Soon after the first pandemic wave subsided, COVID-19 turned from the “great equalizer” to a poor people’s pandemic in the United States, shows a recent report published by the Poor People’s Campaign (PPC). The report brings a detailed analysis of how the pandemic affected poor and low income communities in the US, asking if their experiences are being taken into consideration at all, regardless of whether we are looking at pandemic response or post-pandemic re-building.
The Poor People’s Pandemic Report is focused on the data and lived experience of people in the 1,000 poorest counties in the US, shining a light on the intersections between poverty and the pandemic. Some of the counties highlighted in the report have a very small population, which means they are not included in the official Centers for Disease Control (CDC) reports.
Poverty is on the rise in the UK. And in contrast, Tory chancellor Rishi Sunak’s family riches can only be described as obscene.
The mainstream media has focused on his wife Akshata Murty’s tax issues and non-domicile (non-dom) status. But the real scandal is about much more than that. And it also has a Russian dimension to it.
Obscene wealth
The register of financial interests of MPs lists just two items for Sunak as of 17 January 2022. These are a £50,000 donation from Dean R Benson and a flat in London worth over £100k. But in October 2021, Tatlerreported that Sunak has a personal portfolio worth more than £10m. That includes his London properties, his property in California, and his £1.5m manor in Yorkshire.
But that’s not the full story. It’s believed that Sunak is worth around £200m and that Murty is wealthier than the Queen. Her stake in the IT multinational Infosys is worth around an eye-watering £690m. The Guardian also reported that Murty has an interest via her father in a “£900m-a-year joint venture with Amazon in India”.
With all the negative publicity, it’s perhaps unsurprising that Murty has now decided to pay UK taxes on her overseas income. But will she pay the taxes she saved over the years because of her non-dom claim? The answer is that she has said she will only pay UK taxes on an “arising basis”.
Lucrative contracts
Infosys has reportedly won contracts with a number of publicly funded UK organisations, as well as with the UK government – altogether worth £22m. The Mirrorreports that Infosys was one of several companies that between 2015 and 2021 had a share in public sector contracts worth £100m. It was also one of 12 companies that had a share in a £95m contract with Transport for London in 2015. There were several more contracts, including:
£15m worth of work since 2016 for the UK’s care home regulator, the Care Quality Commission.
A £5m contract in 2019 with the government agency responsible for regulating medicines and healthcare products.
A £25m IT contract in 2022 with “the Tory-run East Sussex County Council”.
The Mirror added that Infosys:
was one of 12 suppliers in a £95m deal with Transport for London in 2015, at a time when Prime Minister Boris Johnson was Mayor of London.
And it was one of nine partners in a £10m contract with Tory-run Westminster City Council last year.
Labour’s deputy leader Angela Rayner insisted that Sunak should declare any potential conflicts of interest in his wife’s finances in the Register of Members’ Interests.
Section 7 of the the Ministerial Code of Conduct states:
Ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise.
The code further states that declarations “should also cover interests of the Minister’s spouse or partner and close family which might be thought to give rise to a conflict”.
Just as the Sunaks’ family wealth can be described as obscene, so too are the rising poverty levels he oversees as chancellor. For example, the Resolution Foundation thinktank calculated that 1.3 million more people will be in absolute poverty come 2023.
In February, an article in The Canary reported that the National Institute of Economic and Social Research’s “forecast of one million destitute households could potentially mean over 2.2 million people will be living in the most abject poverty”.
As for the massively increasing energy prices, The Canary’s Steve Topple quotes from a Resolution Foundation study. It concludes 62% of the poorest households in the UK are in fuel poverty. And with the further rise in energy costs flagged for October, 80% of the poorest households will end up in fuel stress. It adds:
As ever, it is lower-income households who are disproportionately impacted by high energy costs
1 April saw energy companies hike their prices by 54% while the government stood by and watched. However, a think tank’s analysis has helped to expose the real issue here. It’s not a cost of living crisis. The issue is that the richest people are waging a class war on the rest of us – and energy prices are their latest weapon.
The Russian connection
Then there’s the Russian connection to the scandal. On 13 March, Sunak tweeted:
I am urging firms to think very carefully about their investments in Russia and how they may aid the Putin regime. I also want to make it clear that there is no case for new investment in Russia.
What he failed to mention is that Infosys has been doing business in Russia via its Moscow office. On 24 March, when asked by Sky News if his family has potentially benefited from Putin’s regime, Sunak answered:
I don’t think that’s the case, and as I said the operations of all companies are up to them.
However, Ukrainian MP Lesia Vasylenko commented in an LBC interview that with regard to firms doing business in Russia like Infosys:
Every company has the choice to make, you can run the business as usual and make your money, but you have to live with the fact it’s bloody money, and bloody trade.
She added that such money would “buy the bullets that are killing Ukrainian children, Ukrainian women”.
Professor Richard Murphy, director of Tax Research UK, told the Mirror:
Rishi Sunak is the man in charge of our nation’s finances. My question is, is he a fit and proper person to be in charge? Is he objective and able to form an uninfluenced opinion about what is best for this country, independent of Russia’s influence on his family’s fortune? I don’t think he is.
Following weeks of sanctions imposed on the Putin regime, it was announced on 1 April that Infosys has closed its Russian office. However, its website appears to suggest otherwise:
Other guilty parties
Of course, Sunak isn’t the only senior UK government figure with links to Russia.
For example, there’s Jacob Rees-Mogg, who holds shares in the investment firm Somerset Capital Management (SCM). Reportedly, SCM maintains its investments with one of four Russian-operated firms has been relinquished. As for the other three, they are “in the process of exiting”.
SCM also holds significant shares in Infosys.
And then there’s current Tory party co-chair Ben Elliott. He co-founded Quintessentially, which caters to the stinking rich, including oligarchs. So perhaps it’s no surprise that after Putin ordered the invasion of Ukraine, it wasn’t long before Quintessentially deleted its Russia page. This is referred to in a Led By Donkeys video:
Here’s an archived copy of that Quintessentially page, describing the services on offer in Russia:
Let’s also not forget prime minister Boris Johnson’s links to Russian oligarchs, as published by The Canary via multiple articles.
Class war – fighting back
As Topple says, the Tories are waging a class war. And that war never ceases, though there’s been the occasional victory.
In the late 1980s, the Thatcher government told everyone they had to pay a community charge, or ‘poll tax’, which was a fixed rate charge per adult resident. So people took to the streets, with the largest demonstration in London on 31 March 1990 (police estimated around 200,000 took part). Around 5,000 people were injured. Rioters attacked a number of chain stores, high-end shops, bank branches, cafes, and wine bars. Moreover, “Porsches and Jaguars were set on fire”.
People also refused en masse to pay the charge. Then in 1993/4, the poll tax was abolished, replaced by the Council Tax, which was not dissimilar to the old Council Rates system.
Today, conditions are arguably far worse – with price rises, rising energy costs, and tax increases – and some of the UK’s poorest may either freeze or starve to death. Alternatively, like the poll tax protesters some 32 years back, we fight back.
Global hunger could get even worse because of the war in Ukraine. The Stockholm International Peace Research Institute (SIPRI) has published a report on the global impacts of the war. It says the war adds to the existing problem of global food poverty. However, this is more than avoidable given that enough food is already produced globally for everyone.
SIPRI said the problem of hunger due to the Russian invasion is very real. This has resulted in a Ukrainian government ban on food exports:
Amid fears of food shortages and in order to alleviate hunger, the Ukrainian Government has banned exports of locally produced food commodities, including wheat, barley and sunflower oil. As a result, Ukraine will probably become a net consumer of these.
The report said the war was likely to impact planting and agriculture. This would have knock on effects inside and outside the country, which is known as one of the breadbaskets of Europe due to its role in food production:
Further, should the planting season take place despite the conflict, it is likely that production will be destined to cover domestic needs first. The country could even shift to being a net recipient of food aid—meaning dependent on food aid to ensure food security—as the war wages on.
Global impact
Reduced production and an export ban have global implications. SIPRI said that the World Food Programme (WFP) bought half of its grain from Ukraine prior to the Russian invasion. These factors could worsen food poverty and hunger globally:
The bans on exports and the increased needs in Ukraine have serious implications for humanitarian food supplies. Before the war, the global humanitarian system relied on the country as one of the main suppliers of food. WFP used to buy half its wheat from Ukraine for food assistance, including in-kind distributions.
Food supply is key to famine-hit countries, SIPRI said:
Indeed, these distributions remain the organization’s core delivery mechanism for food assistance. Food supplies, therefore, play a key role in ensuring food security and averting famine in hunger hotspots.
Prices
The international research body also warned of a spike in food prices in recent years and added that aid agencies had reported their buying power had been “weakened” as monthly costs soared:
In 2020, agencies reported weakened purchasing power due to higher food prices, as part of the economic fallout from the Covid-19 pandemic. WFP, for example, reported higher monthly costs of $42 million in 2020. The conflict in Ukraine is now putting further pressure on global food prices. Today, WFP estimates it costs $71 million more every month to pursue its work globally.
It said there was a risk that less popular causes in the Global South could be hit hard by the new focus on Ukraine. Needless to say, all of the places affected by an underfunding of aid and humanitarian are outside Europe:
The situation is particularly concerning in 13 underfunded humanitarian operations, including in the Democratic Republic of the Congo, Honduras, Lebanon, Madagascar, Myanmar and Syria. Prior to the Ukraine crisis, underfunding had already resulted in food rations being cut in South Sudan and Yemen.
