bestselling author of Nickel and Dimed: On (Not) Getting By in America, which just had its 10th anniversary edition published. She is also the author of numerous other books, including Bright-Sided: How Positive Thinking is Undermining America and Bait and Switch: The (Futile) Pursuit of the American Dream. She is a frequent contributor to Harper’s and The Nation and has also been a columnist at the New York Times and Time Magazine.
Standard & Poor’s announced Friday it has downgraded the U.S. credit rating for the first time in history. The move by S&P, one of three leading credit rating agencies, came just days after Congress approved a $2.1 trillion deficit-reduction plan. "In some ways, that is in another world from most Americans and their day-to-day struggles. What is it going to mean to you if you have no job now?" says our guest, Barbara Ehrenreich, who has just published the 10th anniversary edition of her book "Nickel and Dimed: On (Not) Getting By in America." In the book, Ehrenreich tells the story of life in low-wage America and tries to earn a living working as a waitress, hotel maid, nursing home aide and Wal-Mart associate. Ten years later, she compares the current situation of low-income U.S. workers to "third-world levels of poverty." [includes rush transcript]
AMY GOODMAN: Standard & Poor’s announced Friday it’s downgraded the U.S. credit rating for the first time in history. The move by S&P, one of three leading credit rating agencies, came just days after Congress approved a $2.1 trillion deficit-reduction plan. S&P called the outlook "negative," indicating that another downgrade is possible in the next 12 to 18 months. Lowering the nation’s rating to one notch below AAA, the credit rating company said "political brinkmanship" in the debate over the debt had made the U.S. government’s ability to manage its finances, quote, "less stable, less effective and less predictable." It said the $2.1 trillion bipartisan agreement reached last week "fell short" of what was necessary to reduce the nation’s debt over time.
In its report, S&P explicitly blamed the political process in Washington and the refusal by Republicans to raise taxes as part of last week’s agreement to raise the debt ceiling, writing, quote, "We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act," they said.
Speaking to reporters yesterday, Democratic Senator John Kerry blamed Tea Party Republicans who refused to sign on to any deal that raised taxes.
SEN. JOHN KERRY: I believe this is, without question, the Tea Party downgrade. This is the Tea Party downgrade because a minority of people in the House of Representatives countered even the will of many Republicans in the United States Senate, who were prepared to do a bigger deal, to do $4.7 trillion, $4 trillion, have a mix of reductions and reforms, in Social Security, Medicare, Medicaid, but also recognize that we needed to do some revenue.
AMY GOODMAN: Well, to talk more about the state of the American economy and how it impacts the American people, we go to Washington, D.C., to talk to bestselling author Barbara Ehrenreich.
On her Facebook page, Ehrenreich writes, quote, "My patriotic pride is not offended by S&P’s downgrade of the US credit rating, but by the fact that while resistance bursts out everywhere—Tel Aviv, Santiago, Tottingham, not to mention No. Africa and Middle East—we do NOTHING."
The 10th anniversary edition of Barbara Ehrenreich’s book Nickel and Dimed: On (Not) Getting By in America has just been published. In the book, she tells the story of life in low-wage America, and she herself tries to earn a living working as a waitress, a hotel maid, a nursing home aide and a Wal-Mart associate. The book, over the last 10 years, has sold more than two million copies.
She’s also the author of many other books, including Bright-Sided: How Positive Thinking is Undermining America and Bait and Switch: The (Futile) Pursuit of the American Dream, a frequent contributor to Harper’s and The Nation and has also a columnist at the New York Times and Time Magazine.
Barbara Ehrenreich, welcome to Democracy Now!
BARBARA EHRENREICH: Good to be with you, Amy.
AMY GOODMAN: It’s great to have you with us. Before we get to Nickel and Dimed, let’s talk about Standard & Poor’s—and perhaps then we’ll go into poor is the standard in America today—but the significance of this for everyday people in the United States, the downgrading of America’s credit rating?
