MScreeton-Research-Final-Edit-Poverty-12-9-15

M. SCREETON – THE ECONOMY OF POVERTY IN AMERICA 1
The Economy of Poverty in America
Martin Screeton
English W233, Section 11
Professor Baratier
December 8, 2015

Abstract
This final research paper will look at economic conditions of the American family along with
personal experiences and will encompass an interview with a professional that works in the
poverty alleviation field. This research paper hopes to answer and gain some insight into just
what constitutes a person that lives in poverty as well as some current insights into homelessness
of individuals and families and some of the causal factors of homelessness and poverty in
general. This research also aims to draw a link between poverty, generational family dysfunction,
homelessness and the wider economic and social factors that perhaps have contributed to these
conditions in the United States.

Introduction
When I started this research project I talked about my own family and their living and
working conditions in America currently. I wondered with that first paper why three of my four
children were making a wage that was just slightly higher than the wages I made in 1979
America, even though I was a high school dropout and they all have college education. One of
them actually works two jobs, along with her husband which totals three different jobs for the
household! Since we are in the state of Indiana, a state that is relatively inexpensive as compared
to other states and regions in the United States, anything that would be considered “bad” (and I
think it’s bad) here perhaps would be described as exceptionally bad anywhere else in America.
That question of why wages have not climbed (inflation adjusted) over almost four decades took
me through four different economics publications, economics journals, a local poverty specialist,
national homelessness organizations and a doctor of medicine specializing in addictions and
childhood afflictions from Canada and finally the most recent Nobel Prize winner in economics.
As a father, it breaks my heart to see my children working to the point when they get off
work they sometimes forget where they live… that has been described to me as well as reporting
to work at four am in the morning and getting off at one pm and then someone says to you that
you have been scheduled for another shift that day. That has also been intimated to me from my
children as well as never having a set schedule which makes planning child care precarious, as
well as trying to get child care service at four am in the morning! This is the new, frustrating,
work environments today in America … something that I see as totally unacceptable working
conditions as a father and as well, were not my working conditions over the past decades. A

couple of glaring statistics in America today are number one; That Incomes have failed to
increase somewhere around 1980 when inflation adjusted. Another one is the precipitous decline
over the decades of Union membership. Many economists have written about this situation and
described it as detrimental to the survival of the American Family such as Richard D. Wolff,
Democracy at Work, A Cure for Capitalism, 2012, Joseph Stiglitz, The Great Divide, 2015,
Robert Reich, Saving Capitalism: For the many, Not the Few, 2015 and Paul Krugman, End This
Depression Now! 2012.
The chart below shows this picture of what has happened since 1980 that paints a clear
understanding of three situations that have developed since then; Number one is the inflation
adjusted wages not increasing, and number two the productivity gains continuing to raise even
though workers were not sharing in these productivity gains and number three, once these
productivity gains were far above wage compensations, CEO’s compensation started to increase

reaching far above the average workers’ wages levels never seen before in the history of
economics (up to 300+ times workers’ wages) (Dill). This lead me to look at how people were
surviving and to look at poverty rates, applications for food assistance, as well as homelessness
in which I interviewed a local Human Services counselor at a homeless shelter.
METHODS
I interviewed Patrick Chesebrough, Homeless Caseworker, for the Fort Wayne Rescue
Mission at with ten questions on/about November 26th at his office on Main Street. My official
title is Case Manager II. I graduated with a B.S. in Human Services from IPFW. I started
working in social work in 2009 at a small not for profit that worked with refugees. In 2012 I
completed my internship at the Rescue Mission and have been working there everything ever
since. Patrick surveyed the current population of homeless persons at the mission currently using
my form questions below and assigned percentage:
Homeless Reasons (reported by client) Percentage
Alcohol and/or drug problem 50%
Mental Health, other than substance abuse 20%
Economic (low pay, just cannot afford to live independently) 10%
Circumstantial Event; Eviction, Marriage break-up, Fire, etc. 5%
Loss of Job 12%
Physical Health, No Insurance or resources, cannot work 2%
When I asked Patrick about the impact of economic conditions in his opinion, he stated
the following: I do see the economy being a major influence on the homeless trend but I also see
other problems that combine to raise the homelessness problem as well. An aggregate of