Empty stomachs
And while it is understandable that Ukraine was a key focus for humanitarian aid, SIPRI warned that other countries must not be forgotten:
Russia’s invasion has sparked a devastating humanitarian crisis in Ukraine, which will have implications for other crises across the globe. This in turn will impact global hunger. More civilians are likely to go to bed on an empty stomach, both in Ukraine and beyond.
It said nobody should be in this situation in a world where there was enough food for everyone. And they’re right. This new danger is an indictment not just of this particular war, but of an entire global capitalist system which prices millions of people out of meeting their basic human needs.
A first-of-its-kind examination of the coronavirus pandemic’s impact on low-income communities published Monday shows that Covid-19 has been twice as deadly in poor counties as in wealthy ones, a finding seen as a damning indictment of the U.S. government’s pandemic response.
“The neglect of poor and low-wealth people in this country during a pandemic is immoral, shocking, and unjust, especially in light of the trillions of dollars that profit-driven entities received,” said Rev. Dr. William Barber II, co-chair of the national Poor People’s Campaign, which conducted the new analysis alongside a team of economists and other experts.
Released on the 54th anniversary of Dr. Martin Luther King Jr.’s murder in Memphis, Tennessee — where he was fighting for the rights and dignity of low-wage sanitation workers — the new report aims to bring to the forefront the relationship between poverty, income, and occupation and Covid-19 mortality.
The extent to which class is a predictor of coronavirus vulnerability is understudied, according to Barber, who noted that “Covid-19 data collection does not include data on poverty, income, or occupation, alongside race and pandemic outcomes.”
“The Poor People’s Pandemic Digital Report and Intersectional Analysis addresses this knowledge gap,” said Barber, “and exposes the unnecessary deaths by mapping community characteristics and connecting them with Covid-19 outcomes.”
Assessing figures from more than 3,000 U.S. counties, the researchers estimated that the poorest counties have suffered twice as many coronavirus-related deaths as the wealthiest. In the most fatal waves of the coronavirus pandemic — the spike in the winter of 2020-2021 and the Omicron surge — the poorest counties suffered 4.5 times more deaths than the wealthiest.
“This cannot be explained by vaccination status,” Shailly Gupta Barnes, policy director for the Poor People’s Campaign, said in a statement. “Over half of the population in [the poorest] counties have received their second vaccine shot, but uninsured rates are twice as high.”
The analysis features an interactive map that ranks counties based on the intersection between poverty rates — specifically, the percentage of people living below 200% of the official poverty line — and coronavirus death rates.
The county highest on the list is Galax, Virginia, where nearly 50% of the population lives below 200% of the poverty line. The county has a coronavirus death rate of 1,134 per 100,000 people, far higher than the national rate of 299 per 100,000.
Next on the list is Hancock, Georgia, which has a Covid-19 death rate of 1,029 per 100,000 people. More than 52% of the county’s population lives below 200% of the poverty line.
The counties with the highest coronavirus death rates, according to the new report, had one-and-a-half times higher poverty rates than counties with lower death rates.
Dr. Jeffrey Sachs, president of the U.N. Sustainable Development Solutions Network and one of the experts behind the study, said the findings make clear that the pandemic is “not only a national tragedy, but also a failure of social justice.”
“The burden of disease — in terms of deaths, illness, and economic costs — was borne disproportionately by the poor, women, and people of color,” said Sachs. “The poor were America’s essential workers, on the front lines, saving lives and also incurring disease and death.”
The researchers who conducted the analysis are expected to amplify their findings and discuss their implications during a press conference in Washington, D.C. at 10:00 am ET. The press conference will also feature people from some of the poorest, hardest-hit counties examined in the report.
SPECIAL REPORT: The Poor People’s Campaign releases “The Poor People’s Pandemic Report,” a generationally significant report that uncovers things that will shock the nation’s conscience and the political establishment. https://t.co/SxgV3BLJf9
— Rev. Dr. William J. Barber II (@RevDrBarber) April 4, 2022
The analysis was released as the U.S. moves closer to the grim milestone of 1 million coronavirus deaths, an estimated toll that’s widely seen as an undercount.
Rev. Dr. Liz Theoharis, national co-chair of the Poor People’s Campaign, said in a statement Monday that “the Covid-19 disparities among counties across the U.S. are striking.”
“This report shows clearly that Covid-19 became a ‘poor people’s pandemic,’” said Theoharis. “We can no longer ignore the reality of poverty and dismiss its root causes as the problems of individual people or communities. There has been a systemic failure to address poverty in this country and poor communities have borne the consequences not only in this pandemic, but for years and generations before.”
“However, this does not need to continue,” she added. “Our nation has the resources to fully address poverty and low wealth from the bottom up.”
At the nexus of multiple injustices in the United States lies a particular cruelty visited upon working parents and their very young children: the crisis of child care. This point of failure involves poverty, neoliberal deprivation, patriarchal family structures, racial inequality and more, sited at the intersection of several of capitalism’s most glaring inequities. For many, options for child care are lacking, and the patchwork private system that does exist is deplorably expensive and of disturbingly low quality. These deficiencies introduce multiplying financial, logistical and emotional stressors into the lives of working-class parents, particularly women and people of color, along with grave outcomes for child development — and the social world writ large.
The cause is the state’s effective abdication of this critical societal function to private enterprise. As is so often the case, the venerated free market has utterly failed to adequately provide for public needs, and the hindering of public support has proven inimical to human thriving. The COVID-19 pandemic engraved those existing fissures more deeply — yet the execrable conditions in the child care sector long predate the pandemic. They are the product of a neoliberal capitalism that has dispensed with social welfare in service of profit and free-market idolatry. Yet there are advocates and committed organizers who have a vision of a more humane and just world — and who, despite towering obstacles, have set out on their tireless work of bringing it to fruition.
A Costly Necessity
Child care is an ineluctable social need, and has become only more so because of systematic inequality and impoverishment; many adults have had no choice but to take on additional jobs. Among mothers of young children in the United States, nearly two-thirds participate in the workforce. Correspondingly, 8.4 million children under the age of 5 need child care — while only 5.9 million slots exist.
Research has confirmed the benefits of quality care in those deeply formative years. Interventions in early childhood have an outsize effect on well-being: improvements in cognitive and language skills, socialization, and emotional functioning dovetail with the relief of strain that child care offers for workers, particularly working women. Yet the inverse is also true: Nonexistent, inattentive — or worse, abusive — child care resonates throughout lives, and across generational time spans. It is critical that children be attended to with empathy and provided learning enrichment, entering them into a virtuous cycle that catalyzes later thriving.
Yet there is nothing virtuous about the status quo of child care in the U.S. The stresses it places upon new working-class parents are multifarious and punishing. Priming the difficult circumstances, the Family Medical Leave Act offers only limited paid time off for pregnancy and early-life care, and even that is subject to stringent constraints. (The U.S. stands utterly alone among developed nations — in fact, among nearly all other nations — in failing to guarantee paid time off for parental leave.) When whatever time off they are allotted has ended, new parents must then arrange care for their pre-K children. In doing so, they are forced to navigate a poorly regulated, competitive and flagrantly expensive network of private daycare options.
The average cost of child care represents 17.1 percent of the national median household income — and double that for low-income families, at an untenable 35 percent of earnings. This expense, which can effectively amount to a second rent, is simply out of reach for innumerable families. In another stark illustration of the outlay: “In most states, putting a baby in a licensed child-care facility costs more than in-state college tuition,” reports Bloomberg. Federal funding to alleviate these extortionate costs is marginal: Of the already-limited number of children who were even eligible for assistance in 2015, only 15 percent received any subsidy. (Comparably limited state funding means that preschool costs are often little different.) Other wealthy capitalist countries devote an average of $14,000 of annual public spending per child. (Norway spends nearly $30,000; Hungary, a little over $7,000.) The U.S. spends, startlingly, a mere $500. The depth of U.S. coffers seems matched only by the extent of its parsimony when it comes to working people.
Unaffordable, Unavailable or Unsanctioned
The strain on parents is redoubled by the difficulty of locating any care at all, affordable or not: A vastly inadequate supply has created “child care deserts.” A 2016 survey of states (comprising 40 percent of the population) from the Center for American Progress (CAP) found that existing supply could serve only a quarter of toddlers and infants. For the latter, it’s worse, as CAP points out: “Licensed child care is more than three times as scarce for children ages 0 to 2 than it is for those ages 3 to 5.”
Oftentimes, options simply do not exist. But parents who lack for alternatives — many of them women of color — have then faced stigma, censure and even incarceration for leaving children while at work or in job interviews. The jeers of the public that such stories have drawn arise from a kneejerk impulse to condemn the individual, in ignorance of the structural factors and outright impossible situations to which low-income parents have been condemned by these realities.
Yet the catastrophic failures of child care extend further still. In an article for The New Republic, Jonathan Cohn documents the staggering abuses and tragedies that the laissez-faire approach has produced. The limited programs that are both available and affordable are often unlicensed and unregulated. Daycares of “abysmally” low quality predominate. “A 2007 survey by the National Institute of Child Health Development deemed the majority of operations to be ‘fair’ or ‘poor’ — only 10 percent provided high-quality care,” writes Cohn. Yet “just thirty-nine states in the wealthiest country in the world even have a program that rates the quality of day-care centers.”
This dearth of oversight facilitates negligence, which can lead, in the grimmest cases, to the single worst imaginable occurrence for any parent. Staffing issues, facilities in poor condition, poorly trained workers, inattention to health and safety — all of these factors result in ghastly statistics. “The death rate of children enrolled in home-based day care — which is far more likely to be unlicensed than a center-based program — is twelve times that of center-based care,” Cohn writes. The horror of harm to even a single child notwithstanding, poor oversight and a reliance on self-reporting means that the true numbers, of injuries and even deaths, are unclear.
