by John de Graaf; David Wann; Thomas H Naylor; David Horsey; Vicki Robin
things money can buy has created an in-your-
face, “I’m rich and you’re not” attitude that
pigeonholes people as winners or losers, princes
or paupers.
—TREND-SPOTTER GERALD CELENTE
I go to Bloomingdale’s, to the fourth floor,
and I buy 2,000 of the black bras, 2,000 of
the beige, 2,000 of the white. And I ship
them around between the homes and the
boat and that’s the end of it for maybe half
a year when I have to do it all over again.
—IVANA TRUMP
Few Americans saw the pictures from Thailand (we have little interest in foreign news, after all), but they were horrifying. In 1993, a Thai toy factory burned to the ground. Unable to escape, hundreds of female workers perished in the flames and smoke. Their charred bodies lay among the ruins of the building, a firetrap similar to many throughout the developing world where millions of plastic toys are made for American children. Here and there amid the blackened rubble were the Bart Simpson dolls and other toys.
Many of the women were mothers whose meager incomes would not allow them to buy for their own children the toys they were making for export. The grisly images from that factory fire, and the facts that lay behind them, speak volumes about the widening canyon that separates the haves and have-nots in the Age of Affluenza.
One fact is simply undeniable: there is no economic system even remotely capable of producing consumer goods as cheaply as the unfettered, deregulated free market. It can, for example (especially with the help of regimes that allow workers little freedom to organize), produce children’s toys so cheaply that they can be shipped halfway around the world and still be given away with two-dollar meals at fast-food restaurants like McDonald’s and Burger King.
The deregulation of the American economy, which began in the 1980s under Ronald Reagan, coupled with a precipitous decline in the influence of organized labor, has increased domestic productivity. It delivers the goods, but in a manner far less equitable than before.
In contrast to other societies, Americans have long considered theirs a “classless” one, with few citizens who are either very rich or very poor. This notion of a “classless” America has always been suspect. Even in 1981, when all political efforts to counteract or quarantine affluenza were abruptly abandoned, the United States ranked thirteenth among twenty-two leading industrial nations in income equality.1
But today we’re dead last.2
THE OTHER AMERICA
The rising tide of American affluence hasn’t lifted all boats, but it has drowned a lot of dreams. A titanic gulf now separates rich and poor in America. “If you look at the big consumer boom since the ’80s,” says Boston College’s Juliet Schor, “one of the things you’ll find is that it’s fairly heavily concentrated in the upper part of the middle class and above.”3
Indeed, during the ’80s, three-quarters of the increase in pretax real income went to the wealthiest 1 percent of families, who gained an average of 77 percent. Median-income families saw only a 4 percent gain, while the bottom 40 percent of families actually lost ground. Some might argue that these figures reflect overstated inflation estimates, and that, therefore, all sectors gained more than official figures suggest. But what is uncontestable is the astoundingly unequal distribution of the gains.4
As the super-rich increased their share of national income during the ’80s, they also became stingier. They gave a far smaller share of their incomes to charity than was previously the case. In 1979, people who earned incomes of more than $1 million (in 1991 dollars) gave 7 percent of their after-tax incomes away. Twelve years later, that figure had dropped to less than 4 percent.5 This, at a time when advocates of sharp cuts in government welfare programs suggested that private charity would make up much of the difference.
Instead, not surprisingly, the percentages of families in poverty, which had been declining, began once again to rise. The number of people who were working (not on welfare) but earning below-poverty wages nearly doubled during the ’80s.6
In spite of America’s image as a cornucopia of plenty, where the shelves of supermarkets are always fully stocked, ten million Americans go hungry each day, 40 percent of them children, and the majority, members of working families. Twenty-one million other Americans keep hunger from the door by turning frequently to emergency feeding programs such as food banks and soup kitchens. On any given night at least 750,000 Americans are without shelter, and nearly two million experience homelessness during the course of the year. That’s the bad news. The good news is that nine million Americans own second homes. America’s housing shortage might really be a distribution problem.7
Increasing concentration of income continued throughout the Clinton economic boom. The top 20 percent of American households now earn nearly as much as the bottom 80 percent (49 versus 51 percent of the national income), a record high rate of inequality. In 1968, the top 20 percent of American households earned about eleven times what the bottom 20 percent did. Today, they earn fifteen times as much.8 The distribution of wealth is even more skewed. By 1999, 92 percent of all financial wealth (stocks, bonds, and commercial real estate) in America was owned by the top 20 percent of families (and 83 percent of stock was owned by the top 10 percent). Many of the richest Americans find ways to pay little or nothing in the way of taxes. The article “Trillion-Dollar Hideaway” in the November-December 2000 issue of Mother Jones magazine shows how the rich evade billions in taxes by sheltering their money in offshore accounts in the Caribbean and elsewhere.9 Meanwhile, in 2004, the tax share paid by the wealthiest 1 percent of Americans fell by 19 percent while that paid by median-income Americans rose by 1 percent.10
THE BIG WINNERS. . .