BARBARA EHRENREICH: I don’t know. I’m not sure. I mean, it’s part of a general sense of decline that I think we’ve gotten in many ways and that people like Tom Friedman have been writing about in the New York Times for some time. But, you know, in some ways, that is in another world from most Americans and their day-to-day struggles. What is it going to mean to you if you have no job now? Or if you have a job and you have no health insurance? Or if you are trying to get through college while working full time? It just seems very distant and abstract. When we’re talking about the economy in this country, we seldom talk about real people’s lives.
AMY GOODMAN: And that’s what we’re going to talk about today. I mean, your book took this country by storm. I am sure there was no one more surprised than you, Barbara. You have written a number of books. You did do something very interesting in Nickel and Dimed, but the fact that it caught on in a time when "prosperity" was the watchword, the buzzword, in the mainstream media—talk about—especially for young people who were 10 years old when the book came out, talk about exactly what you did, what you found then, and what it means today, 10 years later, when "prosperity" is certainly not the buzzword.
BARBARA EHRENREICH: Well, I took on a challenge that I set myself, which was to see whether I could support myself on the money I could earn in, well, obviously entry-level jobs, which are the, you know, kind of jobs where you go and apply, and they’re not going to ask—you know, they’re not going to ask for a résumé. They’re not going to—they don’t care about anything, except whether you’re a convicted felon or whether you have—you’re actually—you know, it’s legal for you to work in this country. So, I—you mentioned some of the jobs I worked at. I think you left out the maid with a house cleaning service, though. That was a very instructive one. And all these jobs averaged at the time, in around 2000, about $7 an hour, even including the tips with waitressing, which would be equivalent to about $9 an hour now.
And basically, what I found, that for me, just as one person—I wasn’t trying to support my family with my earnings or anything like that—it just wasn’t doable, because the rents were so out of line with my earnings. And I did try. I mean, I didn’t spend any money except on gas, food and, you know, the bare minimum, which was possible to do because I worked at each city for only a month. You know, so I wasn’t depending—you know, medical care or anything like that was not coming through my jobs.
But I found, you know, a very important thing—well, two very important things. First, at $7 an hour, or $9 an hour in today’s dollars, you’re not considered poor. You know, you don’t show up in the poverty statistics. You’re considered to be fine if you’re one individual earning that much. And the other big lesson here is—which is maybe a hard one to remember at a time of high unemployment—is that jobs are not necessarily a cure for poverty. Jobs that don’t pay enough to live on do not cure poverty. They condemn you, in fact, to a life of low-wage labor and extreme insecurity.
AMY GOODMAN: We’re going to break and then come back to Barbara Ehrenreich. It’s hard to believe, but her book Nickel and Dimed: On (Not) Getting By in America came out 10 years ago. And we’re going to talk about some of the people she met as she wrote this book and where they are today, and where America is. This is Democracy Now!, democracynow.org, The War and Peace Report. Back in a second.
AMY GOODMAN: We’re talking to bestselling author Barbara Ehrenreich. Her book took the country by storm 10 years ago, called Nickel and Dimed: On (Not) Getting By in America. Now it’s been updated and out again. Barbara Ehrenreich, our guest.
This figure, Barbara, of the number of Americans on food stamps, almost one in six, almost 15 percent. The figures from May, people on food stamps were 12 percent higher than a year earlier, according to the Agriculture Department. One in almost six Americans. And this applies directly to the people that you met, to the jobs that you took—for example, being a Wal-Mart associate. Talk about that and the woman you wrote about and where she is today.
