Day: April 22, 2017

Whenever the topic of wealth and inequality is discussed, the one thing that never ceases to surprise me is the statistics behind it all. According to Chapter 10 of Urban Issues, the top 1% of the world’s richest own about half of all global wealth and the bottom half less than 5%. This is quite alarming because wealth inequality now exists on a worldwide basis but in the recent years, the United States has become the country where it is most prevalent. Wealth inequality poses a serious problem because it threatens democracy. We see that the wealthier people are, the more the government listens to them. This is because they are supposedly paying “more taxes” and because America has now become corporate America where the CEOs have much more influence in terms of policy making and getting what they want in order to secure the future of their businesses. One interesting point that Urban Issues highlighted was the fact that once the economy picks up and unemployment goes back down to 5%, the income inequality will go away again. Now, most economists believe that recessions and booms are virtually unavoidable. The real question therefore is how do we mitigate the effects of a recession, that is how do we make it less severe for those who are already struggling to survive in a power hungry world?

Urban Issues states that as income rose for the top 1% by 156%, hourly wages for the ordinary workers only increased by 9% and an enormous transfer of wealth was made from the middle and poorer classes to the wealthiest people. This is very clear evidence that the gap between rich and poor is not only widening more but at a much quicker rate. A surprising claim that was made by a critic of wealth inequality was that the rising wealth at the top doesn’t hurt those at the bottom because if the economy grows, all will benefit. This claim would only be true if there was simultaneous growth between the profits made by corporations and their CEOs, and the amount of money their workers receive. Based on this also very surprising statistic which states that after the recession, the top 1% annual incomes of more than $394,000 saw their incomes grow by 31% compared with a less than 1% gain of the other 99%, we see this is clearly not the case, in terms of a strong correlation between profits made by corporations and the minimum wage of workers. In addition, another claim that was made was that raising taxes on the rich would hurt the economy because the wealthy would have less money to invest in job-producing industries that benefit the rest of society. The truth is, yes investment does in fact lead to higher income but the question again is who benefits from such higher incomes? Again it is not those who really need an increase in income that benefits from it.

Globalization contributes to the outsourcing of jobs overseas, which explains why it affects the employment rate in America. Americans however, benefit from it because of the reduced cost of products and business benefit since they earn a net profit due to lower production costs. Hence, in my opinion CEOs and other business owners should take this into consideration and use the very net profits they make and pay their American workers more. In countering every argument that critics make of wealth inequality, it comes down to one main reason, greed. Realists for the most part believe humans are selfish and tend to only look out for themselves if something is affecting them and this tends to explain why corporations don’t really care about the welfare of low income workers. To really fix the problem of wealth inequality, we would need the wealthy to be more empathetic in the situation and that can only happen if they choose to do so.

Chapter nine of the CQ Reader poses the interesting question of causation versus correlation between unemployment and homelessness. The chapter makes the claim that, “experts agree that poverty is the main cause of homelessness,” but expands this point later by defining the many facets of being poor. Poverty is multi-dimensional, and though widely agreed to be the cause of most homelessness, a statement without qualification of the mitigating factors of poverty– both economic and social– is devoid of critical context necessary to intelligently understand the problem.

On the subject of homelessness, I find myself less knowledgable than I would like– after all, isn’t one of the most present sights of the City men and women in tattered clothes asking for spare change? Maybe this is a symptom of the wider New Yorker avoidance of the homeless, or perhaps just indicative of my own intellectual blindness, but reading this chapter was my first actual exposure to studying homelessness. The biggest takeaway that I have from this reading is the importance of recognizing the many factors that contribute to homelessness and how this reflects on the view of, and aid to, homeless New Yorkers as a whole by policymakers. It is a misconception that only economic factors, specifically joblessness, lead to homelessness.  As the chapter says, a recent study found that 17% of the adults in homeless families were working at least part-time. This points potentially to the issue of underemployment, meaning that some people are working and still unable to afford to support themselves due to rising housing costs combined with general economic inequality. To interject something personal to my research project, this is a concern that has been cited in some of my interviews with adjunct professors– they are aware that their financial situation puts them in the vulnerable position where many could end up on the street if not for taking on freelance or other work (one of my interviewees makes the majority of his money moving furniture). The point is though, that not everyone has the same ability to harness and outsource their labor and remain off the streets like the professors I spoke to. This inability can be related to social factors such as mental illness, disability, trauma, or substance abuse. Homelessness seems thus, to me, an effect of inadequacies in social welfare policy, namely in the lack of funding for education, job training, mental health treatment, programs to aid abuse victims, and income inequality as a whole. This is all to say that many, including myself, are sometimes guilty of simplification of solutions to complex issues like homelessness. Statements such as “get a job” or “tax the rich,” though attractive, seem to lack the nuance that comes from actual understanding of the issue at hand, but do reflect the obstacles in thinking that need to be surmounted in order to make progress in aiding those afflicted. Increased funding is an obvious (and expensive) solution, but in this era it does not seem likely. Rather, I tend to believe that change will come from making people realize the wide and tragic effects of poverty and homelessness. Ultimately, isn’t it what stems from chronic poverty (misery, crime, political upheaval) that makes people afraid? In my opinion, the threat to mess with money or with the normal rhythms of someone’s day is likely to produce at least more interest in reforming social policy in the areas of homelessness and disparate income than is relying on pure sympathy.