A Surprising Cause of Poverty

Why are there so many more poor people in America?  And why are the rich making so much more money?  It seems, as some say, to be a classic case (whatever that means) of “the rich getting richer, and the poor getting poorer.”  Certainly looking around in my own community it appears that there are some very rich people.  Just today I heard that a man in my old church made a net profit of about $3 million in just three years … doing something part-time. 

I actually know quite a few people who work part time (most of them not by choice).  But I don’t know any that even make a decent living wage, let along six figures or more.  Of course, this man was already wealthy, living in a gated community on a golf course.  So the adage seems true enough.  I mean there is always plenty of circumstantial evidence to support this claim that the rich are getting richer.  America’s wealth is getting more and more concentrated at the top of the economic food chain.  And poverty in our country is expanding like some kind of a mushroom cloud.

To be honest, I haven’t questioned the claims.  I just accepted them.  My own family is definitely worse off financially.  And I can see that my money went into someone else’s pocket.  But why?  What are the reasons for this?  What keeps Americans – who live in the richest country on earth - trapped in poverty?  What facilitates the transfers of wealth from the poor and middle class to the rich?  For many years now, I’ve observed the world around me and drawn my own conclusions about why this might be.  

·        Executives in major corporations outsource jobs to third world countries like India & China.  This puts the people who used to do those jobs in the unemployment line or in the ranks of the underemployed.

·        Retailers, such as Wal Mart or Albertson’s, and restaurant chains, among others, refuse to give their employees more than 32 hours a week --- so that they can avoid paying for benefits for those employees.  They hire more people than they would typically need … but don’t give any of them enough hours to make a living wage.  So they are the working poor.  (It’s been widely reported that many Wal Mart employees qualify for food stamps!)

·        Automation has made process lines, among other things, more efficient.  Everyone from auto workers to bakers, even when their jobs aren’t sent offshore, still experiences reduced employment because technology eliminates many of their jobs. 

·        The Internet is changing everything.  E-mail is wiping out the postal service (and its workers).  On-line shopping is wiping out sales clerks, inventory clerks, and other retail support jobs.  On-line delivery of movies has decimated Blockbuster video rental stores across the country. 

I’ve quietly seethed about the injustice of it all, but smugly considered myself so clever to at least have all of this insight and understanding of the problem.  At times, I’ve day-dreamed about how I might fix it.  For example, I considered running for mayor and passing municipal laws that would require retailers and restaurants in my city to give every employee at least 40 hours per week (and have clean bathrooms).  I’ve also considered applying to be the CEO of a major corporation and moving jobs back to the U.S. from India.  But as it turns out, I really haven’t had time to do either of those things.  So I just smugly seethed.

The Presidential election campaigns may have finally “moved the needle for me.”  You see, I’ve been listening to people (other than me) rant and rave about the injustice of the plight of the poor and rich in our country.  Of course, most of them blame Obama.  (They seem to blame him for everything.)  There’s a verse in the Bible that admonishes God’s people to examine and test our ways.  The point is to examine our thoughts and test them against what’s really true and right.  So was my motive to examine my thinking on this subject and test it to see if I’m as wise as I thought. 

I’ve been doing some digging see if my thinking about that is correct.  And I’ve been surprised to learn that it wasn’t.  I’ve been wrong.  Very wrong, it seems.  You see, one of the leading causes of the exponential growth of poverty in America has not been what most of us have been making so much noise about (i.e., shipping jobs overseas, tax policy favoring the rich).  Instead, perhaps the single biggest factor has been the huge surge of low-wage immigration.

Now in my part of the country, we’re all used to seeing skilled Asians in top technology and financial services jobs, engineering, and even medicine.  I was in a meeting just last week and observed the number Asians in charge of the Americans even.  But it turns out that they don’t actually represent the majority of immigrants to the U.S.  Most don’t arrive on our shores with the engineering MBA in hand.  Most don’t graduate from our medical schools and decide to stay.

Since 1970, there’ve been almost 30 million immigrants welcomed to America.  An enormous percentage of them arrived here without any professional skills at all.  In fact, many lack even a basic education.  Statistically, they are three times more likely than native-born Americans to lack a high school diploma.  (This is despite the fact that about 25% of all Americans drop out of high school without a diploma.) 

Even before our most recent recession, they were 50% more likely to be poor than native-born Americans.  In fact, the best data available seems to indicate that even the great-grandchildren of low-skilled Latino immigrants continue to struggle economically --- three generations after immigrating to the U.S.  (Sources:  U.S. Census Bureau, Pew Study, U.S. Dept. of Education, CNN)

This isn’t Obama’s fault.  It’s not Bush’s fault.  It’s not Clinton’s fault.  It’s a trend that’s been consistent for more than 40 years.  In case you aren’t aware of it, 30 million immigrants represent about 10% of the entire population of the U.S.  I’m starting to understand the size of the problem a little more clearly.  Now if I could just come up with some solutions ... I could run for President!

(Sources: U.S. Immigration Bureau, U.S. Dept. of Education, CNN, Wall Street Journal, Bloomberg)