addiction, unemployment, mental illness and other hardships are influencing the rate of
homelessness (see Mate, Denton). Economically there are a lot of people that are a paycheck or
two away; a major life event away from financial disaster. The threat is always there for many.
National End Homelessness Now Organization (endhomelessness.org) reports as of April
of 2015 “Though national data show that targeted funding for homeless programs is reducing
homelessness, the number of low-income people living in doubled-up situations with family and
friends is growing, and the number of poor renter households who must pay more than 50
percent of their income toward housing remains at a historic high, demonstrating that the
affordable housing crisis threatens progress.” The number of double-up people (individuals
living with family and/or other individuals to be able to afford housing) stands right now at
almost 7.7 million people (up 67% since 2007) and the number of poor renter households
(individuals paying out more than 50% of their income towards rent) stands at 6.4 million which
is up almost 25% since 2007. On a personal note here I worked as an intern for about eight
months (four months for each) at both of the men’s shelters, The Rescue Mission and The Men’s
Rehabilitation unit of the Salvation Army. One of the very frequent reasons why a person would
show up at a shelter was that they were in a “doubled up” (i.e. sleeping on a couch or extra
bedroom) and had had a conflict with the lease holder of the house or apartment.
Results
Patrick Chesebrough, Homeless Caseworker, for the Fort Wayne Rescue Mission at with ten
questions on/about November 26th at his office on Main Street

The State of Homelessness in America 2015 by Naehblog retrieved from
HTTP://www.endhomelessness.org/blog/entry/just-released-the-state-of-homelessness-in-
america-2015#.VmeOqrgrKUk
Discussion
From all of the data on Incomes not increasing for the great majority of workers in the
population… The higher end of the stratification of our society (as well as internationally) has
grown exponentially by a wide margin and has prompted many books on income inequality and
a called for major legislation which has not succeeded nationally as of this writing. However
several cities and some states have adopted higher minimum wage laws to compensate workers
since the capitalist marketplace has not done it. Many economists have studied this situation to
death but leaders at the federal level continue to be unwilling to change the Status Que. Many of
these same leaders however are making much more money from the current arrangement of
capitalist exploitative labor, both here in the United States and abroad. Oxfam International
(Oxfam.org), a world poverty alleviation organization, reports that the global top one percent of
wealthy individuals are projected right now to have more wealth then the rest of the bottom
ninety-nine percent of people starting in 2016 if everything stays the same.
Joseph Stiglitz, (2015). The Great Divide, New York and London, W. W. Norton &
Company. Stiglitz grew up in Gary, Indiana amongst the American steel industry while in its
heyday which had a great influence on him as he still mentions in his many economic
presentations today. Stiglitz states “What is practiced in the United States today is perhaps best
described as an ersatz (inferior) capitalism designed to create inequalities. This fact was made

abundantly clear during the financial crisis, when we socialized losses but allowed the banks to
privatize profits, extended largesse to the victimizers but did little to help the victims who were
losing their homes and jobs.” And this statement, although current to the modern era, reminds me
of a famous quote by Martin Luther King Jr. way back in the 60’s that essentially said the same
thing (I collect quotes as a hobby) “We all too often have socialism for the rich and rugged free
market capitalism for the poor.” - Martin Luther King Jr.. And this is exactly what happened in
the 2008 crash of the stock market whereby the Federal Reserve remonetized six of the largest
Wall Street banks to carry on business as usual while the initial price tag was $700 billion dollars
… The American Enterprise Institute in 2014 reported that the Federal Reserve purchased all the
mortgage-backed securities (i.e. non-performing paper) of the Wall Street Banks (called
Qualitative Easing or QE 1,2,3) from 2008 through 2014 for a total price tag of 4.25 trillion
dollars. The citizen on the other hand has lost his middle class job (and home in many millions of
cases) that perhaps was making him/her the average household wage of $25 per hour and now
works for a nonunion factory making $9.00-$11.00 an hour and spends 50% of his/her take home
pay for rental housing. As the Presidential candidate Bernie Sanders says, “Enough is enough”
and we should not accept these conditions anymore in America.
Robert Reich. Saving Capitalism: for the many, Not the Few, New York, Alfred A Knopf.
Reich is an American Political Economist and current Professor of Goldman School of Public
Policy at University of California at Berkley. Reich is another voice of the problems of inequality
in the country. Reich stated “The simultaneous rise of both the working poor and non-working
rich offers further evidence that earnings no longer correlate with effort. The resulting skewed
pre-distribution of income to the top inside the market has generated demands for larger

