Report: US has highest income inequality in the Western world

UN ambassador to the UN, Nikki Haley, withdrew the US from the UN Human Rights Council just days before a report was to be presented detailing the threat which poverty poses to human rights in America, and the threat which it poses to America’s democracy. Haley’s withdrawal took place on Tuesday, and UN Special Rapporteur Philip Alston’s report came out on Friday. Haley’s personal position on the report was that it is ridiculous to pay attention to human rights and inequality in the US when there are issues in undeveloped nations in a sort of ‘don’t pay attention to us, look over there!’ maneuver.

In the report, Alston observes that the United States has the highest income inequality in the Western world, with 40 million Americans living in poverty, and over 18 million of them in extreme poverty. Additionally, amongst the middle class, 40% of them reportedly would be unable to cover an unexpected $400 expense. Alston goes on to describe the American dream as an illusion saying ‘In other words, the American dream of mobility, is turning into the American illusion, in which the rich get ever richer, and the middle classes don’t move.’

Included here is Alston’s statement, relative to his findings on America’s poverty to the 38th session of the Human Rights Council in Geneva on Friday, added emphasis is mine:

Mr. President,
distinguished delegates,
representatives of civil society,

I am presenting three reports today, one on the USA, one on Ghana, and one on the International Monetary Fund (IMF) and social protection.

1. The USA

I note with regret that United States Ambassador Nikki Haley has characterized this Council as a cesspool and chosen to withdraw from it just days before my presentation. Speaking of cesspools, my report draws attention to those that I witnessed in Alabama as raw sewage poured into the gardens of people who could never afford to pay $30,000 for their own septic systems in an area remarkably close to the State capital. I concluded that cesspools need to be cleaned up and governments need to act. Walking away from them in despair, as in Alabama, only compounds the problems.

The suggestion that this Council should only consist of rights-respecting States was made long ago by the US and others, but abandoned because there are no workable criteria to determine who should qualify under such a test, and because a body composed only of self-appointed good guys would not only be tiny but would be talking unproductively among themselves. Human rights promotion requires robust engagement, not behaving like the kid who takes his football and goes home.

Ambassador Haley complained that the Council has done nothing about countries like Venezuela. In fact I and several other special rapporteurs reported earlier this year that “vast numbers of Venezuelans are starving, deprived of essential medicines, and trying to survive in a situation that is spiralling downwards with no end in sight”. We warned of “an unfolding tragedy of immense proportions.”

Mr President, I turn now to my report on the United States. My starting point is that the combination of extreme inequality and extreme poverty generally create ideal conditions for small elites to trample on the human rights of minorities, and sometimes even of majorities. The United States has the highest income inequality in the Western world, and this can only be made worse by the massive new tax cuts overwhelmingly benefiting the wealthy. At the other end of the spectrum, 40 million Americans live in poverty and 18.5 million of those live in extreme poverty. In addition, vast numbers of middle class Americans are perched on the edge, with 40% of the adult population saying they would be unable to cover an unexpected $400 expense.

In response, the Trump administration has pursued a welfare policy that consists primarily of (i) steadily diminishing the number of Americans with health insurance (‘Obamacare’); (ii) stigmatizing those receiving government benefits by arguing that most of them could and should work, despite evidence to the contrary; and (iii) adding ever more restrictive conditions to social safety net protections such as food stamps, Medicaid, housing subsidies, and cash transfers, each of which will push millions off existing benefits. For example, a Farm Bill approved yesterday by Republicans in the House of Representatives would impose stricter work requirements on up to 7 million food stamp recipients. Presumably this would also affect the tens of thousands of serving military personnel whose families need to depend on food stamps, and the 1.5 million low-income veterans who receive them.