At one point, before a drop in Microsoft stock prices halved his net worth, Bill Gates held assets worth about $90 billion, nearly as much as the bottom half of the American population (and greater than the gross national products of 119 of the world’s 210 nations). By contrast, 40 percent of all Americans own no assets at all.
Nothing better illustrates the extent to which affluenza has been embraced in America than the compensation awarded senior executives of large companies. In a cover package titled “Is Greed Good?”, Business Week, which seems to think so, reported that in 1998, average total compensation for CEOs of the 365 largest American companies increased by a whopping 36 percent, to $10.6 million each. By contrast, blue-collar workers got a 2.7 percent raise. Three in five new jobs pay less than the median hourly wage of $13.53.
Average CEO pay has continued to increase at double-digit rates—by 27 percent in 2003. By 2000, CEOs earned 475 times what their average workers made (at financially ailing Delta Airlines, the gap was 1,531 to 1!), up from 40 times as much in 1980 and 84 times as much in 1990.11 By contrast, until recently, when they began to feel a need to keep up with their American counterparts, Japanese and German CEOs earned only about 20 times as much as average workers.
AND THE LOSERS
Meanwhile, columnist David Broder reports that the people who clean the bathrooms and offices of “the masters of the universe”(as he calls high-tech millionaires) earn poverty-level wages. In Los Angeles in 2000, he found janitors picketing for a pay raise that would bring them $21,000 a year by 2003. Even at that pay scale, it would take 27,380 such janitors to earn as much as a single Los Angeles CEO, Michael Eisner of Disney, made in 1998 ($575 million).
To the affluent, the poor have become invisible. “There are millions of people whose work makes our life easier, from busboys in the restaurants we patronize to orderlies in the hospitals we visit, but whose own lives are lived on the ragged edge of poverty,” writes David Broder. “Most of us never exchange a sentence with these workers.”12 In sight, but out of mind.
Thirty-six million Americans lived in poverty in 2003, up 1.3 million since the year before. Their average income: $12.88 a day. Many worked multiple jobs to make ends mee
t. In February 2005, one of them, a mother of three named Mary Mornin, told President George W. Bush that she had to work three jobs. “You work three jobs?” the president asked. When she replied in the affirmative, Bush said, “Uniquely American, isn’t it? I mean, that is fantastic that you’re doing that. Get any sleep?”
Uniquely American? Maybe. Fantastic? What do you think?
One fact Americans used to point to as evidence of a “classless” society was that (compared with, say, the wealthy of Latin America) few American families employed servants to do cleaning and housework. But as we increasingly become a two-tiered society, that’s changing. Upper-middle-income Americans are turning to domestic servants in a big way. In 1999, between 14 and 18 percent of American households employed an outsider to do their cleaning, a 53 percent increase from 1995. America’s 900,000 house cleaners and servants earned an average of $8.06 an hour in 2003, below the poverty line for three-person families.13
“This sudden emergence of a servant class is consistent with what some economists call the ‘Brazilianization’ of the American economy,” wrote Barbara Ehrenreich in Harper’s. “In line with growing class polarization, the classic posture of submission is making a stealthy comeback,” charges Ehrenreich, who worked as a maid for $6.63 an hour to research the story. She points out that one franchise, Merry Maids, even advertises its maid services with a brochure boasting that “we scrub your floors the old-fashioned way—on our hands and knees.”14
Doing research for her best-seller Nickel and Dimed, Ehrenreich went a-scrub-bing from McMansion to McMansion in Portland, Maine, working under rules that prohibited her from even taking a drink of water while cleaning a house. She discovered that some homes had hidden video cameras to be sure she stayed on track. She was amazed at what messes people left for her. Especially the children, one of whom exclaimed “Look, Mommy, a white maid!” upon seeing Ehrenreich.
Having “cleaned the rooms of many overprivileged teenagers” as a maid, Ehren-reich concluded that “the American overclass is raising a generation of young people who will, without constant assistance, suffocate in their own detritus.”
Whether or not they are literate enough to know what that means.
THE POOR PAY TWICE—AND THEN SOME
Affluenza affects Americans across all income barriers, but its impacts are more destructive for the poor. In the first place, the poor are often the original victims of the environmental consequences of cost-cutting production strategies. They live disproportionately in areas where environmental contaminants and patterns of pollution are most severe —one such area is Louisiana’s notorious “Cancer Alley,” where petrochemical companies unleash a frightening barrage of carcinogens into the air and water.
At the same time, the vastly inflated wage scales paid to winners in the new “information economy” lead to competitive bidding on housing stock that drives the cost of shelter beyond the reach of average earners. Many are forced to leave communities where they and their families have spent their entire lives.
Finally, the poor are taunted by television programs and commercials that flash before them images of consumption standards that are considered typical of the average American, but which they have no possibility of achieving—except perhaps by robbing a bank or winning the lottery.