Caregiver Exploitation
Daycare staff, for their part, contend with low salaries, punishing hours and dismal job conditions. “To the extent that child care is affordable for parents at all, this is only because the child care workforce effectively subsidizes child care costs with low worker wages,” CAP notes.
The pandemic, as it tends to do, has exacerbated all of these failures. Child care was immensely fragile even before COVID-19, but its ruptures have deepened the availability and staffing crises, with many daycares shuttering and workers abandoning the profession. A 2020 survey from the National Association for the Education of Young Children found that the majority of daycares had incurred substantial new operational costs. An estimated 86 percent are serving fewer children than they did before the pandemic — a reflection of closures, reduced resources, and parental job losses. Some federal grants and subsidies have been disbursed to prop up the industry, but these are, on balance, insufficient. (During the pandemic’s first year, child care workers were also denied vaccine priority despite their putative “essential” status.)
Of working parents, two out of three were forced to revise their child care arrangements because of the pandemic. These conditions have been mitigated to some extent as the world adapts to COVID, but the system’s fragility in a crisis is telling. While the convergence of COVID and child care was “a global fiasco,” subsidies and social supports of many kinds in Canada, Australia, Japan, South Korea and across Europe meant that those countries weathered it far better. Meanwhile, job loss among women was worse in the neoliberal strongholds of the U.S. and U.K. Without drastic reform, some of the pandemic-inflicted damage to U.S. child care could be permanent. Again, the lack of a resilient publicly funded system — and a blanket aversion to redistributive policy — is to blame.
First Steps Toward Universality
Many envision how these harsh conditions might be different — how we might design policy that assigns human life and thriving intrinsic value, especially the well-being of children. Historical antecedents in the U.S. do exist; as Meagan Day writes in Jacobin, the Comprehensive Child Development Act of 1971 would have created universal daycare programs, development centers and preschools as a means of addressing poverty, as well as neglect and abuse. But that better future was foreclosed when the bill was vetoed by then-President Richard Nixon, pleasing his fundamentalist constituents.
Organizers in the Democratic Socialists of America (DSA) have set their sights on rekindling the concept. In fact, there’s already a contemporary success to point to: Measure 26-214 in Oregon’s Multnomah County, developed by Portland DSA and a local coalition and passed in 2020, will institute a fully universal preschool program, funded by a tax on high incomes. The victory hinted at the popularity of the idea, and provided a model that organizers are eager to replicate — and significantly expand.
“We’re looking to make child care — inclusive of infant care, preschool and before and after-school programs — a public good,” said organizer the co-chair of the DSA-LA Childcare for All campaign and a onetime child care worker herself. (Farzana declined to provide her full last name due to fear of workplace reprisals.) DSA Los Angeles recently passed a resolution to make pursuit of universal child care a chapter priority. The first Childcare for All canvassing campaigns are just getting underway in the city.
Organizers in Columbus, Ohio’s DSA chapter have also officially began developing their own campaign to mitigate the woeful realities of child care in their city. Rita Hallaveld is a campaign steward in Columbus DSA’s Child Care Priority Campaign. “In Franklin County,” she said, “there are not enough child care center slots to cover all infants and toddlers. In Columbus, a single mother of two making $15 an hour spends over half her income on child care, without enough to cover rent, food, etc.” Hallaveld said that the Columbus DSA organizers “hope to really engage residents and highlight all the ways that child care is a common good to help get everyone on board.”
In Los Angeles, organizers’ efforts have already earned positive responses. While their goals are sweeping, they are popular ones, “easily understood and widely felt,” Farzana W. told Truthout. “So far, the response from the public has been quite supportive. The need for reliable, quality child care is something that’s intuitively understood by many, partly due to its immediate relevance to people’s lives.” She echoed deep concerns about availability, cost, quality and staff wages.
The two campaigns are only just taking their first steps. Hallaveld described the initial phase of intensive policy planning in the Columbus DSA working group, which is analyzing funding sources and tax structures. Such ambitious measures will require strong alliances, and Columbus organizers are hoping to build “a diverse grassroots coalition made up of parents, child care educators, and residents in our area,” Hallaveld commented. “We want the voices that are most impacted to be a part of this process from the beginning. Child care providers are disproportionately women of color, so we want to center their voices throughout the process … Eventually we hope to put the measure on the ballot, so we’ll be doing a lot of work to engage voters.”
In the near term, Farzana W. also pointed to coalition building, along with continued canvassing and outreach, community surveys, research and policy planning, activating parent and care staff organizers and agitating around the demands, all while assessing and refining their methods.
While both campaigns remain nascent at this stage, if the success of the pre-K ballot measure in Portland indicates anything, it’s that deeply committed advocates can realize long-shot ambitions. Organizers see those ambitions as part of a holistic vision of a socialism that meets people’s real needs: “We want to change the reputation of the left in Los Angeles,” said Farzana W., “from one that’s insulated, online and foreign to one that’s approachable, reliable, homegrown and advancing demands that people care deeply about.”
A publicly funded universal system would mean an early chance for intervention in improving well-being, resonant with multiple social needs. It is logical for socialists to take up efforts to confront this moral crisis: a crisis of injustice and inequality that punishes the most vulnerable. As Farzana W. reiterates, “We want to remove the profit motive from the child care industry [and] reestablish the public good as the core of left politics.”
1 April saw energy companies hike their prices by 54% while the government stood by and watched. However, a think tank’s analysis has helped to expose the real issue here. It’s not a cost of living crisis. The issue is that the richest people are waging a class war on the rest of us – and energy prices are their latest weapon.
Shocking levels of fuel poverty
The Resolution Foundation, a living standards think tank, has done research into the effect of rising energy costs. It calls struggling to pay energy bills “fuel stress”. This is when households spend 10% or more of their budgets on energy. This used to be what the definition of fuel poverty was. But the government moved the goalposts to make it look like fewer people were in fuel poverty.
In short, the Resolution Foundation found that 1 April’s 54% rise will hit the poorest households the hardest. In 2021, it said that 37% of the very poorest families were in fuel stress. As of 1 April, that figure shot up by 67.6%. This means that 62%, or nearly two-thirds, of the poorest households are in fuel stress right now.
The Resolution Foundation says things will only get worse. Energy companies look set to increase their prices again in October. If this goes how the Resolution Foundation think it will, then 80% of the poorest households will end up in fuel stress.
The rich/poor energy divide
The think tank’s research also showed the bigger picture. In one graph, it’s very clear that the richest households are barely going to notice rising energy prices:
As ever, it is lower-income households who are disproportionately impacted by high energy costs, with four-in-five of England’s poorest families set to be facing fuel stress come October, compared with just one-in-fifty of those in the top income decile
So, what can be done about this? Well, if you’re the Labour Party or corporate media, then you won’t do anything.
Protecting the powerful
Labour leader Keir Starmer said that energy companies increasing their prices by 54% was due to “Tory incompetence” – like the government made a silly mistake that led to this situation. He then said:
People don’t want a revolution, they do want to know how to pay their energy bills.
Talk about not reading the room. A revolution of some kind would be better than a continuation of this shit – which is exactly what Starmer is propping-up. Moreover, his comments whitewash the chaos. Then, BBC News did similar.
BBC: ‘think your poverty better’
It ran an article where four “experts” told the rest of us how to “protect” our finances and “soften the blow of rising bills“. The four top tips were essentially:
Cut back elsewhere.
Cut back elsewhere again, after you’ve already cut back.
Look after your mental health – or, ‘think your poverty better’.
Much like Starmer, the BBC whitewashed the chaos. It’s also saying that it’s up to poor people to sort this mess out themselves. Further, both it and the Labour leader are ignoring the fact that companies are taking the piss with their price rises – and that the government is allowing them to do so.
‘Money Saving Expert’ Martin Lewis seems to get it. But as soon as he put his neck on the line to help people, energy provider E.ON promptly took to Twitter – blaming him for “bringing Britain down“. Little wonder Starmer and the BBC won’t rock the boat.
Energy price rises are class war
The level of difference between how hard energy companies are hitting the richest and poorest, coupled with the fact the government knows this and is barely acting is class war. That is, the rich and powerful are knowingly doing things that will suppress the poorest people and keep them in their poverty-stricken place. Shills like the BBC and Starmer are helping them out.
Decisions made by those at the top of society that will plunge 7.5 million families at the bottom into further poverty is class war. To say it’s anything else is just propping up those enacting this on the rest of us.
Boris Johnson has once again used Prime Minister’s Questions (PMQs) to lie about child poverty figures. Good timing, though – #BorisTheLiar had already been trending.
The Tory class war rages on
During PMQs on Wednesday 30 March, Labour MP Apsana Begum asked the PM about the ongoing class war – or the “cost of living crisis” if you are a Westminster politician or journalist. She noted that the Tories are cutting social security in real terms from April – £10bn, by all accounts. She said that this crisis was:
due to Conservative economics and the notion that while some have the pleasure of partying, the rest of us should suffer.
Johnson waffled about “levelling up” for a while, then turned his attention to poverty rates. And once again, he lied through his teeth.
Johnson: think about the kids!
Specifically, Johnson claimed that there are:
200,000 fewer kids… in poverty
This is literally not true. The independent Children’s Commissioner, appointed by the government, said:
relative child poverty did indeed increase by 600,000 between 2011/12 and 2018/19 – from 3.6 million (in 2011/12) to 4.2 million (in 2018/19).
