How Millions In America Get Entrenched In Poverty

An inside look at the system that’s producing America’s growing underclass.

The following are excerpts from Sasha Abramsky’s new book The American Way of Poverty: How the Other Half Still Lives (Nation Books, 2013): 

In the fall of 2011, with hunger rearing up across America, the large freezer bins at the Port Carbon Food Pantry (PCFP), in the small, gritty, Appalachian town of Pottsville, Pennsylvania, were empty. The shelves next to the freezers were also largely barren. A few boxes of egg noodles provided about the only sign that this was a place in the business of giving out food to those who could no longer afford to buy it. An adjacent room was doing slightly better, displaying stacks of canned fruit, canned corn, beans, and bags of pasta. But, taken as a whole, these were slim pickings. Clients who walked or drove up the hill, the remnants of an unseasonably early snow storm still on the ground, from the center of town to the two-story building were eligible for six to ten days of food, but that food was all they’d be able to get from the pantry for the next two months.

Three years earlier, explained PCFP’s coordinator, Ginny Wallace, the rooms were filled to bursting with food. Then the economy tanked; demand for the free food soared; and at the same time, locals’ ability to donate to the pantry crumbled.

Pottsville, and neighboring communities such as Mechanicsville and Schuylkill, made up a bleak region even in the good times. A onetime coal mining hub, it was a center of labor militancy in the early years of the twentieth century. But in recent decades most of the mines had closed down; many of the jobs that replaced the unionized mine work were low-paying, service-sector ones that provided few benefits. Add into the mix rising unemployment and home foreclosures, and an already precarious situation suddenly got a whole lot worse. “The need has increased and the surplus food given has decreased,” Wallace explained, holding open the lids of the large freezers to emphasize their emptiness. “The only thing in here is frost building up. Three years ago, we used to have to turn down deliveries.”

Many of the men and women who were helped by food pantries such as this were elderly people on fixed incomes who increasingly found they couldn’t stretch meager monthly checks to pay all their bills, buy all their medicines, and also feed themselves. People such as 86-year-old widow Mary, a onetime factory worker and bookkeeper of Polish immigrant stock, whose $592 Social Security check didn’t come close to covering all her costs. “I manage,” she said flintily. “You’ve got to know how to manage. And if you’re a boozer and a smoker, then you don’t manage. I live according to my means. That’s what life is all about.” Yet despite her pride, Mary, who picked up some additional money helping to care for a 102-year-old woman nearby, recently had had to turn to the pantry for help. “Every time you go to the store or turn around,” she explained, “the bills are higher.”

Other pantry clients were younger, families whose breadwinners lost their jobs during the recession that followed the financial collapse of 2008. Take 53-year-old Luann Prokop, an accountant who was laid off when the local manufacturing company she worked for could no longer stay afloat as an independent business and was taken over, and restructured, by a multinational corporation. “I had to apply for food stamps. Money was really tight. By the grace of God I was able to hold onto my house, but I did have to apply for two deferments during the two years I was on unemployment. I became more introverted, especially after getting rejected [from jobs she’d applied for] over and over and over again. I had a good, solid background; I have fabulous references. I couldn’t understand why. It was a difficult, dark period.”

Having burned through her savings, her retirement accounts, and her unemployment benefits, and having fallen far behind on her mortgage, Luann realized that unless she started using the food pantry she and her two teenage children would literally go without meals. Then, adjusting her expectations ever downward, she took an accounting job at the center that housed the pantry. She was bringing in about $20,000 per year, whereas a few years earlier she had earned $60,000—not enough to live well, but too much to qualify for many government benefits.

Now, I shop in thrift stores. I live paycheck to paycheck. I make sure my children have necessities before I buy for myself. Fortunately, I don’t have a car payment, but my car is on its last lap. I’m barely holding onto the house. I’m on assistance for electricity—a state program, which allows me to keep my lights on. I don’t know how I’m going to make it through the winter with heating. I saved up money for oil, but it’s a fraction of what I’m going to need to get through the winter. I don’t get food stamps. I’m strictly on my own. Last year it was really, really rough—coming up with the money to heat the house. I had to defer my mortgage for three months; they added the interest I would have paid onto my new payments.