BARBARA EHRENREICH: Yeah, I mean, one of the surprises to me—and it’s not a surprise anymore, because a lot more research has been done—is how many Wal-Mart employees depend on some kind of government program to supplement their low wages and pathetically inadequate health insurance, which most people can’t afford anyway. In fact, when you—I noticed that when I went through the orientation for my job at Wal-Mart, and there was a whole table full of new hires sitting around, you know, that they, the Wal-Mart people, asked to see whether anybody here might be eligible for TANF, for example, Temporary Assistance to Needy Families, because they’re kind of depending on that government—those government supplements to keep people going. You’re not going to do too well on just your Wal-Mart pay. And then, at another time as a Wal-Mart associate, I went to seek food aid. I went to a sort of public/private charitable place that what you could get—you could come out with a sack of food. And when the interviewer—the social worker who interviewed me kept getting me mixed up with somebody. You know, I’d tell her that I had a car, and then she’d forget I had a car, and so on. And then she said, "You know, it’s just—we have other—you know, people are always coming from Wal-Mart. You work at Wal-Mart. I get you mixed up." And that, to me, was a big clue.
AMY GOODMAN: So, in other words, I mean, you have Wal-Mart, that is famous around the country for fighting unionization, part of the whole movement of corporations that fight tax cuts for the wealthy, for example, is subsidized by the government, is subsidized by the U.S. taxpayers.
BARBARA EHRENREICH: Oh, yes. I mean, in many more ways than that. I mean, there are so many subsidies often involved in luring a Wal-Mart to one’s area—you know, tax rebates or, you know, things like that. But I was very excited yesterday. I went to the Jobs with Justice conference in Washington, D.C. That’s an organization that’s devoted to getting workers rights and improving their standard of living. And there were a number of women Wal-Mart employees there—or "associates," as they are called—who are now organizing their own workers’ association, called "OUR Walmart." And this is a new thing. And they were dynamic. So things may be about to change a little.
AMY GOODMAN: Barbara Ehrenreich, in 2009, you co-authored an article called "The Destruction of the Black Middle Class." And you wrote, quote, "For African Americans—and to a large extent, Latinos—the recession is over. It occurred between 2000 and 2007. [...] What’s happening now is a depression," you wrote.
Well, we’ve just reported on a new study of the U.S. census data by the Pew Research Center that reveals wealth gaps between whites and people of color in the United States have grown to their widest levels since the U.S. government began tracking them a quarter of a century ago. White Americans now have on average 20 times the net worth of African Americans, 18 times that of Latinos. Last month, we spoke about the findings with Roderick Harrison, who’s the former chief of racial statistics at the Census Bureau.
RODERICK HARRISON: People use net worth or draw on net worth to invest in their children’s education, to help with perhaps a first home, a down payment for a first home. We’re entering a period now where black and Hispanic families, one-third of whom have no net worth at all or negative net worth, won’t be able to help their children in this way. So this is going to definitely play into the next generation.
AMY GOODMAN: Barbara, your thoughts on the report and of the state of black and Latino middle class in this country, if you can even talk about these—
BARBARA EHRENREICH: Yeah.
AMY GOODMAN: —lines anymore?
BARBARA EHRENREICH: Yes. You know, the case of African Americans is very particularly tragic. When you recall that they didn’t—in the middle of the 20th century, they didn’t have a lot of wealth compared to white people, because they came from, you know, very underpaid agricultural jobs, often, in the South. Then—and they couldn’t get credit. You know, that was a big problem. You could not get credit because of racist lending policies. Then, in the 2000s, suddenly, the banks started offering credit actually targeting African Americans, and to a certain extent, Latinos, much more than white people with their subprime mortgages. And it was—you know, it seemed like a great boon to people who hadn’t had credit before because of racism. Surprise, of course. You know, that was a big part of the wipeout of so much of the black middle class, plus the fact, which is hard to explain, that blacks have been much more likely to be laid off in the peak years of the layoffs in the recession and to be unemployed now, three times more likely.
AMY GOODMAN: Barbara Ehrenreich, talk about some of the other people in Nickel and Dimed that you’ve caught up with 10 years later, that you met as you eked out your living as a house cleaner, as a maid, as a Wal-Mart associate. Who did you find, and who didn’t you find?