And in 2019/20, this went up by another 100,000. Though it’s true that by 2018/19 absolute child poverty had fallen by 200,000. But overall, this is still half a million more children in some sort of poverty.
Johnson: the serial liar
In July 2021, the Office for Statistics Regulation (OSR) issued Johnson with an official warning for lying over child poverty. And this wasn’t the first time. The warning was issued because:
Over the last year, a number of concerns have been raised to us regarding the prime minister’s use of statistics on child poverty and in each case, we have brought this to the attention of the briefing team in No10.
So, will it do the same again?
Who cares – it didn’t stop him lying again, did it?
Watch:
Even after the Office for Statistics Regulation (OSR) rebuked Boris Johnson over his lies about poverty here he is again at #PMQs claiming there are "200,000 fewer kids in poverty" #BorisTheLiarpic.twitter.com/UU7balzBEK
A large number of New Zealanders are facing a perfect storm at retirement, with minimal savings and no house, raising the risk that thousands will enter old age in poverty.
According to the latest retirement expenditure guidelines from Massey University, a two-person retiree household living an urban “choices” lifestyle, which includes some luxuries, would need to have saved NZ$809,000.
In the provinces, a couple would need to have saved $511,000.
New Zealanders have traditionally relied on owning a home to support themselves during their retirement years. But many of the New Zealanders now aged between 50 and 65 – a cohort of almost half a million people – will go into retirement as renters after skyrocketing house prices over the last three decades put home ownership out of reach.
At the same time, this generation were already working adults when the Labour government introduced KiwiSaver in 2007, and are less likely to have a significant savings cushion.
Then Prime Minister Helen Clark introduced KiwiSaver in 2007 as a way to address New Zealand’s low rate of savings. Image: The Conversation/Phil Walter/Getty Images
Last year, Treasury raised concerns that this mixed group of baby boomers and generation X will not be able to financially manage retirement on their own.
Declining home ownership Home ownership in New Zealand has fallen to the lowest rate in 70 years, with just 65 percent of people living in houses they own, down from the peak of 74 percent in the 1990s.
According to the 2018 Census, around one in four people between 50 and 65 don’t own the home they live in.
Research by Kay Saville-Smith from the Centre for Research Evaluation and Social Assessment suggests that by 2053 almost half of over-65s would be renting. That would mean 640,000 over-65s renting, including 326,000 renters aged over 85.
This issue of declining home ownership disproportionately affects those who have remained on low incomes throughout their working life. This, in turn, has stark consequences for Māori and Pacific people in New Zealand.
Between 1986 and 2013 the proportion of Māori and Pacific peoples living in owner occupied housing fell at a faster rate than the overall population (down 20 percent and 34.8 percent, respectively).
Skyrocketing rents Also, in the last five years nationwide rents have risen 28 percent across all property types and regions.
High rents make it harder for New Zealanders to save for a house. Image: The Conversation/Getty
For increasing numbers of people, housing — whether through ownership or renting — has become unaffordable.
The rapidly increasing rental costs have also reduced the ability of people to save for their own home.
KiwiSaver came too late
In 2007, the Labour-led government set up KiwiSaver as a voluntary savings scheme to help New Zealanders save for their retirement and to lift New Zealand’s low national savings rate.
But New Zealanders aged 50 to 64 were already adults and mid-career when KiwiSaver was launched. In our low-wage economy, they are likely to have contributed only 3 percent of wages, in addition to the employer’s 3 percent.
While some will have used their KiwiSaver account plus the government subsidy to put a deposit on a home purchase, few will have saved a significant nest egg for retirement. The 2021 Financial Markets Authority KiwiSaver Report showed average balances of only $26,410.
Squeaking by on superannuation There is some support for retirees. When a person reaches the qualifying age of 65 years, they receive New Zealand Superannuation, currently $437 per week after tax for a single person.
But superannuation is predicated on owning your home rather than renting. Home ownership means effectively living rent free, with only rates and maintenance as regular necessary expenses in addition to food, power and phone.
A couple looking to retire comfortably in the city in New Zealand would need to have $809,000 saved, while the same couple looking to retire in the provinces would need $511,000. Image: The Conversation/Didier Marti/Getty
Those people renting are currently confronted by a median weekly rental for a small house or apartment of $390 per week. While they may also be able to access the accommodation supplement and temporary additional support to assist with costs, a new threat has emerged in the form of inflation.
Consumer price index inflation peaked at close to 6.35 percent in early 2022, its highest level in three decades.
As well as steady increases in the price of electricity, petrol prices increased by 10 percent over the past year, and annual food prices rose 6.85 percent in February year-on-year. Fruit and vegetables are the largest contributors to the price rise. Car use can be contained with less recreational outings, but electricity, fruit and vegetables are needed for health.
None of this is going unnoticed. Treasury has raised the alarm about the increase of old age poverty. Many in the 50-65 age group share those concerns, and are approaching retirement with rational trepidation.
Rights group’s annual report accuses Britain of setting ‘worrying reverse course’ in bills on refugees, policing, protest and welfare
The government’s attack on fundamental rights and protections enshrined in UK law is an “act of human rights vandalism” that would curtail the ability of people to hold the state to account, Amnesty International has claimed.
By Pauline Canham As the world’s media marks one month of the invasion of Ukraine, Yemen slips quietly unnoticed into an eighth year of brutal conflict and ceaseless suffering. Martin Griffiths, Yemen’s UN envoy, may well believe that “out of the headlines does not mean left behind”, but for the millions who struggle to find […]
New research finds that if the expanded child tax credit were made permanent, the social and economic benefits from the investment would far outweigh the costs of the program.
A working paper from Columbia University, Barnard College and Open Sky Policy Institute researchers finds that if low-income families with one child saw their income increase by $1,000 a year, the benefits would outweigh the cost of the program 10-fold.
While making the program permanent would cost the government $97 billion, it would create social benefits worth $982 billion. These benefits include direct impacts, like improved health and longevity for both children and parents and increased future earnings for the children, and indirect benefits, like lower crime rates. Taxpayers would also benefit, saving $135 billion in total, the research finds.
Working papers are often not yet peer reviewed or edited for publication in a journal. If the paper’s findings are true, it bolsters arguments from advocates of expanding the tax credit that the benefits of the program quite literally outweigh the costs.
Other research has found that the expanded child tax credit from the COVID stimulus bills, which gave families $300 a month for children under 6 and $250 a month for children aged 6 to 17, had a huge impact on the economy. Data released last month found that after the tax credit expired in January, child poverty increased by 41 percent, plunging 3.7 million children into poverty.
Other surveys also showed that the tax credit was transformative for families. The Census Bureau has found that 91 percent of low-income families spent the credit on necessities, while 92 percent of families said that the payments helped improve their financial stability, according to a poll by SaverLife.
Some conservatives have tried reviving the proposal by tying it to work requirements, but advocates say that adding hurdles would only weigh down the program and make it harder for the money to reach families who need it most.
The Child Tax Credit expansion lifted millions of kids out of poverty.
In the annals of American history we have never had a government program that so clearly and directly helped so many in such direct need.
Poverty is a policy choice. It’s not too late to renew the expansion.
Progressive lawmakers expressed frustration last year as Manchin demanded that they choose between the tax credit, paid family leave or child care funding proposals that were in some versions of the Build Back Better Act.
Some progressive lawmakers have called for reviving the expansion. “Another month without the expanded Child Tax Credit and working people continue to pay the price,” wrote Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-Washington) on Wednesday. “We have to fix this. Renew it now.”
Well before the floods hit the Northern Rivers of NSW, many people were already living precariously.
The images of shattered men, women and children losing their homes from weatherboard ‘queenslanders’ to caravans was spine-tingling, even for me, a seasoned reporter. Homes now full of mud, sewerage and mould had to be abandoned.
A shortage of affordable housing was the context too of the Black Summer bush fires. Many who lost homes across the south coast of NSW are still in temporary accommodation.
Our geography doesn’t help. A startling fact tucked away in a recent Insurance Council of Australia report explains that Australians especially vulnerable. The Insurance Catastrophe Resilience Report 2020-21 tells us that “Australians are five times more likely to be displaced by a natural disaster than someone living in Europe”.
And yet after decades of research sounding the alarm on the science, Australia still has no national and cross-jurisdictional housing strategy, and certainly not one that anticipates climate impacts on housing.
We at the Equality Rights Alliance (ERA) keenly make this point in our submission to a Productivity Commission review into the National Housing and Homelessness Agreement currently underway. The five-year state-federal agreement expires next year and the PC is asking the public for comment.
The agreement is national in name-only. It largely excludes local government. It lacks accountability measures to keep all parties focussed on the objective of delivering affordable housing and reducing homelessness. There is no explicit policy connection to climate change adaptation and mitigation, nor women’s safety, gendered poverty or the needs of people with a disability. And it avoids the elephant in the room, tax reform.
What’s holding us back is a narrative stuck in a groove: ‘housing as an investment right’ rather than ‘housing as a human right’. While the Federal Government tries to reduce affordability pressures with measures like rent assistance (which is way too low in our view), policy settings simultaneously bias the housing market in favour of those with capital.
We argue that a new National Housing and Homelessness Agreement should join up the dots and be driven by a federal housing minister who sits in cabinet, and with the support of a dedicated agency that measures and marshals the evidence. That way it gets the sustained attention it needs.
All levels of government have to work together better, recognising the Commonwealth’s role with macro-policy settings which drive housing demand such as taxation and population, and the responsibilities of State, Territory and Local governments for land use, land supply and urban planning and development policy, infrastructure policy and tenancy legislation.
