Over two years ago I posted on Economic Inequality: “The Defining Challenge of Our Time”. That quote is from then President Obama. Among other topics not usually seen as resulting from poverty, I reported that economic inequality is a public health problem. Specifically, the wealthy outlive the poor, and the life expectancy difference is increasing - dramatically. If you were a man born in 1920, there is a 6-year difference in longevity. If you were born thirty years later, the difference over doubled to 14 years. (And the same is true for women.)
Here now is an update on what we’re now calling economic justice.
Nearly two out of every three Americans do not have sufficient funds to cover an unplanned expense.
You read that right. 63% Of Americans Don’t Have Enough Savings To Cover A $500 Emergency Maggie McGrath reported at Forbes magazine.
The car brakes go on the fritz. The refrigerator stops refrigerating. The dog gets his paws on a batch of chocolate chip cookies and earns himself a trip to the vet ER.
These are just three of any number of things that could go wrong during the course of the year. Recovering from any one will set you back about $500, which means these scenarios fall closer to the “undesirable inconvenience” category than they do the “massive calamity” one. And yet, nearly two-thirds of Americans do not have enough money in savings to cover the cost of a single one of these unplanned expenses.
According to a brand new survey from Bankrate.com, just 37% of Americans have enough savings to pay for a $500 or $1,000 emergency. The other 63% would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event.
How serious is an unexpected event depends on family income. For example, a Pew study cited by McGrath looked at the relationships between the most expensive “shock”, the number of days of income needed to pay for it, and the family income bracket. I’ll cut through the numbers to make it simple. As income roughly quadruples from less than $25,000 to over $85,000, the most expensive shock nearly quadruples (from $2,400 to $10,000). But as family income declines, the number of days required to pay for the most expensive shock also quadruples (from 26 days to 96 days). So the cost of unplanned events really slams those in the lower income brackets, especially those defined by HHS as in poverty ($25,100 for a family of four).
Consider also that those families in the next lowest income bracket ($25K - $50K) must work 48 days to counteract a $5000 expense. In other words, the ’Economically forgotten’ have much in common with America’s poor, as AZBlueMeanie put it in Blog for Arizona.
The Blue Meanie cited an Axios.com Exclusive: 40% in U.S. can’t afford middle-class basics.
At a time of rock-bottom joblessness, high corporate profits and a booming stock market, more than 40% of U.S. households cannot pay the basics of a middle-class lifestyle — rent, transportation, child care and a cellphone, according to a new study.
Quick take: The study, conducted by United Way, found a wide band of working U.S. households that live above the official poverty line, but below the cost of paying ordinary expenses. Based on 2016 data, there were 34.7 million households in that group — double the 16.1 million that are in actual poverty, project director Stephanie Hoopes tells Axios.
Why it matters: For two years, U.S. politics has been dominated by the anger and resentment of a self-identified “forgotten” class, some left behind economically and others threatened by changes to their way of life.
When you add them together with the people living in poverty, you get 51 million households. “It’s a magnitude of financial hardship that we haven’t been able to capture until now,” Hoopes said.
So what can be done? The Blue Meanie also alerts us to the Poor People’s Campaign Begins With Protests and Arrests as reported in the NY Magazine.
… co-organizer Reverend William Barber II told the LA Times:
Much of what happens to hurt poor people happens in state capitols, not in the Congress. Healthcare is blocked in state capitols. Voting laws are written in state capitols. Denial of living wages happens in state capitols. Cutting money from public education happens in both federal and state, but so much of it happens at the state level.
And so the new campaign is focused as much on 39 state capitals where its protests have already been organized as on anything in Washington. …
The Poor People’s Campaign’s list of demands is as broad and inclusive as those [Martin Luther] King and his colleagues advanced in 1968, and then some, ranging from living wages and universal access to health care, the right to vote without harassment, clean drinking water, family-friendly immigration policies and reduced military spending, to an end to mass incarceration and even an expanded definition of poverty to include people struggling to get by. …
It’s likely that over the next 40 days and beyond the Poor People’s Campaign will drift in and out of the local and national news. But it will insist on its perspective being heard and seen on the political issues of the day, and will try to act as a burr under the saddle of those in both political parties who would ride right past the most urgent economic and social needs of their country in order to appeal to comfortable donors and voters. A lot has changed for the better in America since 1968, but not enough, and certainly not right now.
It remains the ‘defining challenge of our times.’