When she ran out of food, Luann improvised. “Chicken bouillon plus rice tastes like chicken rice soup,” she said, and shrugged. “Of course, there’s no chicken in it.”

And then there were the pantry denizens escaping domestic violence who had run up against draconian cuts to the shelter system. One client, Wallace recalled, was a woman in her late forties, about to enter a shelter. “We got a request to provide her food because she has to bring her own food to the shelter. The programs that assist the working poor and the poor are in dire straits.”

***

Variations on the stories from Appalachian Pennsylvania could be encountered in cities and regions across America. After all, an economic free-fall of the kind that the United States underwent after the housing market collapse and then the broader financial meltdown leaves carnage in its wake. For those born into poverty, the hardship is magnified. For millions of others who thought of themselves as upwardly mobile, with middle-class aspirations and middle-class spending patterns, the crisis flung them down the economic ladder, replacing a precarious fiscal stability with a continuous struggle to survive.

In the working-class, immigrant community of Pomona, a few miles east of downtown Los Angeles, in fall 2008 five eleventh-grade and ten twelfth-grade students in Village Academy teacher Michael Steinman’s English classes began compiling their stories of poverty for a video project. “I was aware of the economy, but I wasn’t personally affected too terribly,” Steinman explained. “But when I asked my students how things were going, in my AP class—we were studyingThe Great Gatsbyat the time—every single student had been affected. I wanted them to give testimony to what they had witnessed and they were going through. The concept of the American Dream has either evaporated or gone away. Daily, I work with kids who are very much stressed. They hide it well; there’s a certain amount of shame that they carry about being poor or struggling. But I do know they’re going through circumstances that definitely impact their studies and their ability to think about the future and be positive.” The video footage that they created and put up on YouTube went viral in January 2009. Barack Obama’s presidential transition team was shown the video. A couple of months later when he visited Southern California, the newly inaugurated president held a rally in a lot adjacent to the buildings that housed the experimental school—whose student body is overwhelmingly made up of young people from ethnic minority backgrounds, and one ranked by U.S. News & World Reportas one of California’s best educational establishments. Obama also invited Steinman and his students to the White House.

Yet for all the hoopla around their project, nearly a full presidential cycle later, conditions for many of the students at the Village Academy high school remained appalling. Large numbers of the kids lived with parents who had lost their jobs during the recession and either failed to find new employment or were working long hours at jobs that paid only minimum wage. Many had lost homes to foreclosure—either because of variable-rate, subprime mortgages or because of unemployment—or, behind on mortgage or rent payments, lived in constant fear of losing their homes to the banks or to landlords. Almost all of Steinman’s students qualified for free school breakfasts and lunches—and, for many of these kids, these were the only hot meals they ate. Evenings and weekends, they either went without or grabbed some dry cereal to stanch their hunger. Several honors students at the high-performing school, who should have been applying to college, were instead thinking of quitting education and getting dead-end work just to help their families pay the bills.

“Sometimes I cry,” Oliver Lopez explained as he described his family’s struggles—his mother out of work, his father working two part-time minimum-wage jobs, he and his three younger brothers living from meal to meal. “I see how hard my father works; and I’m 18 years old and just come to school. I don’t do nothing. Sometimes we don’t even have food to eat.”

One of Oliver’s classmates described how he, his mother, his two sisters, his grandmother, two uncles, an aunt, and her daughter all lived in a one-bedroom apartment, most of them sleeping on the floor, until they fell behind on their rent and were evicted in early 2010. The family had split up, with groups of two or three going off to stay with different relatives. The young man was living with his mother, who in a good week was earning $300 as a housecleaner, and his two younger sisters in a single room in a friend’s house. During mealtimes, the mother would eat leftovers off of his and his sisters’ barely filled plates. “I’m depressed. I spend most of my time crying alone. My mom tells me I should get a job. She gets mad at me. She works from 6 A.M. to 5 P.M. I’m actually out trying to find a job. But there’s nothing.”

