Poverty, by America

In these chapters, Desmond touches on a special aspect of The Importance of Poverty Abolitionism by demonstrating how poverty is rooted in societal and political structures that both trap people in cycles of poverty and make it very difficult to get out of poverty. On one hand, Desmond explores the declining power of workers in the labor market, who are fighting for fewer and fewer well-paid opportunities while often succumbing to the precariousness and low wages of the “gig economy.” On the other hand, he emphasizes how low-paid workers struggle to maintain a decent standard of living and to work their way out of poverty because so many necessary goods and services cost far more than they should.

Ideally, a free market should promote convergence between the price of an asset and its value. The primary determinant of both is the law of supply and demand, where the relative scarcity of products or services compared to the number and intensity of willing buyers determines the relative power of buyers and sellers. Something that is inexpensive to produce is likely to have stiff competition in the market from similar products, and so the buyer can keep prices low with the threat of taking their business elsewhere. Food and clothing are mass produced, and so even the poor should be able to secure basic needs at a reasonable price given the likelihood of one seller undercutting another, even if it marks a drop in quality. By the same token, the laws of economics hold that a competent worker should be able to receive fair compensation based on the value of their labor. With the right set of skills and willingness to work, they should make their value obvious to an employer, and if their current employment is not paying enough, the threat of taking their work elsewhere should earn them some bargaining power.

In reality, the relationship between consumers and producers, and between employers and employed, is subject to the inefficient distribution of goods and services that opens up a gap between the value something should have under ideal conditions and the actual price affixed to it. The free market presumes a perfect balance of power between labor and capital, but the latter have numerous advantages they can rely on to stack the deck in their favor. Companies may enlist the coercive power of the law to frustrate or suppress workers seeking to improve their condition or flout the law by hiring undocumented migrants whom they can pay sub-market wages. As of 2023, Congress has not raised the federal minimum wage since 2009, leaving millions of workers unable to make enough to compete with inflation and increases in the cost of living. In a post-industrial economy, the bargaining power of workers through unions has declined as work has become more individualized, isolating workers into solitary tasks that make sectoral organization impossible.

Desmond uses the story of Julio Payes to illustrate how these structural issues create and exacerbate poverty. Payes was highly motivated and hardworking and spent a period of time working two full-time minimum wage jobs. In spite of the excessively long hours he worked each week, Payes was still struggling to maintain a decent lifestyle because his wages were so low in a society where the costs of necessities, like housing, are high and ever rising. For all of his dedication, Payes could not work himself out of poverty. As Desmond reveals, it was only when Payes and other campaigners organized and succeeded in securing a living wage in his hometown that Payes’s life significantly improved: He could work normal hours while more easily covering his costs and felt better physically and mentally as a result. Payes’s story thus highlights two important aspects of Desmond’s analysis of poverty: the idea that poverty is a social problem as well as an economic one and that it is rooted in structural inequities that The Myths of Scarcity in American Society seek to obscure.

Likewise, Desmond draws attention to how systems such as the housing market and the banking sector exacerbate poverty by creating two-tier systems that disproportionately disadvantage the poor. In spotlighting how many landlords overcharge poor tenants for substandard properties, he both stresses the high basic living costs shouldered by the poor and exposes the incentives the more privileged classes have for exploiting those in poverty. The banks in turn further complicate the lives of the poor by making it difficult for them to become homeowners instead of renters, as banks are often reluctant to give mortgages to those on a low income, thus trapping them in an unfavorable rental market. Desmond also notes that banks charge service fees and overdraft fees that the poor are most likely to be affected by and also have the least ability to easily pay. As Desmond argues, such structural inequities and biases against those on a low income make securing basic necessities all the more difficult and expensive. In these ways, citizens in poverty are squeezed between wages that are too low to survive on, and systems that make it difficult for them to cover their needs or improve their condition.