07 April 2011

Incarceration Rates, Poverty Gap, Socioeconomics, Education, and the Capitalist Effect

I was driving to work today on the highway when traffic came to a near stand still.  I couldn't see what had happened to cause the slow down, so I crept along in the same lane.  Eventually I realized there had been an accident.  A fire truck was coming up and cars were jockeying for position.  I realized that this scenario was a perfect example of how capitalism works.

As good little capitalists, we are told to watch for deals, buy low, sell high.  What we aren't told is that when you buy low, someone else is probably losing.  For the clearest example of this, we need not look any farther than real property.  At this time there are a lot of properties selling at a fraction of what they cost two years ago.  That's great for making a profit, but it also means someone else is losing.  

As the capitalist system chugs along, research indicates that it very clearly is an economic system that works for the few.  As Michael Parenti points out in Democracy for the Few, capitalism and democracy are mutually exclusive.  The principles of democracy are undermined and trumped time and time again by the needs of capitalism.

Whereas democracy advocates equality, capitalism adheres to elitism.  While the democratic dream is of shared values, the capitalist dream is more ownership for fewer individuals.  The entire American system, and this is borne out in England and Canada as well, has been infiltrated by the capitalist mentality that puts profit margins ahead of human interest.  The system is designed for people to fail and for others to take advantage of failure.  And, oh my, have people taken advantage.
As the wealthiest top 10% earn more, and the bottom 50% remain relatively stagnant, the poverty gap increases.  As the number of people living in poverty increases, the wealth of the top earners increases.  This is capitalism.  The fortunate take advantage of the less fortunate.

What keeps most workers from revolting against the system?  The dream that one day they too will be wealthy.  However, chances of you getting into the top wage earners' group are startlingly low for a few reasons.  Most of the wealth is inherited, some is gained through crime, some married into.  There are a few cases, like Tim Blixseth, who have joined the upper echelon after growing up in poverty.  But the likelihood of that happening to you is slim. 

The dream of becoming wealthy in the United States is not a dream at all but a fantasy.  The longer we continue to live in this system the less likely it will be that you become wealthy.

Mobility in the socioeconomic strata is possible, not probable, and most of the movement is confined to between classes not across them.  A child born into poverty may as an adult join the middle class, in fact this entirely possible.  However, it is extremely rare to see an impoverished child grow up and enter into the upper class.  Additionally, a growing gap between education levels and attainment indicates that movement between classes will be limited in the future.

The Economic Mobility Project studies various factors of movement between classes.  The best indicator for hope in the economic mobility reports is that higher education degrees can still open doors of opportunities across economic classes. The reports can be found at economicmobility.org.  Tuition today is at universities is at an all time high and they keep climbing.  It's nearly unheard of today to find a recent graduate without student debt, some owe hundreds of thousands of dollars and will never be able to pay it off.

The conclusion that can be drawn from the mobility studies is that the best way to try to climb the economic ladder is to try to be born into a wealthy family with highly educated parents who own a home and have health coverage.  The reason for this is that let's just say you were born into poverty.  But you attend a local university and earn a degree.  You'll more than likely have accumulated a substantial debt that you'll have to start paying off immediately after graduation.  There won't be any jobs available in the city and if there are you may have a hard time getting there because there won't be any public transportation.  All in all there may not be a silver lining to this cloud.

Another lesson that can be culled from the mobility studies is that significant loss for lower income families is far more challenging to recover than significant loss for upper class families. This may seem obvious at first but what republicans have been pushing for is reducing contributions to Social Security and allowing consumers to invest in individual savings accounts (stocks).  Unfortunately there is no guarantee that betting on stocks will pay off.  And, all of the working class families that lose money, aren't really losing money they can afford to lose for the very reason that it will be incredibly more difficult for them to earn it back.