The Commonwealth is best placed to deliver overarching leadership that strengthens cooperation and accountability and it is best placed to provide capital injection for net growth in social housing stock in partnership with the states.
The design and delivery of housing and homelessness services must be more gender explicit. Conditions are undoubtedly worse today for anyone on low income but the fastest growing group to experience homelessness in Australia is older single women. Many are first-time users of the welfare system.
Maggie Shambrook of Brisbane had post graduate studies behind her and steady work but an abrupt change in her family’s life suddenly saw her at risk of homelessness.
“The stereotype of a person who is homeless does not reflect reality. It’s a surprising picture of women who have been carers for chapters of their life and who have enjoyed modest incomes, even earned PhDs.”
Maggie is now an advocate with the Housing Older Women (HOW) movement based in Queensland.
“There are many women who are hidden from view. A friend moved 18 times in 3 years trying to stay safe, staying with friends and family, remaining invisible. The toll on her physical and mental health was huge,” she told ERA.
Women and children are disproportionately impacted in the wake of economic shocks and natural disasters. They will need specialised support over some time because women are more likely to take on unpaid care while living with the legacy of systems that lead to compound disadvantage.
The Housing Older Women movement is among many in the sector who with at ERA argue for measures that address a ‘missing middle in terms of housing options’ – options in between private ownership and multi-level public housing where every tenant is struggling.
We hope the Productivity Commission will listen to the call for more housing options. Its review is a once in a generation opportunity to reset housing policy for the long haul, one that sees beyond annual budgets and political terms and one driven by a vision that leaves no one behind.
This year’s International Women’s Day theme of #BreakTheBias invited us all to imagine a world that’s free of inequality, bias and discrimination. While advocacy work has highlighted the deep-rooted inequality experienced by women in many parts of the world, it has also drawn attention to a cohort of older adults that are suffering the most – women.
Women retire with 24% less super than their male counterpart
34% of single Australian women over 60 live in income poverty
59% of those accessing homeless services are women
If older women are most at risk of poverty and more likely to experience homelessness at retirement, then what has contributed towards these dire statistics? The answer to this question is arguably complex, but in part, can be explained by understanding cumulative inequality. Let’s unpack.
Fundamentally, women’s cumulative inequality is upheld by social systems that generate inequality. These systems manifest over their life course and influences women’s personal trajectories, including their exposure and accumulation of risk and the kinds of resources available to them.
A good example is that of unpaid work. While we may not value unpaid work from a monetary perspective, it’s still a form of work that satisfies a need. More women undertake unpaid domestic or family caring work, while men outsource it or have someone devoted to doing it. These dynamics forms part of the social structure that maintains the economic insecurity of women.
While we may be socialised to accept and even expect women to take on this role, it’s also no coincidence that women belong to the largest constituents of low-paid and part time workers.
Recently, it was reported that Australian women form 67% of part time workers and earn 14.1% less than men.
If we include unequal pay, the promotion gap and the superannuation gap into the equation, the result is gendered poverty. Ultimately, the experiences of women that include career disruptions, unpaid work, caring responsibilities and mom tax all compound over women’s lifecycles to results in the conception of poverty at retirement.
What this is showing us is that our current social and economic structures lead to and maintain inequality. But more importantly, we ought to acknowledge and appreciation that inequality is fundamentally not the result of individual choices and actions but is structurally generated. As articulated by Elizabeth Broderick, the former Australian Sex Discrimination Commissioner, “there is no one single point where the gap begins and ends”.
Understanding the accumulation of inequality helps us to understand how social and economic structures fail women on a systemic basis. And while we may not have all the answers to solve this problem, what we can do is collectively use our voices to RISE in order to advocate for:
Representation
Inclusion
Social Reform and
Economic Empowerment
Bernice King, the daughter of civil rights activists Martin Luther King Jr. and Coretta Scott King, recently tweeted, “If you don’t think representation matters, you’re probably well-represented.” Part of breaking the bias is stressing and illuminating the underrepresentation of Australian women in positions of leadership.
While women make up close to 50% of the workforce, yet only a third occupy key management positions across all industries. Even fewer women are represented as CEOs and chairs of boards (18 percent and 15 percent respectively). The long-standing biases that women do not aspire to the highest ranks of organisations contributes to these figures when in fact the Harvard Business Review reported that women score higher in leadership skills.
Dr Bomikazi Zeka believes a truly fair and bias-free society, is one where everyone has equal access to opportunities. Picture: Supplied
Inclusive policies that acknowledge and consider the career patterns of women is a central part of correcting gender inequality. More so, policy should incorporate and demonstrate how the cumulative disadvantage of women is considered in the design of gender-neutral policies. Because if we can identify, acknowledge and address how and why women are slipping through the cracks, then we can develop policies that addresses the gender income inequality gap.
The late Archbishop Desmond Tutu once famously stated that: “There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in.”
If we consider that data on housing insecurity, homelessness, income insecurity and gender pay gap, it’s all connected and speaks to the issues facing most Australian women. So why not streamline what would otherwise be independent policy areas of employment, healthcare, social protection, housing support and pensions? What this would do is encourage a minimum universal social protection threshold for all women throughout their lifecycle and address the issues that are central to the eradication of poverty.
Because poverty is not just a matter of monetary deprivation. It permeates every aspect of a person’s life. Rania El Mugammar articulated that “poverty monopolizes your time, you spend hours waiting for underfunded transit, healthcare and social services.
Time negotiating payments, filling out paperwork, walking to save bus face, going far for work or even just to pay less for something. It steals your life in instalments.” The economic inclusion and empowerment of women is thus a pivotal part of correcting cumulative inequality. This means that all women should be able to participate in economic decision-making at all levels because equality is also access to opportunities. And a truly fair and bias-free society, is one where everyone has equal access to opportunities.
The Trades Union Congress (TUC) was supposed to be protesting at this year’s Tory spring conference, but it ended up redirecting its energy to the Russian invasion of Ukraine. Never fear, though – as local groups in the North West are refusing to let the Tories off the hook that easily.
The conference is taking place on 18 and 19 March at the Blackpool Winter Gardens.
Over the coming fortnight we will be mobilising trade unionists in support of the ITUC day of solidarity with Ukraine on 15 March.
And we will support the mobilisations in London and around the UK for the UN Antiracism Day on 19-20 March – particularly as this government refuses to welcome enough refugees from Ukraine into the UK.
The wages and bills crisis is about to bite. The TUC and the whole trade union movement demand action. So we will be bringing our campaign to win pay rises and a new deal for workers to a town or city near you soon and hosting a national mobilisation in London this summer. Dates and details to be announced soon.
But local groups clearly felt they should still take action.
Tory spring conference: the demo is on
So, two days of action are happening anyway. Wendy Fell from Blackpool, Fylde and Wyre Trade Union Council and Unite Community Lancashire said in a statement:
Within 24 hours we and allies locally… turned round the TUC pulling out. We have got things agreed with the police who will be all over that area of Blackpool. We have got a march route organised and adverts and social media material ready.
The two days of action will see plenty going on. On 18 March, St Johns Square in Blackpool will see stalls and speakers from 1pm. Then, on 19 March, people will meet at the Comedy Carpet on the sea front near to the Blackpool Tower. They’ll march to the Tory conference at Winter Gardens/St Johns Square. If you can make it in person, be sure to follow the demo on social media:
will try and dominate the domestic news agenda with their narrative. While the media and the Conservatives are in Blackpool, we will attempt to get our own ideas across, ideas which include social justice and fairness – unlike theirs.
The Conservatives haven’t had a conference here since 2007 and it warrants a big turnout to let them know we’re watching. Watching as they trash our NHS, increase food-bank use, give their mates lucrative contracts, fail to deliver on any promises, ignore the refugee crisis, refuse to act on the environment, the cost of living crisis and so much more.
With the price rises and cost of living crisis, disabled people face the devastating impacts of poverty more fiercely than other demographic. Please do all you can to help us in that crucial task.
So, if you’re in or near Blackpool on 18 and 19 March, it’s time to show the Tories that people won’t take their toxic governance lying down.
Sen. Rick Scott’s (R-Florida) plan to force every American to owe income tax in his recently released platform for the Republican Party would raise taxes by over $1,000 for the bottom 40 percent of income earners, a new analysis found.
In a report released on Monday, the Institute on Taxation and Economic Policy (ITEP) estimated that the poorest Americans would be the most affected by Scott’s plan — meaning that the GOP’s tax plan would essentially be to tax the poor.
The poorest 20 percent of Americans, who make $12,300 a year on average, would owe about $1,050 more in federal taxes, or about 9 percent of their income. The next 20 percent, who make $34,700 on average, would owe $1,390 more, or 4 percent of their income, ITEP found. The middle 20 percent of Americans would owe about $500 more on average. The top 5 percent would essentially owe $0 more.
Scott’s outline says that he wants to make sure all Americans pay some income tax in order “to have skin in the game.”
“Currently over half of Americans pay no income tax,” Scott wrote. Indeed, a large portion of Americans don’t owe federal income taxes. Many don’t owe taxes because they simply don’t make enough income to qualify. People with disabilities, retirees and other Social Security beneficiaries don’t owe taxes because much of the program is tax-exempt.
Some people don’t owe federal income taxes because they receive tax credits; because of programs like the Earned Income Tax Credit and the Child Tax Credit, many Americans have a negative tax burden.
ITEP calculated these estimates by assuming that Scott’s plan would make it so that all Americans owed at least $1 in taxes, taking credits into account. So, if a household had an income tax liability of $1,000, and would normally have received a credit of $1,500 from the Internal Revenue Service (IRS), they would not receive their expected $500 tax refund under Scott’s plan, ITEP wrote.
