Part 3 The Division Between the Rich and the Poor Remaining a Difficult Problem to Solve in the United States
The causes of the division between the rich and the poor in the United States are not something occasional or periodic. The so-called US democratic system deprives its citizens of economic, social, and cultural rights, leading to a growing gap between the rich and the poor and the long-unsolved problem of poverty that affects tens of millions of people.
(1) Structural Causes Leading to the Division Between the Rich and the Poor
First, disorderly competition in the capital market and hostile takeovers have resulted in fewer middle-income jobs in the United States. The Gallup website reported on September 20, 2016, that high-priced acquisitions of rival businesses resulted in a significant reduction in middle-income jobs, and that in the recent 20 years, the number of companies listed on the American stock exchanges had plummeted from 7,300 to about 3,700, and bankrupted small businesses had significantly outnumbered newly-established ones in recent years. The website of the British newspaper The Guardian reported on December 8, 2017, that in 2017, the unemployment rate of young US citizens was as high as 15.9 percent and that due to insufficient full-time jobs, about 4.8 million people who wanted to work full-time jobs could only engage in part-time jobs.
Second, the structural rise in housing prices has made housing more unaffordable for low-income people in the United States. In 2018, the National Association of Realtors of the United States conducted a survey on home buyers and found that due to rising housing prices and interest rates, housing affordability declined and house purchasing was no longer an easy decision for home buyers. “The State of the Nation’s Housing 2018” released by the Harvard Joint Center for Housing Studies showed that in 20 urban areas, more than 30 percent of middle-class households spent at least 30 percent of their incomes on housing. The website of The Washington Post reported on August 6, 2018, that poor urban residents had experienced sharp increases in rent in recent years. According to the report, since 2011, the nation’s minimum rent has increased by 18 percent, and it is particularly noteworthy that since the summer of 2017, in San Francisco, Atlanta, Nashville, Chicago, Philadelphia, Denver, Pittsburgh, Washington, Portland, Oregon, and other places, the rent for the high-income group has fallen, while the rent for the poorest group has risen.
Third, due to the high-priced, inefficient medical services, the health conditions of low-income US people have deteriorated. The deteriorating health conditions of the US people are closely related to the high-priced, inefficient US medical system. According to a survey on medical service systems conducted by the Commonwealth Foundation in 2014, among the 11 countries at the same developmental level, the United States had the least efficient, least productive, and most unfair medical service system, it also had the highest mortality rate and infant mortality rate, and its citizens aged 60 had the worst health conditions. Besides this, the survey also showed that US citizens paid twice as much for medical services as those living in the other 10 countries did. The website of the British newspaper The Guardian reported on November 13, 2017, that medical costs and medical insurance in the United States were becoming increasingly expensive, especially those for the treatment of chronic diseases, and the prices of medicines treating asthma or cancer continued to hit record highs.
Fourth, the rising cost of higher education has deprived low-income groups of their opportunities to receive higher education in the United States. The Gallup website reported on August 3, 2017, that since 1980, there had been no measurable indicators showing any improvement in the quality of higher education in the United States, but the prices for higher education had increased rapidly. The Forbes website reported on February 21, 2017, that student loan debts had become the type of consumer debts second only to mortgage debt, outnumbering the total of credit cards and car loans. There are more than 44 million students relying on loans to continue their education, and the total amount of their loans is as high as US$1.3 trillion. The average per capita loan for students enrolled in 2016 was US$37,172. In some regions, cuts in fiscal plans are leading to a decline in school enrollment. The website of the Chicago Tribune reported on September 30, 2016, that the freshmen enrollment declined significantly in many state universities. For example, the number of freshmen enrolled in Chicago State University was half of what it was in 2010, and the number of freshmen enrolled in the University of Illinois has fallen by 25 percent from the previous year. A 2016 study made by a non-partisan think tank, the Center on Budget and Policy Priorities (CBPP), showed that public colleges in Illinois reduced their per-capita funding for the students by 54 percent compared to the number in 2008, while in Arizona, there was a 56 percent reduction. In 2018, the World Bank released a report entitled Intergenerational Mobility around the World. It took the people born in the 1980s as its subject of research and found that the United States was one of the only four developed economies among the 50 economies that did the worst in realizing intergenerational mobility through education and that the United States was among the developed economies that did a bad job in actualizing intergenerational income mobility.
(2) The US Government Lacking the Political Will to Narrow the Gap Between the Rich and the Poor
The US government lacks the political will to change the structural roots that lead to the division of the rich and the poor. Instead, it adopts a series of policies and measures that further widen the gap.
