Extreme Poverty Cut in Half? Only in the Minds of the Capitalists

Paul Buchheit

Paul Buchheit Author, editor, expert on income inequality

"Take a bow, capitalism." That's from the Economist, a business-happy publication that has every reason to perpetuate the myth that a world run by free enterprise is improving people's lives. Its story continues with an astounding claim: "The world now knows how to reduce poverty." Perhaps by presenting questionable data that seems to support what the business community wants us to believe. 

Other super-capitalists are similarly exuding hyperbole in defense of their shaky beliefs. Said a spokesman for the American Enterprise Institute: "It was the American free-enterprise system that started to spread around the world. They looked at you and said, 'I want to have their life, their freedom, and their stuff, and they threw off their chains of poverty and tyranny.'" But it's clear, when the facts are checked, that the chains of poverty are being wrapped around more and more human beings. 

Extreme Poverty Has Increased, in Terms of Wealth 

According to the Credit Suisse Global Wealth Databook 2016, the median wealth of the world's adults is $2,222, down from $3,248 at the end of 2007. While the rich people of the world have taken more than their share of the $35 trillion wealth gain since the recession, the world median has dropped by over $1,000!

There are other recent indications of rising poverty. Based again on Credit Suisse wealth data, in just seven years the world's Gini Coefficient, the most widely accepted measure of inequality, has surged from 88.1 to 92.7. Wealth inequality between countries has grown dramatically. It's a stunning rise, further evidence of a world splitting into two

A widely held misconception is that global inequality between countries is declining because of growth in China and other developing countries. But that claim is generally made with respect to income inequality, and it is only partially true. Global income inequality is down only in relative terms, in the sense that an income boost from $1 to $2 a day is greater in percentage than an income boost from $1,000 to $1,500 a day. 

The Poverty Threshold Is Absurdly Low 

The world poverty threshold was recently increased by the World Bank from $1.25 to $1.90 per day. Numerous sources have recognized the absurdity of this dollar amount for day-to-day survival. The United Nations Conference on Trade and Development argues for a $5 minimum; ActionAid says $10; even the World Bank admits that the $1.90 poverty line is "too miserly for middle-income countries," and that"more than 50 percent of the population in IDA [the world's poorest] countries live on less than US $6 a day and are considered at high or moderate risk of relapsing into poverty." 

In addition, the poverty threshold has not kept up with inflation. The World Bank set the first poverty threshold to $1.01/day using 1985 purchasing power parity. It eventually raised the threshold to $1.90/day at 2011 purchasing power parity. But with inflation, $1.01 in 1985 is equivalent to $2.10 in 2011. The World Bank's most recent threshold adjustment falls far short of realistic human needs. 

Taking Credit for China, and Further Fudging the Numbers 

Most of the so-called "escape from poverty" has occurred in China, where starting in the 1980s millions of residents of farming communities moved en masse to the cities for jobs in the factories of technology and in service-related positions. 

The UN's Millennium Development Goals took advantage of this in the year 2000, calling for a halving of poverty, but backtracking to the year 1990 to include the income gains across China. The UN also revised statistical and caloric standards to ensure that its poverty reduction goals were reached. 

An Extra $1 a Day, but is it Worth It when You're Living in These Conditions? 

China may have pulled millions "out of poverty," but in reality they've gained a few dollars a day while the country has become increasingly unequal in terms of wealth. The new Chinese "middle class" has in many ways gone backwards. According to China Labor Watch, weekly working hours in Apple's factories surpass 60 hours, much of it without compensation. Toy builders labor in the factories 11 hours a day, 6 or 7 days a week, earning minimum wage, while at night 10 workers share a small dormitory room that may not even have hot showers. In the factories making products for Walmart and Home Depot, there are hundreds of underpaid student workers who labor in workshops that are hot and dusty, with volatile chemicals in the air, but with few health safeguards. 

Numerous surveys and studies have made it clear that the Chinese people, despite their nation's unparalleled economic growth, are no happier than they were 20 years ago, and have generally experienced a loss of well-being in their daily lives. 

It goes well beyond China. BBC journalist Paul Mason writes that the developing world middle class is characterized by life in a "chaotic mega-city, cheek-by-jowl with abject poverty and crime, crowding on to makeshift public transport systems and seeing your income leach away into the pockets of all kinds of corrupt officials.." In a review of Mike Davis' "Planet of Slums," urban areas are described as "horizontal spreads of unplanned squats and shantytowns, unsightly dumps of humans and waste, where child labour is the norm, child prostitution is commonplace, gangs and paramilitaries rule and there is no access to clean water or sanitation, let alone to education or democratic institutions." And, ironically, this is caused in great part by the policies of neoliberal institutions such as the World Bank, which would have us believe that conditions are steadily getting better. 

Conditions getting better? Only in the minds of capitalists who don't want their comfortable lives disrupted by a rebellion among their billions of victims.

***

Reposted from AlterNet

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.org, PayUpNow.org and RappingHistory.org, and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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