downward redistributions outside the market through taxes and transfer payments to the poor and
lower-middle class, but such demands have simply added fuel to the incendiary debate over
government’s size.” Which is still the glaring situation today of too few jobs paying enough
income to sustain families without some sort of Government assistance. The number of people
on the governments Supplemental Nutrition Assistance Program at the start of the crash in 2008
was about 26 million and now is right at 47 million recipients at an average cost of $125.00 per
person per month. Although the cost of this is a tiny fraction barely measureable in the U.S.
Budget, some states are moving to reinstitute work rules that were suspended during the crash
period and so many thousands will be forced off of these benefits even though the total recipients
has not waivered much (based on income received) since the crash, averaging about 46 million
people in the country over the last five years.

The type of capitalism that we have been practicing for a couple of centuries now is
starting not to work for all people and this seems to be widespread across the western world
since I do talk to people on a regular basis from Europe and they are saying the same thing. It’s
not working, even for college graduates. The chart below documents the wage losses since 2007
through 2014 for all education levels and it looks like just people that possess a master’s degree
(or higher) did not take a loss of pay over the last seven years. Although they did not make any
gains whatsoever either at 0.0%.

Richard Wolff, (2012). Democracy at Work: A Cure for Capitalism. Chicago, IL
Haymarket Books. Wolff, A not so popular socialist economist that very rarely gave talks before
the 2008 crash, other than in the university classroom or as a visiting professor, is now booking
talks all over the country and has had to hire a staff as well as start non-profit organization
(http://www.democracyatwork.info/) that essentially is helping him fulfill the number of requests
for converting a present capitalist business to a democratically organized cooperative. He states
that he cannot keep up nor has the time to fly to all the locations that want him to speak about
democratizing the workplace, but he is dedicated to one a week. This form of organization was
profiled and presented in a Michael Moore movie in the 2009 documentary, Capitalism: A Love
Story. In it, Moore profiles Alvarado Street Bakery (The Petaluma Company) and president of
the worker owned cooperative. Michael Girkout, president, said, “the cooperative model has
built a company that ships out 40,000 loaves of bread a day, where the average worker earns
between $65,000 and $70,000 a year, where production workers earn between $18 and $22 an
hour, and the ratio of executive to worker compensation is less than three to one.” “Wolff
concludes, in America, we debate everything except capitalism. If there's an institution in your
society that's above criticism, you're giving it a free pass to indulge all of its weaknesses and
darker tendencies.” I would have to wholeheartedly agree and wonder why the federal
government has not come up with much more and varied strong incentives (tax, grants, etc.) to
either convert or create more of these type businesses since they produce much more money per
hour for the worker which would negate changes in other laws to compensate for low pay such
as tax earned income credits or minimum wage laws.

In closing, I’ve been following Dr, Gabor Maté, In the Realm of Hungry Ghosts: Close
Encounters with Addiction (2008) for a long time since I have minor in addictions and Mate’
specializes in the study and treatment of addiction and is also widely recognized for his
perspective on Attention Deficit Disorder and has had firmly held beliefs over the years in the
connection between mind and body health. He states that there is a connection between
capitalism and the health of our society. Mate says, “I’m intending to write a book tentatively
called Toxic Culture: How Capitalism makes us Sick. That’s the working title. My contention is
that the very nature of the system in which people live their lives is a significant source of
illness. Now there are obvious factors like environmental pollution, toxins, and then of course
there are the social determinants of health that you write about in a healthy society; the impact of
poverty, the impact of inequality, the impact of history and continued racism.” He goes to say
that even the inequality does not matter that is in this system … “But I’m going to go beyond
even that and say that even the people who are not on the wrong end of economic inequality or
systemic racism are still made ill just by how we live our lives. The stress that we live under, the
competition, the aggressiveness, the uncertainty, the loss of control that we experience in our
lives. The gender inequalities, these are not just social phenomena, they have an actual impact on
community health and the isolation people are experiencing.” Although I have not studied this
academically, I have worked with the prison populations on parole as well several half-way
houses treating alcoholism and drug addiction and I have sponsored personally some 50 to a 100
people over the last seven years. I can say this, most of these individuals had continual high
stress placed upon them by the current economic system that we have not really changed
fundamentally from the last crash in 2008. Although the social component is just one part of the