The poorest states would be most affected by this plan, the report found. Over 50 percent of Mississippi residents would see a tax increase, with other Southern states like West Virginia, Arkansas, Louisiana and Alabama trailing closely behind.
If Scott’s plan were passed, and carried out in the way that ITEP interpreted, it would have a devastating impact on the people in the country who are most in need.
According to the Federal Reserve, about 36 percent of Americans said in 2020 that they would have difficulty paying for an emergency expense of $400, with 12 percent saying that they wouldn’t be able to. This statistic is similar to that of previous years, despite the fact that COVID relief packages, extra unemployment insurance and expanded child tax credits helped lower financial worries for the public, even if they were laid off during the pandemic.
A recent survey showed that a large portion of Americans would have difficulty paying an emergency $1,000 bill. About 56 percent of survey respondents said that they would have to take steps like charging a credit card and paying it over time, cutting other expenses or borrowing the money in order to pay the bill.
Scott’s tax plan reflects Republicans’ stubborn opposition to raising taxes on the wealthy and corporations. Some of the world’s richest people, like Jeff Bezos and Elon Musk, regularly owe $0 or an otherwise miniscule amount in taxes. But GOP lawmakers have worked to maintain low tax rates for the richest Americans and slash funding for the IRS so that they can keep dodging taxes.
A think tank has warned that the extent of the cost of living crisis is going to become so bad that it will hit people like a recession. Nearly every part of society is going to see a fall in their living standards. Most notably, the Department for Work and Pensions (DWP) will shave £10bn in real terms off people’s social security. Plus, child poverty rates for some groups could hit nearly 80%.
But the think tank has also issued an even starker warning. Because much of this analysis doesn’t factor in Russia’s invasion of Ukraine. And where it has forecast this in, the collapse in people’s incomes could be worse than the 2007/08 financial crash; a level not seen since the late 1970s.
how household incomes and inequalities may change over the next five years
The report uses government, Bank of England, and Office for Budget Responsibility data. The Resolution Foundation then uses its own modelling to work out what will happen to living standards. Overall, It paints a grim picture. The report’s key takeaways are:
“High inflation will squeeze incomes in 2022”.
DWP social security rises “will not keep up with price rises”.
“Tax rises and increasing housing costs” are going to hit people’s pockets.
“Real incomes will take a huge hit in 2022-23, and potentially fall again in 2023-24”.
“A drop in poverty in 2020-21 has probably already been undone”.
The full report makes for even worse reading – especially for people reliant on the DWP.
Everyone will be worse off
Overall, the report says everyone will be on average £1,000 worse off (excluding retired people) in 2022/23 than in 2021/22. It states that even without the impact of Russia’s invasion of Ukraine:
real incomes are currently projected to be lower in 2026-27 than in 2021-22, and the period from 2019-20 to 2024-25 is currently on track to be the worst parliament on record for income growth
The report says the collapse in living standards will be worse for people reliant on the DWP.
The poorest: hit the hardest
The report says that inflation means the DWP will effectively cut social security by £10bn in 2022/23. This will take its value to the lowest levels since the mid-1980s. But moreover, as a proportion of everyone else’s average weekly earning, DWP social security will be at its lowest on record:
Social security rates will recover in the years after this, but only to the levels the DWP set in April 2021. Plus as the report states, the benefit cap isn’t changing. This will mean many families won’t see the full impact of the social security rises after 2022/23 anyway. People affected by the Local Housing Allowance (LHA) and the two-child limit will see a similar impact.
Meanwhile, rent prices for social housing are set to increase proportionally more than rents for private sector accommodation in the next three financial years:
Back to the 1970s?
When the report does factor in Russia’s invasion of Ukraine, it says that in April 2022, inflation could hit 8.3%. If this happens, it would mean the collapse in real income would be the most drastic since the late 70s/early 1980s:
From 2020/21 to 2026/27, the poorest people are predicted to see repeated falls in their overall income – whereas the richest will eventually see theirs rise:
All this will lead, as the Resolution Foundation says, to poverty increasing again, and the:
prevalence of absolute child poverty is projected to be higher in 2026-27 than in 2019-20, with a large rise between 2020-21 and 2022-23 even before we consider the impact of the war in Ukraine
It will be worse for children in larger families with those in four-child and more families seeing their poverty rate hit nearly 80%:
An ongoing disaster
The poorest people in the UK are facing a disaster on top of the cost of living crisis that has already begun. Those reliant on the DWP are facing a collapse in income not seen in decades. It will come after years of cuts and freezes. And with the effect of the Russian invasion of Ukraine still not clear, the 2020s could be another lost decade for countless people. Moreover, as the Resolution Foundation’s analysis shows, the fact living standards can fall so low without us being technically in a recession shows that the way we measure the economy is weighted towards measuring the situation of the rich rather than society at large.
The poorest people cannot be punished while the government allows the richest to prosper. So, protest and community organising in the face of this crisis is more important than ever.
Exploited and abused for generations by white colonial powers and manipulative economic structures, there is a growing feeling of solidarity within parts of the African continent, as exemplified by the #NoMore movement. Covid vaccine inequality and environmental injustice, together with recent events in Ethiopia, have galvanized people.
Ideas of African unity and rage against former imperial forces are nothing new; the chain of suppression and exploitation of African nations is long, running from slavery and colonialism (including colonial extraction) to wealth and climate inequality, racial capitalism and now Covid vaccine apartheid.
Despite the fact that many would say Africa was united long before Europe – family to tribe, tribe to nation, nation to continent, with 54 countries spread over a vast area – establishing a defined Union of Africa seems unlikely, if not impossible. Standing in solidarity, rejecting western intervention, challenging the exploitative status quo and reductive notions of development based on a defunct western model is not; indeed, if African nations are to prosper and create vibrant economies allowing its burgeoning young population to fulfill their enormous potential, they must.
Poverty amidst abundance of resources
Blessed with rich environments and vast natural resources, Sub-Saharan Africa should certainly not be poor. But for huge numbers of people across the continent grinding poverty and hardship are the norm.
According to the World Bank reportAccelerating Poverty Reduction in Africa, while those living in extreme poverty (less than $1.90 a day) has fallen in the last twenty years, the number of “poor people [living on $5 a day or less]…has increased from 278 million in 1990 to over 413 million” Over 80% of those living in stifling poverty are found in rural areas where education and health care are scarce.
Natural resources dominate many African economies and, along with agriculture, are central to the livelihoods of the poor rural majority. African natural resources that are owned by multi-national mining companies, dug out of the ground by grossly underpaid local workers, are exported for production in goods that are sold in the rich developed nations. This has been the role of Sub-Saharan Africa for generations, and is fundamental to the prosperity of advanced countries: they need the raw materials and they need them to be dirt cheap.
The handful of conglomerates that dominate, collude in enabling monopoly buying structures. Contracts agreed at national levels are administered by middle-men, often corrupt, in the pockets of the corporation; the local workforce has little choice but to accept whatever ‘terms of employment’ are offered; poverty entraps and silences rebellion.
It is a crippling model of suppression and exploitation; a form of wage slavery that holds not just the workers in its suffocating grip, but the nation and continent. It is one of the main reasons African nations that are overly dependent on raw materials, whether cotton or oil, coffee, diamonds or Cobalt, are poor. Poverty is political, the result of short-term political and economic decisions taken in The West by duplicitous corporate-controlled governments.
The other reasons that ensure Africa remains poor and dependent are historical and economic: Colonization, which persists as economic and cultural imperialism, together with a certain mind-set of superiority/inferiority. A mind-set that maintains consciously or unconsciously that some people (black, brown) are worth less than others and, as Covid vaccine inequities demonstrate, can be sacrificed. The economic structures, global institutions and economic ideologies championed by abusive self-centered governments and promoted in the business schools around the world are all designed to ensure Africa remains poor: Imperialism never ended, it just changed form.
When colonial powers withdrew from the global south they needed new ways of maintaining the enslavement of Africa and Africans. Three interrelated weapons where used to create dependency: Aid, debt and the toxic Structural Adjustment Programmes (SAPs), the overarching umbrella of control.
In the 1980s SAP’s were introduced; the International Monetary Fund (IMF) and World Bank (WB) gave highly conditional loan packages to African nations in order to aid their ‘development’; in fact, the loans/SAPs, which destroyed African economies and agriculture, were simply forms of debt entrapment. Once a country is indebted it becomes easy to control. SAPs hollowed out national economies and incorporated Africa into the global political economic system, dominated by the US. It’s economic warfare: the rich countries set up these unaccountable institutions and systems to control the poor nations.
The IMF, WB, World Health Organization (WHO) and the World Trade Organization (WTO), were given enormous political influence/control of African governments and economies. Funding for public services (e.g. education and health care) was slashed to repay loans; countries were forced to ‘liberalize’ their economies, and privatize, selling off key areas like utilities to western or western-backed companies.
In his book Confessions Of An Economic Hitman, John Perkins designates this process of economic terrorism as ‘Predatory Capitalism’: he describes how in an earlier period, during the 1950’s the IMF, CIA and US State Department set up a faceless bank to lend money to African countries that were producing raw materials; any national President that refused the loan was at risk of being handed over to the ‘Jackals’, as Perkins describes the CIA thugs that accompanied him.
At independence, many African countries were self-sufficient in food production and were, in fact, net exporters of food; SAPs and the WTO Agreement on Agriculture, changed all that. Countries were forced to withdraw State subsidies to agriculture (while farmers in Europe and the US receive huge subsidies); farmers suffered, food prices increased, food insecurity was created, dependency on aid and Western benefactors ensured and with it control by the US and her puppets, of Africa, its direction and ‘development’, or, as these paranoid selfish states would have it, its non-development.
