the 1%ers are hoarding whatever cash they don’t send abroad to exploit someone else.

    Who’s going to make up the difference when a $16,000 a year wage earner is stiffed $2000 and his health insurance isn’t paid? Right. The other 99% of us. Reducing welfare subsidies is all fine and good, except for the fact that it’s the high rollers who can’t seem to manage without a lot of free labor from a fungible workforce and we get to clean up the mess. Georgia is considering cutting back unemployment compensation because the employers, who mismanaged their assets and couldn’t plan ahead are already stressed. Poor babies.

    ###

    Monica Smith

    Monica Smith writes Hannah's Blog. Born in Germany, she came to the United States as a child, living first in California, then after an interval in Chile, in New York. Married to a retired professor at the University of Florida, where she lived for 17 years, she moved to St. Simons Island, Georgia, in 1993 and now divides her time between Georgia and New Hampshire. (New Hampshire, she says, is always interesting during a presidential election.) She and her husband have three children and five grandchildren. Ms. Smith says she "learned long ago that I am not a good team player when I got hired at the Library of Congress, fresh out of college with a degree in political science and proficiency in four foreign languages, to 'edit' library cards and informed my supervisor that if she was going to insist I punch the clock exactly on time, my productivity was going to fall from being the highest to being the same as everyone else's. The supervisor opted to assign me to another building where there was no time-clock. After I had the first of our three children, I decided a paycheck wasn't worth the hassle."

     

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    • John Hickman

      Coupled with the re-proletarianization of so much of the middle class, the growth of a shadow economy in which the grinding exploitation of the working class -- described so well here by Monica -- would cause responsible major news sources to challenge the neo-liberal economic consensus. Instead most major news sources are busy normalizing the tragedy for us.

    • Del Olds

      It’s not necessarily bad to be poor, but it is damn inconvenient.

      I studied hard, worked long hours and did all I could to get out of poverty. My Mom always told me to “Get an education because that can’t be taken away from you.” “Learn how to learn, and you can do anything.” I listened and did so.

      • http://hannah.smith-family.com/ Monica Smith

        As with so much else, it all depends on whether it’s chosen or imposed. Jesus said, “blessed are the poor” and “the poor you will always have with you.” I don’t think He meant it as a prescription.

        • Del Olds

          I thought it was “blessed are the poor in spirit”.

          And then “help the poor (destitute) as they will always be with you, but I will not always be with you.”

    • Gail

      Poverty a virtue? You’ve gotta be kidding, Monica. Handling it well may be a virtue. But I know that suffering poverty is grinding, humiliating, painful and demoralizing. I see no virtue there. Been there, done that.

      • http://hannah.smith-family.com/ Monica Smith

        See above. And thanks for joining the conversation.

    • billy

      Progressives want to create poverty by making commerce impossible. Support individual liberty and the constitution. You will never find social improvement springs from dependence on the government. Obama wants all citizens to be wards of the state.

      • http://hannah.smith-family.com/ Monica Smith

        We the people govern. What you see in Washington and in the various state capitals are merely agents of government--people who are supposed to carry out specific obligations and deliver specified services. In many instances (e.g.incarceration, fire suppression, flood control, pest removal), the services are not perceived as goods or utilities because the targets of the action aren’t wanted to begin with.
        Delivering what people actually want is the appropriate function of the market or private enterprise. Moving goods and services from where they are produced to where they are used is a necessary function and, doubtless, deserves to be rewarded with payment. However, commerce that’s just churning goods and dislocating people to keep them in motion and discombobulated is not only useless, but impoverishing. From where I sit, having little money to purchase things is not as bad as having no time, or access to resources, to look after oneself. To the extent that the commercial class siphons off assets from producers and nuisance without providing any benefit, they are a plague on their own kind.
        Some humans have been exploiting their own kind ever since Cain did away with Abel. There’s not been much progress there. Human husbandry is a kinder/gentler version.

      • John Hickman

        Thank you Billy. Lord knows everyone needed to read Republican talking points yet one more. Conservative cant just can’t be repeated too enough. If it is repeated enough maybe it will be true!

  • Worthy of Comment



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