***

We will get far further in understanding twenty-first century American poverty if we consider how entrenched the new plutocracy, and its economic agenda, has become than if we look solely for explanations regarding the purported intellectual, economic, and cultural inadequacies of the poor. It is, after all, surely no coincidence that the United States, the country with the wealthiest elite in the Western world, and an economy that has averaged 2.2 percent productivity gains each year since 1947, also has vastly higher poverty rates than its peer nations.

Shortly after the financial crisis hit, the OECD published a table on income distribution: Even after government benefits were factored in, more than 11 percent of the American population had incomes of only 40 percent of the median income in the country. In Great Britain, that number was only a little above 6 percent; Germany’s number was a little more than 4 percent. In Sweden it was 3.8 percent; and in the Netherlands, 2.7 percent. Even Greece and Ireland, two countries tottering toward bankruptcy, had a far lower percentage of their populations living significantly below the poverty line than did the United States.

“What’s most striking in the past few years is the absolute absence of discussion of poverty on the public agenda,” noted University of California at Santa Barbara historian Alice O’Connor, who has built her career studying Americans’ shifting attitudes toward poverty over the centuries. “It’s just not there. The great shift is that we’ve come to accept very high levels of poverty as either inevitable or the way things should be.” For O’Connor, the callous approach to poverty wasn’t unprecedented in American history, but it wassomething that found equivalents only distantly back in time. “You’d have to cycle back to the Gilded Age,” in the latter decades of the nineteenth century, “to find a similarly untroubled acceptance of mass poverty,” she believed. These days, said O’Connor, politics has become increasingly reliant on big-dollar contributors, and in so becoming has lost touch with the expectations of the vast majority of Americans who cannot afford to buy access to the political process. “The narrow politics of winning elections,” she averred, “has less and less to do with connecting with what people really care about, and more to do with raising money and buying media and these kinds of things.”

Increasingly, however, large numbers of Americans do seem to be troubled by the political elite’s acceptance of wholesale poverty as a normal part of contemporary life. Members of the overwhelming majority—the much-touted 99 percent—who haven’t benefited from this epic economic change are realizing the plutocratic implications of this shift. “We’re all out here and we all get it,” said 26-year-old Thomas Reges, one of the Occupy D.C. protesters camped out in the capital’s MacPherson Square, in October 2011. “We’re all angry. We all know something is wrong, and we’re trying to make it better.”

That month, at the height of the Occupy Wall Street protests, an NBC/Wall Street Journalpoll found 37 percent of Americans supported the protests, and only 18 percent opposed them, with the remaining 45 percent presumably neutral. A couple of weeks later, a CBS News/New York Timespoll found that 43 percent of Americans sympathized with the protests. Other polls during this period found that more than six out of every ten Americans believed the economic system was rigged in favor of the wealthy; three-quarters felt that things were getting better for Wall Street CEOs but not for ordinary middle-class Americans, and a majority of the population believed that economic inequality was a bigger problem than government overregulation. Sizeable majorities also supported the notion that the administration should pursue policies intended to reduce economic inequality. This was subsequently reinforced by exit polling on November 6, 2012, showing that most voters favored raising taxes on the wealthy to help deal with the country’s burgeoning deficits.

When the American Bankers Association held its annual conference in Chicago in 2009, several thousand protesters descended on the event. Three years later, groups such as National People’s Action, run by a longtime organizer named George Goehl, trained large numbers of people in what they termed “economic civil disobedience”: Protesters would attend shareholder meetings and demand that their economic grievances be heard; often, they engaged in sitdown protests and sometimes blockades.

For many of the protesters, the economic crisis, and the ways in which large banks treated small borrowers, had catalyzed a political response that they didn’t know they previously had in them.