‘Development as Westernisation’
Within the narrow socio-economic paradigm that dominates global affairs, ‘development’ and perpetual economic ‘growth’ are regarded as all important. Dominated by quarterly national GDP figures, it is a reductive model designed by ‘donor’ nations to serve not the people of Africa or Asia, but western corporations and the unjust, defunct Ideology of Greed, so beloved.
The very idea of development has become synonymous with ‘Westernization’, including the way of life, the values, behavior and attitudes of the rich, ‘successful’ nations of The West: a hollow, deeply materialistic way of life rooted in division, selfishness and conformity that has poisoned and vandalized the natural environment, created unhealthy, unequal societies of anxious suppressed human beings.
In order to develop, economists maintain Africa must industrialise and manufacture – no country has ever ‘developed’ without manufacturing. All this is true, and some African nations, like Ethiopia, which has a vibrant leather industry, are beginning to do just this. But this is only true within the suffocating boundaries of the existing model of extreme capitalism based on unsustainable consumerism.
There must be another way; perhaps as we sit at this transitional time, not just for Africa, but for the world as a whole, the opportunity presents itself to re-design the socio-economic structures, reimagine civilization, and in so doing save the planet. And perhaps Africa, unburdened, energised and dynamic can play a leading role; working with the West, but rejecting the model of conformity and exploitation, the conditionality of support.
The existing development paradigm sits within the overarching political-economic system, a system of global monopolies, centralized control, massive inequality, grinding poverty, financial insecurity and stress. Not only should this model of development be rejected by Africa, and it would be were it not for the Noose of Debt, and the fact that it is presented as the one and only show in town, but the poisonous spring from which it flows – Market Fundamentalism as some call it – must also be radically dismantled.
It may appear impossible to challenge, but there are alternatives to the current unjust political-economic system. And as the environmental and social impact of the Neo-Liberal experiment becomes more apparent, as well as the economic pain of the majority, more and more people around the world, especially within Africa, where the environmental emergency has inspired powerful movements of activism, recognize the urgent need to reject this way of organizing life and are demanding change.
Western powers (dried-up imperial forces) do not want Africa and Africans to flourish and become strong, this is clear to all. Africa’s destiny must rest in the hands of Africans, in particular young Africans (the median age in Africa is around 20, Europe is a greying 43, US a complacent 39), who are increasingly standing up, organizing, particularly in regard to the environment, and calling for change.
But what should that change look like? Not a shadow of Western nations, but a creative evolving movement of development in which the people have a voice; social and environmental responsibility are championed and lasting human happiness sit at its core. Unity is essential, African unity is essential; together, not necessarily under some defined structure, but coordinated cooperation and support through the medium of the African Union and civil society.
The first and most basic step towards establishing a less brutal, more just system would be the equitable distribution of the resources of the world – the water, land and food; the machinery needed to build infrastructure; the skills, knowledge and expertise.
The world is one: We are brothers and sisters of one humanity. And if we are collectively, within Africa and the world, to establish An Alternative Way, this basic fact needs to form the foundation and provide the touchstone of new systems and modes of living. Only then will we begin to build a global society in which the values of unity, compassion, tolerance and sharing, which are found in tribal societies all over Africa, may flourish.f
New data shows that the ending of the popular Child Tax Credit payment program due to objections from conservative Democrat Sen. Joe Manchin (West Virginia) has resulted in a massive increase in the childhood poverty rate throughout the U.S.
Reviews of the payments showed that they had immediate and lasting impacts throughout the program’s six-month run. In the first month of payments, around 3 million children were kept out of poverty due to increases in monthly family incomes; by the last month, the number of children being kept out of poverty by the program went up to 3.7 million.
The program also had a remarkable success rate in terms of payments going toward necessities that families had previously struggled to afford. A study by the U.S. Census Bureau found that 91 percent of low-income families spent the monthly benefit on basic needs.
But new research shows the predictable outcome of ending the payment program — that millions of children across the U.S. have slipped back into poverty.
In December, the child poverty rate was 12 percent. In January, it climbed up to 17 percent — meaning that more than one in every six kids in the country are now living in poverty, versus close to one in eight last month.
The rate shows that 3.7 million children are now living in poverty that weren’t in December — the exact number that previous studies, cited above, showed were lifted out of poverty due to the child tax credit payments.
Most Democrats sought to make the tax credit payments permanent, or at the very least, to extend them beyond their December expiration date. But those efforts were dashed after Manchin derided the way the payments were being spent, parroting unverifiable claims that parents were using the payments to buy drugs in spite of evidence showing the payments were being used otherwise.
Manchin said that he wanted payments modified to exclude higher-income families, but his proposal could have lowered the threshold to families earning under $60,000, which is below the living wage for a family of four in nearly every state. Manchin also wanted to institute work requirements for people to receive the payments, a standard that has produced negative outcomes in other social safety net programs.
Critics of Manchin’s proposals said that they would be detrimental to the overall goal of helping children.
“If the point is to lift children out of poverty, then my personal opinion is that we should be designing the credit to do that as effectively as possible, rather than designing it in a way that claims it’s for the purpose of reducing poverty, but ends up being an incentive program for the adults,” said Elena Prager, an associate professor of strategy at Northwestern University’s Kellogg School of Management.
“Means testing doesn’t actually save money,” Rep. Andy Levin (D-Michigan) said in October. “It only makes programs harder to administer, forces people to jump through hoops to get needed benefits and continues cycles of poverty.”
Progressives in Congress cited the report on child poverty that was released this week as reason to reinstate the child tax credit payments.
“How did this happen?” wrote Sen. Bernie Sanders (I-Vermont) on Twitter, referencing the drastic rise in childhood poverty rates. “50 Republicans and 1 corporate Democrat allowed the $300 a month Child Tax Credit to expire. That is morally obscene.”
Rep. Alexandria Ocasio-Cortez (D-New York) also suggested that Manchin was to blame for the rise in child poverty.
“One US Senator ‘heard stories’ about people allegedly using the Child Tax Credit ‘for drugs’ without any evidence or data to back it up,” she said. “He then used that as justification to nuke the entire national program, causing millions of kids to fall into poverty in weeks. Horrifying.”
Women, particularly those in the Third World, often find themselves with limited ability to participate in community organizations and political life because of the bondage poverty and their traditional sex role imposes on them. On them falls sole responsibility to care for their children and other family members, especially when sick; they maintain the home, cook the meals, wash the dishes, the clothes, bathe the children, clean the house, mend the clothes. This labor becomes unending manual labor when households have no electricity (consequently, no lights, no refrigerator, no labor-saving electrical devices), and no running water. The burden of this work impedes the social participation, self-expectations, and education of the female population.
In news that will anger a lot of people, banks look set to give their staff the biggest bonuses since the 2007-08 financial crash. At a time when the rest of us face a huge cost of living crisis, the banks’ actions will probably turn your stomach.
Bankers: laughing all the way to the…
The Guardianreported on bankers’ bonuses and pay. It noted that:
Mergers and acquisitions bankers got fees of £2.6bn in 2021. These bankers advise on company mergers.
HSBC, Barclays, Lloyds and NatWest are “expected” to say they’re paying out £4bn in bonuses.
3,519 UK bankers earned more than £835,000 in 2021.
NatWest is expected to announce £4bn in profit for 2021 – while the public still own over 50% of it.
Overall, banks profits are expected to be £34bn – the highest since 2007.
Meanwhile, the rest of us are in the shit.
A crisis for the rest of us
As The Canary previously reported, the UK is facing its biggest cost of living crisis in recent years:
2.5 million families are struggling to pay rent and heat their homes.
Energy companies are putting prices up by over £600 a year.
The Tories are hiking national insurance by over 10%.
Over two million people could be destitute – the most extreme form of poverty.
Of course, all this comes after a decade of austerity – one which the bankers caused.
A decade of chaos
Successive governments cut 14% of all public sector spending in the last decade. This hit people reliant on social security particularly hard. Because Tory reform of the Department for Work and Pensions in 2016 led to policies like the:
Benefit cap: £1.62bn cut.
Benefit freeze: £10.2bn cut; 30% of households saw a reduction in money.
Two child limit: £5.35bn cut, affecting 3.8 million families.
“Abolition of £30 a week support for disabled people who were unfit for work (ESA WRAG)”: £1.365bn cut, affecting half a million disabled and sick people.
But clearly, none of this matters to the richest people in the UK. Because while bankers are getting huge bonuses, the Tories also recently gave the banks a tax cut. It shows that shocking inequality still exists in the UK. And it also shows that our country is still one of the ‘haves’ and ‘have nots’.
The poorest households are taking another hit to their finances. People could see broadband bills rise by 10% this year. It comes amid the ongoing Tory-enabled cost of living crisis and is yet another blow to households already struggling.
Cost of living: the crisis
The UK is facing its biggest cost of living crisis in recent years. As The Canary has already documented:
2.5 million families are struggling to pay rent and heat their homes.
15% of households live in food insecurity.
4% of households have used a foodbank.
In the coming months, things will get worse:
The Department for Work and Pensions is making a real terms cut to people’s social security.
Energy companies are putting prices up by over £600 a year.
The Tories are hiking national insurance by over 10%.
Over two million people could be destitute – the most extreme form of poverty.
And now, another area of people’s lives is set to become even more unaffordable – potentially impacting many other areas.