The economic layout of capitalism effects everything in the system including the fabric of society.  This is the Capitalist Effect.  The Capitalist Effect infiltrates our relationships with others, the way people argue - waiting for a weakness and then pouncing.  It can be found in politics and schools.  The Capitalist Effect can reward those who are smart and stealthy, those who are opportunistic and ambitious, and punish those who are meek and timid.  As political leadership pushes for more competition in free (deregulated) markets, and more "rugged individualism", a majority of people suffer and wealth gets more concentrated.  As wealth gets more concentrated, the entire system begins to feel a tremendous burden that it cannot sustain. The budget cuts currently being touted in state capitals and in D.C., are indicative of the negative results.  The social burden has now been placed on the working class where the populace survive.

As the incomes of the wealthy increased and incomes for the working class stagnated, incarceration rates oddly mirrored the rise of the wealthiest incomes.  Incarceration rates have risen astronomically as the income gap (poverty gap) has widened. 

As the poverty gap widens, the incarceration rate has increased from under two million prisoners in 1980 to over seven million in 2008.  That's a three hundred percent increase.  As has been widely reported, the US houses the highest number if inmates in the world.  Now, this ranking may be influenced by the amount of Chinese "criminals" that are put to death, but nonetheless the numbers are startling and are a direct result of the Capitalist Effect as well as a stricter approach to drug possession and non-violent offenders.  

The most remarkable correlation, however, is the increase of prisoners as the top 10% of the population earns more.  Although these two facts are not directly linked, there is a correlation.  Capitalism is an amoral system.  There is no inherent right or wrong in earning money, and the prison industry brings in billions of dollars in earnings every year.  The more prisoners, the higher the profits. 

If this were more than speculative, we would think that these indicators may exist in other sectors.  Just as the prison population has risen along with massive profits for the wealthy, educational statistics for low socioeconomic groups have wilted.  The achievement gap is evidently clear between racial groups and it is also clear within the socioeconomic strata.  Socioeconomic achievement gaps have grown sharply in recent decades.

Further discrepancies support the income-based achievement gap as well as the results of NAEP assessments.

Average scale scores in NAEP mathematics for eighth-grade students, by eligibility for the National School Lunch Program and race/ethnicity: 2007
Race/ethnicity Eligible Not eligible Information not available
White           275          295            296
Black           255          268            269
Hispanic           261          273            270
Asian/Pacific Islander           283          304            303
American Indian/Alaska Native           255          277                
‡ Reporting standards not met. Sample size is insufficient to permit a reliable estimate.
NOTE: Black includes African American, Hispanic includes Latino, and Pacific Islander includes Native Hawaiian. Race categories exclude Hispanic origin. A student's eligibility for the National School Lunch Program, which offers free or reduced-price lunch to students from lower-income families, is used as an indicator of poverty. View complete data with standard errors.
SOURCE: U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics, National Assessment of Educational Progress (NAEP), 2007 Mathematics Assessment.

Additionally, Dahl and Lochner (The impact of family income on child achievement, 2005) found that an income increase of $1,000 was associated with an increase in mathematics test scores of 2.1% of a standard deviation and in reading test scores of 3.6% of a standard deviation. Results of increased income are even stronger for children from families most impacted by the Earned Income Tax Credit.  Of course, the Earned Income Tax Credit is being cut by Scott Walker's budget.

In general, the evidence is mounting in regards to the whole picture of the capitalist effect.  The Capitalist Effect results in huge disparity between the top and bottom wage earners, large incarceration rates, poor educational outcomes, and in general a poor outlay for the average human.   The Capitalist Effect actaully inhibits the growth of a middle class and promotes the rising misfortunes of the populace.  The most dramatic aspect of the Capitalist Effect is that while the lower and working class suffer, the wealthy prosper.  When thousands of people lose their jobs, CEOs can turn record incomes and corporations turn record profits.

Is this a recipe for ultimate failure?  Is it moral for us to allow the Capitalist Effect to continue?

Read more about incarceration in the US:  http://www.sashaabramsky.com/index.php/american-furies/
Read more about education policy: http://www.ed.gov/
Read more about education statistics:  http://nces.ed.gov/
Read more about capitalism:  http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM

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