Economic Insecurity And The Follies Of The Free Market

After I read this story by The Associated Press on Sunday, I was compelled to write the following editorial, which appeared in Monday’s Press & Dakotan:

“Poverty is no longer an issue of ‘them,’ it’s an issue of ‘us.’”

That’s the message Mark Rank, a professor at Washington University in St. Louis, shared with The Associated Press in a story this week about growing economic insecurity in the United States.

He continued: “Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need.”

How is economic insecurity defined? It is experiencing unemployment at some point in your working life, or a year or more of reliance on government aid.

The statistics on economic insecurity reported by The Associated Press are staggering and point to the systemic failures of our economic system.

Four out of five U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives.

If current trends continue, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity by 2030.

What are the causes of this growing insecurity? The Associated Press says the evidence indicates an increasingly globalized U.S. economy, the widening gap between rich and poor and loss of good-paying manufacturing jobs are primary reasons.

For those Americans who manage to pursue higher education in the hopes of getting better jobs, they are often rewarded with a “mortgage” but no home. The Project on Student Debt reports that two-thirds of college seniors who graduated in 2011 (the latest year for which statistics are available) had student loan debt, with an average of $26,600 per borrower. Meanwhile, the unemployment rate for young college graduates in 2011 was 8.8 percent.

It’s hard to start saving for retirement with that kind of debt hanging over your head.

So it’s no surprise that, as Americans age, the faltering economic system means retirement is increasingly becoming a frightening prospect.

According to the Center for Retirement Research at Boston College, more than half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work until age 65.

It’s no mistake that we keep referring to the failed economic system.

In “Days of Destruction, Days of Revolt,” Chris Hedges described in excruciating detail America’s “sacrifice zones,” areas where people and resources have been exploited and then left to decay. The places he and artist Joe Sacco visited included South Dakota’s own Pine Ridge; Camden, N.J.; Welch, W. Va.; and Immokalee, Fla.

Hedges wrote: “The belief that human beings and human societies should be ruled by the demands of the marketplace is utopian folly. There is nothing in human history or human nature that supports the idea that sacrificing everything before the free market leads to social good. And yet we have permitted this utopian belief system to determine how we structure our economy, labor, education, culture and our relations with foreign nations, as well as how we treat the ecosystem on which we depend for life.”

If Americans truly want to address the poverty that is growing around us, they must sweep aside the myths of individualism so ingrained in the American Dream and look instead at the follies of the free market. By addressing its systemic problems — the concentration of capital into the hands of a few while most workers are underpaid in relation to their productivity, the continued recklessness and lawlessness of the financial sector, and the inability to deal with the hollowing out of so many downtowns as small businesses are forced to succumb to national and international chains, to name a few — we may go a long way toward solving our individual struggles.

———

The day the editorial was published, I came across this piece of news:

Young Americans continue to suffer through the slowed economy. A new poll released by Gallup shows that only 43.6 percent of workers aged 18 to 29 had a full-time job in June. That number was 47 percent during the same time last year.

Although college graduates are twice as likely to hold a full-time position than those without a college degree, the lack of jobs is sweeping. Fewer young college graduates have a full-time job than they did three years ago, the same for those who don’t have a degree.

Gallup theorizes that the availability of full-time jobs hasn’t been able to keep up with overall population growth. This puts young Americans at a disadvantage as they lack the ability to obtain training and experience. Older Americans who have more experience are being hired at a higher rate for the dwindling full-time positions.

Read more here.

As Mr. T would say: I pity the fool who was born in 1984 or later. (He would say that, right?)

2 thoughts on “Economic Insecurity And The Follies Of The Free Market

  1. Nice editorial. As a relatively recent college graduate with a decent head on his shoulders, I can’t help but think that the free market is dictated from backwards thinking, or nonsensical ideals. For one, I think there’s way to much importance assigned to a company’s ROI. CEOs and large stakeholders are in cahoots with short-term solutions, since most companies can’t foresee the trends of a seemingly corrupt market in twenty years time or beyond. That being the case, large companies will do things like “let go” an entire branch in order to give the appearance that their costs are down, so their return will churn out an easier profit. Of course, in the long-term, which is always gleaned underneath a carpet, you have an unemployment rate which will kill a country’s morale.

    It’s going to be interesting how my friends and their younger siblings will cope with an abysmal job market and unaffordable health insurance.

  2. The United States is far from a “free market.” Almost every market is either regulated, subsidized, or taxed. We can argue whether they’re not regulated, subsidized, or taxed enough, but we can’t argue they’re operating in a market without government interference.

    There’s a cost for US businesses who operate nationally and internationally. If you sell goods nationally you deal with 50 states with different tax laws and regulations. This is compounded for national corporations.

    It costs a significant amount of money for someone to retire at 65 years old and live until their 85. The idea that retirement was a right would have been comical in 1885. Retirement is a great idea, but there’s a significant long-term cost involved in making it work. We’re seeing many companies/local governments pay the price for these choices.

    There is a fallacy that the free market is perfect. There is no perfect solution, but there are no better solution. As we clamor for more state intervention we dig a hole than no one can climb out of…

    It’s been over 80 years since the US government cut taxes and reduced spending at the same time.

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