Portends for the Future?

By Kollengode  S.  Venkataraman (in the July 2005 issue)

In mid May, I read a frivolous, derisively funny, and outrageous novel, Bergdorf Blondes, by Plum Skyes describing the life of young high-flying men and women hopping between Europe, NY, and LA, living a life of excess even as they endure marital infidelities, pettiness, jealousy, and backstabbing behind their shroud of wealth. (Review in next issue.)

Soon after enjoying reading Bergdorf Blondes for its hilarity, in the week of May 22 and later, I read in The New York Times the riveting multipart series published under the general title “Class Matters.”

This very serious series on which the Times reporters worked for over a year, discusses among other things:

1) How the American sociocultural landscape is transformed in the last 25 years by the ever-widening disparities in wages, incomes and access to resources between the top 2% of the population with wealth and the bottom 30% of the population struggling to make ends meet,

2) How the falling purchasing power of dollar and stagnant income levels of the working class  have seriously affected  typical families (couple + 2 kids) living below the median income (~$42,000 per year) but above the Poverty Line (~$15,000 per year), and

3) How it is becoming impossible for new immigrants taking up the lowest paying jobs to climb out of poverty.

The contrast between the two stood in stark relief.

The series discuses the accelerating costs of health care, college education, and housing, leading to more and more people getting marginalized. Forty-five million Americans out of 300 million population live without health insurance. State universities cost nearly $20,000 per year and private universities $45,000 a year for tuition and boarding. The dropout rate of average university students from low-income families is on the rise because of the high cost of education.   

The American middle-class lifestyle precariously hangs on the thread of people having jobs, which are at best nebulous given periodic convulsions in Corporate America. The salaried “haves” feel insecure even as they maintain a gloss of good life, and the have-nots feel trapped and see no way out of their misery. If this is not enough, consider these:

1. The Medicare program (which seniors depend on in their old age) is in deep trouble right now.

2. Social Security will be in trouble in the next 30 to 40 years. If Wall Street gets into this (as President Bush wants it), this safety net may end sooner, or end in a bigger disaster for the poorer, less educated individuals unfamiliar with speculative investments, particularly those who get into the market late in a rising market.  Since it is their “personal” accounts with full decision-making control, losers can not blame the government or Wall Street. We have been here before.

3.  Large corporations, left, right and center are filing for bankruptcies and  walking away from their pension and healthcare obligations to retirees. Smaller companies are sure to take their cue from their Big Bros.

4.  As it is, many national retail chains don’t offer healthcare and pension benefits to their new employees. Wal-Mart (with employees nationwide over 1 million) pays its employees $19,000/year on the average, forcing them to seek support from food stamps and government subsidized medical care. Since these are tax-payer-funded, even those who don’t buy at Wal-Mart, are indirectly subsidizing Wal-Mart!

The AFL-CIO reports*  that “Fewer than half of Wal-Mart workers are insured under the company plan — just 46%, while 66% of workers at large private firms are insured under their companies’ plans. Wal-Mart’s workers also pay an exceptionally large proportion (42%) of what it costs the company to buy the insurance. The typical employee at large companies pays 16% to 25% percent of total health plan premiums.

So in the next twenty to forty years, more and more lower-income seniors in their last few years will be depending on their children not only for emotional support, but also economic support, like in India and China. This will further cut into the disposable resources of young parents in the American middle- and lower middle class families. 

We are already becoming a economically polarized society, much like feudal societies of Europe and Asia, with ever-decreasing opportunities for upward mobility for those born into economic and social disadvantages, whether white, black, brown, or yellow.

Given this reality, eternal optimists want us to believe that economic Darwinism is still the solution and the forces of Free Market will eventually take over and level the field.

This optimism is unrealistic. At some point, the federal government, even when Republican ideologues occupy the White House and control the Congress and the federal judiciary, will be forced to provide for increased socioeconomic mobility for the socioeconomically disadvantaged through subsidized education, healthcare, and opportunities for youngsters to acquire marketable skills.

Politicians will do it not because it is the conscionable and right thing to do. As Gov. Ed Rendell said recently in a lecture at Pitt, governments [and other man-made establishments including religious institutions] rarely respond to moral imperatives. They will respond only because gross inequities are the breeding ground for much bigger problems such as social upheavals.

* (http://www.aflcio.org/mediacenter/prsptm/pr10212003.cfm)  — END


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