Felicia Edwards, an African American mother of two, who lives in a small apartment in a Hartford, Connecticut, housing project, worries about the pressures her children feel to wear the designer-label clothes they see on other children in their school. “These schools tend to be like fashion shows,” she says with a shake of her head. “There’s a lot of peer pressure that can lead to crime. Kids in school have killed other kids over a pair of sneakers. Parents work two and three jobs to clothe their kids.” Felicia’s own children rarely pester her for stuff, but when her oldest son begged for a pair of Air Jordans he saw on sale for $90 instead of $120, she relented, after first telling him she couldn’t afford them. “Me and his aunt came to a decision that we was going to go half on them,” she says. “So he got the sneakers.”15
And it’s not just clothes. Even in the United States, according to the conservative Heritage Foundation, 13 percent of poor families experience hunger at some point during the year. Another million Americans experience some homelessness each year.
In our poorest communities, the sense of deprivation is intense. Trend-spotter Gerald Celente tells of a conversation he had with a man who works with youthful gang members. “I asked him, ‘What’s the one thing that you see that’s causing a lot of these problems?’” Celente says. “Without skipping a beat, he said, ‘Greed and materialism. These kids don’t feel like their lives would be worth anything unless they have the hottest product that’s being sold in the marketplace.’”16
Margaret Norris, codirector of the Omega Boys Club in San Francisco, agrees. She says the ethic among the low-income youths she works with is Thou Shalt Get Thy Money On, and by any means necessary. Such desperation often leads to crime.
“Never mind, just lock ‘em up” seems to be our response to this situation. Overall crime rates have been falling in the past two decades, a trend that British economist Richard Layard convincingly argues is due, sadly, in large part to the availability of abortion. Another reason is that the United States has already locked more than two million of its people behind prison bars, the largest percentage of any nation in the world, and ten times the rate of most industrial countries.
California alone has more inmates than France, Germany, Great Britain, Holland, Japan, and Singapore combined. In some dying Rust Belt industrial cities, like Youngstown, Ohio, prisons have become the biggest source of jobs. Private companies like the Corrections Corporation of America make millions running lockup facilities. Smart Wall Street brokers play “dungeons for dollars,” investing heavily in the new privatized prison industry.17
GLOBAL INFECTION
The social scars left by affluenza are being replicated throughout the entire world, as more and more cultures copy the American lifestyle. Each day, television exposes millions of people in the developing world to the Western consumer lifestyle (without showing them its warts), and they are eager to participate. David Korten, the author of When Corporations Rule the World, once believed they could and should participate. Korten taught business management at Stanford and Harvard, then worked in Africa, Asia, and Central America for the Harvard Business School, the Ford Foundation, and the U.S. Agency for International Development.
“My career was focused on training business executives to create the equivalent of our high-consumption economy in countries throughout the world,” Korten says now. “The whole corporate system in the course of globalization is increasingly geared up to bring every country into the consumer society. And there is a very strong emphasis on trying to reach children, to reshape their values from the very beginning to convince them that progress is defined by what they consume.”18
Korten now believes that, by pushing consumer values in developing countries, he was spreading the affluenza virus. As he continued to work in the “development” field, the symptoms of that virus became increasingly apparent. He gradually realized that his efforts were causing more harm than good. “I came to see that what I was promoting didn’t work and couldn’t work,” he reflects. “Many people’s lives were actually worse off. We were seeing the environment trashed, and we were seeing the breakdown of cultures and the social fabric.”
As affluenza, the disease of unbridled consumerism, spreads throughout the world, the gap between rich and poor grows ever wider, and the social scars that still remain somewhat hidden in the United States fester as open sores elsewhere. The grim shantytowns of Rio tumble to the golden sands of Copacabana and Ipanema. The luxurious malls of Manila stand alongside Smoky Mountain, a massive garbage dump where thousands of people live right in the refuse, dependent for their survival on what they can scavenge.
The virus passes easily from Sheraton to slum.
&nb
sp; In some ways, a cactuslike plant that grows in the Kalahari Desert of southern Africa may be the metaphor for today’s divided world. The razor-thin Bushmen of the Kalahari eat the bitter hoodia plant because it takes away the pangs of hunger. But now a British pharmaceutical company has patented the hoodia’s appetite-suppressant properties. The company is creating hoodia plantations and plans to market a diet product containing hoodia to obese Americans and Europeans. When it hits the market, the diet product will stand as a symbol for a divided world where some have too much food, and millions more, far too little.
One-fifth of the world’s people —1.2 billion human beings—live in “extreme poverty”(on incomes of less than a dollar day), slowly dying of hunger and disease. Three billion others also desperately need more material goods. Yet, were they to begin consuming as we do, the result, as we learn in the next two chapters, would be an environmental catastrophe.
It is critical that we begin to set another example for the world, and quickly.
CHAPTER 11
Resource exhaustion
We buy a wastebasket and take it home
in a plastic bag. Then we take the wastebasket
out of the bag, and put the bag in the
wastebasket.
—LILY TOMLIN,
comedian
WASHINGTON, D.C.—According to an EPA study conducted in conjunction
with the U.N. Task Force on Global Developmental Impact, consumer-product
diversity now exceeds biodiversity. According to the study, for the first time in
history, the rich array of consumer products available in malls and supermarkets
surpasses the number of living species populating the planet.
“Lastyear’s introduction of Dentyne Ice Cinnamint gum, right on the heels of
the extinction of the Carolina tufted hen, put product diversity on top for the
