In The City Of The Precariat

The subsistence existence is an incoming tide

by Richard McLachlan

On Manhattan’s Upper East Side you can easily to pay $18 for a tuna sandwich – if you can find one. Some streets are effectively food deserts. Uniformed doormen (it’s always men) are in constant attendance at the entrances to block after block of beautifully maintained apartment buildings. It’s hard to escape the clichés – the black people are limo drivers and doormen; desiccated older white women walk their poodles; preppy millennials in Dolce and Gabbana sunglasses gather at the intersections chatting confidently like flocks of well-put-together parrots. Young mothers and their private school offspring compete for pavement space with tourists heading for the Metropolitan Museum. Precariousness here may be existential but it has little to do with income.

Thirty blocks north and you are in Spanish Harlem. There are Hispanic restaurants on every block; mural art portrays cultural heroes (Che, Marcus Garvey, Martin Luther King), or visions of an imaginary world where adults and children hang out together among trees and flowers. A subway clatters loudly across the riveted steel overhead – with an open-air plant shop selling shrubs and tomato plants flourishing underneath. There are lots of people, many of working age, on the streets – and those streets are full of shops of all sorts. Not much Dolce and Gabbana.

You can pay $299 to see The Book of Mormon show on Broadway – or you may never go to Midtown but pay $3 to hear Caribbean soca or Lucinda Williams at the Prospect Park Band Shell during the summer concert season. You can even stand up to watch the Metropolitan Opera if you have $25. The precariat is so large and diverse in New York that there is a commensurate retail industry to serve it. There is clothing, shoes, food, entertainment, cell phone plans, legal services, taxis, $2 shops – all geared to those earning less than $15 an hour. You can buy two big slices of pizza and a can of soda for $2.50 or a new t-shirt for about the same.

It doesn’t mean life is easy; it is very hard indeed for many people. Survival is possible, but only with public assistance if you are getting the minimum wage. People work several jobs – you can see them nodding off on the subway as they go from one to the next. Others collect plastic, glass and cans, and sell them at banks of machines set up on back streets. In summer whole extended families roast corn and meat over little barbecues on the pavement by the entrance to their apartment buildings – or go to Prospect Park and do the same on a much larger scale.

Of course, active human life on the streets is not what everyone wants to see. When Rudolph Giuliani became Mayor and put his ‘no broken windows’ policy into effect, the police started to enforce loitering and vagrancy laws in Harlem. It soon became illegal to hang out on your stoop chatting with your friends and neighbors.

“With the 1990s marking the dismantling of public gardens, crackdown on graffiti and block parties, zero-tolerance policing and the sweeping away of street vendors, community life was almost entirely formally dismantled.”

This has not been the case everywhere. Fortunately, people who made public gardens when Alphabet City (Avenues A, B, C) was effectively a bombsite had them taken over and preserved by the Parks Department before they were acquired by developers. Now there are beautiful community gardens – also in Brooklyn and the Lower East Side – where people can grow vegetables and hang out among the trees and flowers. And block parties are still here, along with street markets and free music in the parks.

The 1990s opened with Roger and Me, Michael Moore’s movie depicting precariat living in the American mid-west, in Flint Michigan. It was a stark precursor of what was to come. The 2008 global financial crisis dramatically increased the range and variety of precariousness. People lost or just walked away from their houses, they moved in with parents, they lost jobs and had to take what was offered in Walmart or in Amazon ‘fulfillment centers’. They continue to survive as best they can on Medicaid, food stamps and the kindness of increasingly stretched extended families.

Here is what constitutes a 15 minute break in an 800,000 square foot fulfillment center, the job-of-last-resort in Swansea, Wales: “it takes me six minutes to walk to the airport-style scanners, where I spend a minute being frisked. I queue a minute for the loos, get a banana out of my locker, sit down for 30 seconds, and then I get up and walk the six minutes back to my station.” It is possible to walk up to 15 miles in a shift. Three sick breaks in a three-month period and the fulfillment center ‘associate’ is fired or, in Amazon speak, ‘released’. Amazon pays a few pence above the minimum wage

Amazon received £8.8 million in grants from the Welsh government to set up their fulfillment center in Swansea rather than anywhere else. In 2012 UK parliamentarians accused Starbucks, Amazon and Google of ‘industrial scale’ international tax avoidance, losing the UK billions of pounds in revenue. Public Accounts Committee chairman Margaret Hodge claimed they were acting not illegally but immorally. The accusations speak directly to the difficulty in holding corporations to account for honoring their side of an unarticulated social compact – that they owe something to the societies from which they draw their labor and from whose infrastructure they derive benefit.