biopsychosocial interview process, it plays a very prominent role in individual dignity of living a
clean and sober life without relapse, when one has a stable job with some benefits.
These economic conditions today are, in my opinion, breaking down our family
structures and increasing substance abuse to critical levels which, by the way, has just pushed up
the suicide rates on white males aged 45 to 54 to 4.5 times higher since the year 2000, as well as
lead to declining life expectancies (Deaton). That was just reported in the journal “Project
Syndicate” where Angus Deaton will receive the Nobel Memorial Prize in Economics “for his
analysis of consumption, poverty, and welfare.” Which was written about by Joseph Stiglitz and
came out a couple of days ago. Stiglitz further comments, “There was no way that this mounting
financial pressure could not have placed middle-class Americans and their families under greater
stress. And it is not surprising that this has been reflected in higher rates of drug abuse,
alcoholism, and suicide.” We have to find a better way to fulfill the basic needs of the whole
population, not just the few at the top.
Martin Screeton

References
Bevins, J. and Mishel L. 2015. Economic Policy Institute. “Understanding the Historic
Divergence between Productivity and a Typical Worker’s Pay”
http://www.epi.org/productivity-pay-gap/
Chesebrough, Patrick. 2015. Homeless Caseworker/Counselor, The Fort Wayne Rescue Mission.
Deaton, Angus and Case, Anne. 2015. Rising morbidity and mortality in midlife among white
non-Hispanic Americans in the 21st century. Woodrow Wilson School of Public and
International Affairs and Department of Economics, Princeton University, Princeton, NJ
http://www.pnas.org/content/112/49/15078.full.pdf
Dill, Kathryn. 2014. Report: CEOs Earn 331 Times As Much as Average Workers, 774 Times As
Much as Minimum Wage Earners. http://www.forbes.com/sites/kathryndill/2014/04/15/report-
ceos-earn-331-times-as-much-as-average-workers-774-times-as-much-as-minimum-wage-
earners/
Economic Policy Institute. 2015. “2014 Continues a 35-Year Trend of Broad-Based Wage
Stagnation” http://www.epi.org/publication/stagnant-wages-in-2014/

References
Hay, Jeremy. 2009. The Press Democrat. “Michael Moore's new film puts spotlight on Petaluma
Company” (Alvarado Street Bakery), http://www.pressdemocrat.com/news/2269969-
181/michael-moores-new-film-puts
Mate, Gabor. 2008. In the Realm of Hungry Ghosts: Close Encounters with Addiction, Toronto,
Canada, A.A. Knopf Canada. Mate, Gabor. 2014. How Capitalism Makes Us Sick. An interview
on health and politics. https://briarpatchmagazine.com/articles/view/gabor-mate-how-capitalism-
makes-us-sick
Naehblog. 2015. The State of Homelessness in America.
http://www.endhomelessness.org/blog/entry/just-released-the-state-of-homelessness-in-america-
2015#.VmeOqrgrKUkns
Oxfam International Org. 2015. “Even it up”
https://www.oxfam.org/en/pressroom/pressreleases/2015-01-19/richest-1-will-own-more-all-rest-
2016

References
Perry, Mark. 2014. American Enterprise Institute. The Fed’s $3.5T QE purchases have
generated almost half a trillion dollars for the US Treasury since 2009.
https://www.aei.org/publication/since-2009-feds-qe-purchases-transferred-almost-half-trillion-
dollars-treasury-isnt-gigantic-wealth-transfer/
Supplemental Nutrition Assistance Program (SNAP) http://www.fns.usda.gov/pd/supplemental-
nutrition-assistance-program-snap
Reich, Robert. 2015. Saving Capitalism: For the many, Not the Few, New York, Alfred A
Knopf.
Stiglitz, Joseph.2015. The Great Divide, New York and London, W. W. Norton & Company.
Stiglitz, Joseph. 2015. When Inequality Kills. https://www.project-
syndicate.org/commentary/lower-life-expectancy-white-americans-by-joseph-e--stiglitz-2015-
12#qIQbPrTf0MZ7BUIk.99
Wolff, Richard. 2012. Democracy at Work: A Cure for Capitalism. Chicago, IL Haymarket
Books.

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