A new study shows that income inequality in America is at a record high. According to an analysis of tax filings, the income gap between the richest 1 percent of Americans and the other 99 percent widened to unprecedented levels in 2012. The top 1 percent of U.S. earners collected more than 19 percent of household income, breaking a record previously set in 1927. Income inequality in the United States has been growing for almost three decades. We speak to Sasha Abramsky, author of the new book, "The American Way of Poverty: How the Other Half Still Lives." It is written in the spirit of Michael Harrington’s groundbreaking 1962 book, "The Other America," in which he chronicled the lives of people excluded from the "age of affluence." Harrington’s book went on to inspire President Lyndon B. Johnson’s subsequent "war on poverty."
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JUAN GONZÁLEZ: A new study shows that income inequality in America is at a record high. According to an analysis of tax filings, the income gap between the richest 1 percent of Americans and the other 99 percent widened to unprecedented levels in 2012. The top 1 percent of U.S. earners collected over 19 percent of household income, breaking a record previously set in 1927. Income inequality in the U.S. has been growing for almost three decades.
AMY GOODMAN: We spend the rest of the hour with a journalist who has covered poverty in America for the last two decades. His name is Sasha Abramsky. His new book is The American Way of Poverty: How the Other Half Still Lives. It’s written in the spirit of Michael Harrington’s groundbreaking 1962 book, The Other America, in which he chronicled the lives of people excluded from "the age of affluence." Harrington’s book went on to inspire President Johnson’s subsequent war on poverty. This is an excerpt of Johnson’s State of the Union address January 8th, 1964.
PRESIDENT LYNDON JOHNSON: The program I shall propose will emphasize this cooperative approach to help that one-fifth of all American families with incomes too small to even meet their basic needs. Our chief weapons in a more pinpointed attack will be better schools and better health and better homes and better training and better job opportunities to help more Americans, especially young Americans, escape from squalor and misery and unemployment.
AMY GOODMAN: Well, nearly half a century later, poverty in America continues to haunt tens of millions of Americans. Census data shows nearly one in two Americans have fallen into poverty or could be classified as low-income. Meanwhile, more than a third of African-American and Latino children live in poverty.
JUAN GONZÁLEZ: Well, our next guest, Sasha Abramsky, chronicles the stories of those struggling with poverty in America today, much like Michael Harrington did 50 years ago. His new book is called The Other American Way of Poverty: How the Other Half Still Lives. Abramsky’s reporting on poverty is funded by a grant from the Open Society Foundation’s Special Fund for Poverty Alleviation.
Sasha Abramsky, welcome to Democracy Now!
SASHA ABRAMSKY: Good morning.
JUAN GONZÁLEZ: Tell us about—we just, as I was mentioning, had a mayoral race where the main candidate on the Democratic side was talking about income inequality, the 47 percent of New Yorkers who live at or near the poverty level. Talk about what you found is going across the country.
SASHA ABRAMSKY: Well, the inspiration for my book was this idea that, even before 2008, something was going wrong with the economy and the way it was functioning for most ordinary Americans. So, if you go back to the middle Bush years, by some measures, the economy was doing very well. Unemployment was quite low. The stock market was quite high. Real estate values were going up. But even then, if you started talking to people on the ground in New York, in Philadelphia or in Los Angeles, in rural communities all around the country, what you’d find was that increasingly people were juggling bills to make ends meet. So, maybe they’d be able to pay their rent or their mortgage one month, but they’d have to forgo a car payment. Maybe they’d be able to buy clothes for their kids, but it meant that they were missing meals at the end of the week, or they were having to rely on food pantries and charity.
Now, obviously, after 2008, all of those crises got magnified, because you suddenly had an unemployment crisis on top of everything else. You had people burning through their life savings trying just to survive, just to make sure they had a roof over their head. You had families routinely going into bankruptcy when they had a healthcare emergency. You had low-income workers in rural areas; when gas prices went up a dollar a gallon, as they did, that was enough to collapse their financial security. And I went around the country, and I started talking to people. And it seemed to me that much as with Harrington about half a century ago, there was a story that was being missed here, that we were talking about affluence before 2008, or we were talking about the struggling middle classes after 2008, but what we weren’t talking about was poverty. We were leaving out of the American story tens of millions of Americans who on a daily basis just weren’t making ends meet. And that’s the story that I chronicle in my book.
AMY GOODMAN: What is your assessment of President Obama’s record on poverty?
SASHA ABRAMSKY: You know, when Obama came in, I was so optimistic, because this is a man who had done community organizing. He clearly understood the complexities of poverty, and he clearly knew how to tell a story. And all of that’s important, because we’re talking about real people, not stereotypes. And I think conservatives very often get away with labeling the poor as undeserving or labeling the poor as dysfunctional or labeling the poor as somehow blameworthy for their poverty. And you can only do that if you’re not talking about real individuals, if you’re not talking about the man like Matthew Joseph, steelworker I met in Stockton, church deacon. He loses his job, and he then spends months and months and months trying to stay in his house, trying to make sure that he and his wife don’t end up on the streets. You can only stereotype if you’re not talking about someone like Megan Roberts, 31-year-old woman I met in Albuquerque. She had been on Medicaid. Her family had been on Medicaid. And then her husband gets a one-dollar-an-hour pay raise, and it’s enough to kick them off of Medicaid and various other government assistance. She has a healthcare emergency, and she goes bankrupt. So I came in—when Obama came in, I was so optimistic he understood these stories.