The US health care system already spends eight times as much to achieve the same life expectancy as in Chile and Costa Rica, and African-American maternal mortality rates are almost double those in Thailand. The World Economic Forum recently ranked the US 26th out of 29 advanced economies for promoting intergenerational equity and sustainability, and 28th for promoting inclusion. WHO data released recently shows that babies born in China today will live longer healthy lives than babies born in America. In global healthy life expectancy rankings, the US came 40th.

In an exclusive Fox News story yesterday Ambassador Haley called my report “misleading and politically motivated.” She didn’t spell out what was misleading but other stories from the same media outlet emphasized two issues. The first is that my report uses official data from 2016, before President Trump came to office. That is true, for the simple reason that there will be no Census Bureau data on the Trump era until September this year. But these data provide the best available official baseline, and my report then factors in the effects of the combination of massive tax cuts for the wealthy and systematic slashing of benefits for the less well-off.

The second criticism, as noted by Sean Hannity, is that the US “economy continues to roar to life under President Trump.” Indeed, the US economy is currently booming, but the question is who is benefiting. Last week’s official statistics show that hourly wages for workers in “production and nonsupervisory” positions, who make up 80% of the private workforce, actually fell in 2017. Expanding employment has created many jobs with no security, no health care, and often with below-subsistence wages. The benefits of economic growth are going overwhelmingly to the wealthy. Average pre-tax national income per adult in the US has stagnated at $16,000 since 1980 for the bottom 50% of the income distribution, while it has really boomed for the top 1%, a trajectory that has been quite different from that in most European countries. Even the IMF has warned that in the US “prospects for upward mobility are waning, and economic gains are increasingly accruing to those that are already wealthy”. In other words, the American dream of mobility, is turning into the American illusion, in which the rich get ever richer, and the middle classes don’t move.

My report demonstrates that growing inequality, and widespread poverty which afflicts almost one child out of every five, has deeply negative implications for the enjoyment of civil and political rights by many millions of Americans. I document the ways in which democracy is being undermined, the poor and homeless are being criminalized for being poor, and the criminal justice system is being privatized in ways that work well for the rich but that seriously disadvantage the poor. Underlying all of these developments is persistent and chronic racial bias. That bias also helps to explain the abysmal situation in which the people of Puerto Rico find themselves. It is the poorest non-state in the Union, without a vote in Congress, at the mercy of an unelected and omnipotent oversight board, and suffering from record poverty levels in the aftermath of Hurricane Maria.

Perhaps the best illustration of the cause and effect of these trends is what might be termed the Ferguson syndrome, recalling the city in which an unarmed African-American was shot dead by a white Police Officer in 2014. What happened in Ferguson, according to the US Justice Department, and what is happening in many other cities and counties can be summed up in the following composite picture.

In a nutshell: state and county taxes are capped; public budgets are slashed; governments are left without essential resources; they instruct their police departments to impose and collect more fines to fund the general budget; these fines fall overwhelmingly upon the poor; the victims cannot pay the fines and so additional penalties and fees accumulate; most scrimp and pay but some default and are imprisoned; when they are in prison their economic and family situations collapse; and when they emerge from prison they are even less unemployable because they have a conviction.

In her statement on my report, Ambassador Haley says that “it is patently ridiculous for the United Nations to examine poverty in America,” and claims that I should instead be looking at the human rights situations in two war-torn African countries (Burundi and the Democratic Republic of Congo).

“Rather than using his voice to shine a light on those vulnerable populations, and so many others, the Special Rapporteur wasted the UN’s time and resources, deflecting attention from the world’ s worst human rights abusers and focusing instead on the wealthiest and freest country in the world.”

Leaving aside the fact that this Council has published many report detailing the situations in those two countries, my view is that when one of the world’s wealthiest countries does very little about the fact that 40 million of its citizens live in poverty, it is entirely appropriate for the reasons to be scrutinized.

If this Council stands for anything, it is the principle of accountability – the preparedness of States to respond in constructive and meaningful ways to allegations that they have not honoured their human rights commitments.