BARBARA EHRENREICH: Well, I didn’t find most people. And the reason for that is simple: you may leave that person with an address and a phone number, but those—neither of those is likely to be good in a few months. People—you know, there’s a lot of insecurity among low-wage people, a lot of turmoil in terms of their housing situation, cell phones get cut off, and so on.
A couple of people, I tracked down. One was not doing that badly. She was still at Wal-Mart. She had advanced to, I think, the huge amount of $10 an hour. But in the meantime, her husband had lost his job, so that, you know, their situation was not at all better. And another woman was piecing together a living cleaning houses and, you know, cooking for other people, sort of what she called "catering." But she was in very bad health, and it was hard for her to do.
The thing that is so painful is that there’s no help coming for people like that. There’s so little help anymore. Food stamps, yes, that’s a help. And I am very—I was very pleased that Obama expanded the food stamp program in '08 and ’09. He made it easier for many people to get unemployment insurance. Now, of course, it's been the aim of Republicans in the Congress to eliminate all such things and to eliminate Medicaid. There’s very little help.
AMY GOODMAN: You’re extremely critical of President Obama. You’ve advocated that students not pay back their college loans, among other things. Talk about both.
BARBARA EHRENREICH: Well, I didn’t come up with that idea, but there is organizing going on among debt-burdened young people, who come out of college, you know, with an average of $25,000 in debt and very likely no job or no professional job that’s going to help them pay that off. And there’s a movement among them for debt forgiveness, to just say, "Hey, we cannot do this. You know, we can’t—we don’t have the jobs that’ll allow us to pay these debts off." And, you know, that’s kind of exciting. That’s what’s going on in Chile right now, has to do with the cost of college, tuition. You know, all the demonstrations in Santiago in the last few days have to do with the cost of college. And I think we’re going to have to see something like that here, with people just saying, "Can’t do it. We can’t do it."
AMY GOODMAN: Now President Obama, your assessment of him, particularly how he’s dealing with, or not, the jobs crisis?
BARBARA EHRENREICH: I feel like saying, "What President Obama?" You know, he forgot about jobs, decided to focus instead on the issue the Republicans chose, which was the debt limit and the deficit. This is tragic. I have no explanation. I just—the only little footnote I would add, though, is that jobs are not enough, unless they pay enough for people to live on. And one thing we’ve seen among American employers—probably employers worldwide, but especially in America recently—is an unquenchable zeal on the part of employers to hold down wages by any means. It’s not just preventing unionization. It’s so many little tricks that happen at the workplace. It’s little tricks like you have to get to work at 7:45 a.m., but the clock doesn’t start ticking until 8:15 a.m. or something. That’s wage theft, which is another nice way of saying sort of unpaid labor or a kind of slavery even. We have, you know, so many things that are holding people down.
I would point out—and these are things that I was not aware of when I finished Nickel and Dimed, or they weren’t, you know, very prominent yet—is that employers no longer want to hire unemployed people. Think about that. They don’t want to hire people with bad credit ratings. Well, you know, who doesn’t have a bad credit rating if they’ve been unemployed for a little while and having to pay their own health insurance and everything? So it’s as if, you know, you try to climb out, you try to hold on, and you just get kicked in the face, one way or another, and pushed further down.
AMY GOODMAN: Barbara Ehrenreich, the Heritage Foundation came out with a study called "Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?" by researchers Robert Rector and Rachel Sheffield, who say the U.S. Census Bureau has reported for the past two decades that over 30 million Americans are living in poverty. But, you know, they ask, well, what does it really mean to be poor? And you get, from the headline—cable TV, air conditioning, etc.—what it means to the Heritage Foundation.
BARBARA EHRENREICH: Yes. Robert Rector at the Heritage Foundation has had a campaign for many decades now to prove that the poor in America really live in some kind of luxury. I would like to say, yeah, in some places, boy, you better have air conditioning. You know, in the D.C. area where I live now, you could not have survived very easily the summer, even with occasional cooling centers to go to.
