The US election was irrelevant to the needs of the poor and working people in the United States. Questions of poverty, hunger, health, education and work were swept under the carpet by both presidential candidates, as JIM CRAVEN reports.
Poor and homeless
There are in the United States three and a half million homeless people either living on the streets or in shelters. The numbers increased by 13% in 2002 and 19% in 2003. President Bush plans to cut housing subsidies. (All statistics in this article are taken from official figures. The reality is undoubtedly far bleaker.)
One in eight of the US population (12.5%) lives in poverty. That’s nearly 36 million people and includes over 12 million children. An extra 4.3 million people have fallen into poverty since Bush arrived. The average earnings for the poorest 20% are $12,000 a year; equivalent to a rate of £3.30 an hour for a 40 hour week. Included in the poorest 20% of the population are more than half of all black and Hispanic children and their old people over 65 years. The income tax cuts made by the Bush administration accelerated the widening gap between rich and poor. For those in the poorest 20% the cuts were worth about $2 a week. For those in the richest 20% they were worth $800 a week. The tax benefit to the top 1% alone would have been enough to ensure two years’ health care for every US citizen.
Health if you can pay
There are 45 million people in the United States who have no health insurance cover. That’s around one in six of the population. There are a further 26 million people who only have cover for part of the year. It has been estimated that around 100,000 people in the United States die every year through lack of health care benefits.
The average family health care costs are greater than the annual income of the poorest quarter of the population. There are two government health assistance schemes. Medicare is a national federally funded scheme open to all old people but it is a contributory scheme that does not cover all the costs of health care. On average, an old person will still have to find around $1,000 a year. Over a third of old people in the United States have reported that they have to cut back on food in order to pay for their medications. Medicaid, for the poor and chronically sick, is a fantastically complicated system. Many poor US citizens on Medicaid have no idea what they are entitled to. They put up with lesser illnesses rather than seek help and throw themselves on the mercy of the system when they are seriously ill. Those on Medicaid will also still be faced with potential bills for some treatments.
The point is not that millions of Americans have no health care at all but that health care for many more millions, including those with health insurance, is a constant source of anxiety. Even the terminally ill suffer. Around 40% of them have trouble paying for medication.
The chance of serious illness is worse for black people than whites. The overall infant mortality rate in the United States is around 6.9 deaths per thousand live births but for the children of black mothers it is 13.6 – almost twice as high. The overall result is a life expectancy of over five years less for black people than for whites. The most common cause of death for young black males is murder.
Unemployment and poverty pay
In Bush’s first two years over two and a half million jobs were lost and the unemployment rate doubled. In January 2004 there were 14.7 million people who could not get full-time work, almost 10% of the workforce. Even though a recovery in the US economy has been officially underway for over two years the number of people without work is still increasing. Nearly a quarter of the unemployed have been out of work for more than 27 weeks.
In the last four years manufacturing employment has fallen from 17 million to 14 million. Skilled, secure and better-paid jobs are being replaced by low-paid, part-time and temporary work under poor conditions and with few if any benefits.
Seven million workers now receive the minimum wage or less. The US minimum wage presently stands at $5.15 an hour (about £2.86). For a 40-hour week this would pay $3,500 a year less than the poverty level for a family of three. To try and earn a living wage US workers now work longer hours than those in any other advanced capitalist country.
Middle class under threat?
We could add many other problems for the working class, such as the crisis in the education system, the more than two million mainly working class people (half of them black) in prisons or the high attempted suicide rate amongst teenagers. Millions of US workers live their entire lives perpetually surrounded by misery. It would be wrong, however, to imagine that the converse is also true – that the rest of the US population live comfortable and secure lives, safely isolated from these threats. The social safety net for Americans is even weaker than in Britain. It is very easy for a middle class family in the United States to fall into poverty.
An important factor that has added considerably to the insecurity threatening the better off workers and the middle class is the enormous level of debt they have incurred. US citizens have been spending like there is no tomorrow; buying more and more cheap imported goods, particularly from China and elsewhere in the Far East. It is large amounts of this money that is coming back into the United States to fund the loans for personal consumption and to finance the record Federal debt. The total consumer and mortgage debt in the United States now stands at over $12 trillion and rising. On average, 12% of incomes are spent on servicing personal debt. This money has been borrowed on the basis of record low interest rates. If interest rates rise, many US families will find themselves in serious economic trouble. Personal bankruptcy is already at record levels.
No solution for ruling class
The situation is untenable but every possible solution would exacerbate another part of the problem. For instance, one way to ease the trade deficit would be to devalue the dollar. A rapid devaluation could trigger a currency crisis. Those holding US dollar debt would start to call in the loans, which might then force the US to increase interest rates to keep the loans attractive. This in turn would have a disastrous effect on those Americans balancing on the brink with large personal debts.
Another urgent necessity is to cut the budget deficit. In 2000 Bush inherited a projected budget surplus. There is now a massive budget deficit, projected to be $450 billion next year. Both Bush and Kerry promised to half the deficit during the next term. This could be tackled by increasing taxes but Bush isn’t going to do this. On the contrary one of his election promises was to make permanent the tax cuts he introduced in his first term and just days before the election he announced an extra $145 billion corporate tax break. If he is not going to increase government income then he will have to cut public spending. This year the military budget increased by 7% to $700 billion. Far from cutting this, Bush is to ask for an extra $70 billion for the war on Iraq. So, any public spending cuts are likely to fall on education, health and social security. He has already announced his intention of privatising the state pension scheme and other parts of social security are likely to follow. Once again it will be the working class that bears the brunt of the attacks.
Working class must fight back
Around half the US adult population chose not to vote or were excluded from the elections. We can assume that many, maybe most of them felt the whole process was irrelevant to their concerns. Many millions in the US suffer constantly from poverty, homelessness, ill health and unemployment. Many millions more get by but live with constant anxiety about health, jobs, education and racism. Large sections of the middle class who presently have a comfortable life could find themselves alongside the working class as a result of the debt they hold and the growing threat of unemployment. The US economy is in serious difficulties. The objective circumstances are ripening for the rebirth of a working class movement in the United States.
FRFI 182 December 2004 / January 2005