AMY GOODMAN: I want to go for one minute to Megan Roberts, to a clip of one of these—
SASHA ABRAMSKY: Yeah.
AMY GOODMAN: —women that you profile.
MEGAN ROBERTS: I stressed, stressed out. The dollar pay raise knocked us off housing. We went from $612 rent to a $1,030 rent. Knocked us off food stamps, so we didn’t get any food assistance whatsoever. We didn’t qualify for any of that. We had no Medicaid at that point, because that dollar pay raise knocked us off that. Left us hanging. He was only going to get private health insurance through his work. It would have taken effect January 1st of ’06, but I got sick December 10th of ’05. So we were left with this bill, and we ended up having to eventually—I believe it was April 16th, we filed for bankruptcy.
AMY GOODMAN: I mean, this is an amazing story. When Roberts’ husband received a one-dollar-an-hour pay raise at his diesel mechanic job, the family was suddenly deemed too affluent for Medicaid, food stamps and housing assistance. And then you hear how it impacts their lives.
SASHA ABRAMSKY: Yeah, and, unfortunately, these are the kind of stories that I encountered around the country. I interviewed hundreds of people for this in dozens of states, and you hear these stories all the time. And what it made me realize is that poverty is immensely complex in America. You can’t reduce it to one set of factors. You can’t reduce it to one group of people. You can’t reduce it to one part of the country. It could be your neighbor. It could be your family member. It could be you, yourself, if you lose your job or your hours are cut at your work.
Now, coming back to what I was saying about Obama, I—when he came in, I thought this is a man who understands the stories, like Megan Roberts’ stories. I think he’s got a very mixed record when it comes to implementing anti-poverty measures. I think his administration did a pretty good job of stemming the worst collapse, of stopping the worst hemorrhaging since the 1930s. They did a far less good job in thinking through creative, holistic anti-poverty approaches. And what they haven’t done yet—and maybe Obama’s speech a couple weeks ago at the Lincoln Memorial, maybe that marks a turning point. But so far, what they haven’t done is put the podium of the president behind a war on poverty in the way that Lyndon Johnson did half a century ago. And that, I think, we’re waiting still to see.
JUAN GONZÁLEZ: I’m a little less optimistic about what may happen in the next few years, because a report that came out just yesterday that said that we have—the stock market has doubled in value since the collapse of 2008. Businesses have cash, huge amounts of cash that they’re holding in their bank accounts. And yet, this report says that 95 percent of all of the gain in income since 2008, since the collapse, has gone to 1 percent of the population.
SASHA ABRAMSKY: That’s absolutely right. And when you look at this, this is a trend that goes back all the way to the Reagan period, and maybe even before the Reagan period, that year in, year out, if you’re at the top of the economy, you’re going to benefit disproportionately. If you’re at the bottom of the economy, not only are you not going to benefit, but from the 1970s onwards, real income in the bottom quintile, the bottom 20 percent of the economy, has gone down. So if you’re a young, working-class adult in America today, there’s a very good chance that you’re earning less in real terms than your father and your grandfather did. Now that’s stunning. That’s never happened before, that kind of downward mobility in America.
AMY GOODMAN: How can the cycle be broken, Sasha?
SASHA ABRAMSKY: Well, I think you have to look at creative policy. So, in the—the first part of my book is all about the stories of people in poverty. The second part of my book details what a new war on poverty could look like. So it involves thinking creatively around, let’s say, taxes. Because we have the money in our system to generate pools of money to be used on anti-poverty initiatives. The fact that we don’t do it is a political choice, not an economic necessity. We’re self-starving our public infrastructure. So I advocate significant reforms in the way we do taxes.
I talk about major reforms in the way we fund education. I advocate something called an educational opportunity fund, which would essentially be a social insurance system, much like Social Security, to render higher education universally affordable.
I talk about things like the earned income tax credit—quite an effective anti-poverty measure. But a lot of states have resisted putting in place their own state versions of the policy. I talk about things like what Alaska did. Alaska, which is by no means a left-wing, radical state—
AMY GOODMAN: We have 15 seconds.
SASHA ABRAMSKY: —implemented an oil profits dividend. Everybody in Alaska gets money from the oil industry. We could do the same all over the country. That we don’t is a lack of political will, and I think we need to change the discussion on poverty.
AMY GOODMAN: We want to thank you very much. Sasha Abramsky’s book is called The American Way of Poverty: How the Other Half Still Lives.