Tuesday, January 14, 2014

The Wealth and Poverty of Nations

Poverty is America’s greatest problem. We’re not being attacked by any foreign powers. Our infrastructure, although aging, still works well. The national economy has rebounded from deep recession, and signs point to a continuing upward trend. We don’t have a civil war as in Syria, Iraq and Libya, or a national war of criminals against society as in Mexico or Venezuela.

But we have too much poverty. According to a UNICEF report from 2012, we have the highest poverty rate among 35 economically advanced nations. Only Romania rivals the US in the percentage of children who live in poverty. About 23% of American children live in households whose income is less than half of the national median income. That’s much higher than Greece or Italy or Spain, countries which have been suffering from serious economic problems. Nations we like to think of as comparably well-off, like Norway or Austria or Germany or France, have rates under 10%.

Poverty is relative. To be poor in countries like Zimbabwe, Afghanistan or Haiti, where the per capita gross domestic product is less than $1500 per year, means a totally different life from poverty in the US, with a per capita GDP 30 times that amount. Many poor Americans have cars, televisions and washing machines, which would be luxuries only the wealthy could afford in less developed nations.

But it is meaningless to tell an American family trying to survive on $10,000 a year that they would be rich in Vietnam. Poverty is really economic inequality. The poor anywhere are poor because their income is far below what average people in their own country make. So to say that we have a poverty problem in America is to say that we have too much economic inequality.

We have enormous wealth. One-third of the world’s billionaires live here. Credit Suisse estimates that over 40% of the world’s millionaires are Americans, and that number is now rising faster than anywhere else: 95% of the world’s newest millionaires were created in the US in the past year. Yet we also have widespread poverty.

Poverty is structured differently across nations. In many countries, like Australia and France, most people defined as poor cluster just below the poverty line. But in the US most poor people are far below the poverty line. In most developed nations, the rate of child poverty is about the same as the overall poverty rate. But in the US, child poverty is much higher, indicating that households with children are much more likely to be in poverty.

The UNICEF report is discouraging for an American. On every measure of poverty, we rank far below other nations. On some measures we take last place among the 35 nations surveyed: the overall poverty rate; the poverty rate among families with one child or with a single parent; the poverty rate among high school graduates without a college education. The US has one of the developed world’s highest poverty rates for unemployed households.

And that is about to get worse. Republicans in Congress have insisted that the government should stop giving benefits to the long-term unemployed. More conservative Republicans, like Rand Paul, do not support unemployment benefits beyond 26 weeks. That approach ignores the new reality of unemployment. Since 1969, at any time only about one-third of the unemployed had been out of work for more than 14 weeks. Since the recent deep recession, however, more than half have been out of work for more than 14 weeks, and about 40% for more than 26 weeks. Cutting off benefits to families who can’t find work is cruel.

What makes a great nation? Perhaps we could compare nations to people. What makes a great person? Not being the strongest, although we give awards in competitions of strength. Not being the toughest, although boxing champions make millions of dollars. Not having the most money, although many people associate wealth with virtue.

Human greatness is about compassion, helpfulness, a willingness to serve others. The Christian Bible, often cited as the ultimate source of wisdom, offers a clear definition of greatness. In Matthew 20:26-27, Jesus said: “...whoever desires to be great among you, let him be your servant. And whoever desires to be first among you, let him be your slave.”

If the United States is the greatest nation on earth, as so many people claim, then why do we allow such misery to continue generation after generation? If the total number of billionaires made a country great, the US would be the undisputed world’s champ. But if we look at how nations treat their poor, how they insure that their children have enough to eat, how they help those who cannot find jobs, then we are among the world’s chumps.

Steve Hochstadt
Jacksonville IL
Published in the Jacksonville Journal-Courier, January 14, 2014

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