It was revealed that Starbucks had paid a mere £8.6m of tax in the preceding 14 years benefitting, it appears, from a series of inflated transactions among the nodes of its own international network. At that time Amazon employed 15,000 people in a series of warehouses in the UK. Its sales however were driven through Amsterdam. Said Hodge, accusing Amazon’s head of public policy of avoiding questions and lacking credibility, “Your entire business is here but you pay no tax here and that really riles us”. Google was paying an effective tax rate in the UK of 0.4 percent.

Mike Warburton, a senior partner in a large US tax and audit company, suggested the UK government was ‘sending the wrong message’ by criticizing Starbucks, Amazon and Google for tax avoidance. While acknowledging rather patronizingly “we all have to pay our taxes”, he suggested, “It is vital for the UK to demonstrate that we are open for business and welcome investment from overseas. Multinational companies do not have to come here and if we drive them away our economy will suffer and jobs will be lost.”

Faith-based pursuit of neoliberal economic principles has left nation state governments mendicants to transnational corporations. The corporations demand and receive tax breaks and outright grants to provide the jobs for which the population continues to hold their governments accountable. Those corporations are often responsible for job destruction in the first place. For example, Amazon employs 14 people for every $10 million in revenue. Ordinary ‘bricks and mortar’ retailers employ 47 for the same revenue.

In 2010 the National government, promising 3,000 new jobs, gave $95 million in subsidies and grants to Warner Bros so they would film The Hobbit in New Zealand rather than elsewhere. Since this nationally demeaning exercise there has been a decline in screen industry jobs of 3,500, and there is now a severely weakened union.

Not only are corporations receiving grants and substantial indirect benefits; social welfare transfers subsidize the low wages many of them pay AND they go to elaborate lengths to avoid paying the very taxes that fund those transfers. In case the electorate decides it has had enough of being treated as rubes by cynical ‘job-creators’, the US Supreme Court in 2010 bestowed on corporations the same rights as individuals. By this means they can contribute unlimited funds to the political party that best serves their interests.

In New York City public toilets are almost non-existent. If you need to go in the city, you go to McDonalds or Starbucks, corporations with a retail face who do us the favor of providing public facilities otherwise unavailable due to lack of public funds. There are even people who feel obliged to buy something first.

In late 2011 participants in Occupy Wall Street coined the slogan “we are the 99 percent”. It went viral and is now part of the lexicon. Income inequality remains on the agenda. In early 2014 the English edition of French economist Thomas Piketty’s Capital in the 21st century became number one on the New York Times bestseller list. He demonstrates a growing structural inequality due to the return on investments exceeding the rate of economic growth, causing wealth to concentrate in the hands of a diminishing number of extraordinarily wealthy individuals and families.

Piketty’s work has provided an evidential basis for what has become increasingly obvious. And in the US the possible return to ‘patrimonial capitalism’, whereby the economy is controlled by wealthy dynasties, challenges the historical and cultural assumptions of mobility that shape American thinking.

Starting in early 2012 with the death of Trayvon Martin, resistance to ‘justifiable homicide’ of young African American males has grown to a national movement – ‘Black Lives Matter’. Police across the country continue to provide ample grounds for protest. Successive incidents have highlighted the low socioeconomic status of many African American communities and the way some have been preyed upon by their own civic institutions. An investigation of the Ferguson Missouri police department found police routinely violated the civil rights of the city’s black residents. A full federal investigation of the Baltimore police department is under consideration. (The wages and conditions on offer at a recent recruitment drive in Baltimore a year and a bit later were definitely an improvement on Swansea.)

The largest protest by low-wage workers in US history is having a significant impact.

There has been widespread resistance to wages on which it is not possible to survive, let alone live with dignity. Highlighting low-wage workers’ reliance on public assistance, April 15th or ‘Tax Day” in the US saw around 60,000 workers walk off the job in more than 200 cities. The Service Employees International Union (SEIU) has contributed $25 million to the campaign.

The “Fight for $15” is a campaign dating back to the November 2012 ‘Black Friday’ strike at Walmart, a family corporation notorious for underpaying its employees. The campaign brings together fast-food workers, home-care aides, child-care providers, Wal-Mart clerks, adjunct professors, airport workers and other low-wage workers. Apparently $150 billion in public assistance is needed to supplement the low wages of working families.

On May 19 the Los Angeles City Council voted to phase in a $15 per hour minimum wage, falling into line with Seattle and San Francisco. Mayor de Blasio would like to see the same in New York City.

In New Zealand, the Unite union has successfully challenged ‘zero-hour’ contracts and written agreements with the major fast-food companies to provide predictable hours for employees.

