Our Oddly Affluent “Poor”.

By Tom Demerly.

 Is our lower class truly poor? Or, is there a cultural shift in expectations that create a conspicuously affluent, but fundamentally impoverished lower class?

The answer points to an important idea: We need to re-orient our society to value education, initiative and personal responsibility and de-emphasize conspicuous consumption and government support of basic necessities.

The United States is in an accelerating crisis that is creating more economic distance between an affluent upper class and a growing “lower class”.

Consider these oddly disparate statistics:

• 88% of Americans own a cell phone, with 56% owning a smart phone.[i]

• “Nearly 90% of Americans now own a computer, MP3 player, game console, e-book reader, cell phone, or tablet computer.”[ii]

• “95% of Americans own a car…”[iii]

• 15.4% of people in the U.S. were uninsured [in 2012].[iv]

• “75% of Americans don’t have enough savings to cover their bills for six months.”[v]

Our lower class is often measured by income and employment statistics. But is our lower class truly poor? Or, is a part of the current crisis a cultural shift in expectations that create a conspicuously affluent but fundamentally impoverished lower class? Does a portion of our lower class spend money on the wrong things? And, if so, how could that change?

There is an argument that the U.S. has the richest- and most underemployed- lower class in the world. Our lower class has privately owned cars, cell phones and non-utilitarian clothing but lacks education, savings and healthcare. They have some of the icing but little of the cake. As a result our society must prop up the foundation of personal financial responsibility by subsidizing necessities like food, medical care, housing, education and retirement.

By contrast Forbes reports that China’s personal savings rate is the highest in the world.[vi] One reason, according to both Forbes and the BBC, is that China subsidizes few truly useful social programs. The Chinese must fund their own retirement. China does not yet have national social security legislation.[vii] And despite numerous other Chinese social programs the emerging Chinese middle class and larger, accelerating lower class still feel the need to save money for a rainy day according to one BBC report.

This is ominous as it puts the U.S. at a strategic disadvantage to China in the economic sector. This also increases U.S. social reliance on government administration of vital programs, a paradigm that has significant risk given the federal government’s weak balance sheet. In short, it weakens our country, not only exclusively, but more dramatically in comparison to our global economic competitors.

“The Affordable Care Act doesn’t provide health care for the poor; it provides financial care for the healthcare industry.”

An additional concern about our current social and governmental direction is that programs like the Affordable Care Act don’t provide health care for the poor; it provides financial care for the healthcare industry. Unlike the federal government’s bailout of the auto industry in 2008-10 there is little provision for a return on investment or any remuneration from the ACA. Its current configuration requires the costs of administration but little revenue stream for administrators. The government becomes a billing agent for private healthcare and pharmaceuticals.

We need to change the direction of America toward valuing the things we’ve discounted over these previous two decades; access to education, quality of education, valuing teachers as pivotal contributors to our nation’s future. We need to teach and reward personal responsibility and initiative. Wealth is not measured by possessions but by capability, output and income.