23 May In the US, Poverty Comes Out of the Closet

May 23rd, 2001
By Naomi Klein

A little over a year ago, The New York Times Magazine ran a major feature about poverty in the United States headlined "The Invisible Poor." It was a well-reported piece, with beautiful photographs, but there was something strange about it. It was as if, at the height of the high-tech boom, in the richest country in the world, "the poor" inhabited an exotic foreign country, there for journalists to discover, but not to cover.

The official story for most of the decade, supported by record low unemployment rates in the U.S., was that poverty was yesterday’s "old economy" problem. Sure, food bank use is up 75 per cent in some American cities, one in five U.S. children live in poverty and 44.3 million are uninsured, but you’d never know it as a casual media consumer. The occasional story may have appeared about the people prosperity "left behind" (as if by some cosmic typo), but in the major national media, there has been little very little appetite for these downer tales.

Not when journalists were checking their soaring stock options from their desktops. Not when their employers were being gobbled up by the same glitzy media conglomerates that were leading us all to the high-tech promised land. It became vaguely gauche to bring up poverty amidst all this plenty—like talking loudly about death at a wedding, or sex at a funeral.

Little wonder. Journalists (or "content providers") have been at the centre the transition from "old economy" to new, a transition that had made media, information, ideas and culture the most valuable and coveted commodities. And the very worst place to get an accurate picture of a storm is from the relative calm of its eye.

But now that the new economy whirlwind is subsiding, necks are beginning to crane backwards to see what has been lost. Entire neighborhoods. The character of cities like San Francisco. Space for artists, for counter-culture. And perhaps because of this pause in the action (combined with the swaggering defiance of George W. Bush’s tax cut), poverty in the U.S. is at last being discussed in less exotic and mysterious terms.

According to several new reports, it turns out that the reason for deepening U.S. poverty is rather simple: it’s all those rich people. Extreme wealth created in the top tier of the economy, rather than trickling down and making everyone better off, is having a direct negative impact on those living in extreme poverty at the bottom.

In her new book, Nickel and Dimed, Barbara Ehrenreich, one of America’s most respected social critics, goes "undercover" in minimum wage U.S.A. She works as a contract maid in Maine, as a Wal-Mart clerk in Minnesota, as a waitress in Florida. Her challenge is a simple one: to survive on her wages. She starts by discovering that she needs two jobs to afford her $625 a month trailer in Key West Florida, and her odyssey comes to an abrupt end when she can’t pay for a Minneapolis motel room (the only rental available) on her Wal-Mart salary.

Economists in U.S. measure the poverty level based on how much food you can buy with your salary. But food prices, Ms. Ehrenreich points out, are relatively stable while in this economy, rental costs—when rental units are available at all—are subject to super-inflation. So her story becomes less about work, than about rent: the struggle to find a place to sleep when real estate markets are exploding and the government has abandoned the project of providing affordable housing.

"When the rich and the poor compete for housing in the open market," Ms. Ehrenreich writes, "the poor don’t stand a chance."

The brutal underside of gentrification is also the persistent theme of "Secrets of Silicon Valley," an important new documentary by Alan Snitow and Doborah Kaufman. The story follows high-tech temps who assemble computers and printers—and don’t earn enough to make rent in a city where houses regularly sell for $100,000 more than the asking price. And where the non-profit agencies that provide services to the poor are fighting their own wave of evictions.

The question of what constitutes a "living wage" in the U.S. reared its head in another form last month, when students at Harvard University staged a historic three week sit-in of their president’s office. At issue was the fact that, on a campus blessed by limitless research budgets and endowments, janitors and cafeteria workers earn as little as $6.50 an hour without benefits. The demand of Harvard’s Living Wage Campaign is for all of the university’s workers, including those who have been outsourced to contractors, to be paid at least $10.25 an hour.

As the invisible class system of the United States’ new economy becomes more visible, it has much to teach other countries that are striving to emulate this so-called high-tech miracle. I keep thinking about a fifty-something software programmer I met in Seattle at the height of the dot-com frenzy. Barbara Judd worked at Microsoft, but her department was staffed exclusively by temps, or "perma-temps" as they called themselves. She had no job security, no stock options, not even, at the time, health insurance.

One day at work, she bumped into a twenty-something programmer—a staffer—by the photocopy machine. Making small talk, the younger woman griped that she was ready to retire but was shackled to the company with "golden handcuffs." (That’s high-tech lingo for millions of dollars worth of employee stock options that haven’t yet ‘vested.)

"Yeah, well," Ms. Judd replied. "At least you have health insurance."