In a May 1st announcement, Unite spokesman Mike Treen described the agreements as “a fundamental shift in the employment relationship of the most vulnerable workers in the country.”

There is a growing impetus in some parts of the world to provide everyone with a fixed sum of money that would enable them, either as individuals or households, to address basic needs such as food and housing. This proposal for a Universal Basic Income has support among people across the political spectrum. Forty-six percent of Canadians support the idea of a UBI and the people of Switzerland will vote next year on a proposal to implement it in that country.

Evaluated trials in India with 6,000 men, women, and children have delivered positive results “the simple fact is that people with basic security work harder and more productively, not less.”

This approach has historical precedent stretching back to the days before neoliberalism colonized collective thinking. Martin Luther King, Milton Freidman, John Kenneth Galbraith have all supported versions of the idea. Richard Nixon proposed it in 1969. It passed through the House easily but stalled in the Senate.

But “by 1980, the political tide shifted to the right and politicians moved their talking points to unfettered markets and individual gain from sharing the wealth and evening the playing field.”

Then in 2013 the subject was reintroduced in the New York Times and in The Atlantic . It is a live debate.

A recent (May 18) working paper from the International Monetary Fund identifies subsidies to the fossil fuel industry of $5.3 trillion. This is estimated to be greater than the total health spending of all the world’s governments. Nicholas Stern, climate economist at the London School of Economics, considers this an underestimate. The figure represents 6.5 percent of global GDP. Unsurprisingly the subsidy benefits accrue overwhelmingly to the world’s wealthiest people. The IMF describes this as an opportunity to redirect this public money toward reducing poverty.

Almost as a retort to the revelation that keeping fossil fuel ‘in the ground’ is the only way to avoid disastrous climate change, expenditure on oil exploration in remote and risky world locations currently stands at $1 trillion. CEO bonuses are directly tied to the success of these ventures. The average recompense for four of the CEOs is $26.5 million. Those four salary packages would provide one year’s basic income of $10,000 for 10,600 people.

The asymmetry is lurid. It is extremely difficult to jail a criminal banker from Wall Street or London – but routine to destroy the work prospects for an African American with a broken tail lamp in Ferguson Missouri. In an era of environmental catastrophe there are vast subsidies and fairytale salary packages to find new oil – but very little available to improve the lives of the new precariat. Tax avoidance by multinational companies is costing the US and Europe at least $100 billion a year in lost revenue. and yet governments continue to try and lure those corporations to their shores with further subsidies and tax write-offs. Meanwhile almost half of the US workforce earns less than $15 an hour.

Religious innovator John Calvin’s success in sanctifying work, frugality and worldly wealth once served America well – so long as one externalizes the costs, (paid by the natural world, the entire native American population, African people etc).

But it’s a different world now. In order to protect an outdated set of assumptions, limited numbers of ‘jobs’ must be ‘created’ – with taxpayer support provided by elected governments. Ideology demands this support go to benevolent trans-national ‘job creators’ – who continue to automate their procedures.

This rickety machine requires, for example, that two parents pursue low-paid demeaning and repetitive tasks, forgoing opportunities to spend time with children or elders, or to pursue their own interests. In other words, sacrificing joy and meaning.

Just as the biosphere and our future viability as a species continue to be externalized in the interests of wealth concentration, so does the life quality of a growing mass of financially insecure people.

Of course the need for work and the satisfaction it can provide is not disappearing along with paid jobs. But conflating those two – jobs and work – imprisons us and inhibits our ability to deal with the challenges we face.

Two core principles of American life, and the lives of many other people, are the inherent value of work and the liberty to choose how to live. Both of these values are being discredited by current economic arrangements and a massive failure of imagination. And they can both be rehabilitated.

Thomas Picketty’s answer is to progressively tax wealth, especially inherited wealth as “a powerful force limiting inequality”. The Black Lives Matter movement wants justice to apply to police as well as the rest of the population. An awful lot of low paid workers’ lives would be transformed by $15 an hour – it could happen. A Universal Basic Income would go a long way toward abolishing child poverty altogether. Removal of fossil fuel subsidies would dramatically reduce CO2 emissions and free up vast resources to reduce inequality.

The successes of Black Lives Matter and Fight for $15 suggest that people filling the streets and blockading businesses does have an effect. The precariat has yet to organize as a political force. The contours of inequality are as stark as the Grand Canyon and its impact on all our lives is as massive – yet we continue to allow it.

As Upton Sinclair pointed out, “it is difficult to get a man to understand something when his salary depends on his not understanding it.”