What’s Happening?
Four in ten Americans can’t afford an unexpected expense of $400, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing the money or selling something.
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Why Is This Happening?
This information comes at a time when income inequality in the United States is at its height. I understand that people know when they are struggling but I don’t think the majority of Americans understand the magnitude and source of the problem. Unfortunately, most people are too busy trying to make ends meet than to have time to question how the United States economy is set up. To be blunt, at the federal level, the United States favors business over its citizens. This statement can be supported by looking at the current federal minimum wage . The federal minimum wage is only $7.25 per hour. This is $14,400 a year with nothing taken out from Federal and State taxes or Social Security. The federal poverty guideline is $12,140 a year for 1 person. This means a person working full time would barely miss the poverty threshold. The federal Government is complicit in the poverty of its citizens.
The last time the federal minimum wage was raised was July of 2009. That means federal minimum wage hasn’t risen in almost 9 years. One could argue that it’s because the economy is still recovering from the great recession. This is just not the case though because the wealthy have done really well economically over the past 9 years when compared to the average American. In fact, a study showed that 85% of gains after the economic collapse went to the top 1% of the population.
We are often told that if people get paid a living wage it will hurt businesses. My question is why do people have to be paid low wages to subsidize the business they are working for? I can see an argument being made about how rising wages would hurt small businesses. My response is instead of the federal governments giving multinational corporations the ability to pay close to $0 in federal taxes through the use of loopholes in the tax code and through off shore tax havens. The federal governments could tax these multinational corporations and could give grants out to States to help small business owners raise the wages they pay. This is unlikely to happen with the current state of politics.
Since the Supreme Court ruling of Citizens United, political campaigns have been able to receive large amounts of money from corporations and wealthy individual donors through organizations called Super PAC’s (Political Action Committee). This money leads to politicians needing to deliver for the donor because of the political donation. Simply put if the politicians fail to return on the “investment”/donation of the large donors, the large donors will not give them another donation. This creates a self perpetuating form of corruption at the federal level. This leads to a minimum wage that is not a living wage even though public opinions polls show the vast majority of Americans support a higher minimum wage.
The gap between the rich and the poor is hard to conceptualize because it’s usually represented in numbers. Below is a link with a 6 minute video showing the disparity among the wealthy and the average American. If you have time please watch it, although it might be from 2012 it has great visual aids to show you the disparity.
Final Thoughts
No one who works for a living should be in poverty. No one should have to sell something or borrow money due to an unexpected cost of $400 dollars. Dentist bills, health care bills, car repair payments, and household repairs are just a few examples of bills that could lead to an unexpected payment of $400 dollars or more. No person should have to sell something of theirs or borrow money to cover their most basic needs.
It’s sometimes discouraging to think that we live in such a society that denies access to it’s citizens most basic needs. I’ve realized though that this has less to do with the character of our citizens and more with a form of inequality funded by the wealthy. What we must remember though is that we have power in numbers. There are solutions to fix this inequality but they require setting aside our differences and coming together as a whole against corruption. We need to get politically active and vote out the politicians who take money from big donors, so they represent the voters and not just big business or large individual donors. We are seeing the effectiveness of this strategy in wins in special elections all around the country. Many people are winning elected office while taking no money from large individual donors. When average Americans get involved in a big way there is no amount of money that can stop them from being heard.
-Christian Rangel
R.I.S.E. U.P. 