Barb Kalbach, for example, was a retired farmer who, in the years following the 2008 collapse, joined an activist group called Iowa Citizens for Community Improvement, began devoting much of her time to protesting economic injustice, and ultimately embarked on campaigns of civil disobedience aimed at putting a spotlight on corporate malfeasance around mortgage foreclosures and other themes. “We ask to meet people like Jamie Dimon [CEO of JPMorgan Chase],” Kalbach explained. “They ignore us, like we are riffraff. That’s when we go forward; we go to their places. I call it ‘Going to see the person who doesn’t want to see you.’” An unlikely direct-action advocate, the elderly farmer had had enough. In all good conscience, she felt she simply couldn’t do nothing. Her aim, she declared, was to shine light, and now to get corporations to change their tactics.

We’re trying to get the lawmakers to see that what’s happened out in America isn’t right, that corporations can’t walk all over people. It’s like a pie, and they’re pulling all the money they can out of the pie. The homes were a pie, pensions and 401(k)s, that was a pie. They robbed us, and then they took a taxpayers’ bailout. Money and power and wealth is being pulled out of America into fewer and fewer hands. It’s the same way with wages and salaries and benefits—it’s a part of a pie.

Ai-jen Poo, director of the National Domestic Workers Alliance, began organizing low-paid, often undocumented domestic workers in the late 1990s, shortly after graduating from Columbia University. For years, she said, they were considered “shadows,” an out-of-sight, out-of-mind pool of caregivers who cleaned up other people’s messes, changed other people’s soiled bedclothes, and administered other people’s medications. In recent years, however, more and more of the people she encountered were finding that their working conditions resembled those of the domestic workers. “Increasingly, the conditions that define the lives of domestic workers—like instability, low wages, low benefits—these are conditions increasingly defining the reality for most American workers. We’re in the same boat more than ever.”

Yet, while more people were making these connections, this hadn’t yet translated into mass political movements. Occupy Wall Street garnered much public sympathy, but most people sympathized from the sidelines. They didn’t have the time and energy to engage in the sort of all-in protests that came to define the Occupy movement—at least in part because so many people were working such long hours just to keep their families afloat—they didn’t like the confrontational tactics and scruffy style of the Occupiers, or they didn’t feel that camping out in parks and outside of city halls would actually change a whole lot in their lives. And despite the opinion poll data showing that Americans were becoming increasingly uneasy about the degree of inequality seen in the country, on the whole that unease was more about the shrinking middle class than it was about the conditions of those at the very bottom of the economy. In fact, politically the country as a whole remained remarkably tolerant of the continued existence of mass poverty and, at the same time, remarkably reluctant to embrace policies that might change this dynamic significantly.

“There are essentially two stories over the last forty years,” Georgetown Law School’s Peter Edelman explained. “The positive story is there would be forty million more people who are poor if we didn’t have the public policies we have—including Social Security, the Earned Income Tax Credit, food stamps, and Medicare and Medicaid. They have helped quite measurably in keeping poverty from being even higher than it is. So it isn’t that we’ve been unwilling as a country to take steps to alleviate poverty.” But, Edelman continued, there’s a second, less savory story that runs parallel to the first. “Over the last forty years, we’ve increasingly become a low-wage economy. People in the bottom 20 percent are worse off than they were forty years ago. Income distribution has deteriorated. The gaps between the rich and poor have widened spectacularly.”

Another way to look at this is to consider that, to a point, America has worked out how to ameliorate some of the consequences of profound economic hardship—albeit reluctantly and with an increasing number of gaps. Yet it is failing, in ever greater degrees, to prevent that hardship from arising in the first place—in changing power relationships in the workplace, the broader economy, and the political process, so as to stop tens of millions of Americans from experiencing desperate insecurity on a daily basis.

From THE AMERICAN WAY OF POVERTY: How the Other Half Still Lives, by Sasha Abramsky.  Reprinted with permission from Nation Books.