First, the US government’s policies and measures to stimulate economic growth are only aimed at benefiting the rich instead of taking into consideration how to reduce the burdens on low-income groups. In his report on his visit to the United States, which was published in May 2018, Philip Alston, the United Nations Special Rapporteur on extreme poverty and human rights, pointed out that the current US administration’s strategy of stimulating economic growth benefited only the rich people, not the common people. The current US administration’s policy of carrying out unprecedentedly large-scale tax cuts for large companies and the wealthy class at the expense of social welfare seems to be a policy formulated to widen the existing inequality. According to the analysis made by the Institute of Taxation and Economic Policy (ITEP), it is estimated that 27 percent of the revenue generated by the United States tax cuts in 2019 will flow into the pockets of the richest 1 percent people of the United States and the rich people will become the group who benefits the most from the current tax policies. Insufficient government financial investment leads to the lack of corresponding social security for the needy groups in the United States. A research report released by the Pew Research Center on August 18, 2015, showed that the United States had a serious shortage of funds for social security, with a deficit of about US$74 billion in 2014. The 2015 annual report of the Social Security and Medicare Boards of Trustees showed that the US social security system had a deficit of US$25.8 trillion, which was almost 1.5 times the total annual GDP of the United States.
Second, the Health Care Reform Act has been struck down, and full coverage of medical insurance has been rejected in the United States. The United States is one of the few developed countries that do not have universal health coverage. A considerable number of its residents do not have medical insurance and cannot receive the medical care they deserve when they become ill. Despite the US Congress adopting the Healthcare Reform Bill proposed by the Obama administration in 2010 and promising to establish a universal health care system, data released by the U.S. Census Bureau showed that there were still 33 million US citizens not covered by medical insurance in 2015. On May 4, 2017, the U.S. House of Representatives adopted the American Health Care Act by a vote of 217 to 213, overturning many important contents of the Obama’s health care reform plan, also known as “Obamacare.”
Third, many rural hospitals have been closed in the United States, which has expanded the “medical desert”. The website of Al Jazeera’s US channel reported on December 17, 2017, that since 2010, more than 80 rural hospitals in the United States had been closed, and hundreds of rural hospitals were on the verge of bankruptcy. The “medical desert” zone is expanding. According to the research data from the North Carolina Rural Health Research Program (NC RHRP), each closed rural hospital can serve approximately 10,000 local residents, who are the most vulnerable group in US society and know the least about how to live a healthy life. The closure of rural hospitals has destroyed the original rural hospital network and forced local residents to drive to hospitals dozens of miles away to receive medical services. A survey report released by the Pew Research Center on December 14, 2017, shows that since 2015, the public’s positive evaluation of government-guaranteed medical services has fallen by 20 percent.
Fourth, the Internet management policy has widened the “digital divide” and strengthened the inferior position of low-income groups in the United States. As reported by the website of Al Jazeera’s US channel on December 15, 2017, on December 14, 2017, the US government ended the net neutrality rules stipulated in the 2015 Open Internet Rules, which forbade Internet service providers from blocking or “throttling” certain data streams and required that traffic would have to be treated equally regardless of the users’ ability to pay. The report commented that this move would allow rich people to enjoy faster Internet services with the help of money and thereby deepen the “digital divide” between the rich people and the low-income groups, putting the low-income groups at a disadvantage in the competition toward a digital future. For instance, in Detroit, where the poverty rate is close to 40 percent, about 40 percent of the city’s population do not have access to the Internet at home. Nyasia Valdez, who engages in the city’s Equitable Internet Initiative, has expressed that making the Internet more expensive will further economically disadvantage poor people. “It would be so devastating and further exacerbate the inequality that’s already there,” Valdez said.
A deeper analysis shows that the reason the US government lacks the political will to bridge the divide between the rich and the poor is closely related to the US political system and the capital interests represented by the US government. The vigorous development of money politics has turned the US government into a spokesman for the rich. The website of the British newspaper The Guardian reported on August 7, 2018, that the public generally believed that the US elections were corrupt and that members of the US Congress served only the companies, wealthy people, and special interest groups. As pointed out by Philip Alston, the United Nations Special Rapporteur on extreme poverty and human rights, in his report released in May 2018, the United States is one of the richest, most powerful, and most technologically innovative countries in the world, but its wealth, power, and technology have not been used to address the persistent poverty of the 40 million people. “The persistence of extreme poverty is a political choice made by those in power,” Alston wrote.
The division between the rich and the poor in the United States will be a stable, long-term trend. One cannot expect any substantial reversal of this situation within a short period. The severe negative impact it has brought on the enjoyment and realization of the human rights of the US people will continue to worsen.