The United States position, expressed by Ambassador Haley seems to be that this Council should do far more to hold certain states to account, but that it should exempt the United States and its key allies from such accountability.

In terms of recommendations, I would single out three in particular. A first step would be to acknowledge that America’s proudest achievement –a vibrant democracy – is in peril unless steps are taken to restore the fabric from which it was crafted, including the adage that ‘all are created equal’. A second step would be to stop irrationally demonizing taxation and begin exploring how reasonable taxes can dramatically increase the social well-being of Americans and the country’s economic competitiveness. And a third step would be to provide universal healthcare, as every other developed and many developing countries already do. This would rescue millions from misery, save money on emergency care, increase employment, and generate a healthier and more productive workforce.

But Nikki Haley doesn’t seem all that concerned about her fellow Americans and their plight, and what it means for the future of America’s civilization. Her concern is about the political reputation of a nation which seems to be constantly involved in violating human rights, whether it is stealing land, bombing, shooting, unjustly detaining, blockading, or otherwise conducting offensive operations against a people whose land the Jewish state presently occupies.

The Trump factor, in and of itself, however, in many ways actually owes its existence on the political scene to the economic issues which America is experiencing. And on the left, Bernie Sanders was a representation of the same issues being presented from the other side of the aisle. Poverty and wealth are not partisan, they’re not concerned about identity politics, but they are not isolated from politics.

Nothing exists in a vacuum. The poverty conditions of America are exacerbated by political policies, however, and the politics of leading politicians and parties in America are both ensuring that the wealth generated by America’s labour force is concentrated into the hands of America’s elite, and the numbers and the polls both show this. By the time of the 2016 presidential elections, it was abundantly clear that public policy needs to be changed in order to solve the problem, since, if it were just a problem of personal initiative there would exist no incentive to do anything about the crisis and presidential candidates would not have been using it as a major part of their platform. This is why Trump ran on the platform of creating more jobs, and why Sanders was campaigning on combatting poverty and on increasing wages. But once in office, Trump went about conducting business as usual, and his trade wars only threaten to worsen the situation as the purchasing power of the dollar meets the costs of Trump’s tariffs.

America may boast of its misleading employment figures, but the poverty situation tells the other side of the story. Employment, without livable wages, does not equal prosperity. Just ask the guy works in a sweatshop, or any other non supervisory or white collar position. If the wages can’t cover a lower middle class existence, then there’s a real systemic problem in America, as productivity has lost its relationship to prosperity for many Americans.

To some extent, Trump understands this, and that’s why he wants to bring back manufacturing jobs. Once upon a time, a factory worker, with no special skills or education, could work his shift, and at the end of the day pay for the living not only of himself, but of his entire family. Presently, for the overwhelming majority of American jobs, not even two jobs accomplishes this.

Even if Trump could and does convince manufacturers to bring their production back to America and hire legal Americans, without a wage adjustment, it wouldn’t significantly improve the American condition. We supposedly have full employment right now, but the poverty situation remains, and the middle class continues to shrink, retirement savings are dropping, whole industries are drying up because they can’t sell their products because their customers can no longer afford them. The problem, then, can’t be entirely lodged on whether employment exists in an adequate quantity, but whether that employment compensates the employee at a livable level.

However, it’s not realistic that America’s manufacturers will bring their production back to America, as I’ve pointed out on numerous occasions, as long as there is some other nation with lower regulatory standards and cheaper labour, and as long as these corporations can legally get away with it, their production will be accomplished elsewhere, and America will increasingly be comprised of what is being called a service economy, and those service jobs will continue to justify them as not being worthy of compensation that would even approach of the cost of living in America. Hence, not only is this problem likely to remain, but it’s likely to get worse as time goes on, as the cost of living increases, as the demographics change, as long as popular attitudes justify it, and the effects of poor policy become ever more manifest. The American dream is quickly becoming the American nightmare, and it isn’t ending any time soon.