due, and sometimes kite checks. And most families carry debt that doesn’t even figure into these budgets. Keep in mind, this is self-sufficiency – it isn’t based on going without. It’s a budget that covers all the basics on the list. The EPI self-sufficiency budget does not include items beyond the basics – for example, there is no budget for existing debt, retirement, life insurance, or vacations. Taking a square look at the lives of working people brings the country’s economic realities into perspective.
In 2017, half of all working people in the US earned pre-tax incomes of $31,561, or less.36 To give this figure context, recall that in the same year, the federal poverty line for a family of four was $24,600. Wages have been completely disconnected from economic growth and from the cost of living. As a result, most people are working hard and having trouble keeping their heads above water. The EPI self-sufficiency budget for that same family of four in the economically distressed rural county of Athens, Ohio, was $72,284 – more than twice the pre-tax income earned by half of all US workers. The broader context offers insight into the breathtaking number of struggling families and some indication of the extent of the financial fragility they face. Working for low wages denies struggling families the economic security that comes with a stable income and savings. It also drives families into debt that is frequently impossible to escape.
The United States has the highest level of wealth inequality among Western democracies.37 Between 2000 and 2010 the nation reached a new level of inequality that was higher than that in India and South Africa.38 Inequality was higher in the US in 2014 than it was in India under colonial rule (1920–30) or in South Africa under apartheid (1960–70).39 Take a moment and let that sink in. The United States has a record level of income inequality that is probably higher than in any other society at any time in the past, anywhere in the world.40 That doesn’t sound like the country we like to talk about and yet it does reflect the country in which we live. There are a lot of struggling people and some very, very rich folks. And not much in between. If this seems doubtful, take a look at 2017 figures for annual income from the Social Security Administration:41
28% of workers earned less than $15,000
35% of workers earned less than $20,000
60% of workers earned less than $40,000
76% earned less than $60,000
These are the federal government’s numbers, but they rarely make the news. At a time when 60% of workers were earning less than $40,000 a year, the poverty line for a family of four was $24,600. And that’s without considering where they live or the impacts of racism and sexism. It’s hard to claim that families are doing okay. But this book isn’t just about people struggling to get by – it’s also about the mechanisms that create poverty for the many as surely as they create wealth for a few. Our economy has lost so many mid-range jobs that it is now bifurcated between some jobs that pay very well and a majority that pay quite poorly.42 Here are some of the upper income limits for 2017 that might be more familiar.43
0.1% earned $2,757,000
1% earned $718,766
5% earned $299,810
10% earned $118,400
These two sets of numbers on national income illustrate that the US middle class has virtually disappeared – unless you change the definition of middle class. The potential for class mobility decreases as the income gap expands. Importantly, our politicians have helped to ensure that the burdens of high tax rates are felt most acutely by the 76% of people earning less than $60,000 a year.44
Despite the glaring inequality and the profound economic struggles of fully employed workers, people in the US tend to believe that we have the best economic system on earth – even if it isn’t working so well for them or for the people they know. It’s a little like my family being convinced we were middle class, even though we had trouble keeping food on the table. We have a federal poverty line that is far too low to capture the reality of poverty and the lives of millions of people who might not be willing to call themselves poor, even though they have trouble providing for their most basic needs. And that suits the wealthiest people just fine.
The United States has a long tradition of trying to ignore or erase class differences. The stories we tell ourselves as families and as a nation about the “haves and have nots” shape the opportunities and the struggles of millions of people. Living on the Edge will bring class inequality into focus as we listen to people talk about their lives in ways that challenge existing measures of well-being. I have learned a lot from the people who generously shared their time and experiences with me. I believe readers will as well.
Notes
1 1 TEMIN, P. 2017. The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Cambridge, MA, The MIT Press.
2 2 This program is now called the Supplemental Nutrition Assistance Program (SNAP). Benefits are received in the form of debit cards rather than as coupon books.
3 3 TEMIN, P. 2017. The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Cambridge, MA, The MIT Press.
4 4 TICKAMYER, A. R. & WORNELL, E. 2017. How to Explain Poverty? In: TICKAMYER, A. R., SHERMAN, J. & WARLICK, J. (eds.) Rural Poverty in the United States, New York, Columbia University Press.
5 5 NATIONAL CONFERENCE OF STATE LEGISLATURES. 2019. National Employment Monthly Update. At http://www.ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx.
6 6 FOTTRELL, Q. 2018. 50 Million American Households Can’t Even Afford Basic Living Expenses. Market Watch, June 9. Also, according to research by PayScale, 46% of workers identified themselves as underemployed before the pandemic. The Atlantic (August 2020) reported that before the pandemic, one in ten workers wanted more hours than they had and 42% of recent college graduates held jobs that did not require a college degree.
7 7 AMADEO, K. 2019. Unemployment Rate, Effect, and Trends. At https://www.thebalance.com/unemployment-rate-3305744.
8 8 ALSTON, P. 2018. Report of the Special Rapporteur on Extreme Poverty and Human Rights on His Mission to the United States of America. At https://digitallibrary.un.org/record/1629536?ln=en.
9 9 ALEXANDER, S. 2019. Walton Family Fortune Increases $3.3 Billion on Walmart Earnings. Bloomberg. At https://www.bloomberg.com/news/articles/2019–02–19/walton-family-fortune-increases-3–3-billion-on-walmart-earnings; KESSLER, G. 2019. Does the Walton Family Earn More in a Minute Than Walmart Workers Do in a Year? The Washington Post, Feb 19.
10 10 METCALF, T., et al. 2019. The World’s Wealthiest Family Gets $4 Million Richer Every Hour. Bloomberg. At https://www.bloombergquint.com/labs/richest-families-in-the-world.
11 11 O’CONNOR, C. 2014. Report: Walmart Workers Cost Taxpayers $6.2 Billion in Public Assistance. Forbes, April 15.
12 12 FITZ, N. 2015. Economic Inequality: It’s Far Worse Than You Think. Scientific American, March 31. At https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think.
