Forgotten People

 Marx is noted for his identification of the lumpenproletariat, the outcasts of society, consisting mainly of the homeless, the long-term unemployed and criminals. But Marx, like many others, thinks mostly of the group, not the people in it.  “Call me Ishmael”, the narrator of Moby Dick begins, and its epilogue starts with a quote from Job, “And I alone am escaped to tell thee.”  He no longer has a name, for he is an orphan on the open sea. That is the fate of outcasts, and that is possibly their greatest loss.  They count only as statistics, not as individuals.  According to a recent report by Fareed Zakaria, there are 46 million of them in America today.

Zakaria notes that the growing concern about income inequality focuses mostly on the flattening of income for the middle class, a good and proper concern, but that to grow the middle class as a factor able to change society requires doing something to improve the lot of the forgotten poor.  That is in fact the most potent way to begin raising the fortunes of the middle class and improving our economy.  .  They must be enabled to become members of the middle class, individuals we know and name as friends, and neighbors about whom we care.

Rand Paul was shedding crocodile tears when he said he was voting against continuing aid to the long-term unemployed because he did not want to encourage growth of a culture of accepted permanent unemployment.  I suppose it’s his own small contribution to solving the obesity problem.  As a consequence of his and other conservative votes, 1.3 million people have just lost the benefits that keep them afloat in very rough seas.  While short-term unemployment is falling, long-term unemployment is higher than it has ever been at the end of a strong recession.  He should have been, but wasn’t, ashamed, for in his role as senator he should know that a large factor in that long-term unemployment is corporate dumping of older, more expensive workers for younger workers willing to work cheaper with less use of corporate health benefits.  They will find no other employment at anywhere close to their former income and skill level.  Yet 80 percent of corporations no longer provide defined pension benefits.  The 401(k) retired workers must eventually rely on will be totally inadequate to their needs; the average size of a baby-boomer retirement account is projected to be $100,000, nowhere near enough to sustain a comfortable retirement.  The Institute for Retirement Security estimates that for Americans aged 55 to 64, the average household is $113,000 short of what will be needed for retirement. Collectively, all workers face a shortfall of at least $6.8 trillion.  But unemployed or minimum wage workers do not save the money needed for retirement.  We face a future of countless numbers of the elderly poor as baby-boomers are “retired” by their former employers.  Many will become homeless.  The upper limit of the “working age” population is being unilaterally lowered by corporations anxious to reap profits as older workers are removed from their rolls.  To the corporations, the health care, housing and feeding of their former workers have become externalities; there are no more guarantees of watches and golden years at retirement. 

The farther down the socioeconomic ladder you go, the more severe becomes the problem.  The University of California Berkeley Labor Center and University of Illinois released a study in October that said 52% of families of fast food workers receive assistance from a public program like Medicaid, food stamps, the Earned Income Tax Credit or Temporary Assistance for Needy Families.  Wal-Mart puts out donation baskets to solicit donations for its workers, while simultaneously fighting tooth-and-nail against raising the minimum wage many of them work at.  Other corporations fight equally hard for tax breaks at the expense of governmental care of the poor.  Responsible treatment of employees is becoming an externality, the easily forgotten concern of others, and we are busily growing a new American lumpenproletariat.  Such forgotten workers do not save for a better future; their personal tragedies are permanent. The sad thing is that we are no longer naming them as our friends and associates; they are becoming statistics.

The problem is not just an American one.  World-wide, there's a race going on between declining working age populations and increasing productivity through automation and robotization.  At the same time as aging populations are providing fewer young workers, automation and robotics are lowering the demand for them.  A new balance must be achieved.  Done right, it can lead to positive gains for people; done wrong, we create a new global lumpenproletariat.  China, for example, is facing a future where a declining population of younger workers will no longer be able to sustain China’s current role as factory for the world, and it must retool itself for a different sort of polity and economy.  They have begun doing that with their recent changes in their one-child policy and with their shift toward internal consumption rather than exports.  But what must not be forgotten is the fate of the displaced.   Many emerging nations will be facing revolutions of rising expectations as the jobs and prosperity their people looked forward to begin to fade away.

Countries will deal with the issue in a variety of ways.  In America we must deal with it in a culture of corporate capitalism, in which corporations generally consider former employees as externalities to be the responsibility of others, combined with a Protestant Ethic which undervalues the worth of the unemployed as people and an empathy gap induced by a mythology of frontier individualism.  We overvalue work and undervalue workers.  We have a lot to overcome in treating the issue seriously.

Many concerted actions are required.  The idea being floated about is a good one to reinstate long-term unemployment benefits as re-employment benefits that include funding for training in new occupations.  Raising the minimum wage is needed.  Incentives to reintroduce defined pension systems are needed.  A national health care system is necessary more than ever.  Job creation through stimulating introduction of new technologies is urgent.   The idea I’ve suggested before might work, of setting up ways for workers to invest in operations such as pension funds that lease robotics to small businesses, and thereby reap their own benefit from the robots that may replace them.  The $6.8 trillion shortfall I've mentioned cannot be met by either government or the private sector working alone.  We are all in it together.  In short, a retooling of the economy is needed with the explicit goal of providing for those displaced by the new productivity gains with part of the profits of those gains.

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The greatest need however is to remember not just the statistics, but the people included in them.  Before 1950, 50 percent of the elderly lived in poverty, often alone, forgotten, with no one left to call them by name.  We, and they, are better than that.  But we are turning again toward the same kind of situation.  It is becoming one of the defining challenges of the 21^st century, and we must meet it with grace.