There are days I feel like I read dystopian statistics for a living. And then there are day when the dystopian statistics take even my jaded breath away. Here’s one: 43% of American households can’t afford a budget that includes housing, food, childcare, healthcare, transportation, and a cellphone. Translation: nearly half of Americans can’t afford the basics of life anymore.
Does that take your breath away too? It should. And yet it might not come as a surprise. You might know it intimately. The statistics say there’s an even chance you’re…living it. What a grim and bizarre reality. Half of people are effectively poor in the world’s richest country. What the?
The folks that did the study above call this new class of people ALICE, for “asset limited, income constrained, employed.” It’s a sharp way to think about American collapse. Let me translate this term, too: the people formerly known as the American middle class.
Let’s take each of those terms one by one. “Asset limited” means that these households don’t have the resources — the hard financial assets — to drawn down on anymore. That tallies with other research which says the majority of Americans now have a negative net worth. In short, “asset limited” is a polite way of saying: indebted for life, with no real way of ever not getting out of the trap. It’s a nice way of saying: broke.
Why not? That brings me to the second idea in the term. “Income constrained.” American incomes haven’t risen for half a century. But the cost of living has exploded..skyrocketed..gone supernova. Healthcare and education didn’t cost as much as a house in the 1970s, or even the 1980s. And houses didn’t cost more than the average person would ever make in their lifetime. If “asset-limited” is a polite way of saying “broke and indebted”, income constrained is a polite way of saying “poor.”
There are two basic kinds of financial poverty, after all. Not having much of an income, and not having any wealth saved up. Americans are poor in both ways now. That’s because their incomes haven’t risen to allow them to save, and their debts keep mounting, which eats up their meagre incomes. Hence (another shocking stat) most Americans now die…in debt. What the?
Is this the 1300s? What do we call a population that live and debt “in debt”? We certainly don’t call them free in any real sense. They’re the modern equivalent of serfs or peasants — who are born owing, and who will die owing, a fictional, unplayable amount.
Americans are something very much like Neo-serfs because of the last idea in the phrase ALICE, “employed.” You see, it’s not as if the average American is poor now because he or she is sitting around playing video games all day. Quite the contrary. Americans are notoriously hard working people — and that trend continues right down to this day. Americans hold several jobs. The “side hustle” has become an everyday feature of life.
Americans aren’t poor because they don’t work, they don’t work hard enough, or they don’t work long enough. They’re poor even if they do. In that sense, the final idea in the phrase ALICE is underwhelming, inadequate — it fails to really get to the root of the problem here. If the majority of people in a rich society are poor now…even though they’re “employed”…then clearly the problem isn’t the people…it’s the system.
Now, you might object. Are Americans really becoming “poor”? What else would you call people that struggle to afford food, housing, childcare, and healthcare? You can’t call them rich, and you can’t call them middle class. They are poor in the sense that they are deprived of the basics of life, and deprivation is what poverty is. Even far poorer countries, I’d wager, don’t have such dire outcomes — bigger percentages can afford the basics — because medicine or rent or childcare in Pakistan or Nigeria doesn’t cost so relatively much. Americans are indeed growing effectively poorer and poorer now — and it shows in their depression, stress, anger, rage, anxiety, falling longevity and health, not to mention classic turn towards authoritarianism.
Poverty in America, in other words, has become endemic and ubiquitous because its systemic and structural. It’s baked into the system. It’s a feature, not a bug. And most Americans these days, I’d wager, understand this intuitively. Work hard, play by the rules, become something, someone worthy. Be a teacher, engineer, writer, coach, therapist, nurse etcetera. What do you get? You get your pension “raided” (read: stolen) by hedge funds, you get your income decimated by “investment bankers”, you get charged a fortune for the very things you yourself are involved in producing but never earn a fair share of, you get preyed on in every which way the predatory can dream up.
But it’s a new kind of poverty too — or at least one unseen since the Weimar Republic, really. It’s the poverty of decline, degeneration, decay. It’s the poverty of a middle class becoming a new poor. It’s the reversal of an upwards trajectory — not the failure to launch. It’s people who expected to live better and better lives finding themselves in the grim, unfamiliar predicament of never being able to reach them, no matter what they do. Except maybe sell out and become one of the predators. What happens when that takes place? Something strange, something difficult, something paradoxical and backwards.
If I say to the average American — “hey, I know you’re poor. Listen, I’m not trying to insult you. I’m trying to help you. I know it. The statistics tell me so. I can see it in on your stressed out, depressed face. I can see it in everything about you now” — what will the average American say? Well, he or she will respond defensively, probably. “Hey, go to hell buddy! I’m not poor!” That’s understandable. Nobody likes to be called poor — and especially not Americans, because living in a hyper capitalist society, poverty is stigmatized, scorned, mocked, and hated. To call an American poor is something like calling a Soviet a bad communist party member — or maybe even a capitalist. Comrade! To the gulag with you!
I get it. But it’s not helping anyone to pretend Americans are rich now when in fact they’re poor. The difficult truths are these. The majority of Americans — or near enough — are effectively poor now. America is the world’s poor rich country. And no progress whatsoever can be made until enough of them are willing to admit it. Think about it. If Americans go on playing this strange and silly game of pretending to be rich when they’re poor…then what reason is there to address any of the obvious and fatal failures at the heart of American life anymore? If you’re rich and fortunate…why do you need public, healthcare, childcare, retirement? And yet without those things, Americans will only ever get poorer.
There’s a place where pride becomes hubris. Where stoicism becomes vanity. Where self-reliance becomes ignorance of the common good. Americans are at that place right now, in this moment.
American poverty — a middle class falling into ruin, the majority of people now effectively poor — is what gave rise to today’s problems: Trumpism, extremism, fascism, theocracy. It’s what drives religious fervour — save me, someone! It’s what ignites the spark of racial hatred all over again.
And until and unless this problem is addressed, my friends, in a tough and gentle and sane way, America is going to stay where it is. People that really understand political economy have a saying: “capitalism implodes into fascism.” That’s because it produces mass poverty, not riches, decline, not upward mobility — and the new poor then turn on everyone, neighbours, friends, allies, values, morals. If that sounds eerily like America today…then you should be able to see America tomorrow, too.
Somebody needs to say it, and it needs to be said with gentle understanding, real empathy, uncompromising truth, and genuine compassion. America is effectively a poor country now. Not a poor country like poor countries, but a poor country of its own kind. A poor rich country, a rich country where the average person lives like a poor person. That single fact is at the heart of American collapse, my friends. And it’s not OK.