But the truth is, here’s what’s happening. More and more people are having to crowd into smaller spaces to live. This is since—this has been going on for a lot of people, you know, for many years. But since the recession, since the financial crisis in '07, you find more and more families—you can have one family per bedroom and somebody, a couch surfer, on the couch in the living room. There's nothing comfortable about that. You know, one of the things that really woke me up to how bad things were was in '09 when a family member of mine suddenly needed money to pay her mortgage or her home would be taken away. I was able to help, but when I found out the real facts, I was horrified. Her home was a trailer home. Not only that, it's a dilapidated trailer home. She lives in it—a single-wide trailer home—along with her daughter and two grandchildren. Now that’s getting down to, you know, third-world levels of poverty, when you crowd that many people into such an inadequate dwelling.
Another thing people are doing: give up on medical care. You know, if we have a healthcare system in the United States, I think its real name is Tylenol. You can’t—you know, it’s something you have to drop. You can’t do it. Food prices are too high. Fuel prices are too high. So you have to give up on those things that it seems like you can get through another day without, even if that’s your blood pressure medicine.
AMY GOODMAN: There are some—
BARBARA EHRENREICH: So I—
AMY GOODMAN: There are some who are doing very well, of course. The luxury category has posted 10 consecutive months of sales increases compared to a year earlier, this a report in the New York Times. Luxury items are—
BARBARA EHRENREICH: Yes.
AMY GOODMAN: —you know, are flying off the shelves, if yachts can fit on shelves.
BARBARA EHRENREICH: Yes, yes, the rich are back. The rich are back. And that’s one reason why, when you read some of our major national newspapers, there’s not much mention anymore of the recession or economic hard times, because the people at the top are doing great. There was an article recently in the New York Times about tree houses that the very wealthy will build for their children, you know, in their backyard, if they even call them "backyards," on their property—tree houses that can cost as much as $350,000 and include flat-screen TVs and air conditioning. That’s for the kid to go out in a backyard and play in. Three hundred fifty thousand dollars. You know, I think that’s flaunting it a little too much.
AMY GOODMAN: Last week, Congress agreed to raise the federal debt ceiling following protracted negotiations. The deal includes no new tax revenue from wealthy Americans, no additional stimulus for the economy. Speaking on the Senate floor, Majority Leader Harry Reid criticized Republicans for blocking the tax hike on the wealthy.
SEN. HARRY REID: The vast majority of Democrats, Independents and Republicans think this arrangement we’ve just done is unfair, because the richest of the rich have contributed nothing to this. The burden of what has taken place is on the middle class and the poor. My friend talks about no new taxes. Mr. President, if their theory was right, these huge taxes [cuts] that took place during the Bush eight years, the economy should be thriving. These tax cuts have not helped the economy.
AMY GOODMAN: That was Senate Majority Leader Harry Reid. Barbara Ehrenreich, as we begin to wrap up, your comment?
BARBARA EHRENREICH: Well, it’s a way—it’s not new. This has been going on for a while, certainly since the Reagan administration. And that is an upward redistribution of wealth by cutting taxes for the wealthiest, and in subtle ways, raising them for the poorest and for the middle class. That’s what we’ve got. It’s a grab. It’s—I’m waiting for people to get really, really angry about it. I think one thing that has held back Americans is the idea that you’re going to get rich, too, you know? That magically, "Hey, I might be one of those multimillionaires next," so that I don’t want to tax rich people. I think we’ve broken through that. I think, you know, that has begun to look like a more and more crazy expectation, that we have to fight for, you know, those people who represent the great majority, the 90 percent of Americans who are not rich.
AMY GOODMAN: Barbara Ehrenreich, I want to thank you very much for being with us, author of—
BARBARA EHRENREICH: Oh, thank you.
AMY GOODMAN: —the bestselling book, Nickel and Dimed. It’s its 10th anniversary and has just been republished, Nickel and Dimed: On (Not) Getting By in America.