Communications: spiralling prices
Ofcom is the communications regulator. It deals with television, radio, internet, and telecommunications. On Tuesday 15 February, it released a report into how affordable communications services are. Ofcom’s findings showed that the price of mobile phones and broadband was also impacting the overall cost of living crisis. As the Guardianreported, Ofcom warned that mobile, telephone, and broadband bills could go up by over 10% this year. Based on an average bill, this would see households facing a yearly rise of just under £40.
This higher than inflation increase comes against a backdrop of people already struggling to keep up with their bills. Ofcom found that:
1.1m households (5%) are struggling with the affordability of their broadband. This included people cancelling services, missing payments, or cutting back on food to pay for it.
1m (4%) households are struggling with the affordability of their smart phone.
Predictably, it was the poorest households and those reliant on social security who struggled the most. Ofcom said that 11% of them were struggling with the affordability of broadband with 3% of low-income households cancelling services because they couldn’t afford them. Moreover, over 1m households (5%) don’t even have home broadband. They rely on mobile data for internet access or other devices. And 7% of this group struggled with these costs.
Social tariffs
Ofcom says part of the solution to broadband being too expensive is social tariffs. As it noted:
Special discounted broadband packages… are available to an estimated 4.2 million households in receipt of Universal Credit.
But only 55,000 homes have taken advantage of these discounted rates so far – just 1.2 per cent of those eligible. That means that millions of benefits recipients are missing out on an average annual broadband saving of £144 each.
Currently there are eight social tariffs available. Some of them are also available to people claiming other types of social security. But the prices and speeds of connection vary:
Ofcom says that 84% of social security claimants don’t even know about social tariffs. This is despite 6.8m households potentially being entitled to them.
Wider implications
Moreover, if people struggle to pay phone and broadband bills and get cut off, this will directly impact on other areas. For example, take the “out-of-work” Universal Credit claimant who Ofcom says spends 8.3% of their disposable income on broadband. They have to manage their social security claim online, so no internet or mobile data would mean chaos.
Historically, if you didn’t have internet access you could visit a library. But with Tory-led austerity closing over 800 libraries as of 2019, this is becoming less of an option. For children, the effect on education has also been stark, highlighted further by the pandemic. As Ofcom wrote:
4% [of children] relied solely on mobile internet access during the pandemic – with 2% only able to get online using a smartphone. School-aged children from the most financially vulnerable homes (5%) were more likely than those in the least financially vulnerable households (2%) to have mobile-only access.
Additionally, around one in five children (17%) did not have consistent access to a suitable device for their online home-learning. This increased to 27% of children from households classed as most financially vulnerable.
And none of this addresses the 3.3 million people in 2020 who had still never even used the internet. This figure includes two million chronically ill and disabled people.
A perfect storm for the poorest people
Struggling to eat, heat, and fuel their homes, the poorest people were already facing social exclusion, financial devastation, and overall socioeconomic hardship. Now, with the added impact of potentially no internet access, the situation for some of the most deprived and marginalised people in the UK is looking even more desperate.
So, community support and cohesion is crucial. We all need to be active in our local areas – offering mutual aid where needed and ensuring as few people as possible fall through the ever increasing cracks in a system collapsing in on itself.
During visits to Kabul, Afghanistan, over the past decade, I particularly relished lingering over breakfasts on chilly winter mornings with my young hosts who were on their winter break from school. Seated on the floor, wearing coats and hats and draped with blankets, we’d sip piping hot green tea as we shared fresh, warm wheels of bread purchased from the nearest baker.
But this winter, for desperate millions of Afghans, the bread isn’t there. The decades-long U.S. assault on Afghanistan’s people has now taken the vengeful form of freezing their shattered, starving country’s assets.
When I was in Afghanistan, our rented spaces, like most homes in the working class area where we lived, lacked central heating, refrigerators, flush toilets, and clean tap water. My Afghan friends lived quite simply, yet they energetically tried to share resources with people who were even less well-off.
They helped impoverished mothers earn a living wage by manufacturing heavy, life-saving blankets and then distributed the blankets in refugee camps where people had no money to buy fuel. They also organized a school for child laborers, working out ways to give the children’s families food rations in compensation for time spent studying rather than working as street vendors in Kabul.
Some of my young friends had conversations with me and with others in our group who had, between 1996 and 2003, traveled to Iraq where we witnessed the consequences of U.S.-led economic sanctions that directly contributed to the deaths of an estimated half million Iraqi children under the age of five. I remember the young Afghans I told this to shaking their heads, confused. They wondered why any country would want to punish infants and children who couldn’t possibly control a government.
After visiting Afghanistan late last year, Dominik Stillhart, head of the International Committee of the Red Cross, said he felt livid over the collective punishment being imposed on Afghans through the freezing of the country’s assets. Referring to $9.5 billion dollars of Afghan assets presently frozen by the United States, he recently emphasized that economic sanctions “meant to punish those in power in Kabul are instead freezing millions of people across Afghanistan out of the basics they need to survive.” The myopic effort to punish the Taliban by freezing Afghan assets has left the country on the brink of starvation.
These $9.5 billion of frozen assets belong to the Afghan people, including those going without income and farmers who can no longer feed their livestock or cultivate their land. This money belongs to people who are freezing and going hungry, and who are being deprived of education and health care while the Afghan economy collapses under the weight of U.S. sanctions.
Recently, I received an email from a young friend in Kabul:
“Living conditions are very difficult for people who do not have bread to eat and fuel to heat their homes,” the young friend wrote. “A child died from cold in a house near me, and several families came to my house today to help them with money. One of them cried and told me that they had not eaten for forty-eight hours and that their two children were unconscious from the cold and hunger. She had no money to treat and feed them. I wanted to share my heartache with you.”
Forty-eight members of Congress have written to U.S. President Joe Biden calling for the unfreezing of Afghanistan’s assets. “By denying international reserves to Afghanistan’s private sector—including more than $7 billion belonging to Afghanistan and deposited at the [U.S.] Federal Reserve—the U.S. government is impacting the general population.”
The Congressmembers added, “We fear, as aid groups do, that maintaining this policy could cause more civilian deaths in the coming year than were lost in twenty years of war.”
For two decades, the United States’ support for puppet regimes in Afghanistan made that country dependent on foreign assistance as though it were on life support. 95% of the population, more than three-quarters of whom are women and children, remained below the poverty line while corruption, mismanagement, embezzlement, waste and fraud benefited numerous warlords, including U.S. military contractors.
After the United States invaded their country and embroiled them in a pointless twenty-year nightmare, what the United States owes the Afghan people is reparations, not starvation.
The eminent human rights advocate and international law professor Richard Falk recently emailed U.S. peace activists encouraging an upcoming February 14 Valentine Day’s initiative, which calls for the unfreezing of Afghan assets, lifting any residual sanctions, and opposing their maintenance. Professor Falk acknowledges that the disastrous U.S. mission in Afghanistan amounted to “twenty years of expensive, bloody, destructive futility that has left the country in a shambles with bleak future prospects.”
“After the experience of the past twenty years,” Falk writes in the email, “it seems time for the Afghans to be allowed to solve their problems without outside interference. I am sure many people of good will tried to help Afghanistan achieve more humane results than were on the agenda of the Taliban, but foreign interference particularly by the United States is not the way to achieve positive state-building goals.”
Several friends and I were able to send a small amount of money to the friend who wrote and shared with us her heartache over being unable to help needy neighbors. “Thank you for hearing our Afghan pain,” she and her spouse responded.
Now is a crucial time to listen and not to look away.
The Conservative Party is once again causing an explosion in destitution. That’s the verdict of a new report. The think tank behind it previously warned that the number of families living in the poorest conditions had already sharply increased. And now, its warning is even more dire. Because government policies from the likes of Rishi Sunak could leave over two million people in the most abject of poverty.
One year ago…
The Canaryreported just under a year ago on the National Institute of Economic and Social Research (NIESR). It looked into destitution levels in 2020. This is defined as:
a two-adult household living on less than £100 a week and a single-adult household on less than £70 a week after housing costs.
In real-world terms, the Joseph Rowntree Foundation says destitution is:
going without the essentials we all need to eat, stay warm and dry, and keep clean.
In February 2021, NIESR said that destitution in 2020 had more than doubled. It found that the number of households living in this level of poverty had gone up from 197,400 to 421,500. NIESR also found that the amount of destitution was different across the UK. For example, in the North West of England rates were three times higher than the UK figure. And NIESR’s research is against a backdrop of increasing social decay.
Now, NIESR has produced another report. It says that destitution this year is once again going to explode.
“Powering Down”
NIESR released a report called Powering Down, Not Levelling Up. In it, NIESR made various economic forecasts. For example, it:
NIESR also looked at the government’s “levelling up” plan. It said that with no new money, the plan “severely limits the prospect for regional regeneration”. In real terms, NIESR said:
by the end of 2024, poorer regions in the North of England and the devolved nations will on average be some £7,500 worse off in terms of disposable income per person than in London and the South East.
NIESR also forecasts an increase in destitution for the financial year 2022-23. And it was this which was of most concern.
Destitution: set to explode
In short, the think tank said that based on its forecasts and current government policies, the number of destitute households will spiral. It said the:
impact of this inflation in energy and food prices is a 31 per cent rise in destitution, bringing the total number of destitute households to about 1 million.
It’s difficult to quantify how many people this will be. Previously as the Guardiannoted, 2020’s 220,000 rise in destitute households may have equated to around 500,000 people. So, based on that, NIESR’s forecast of one million destitute households could potentially mean over 2.2 million people will be living in the most abject poverty.
NIESR also said that the effects of destitution would be different across the UK. Despite the government’s levelling up agenda, this extreme poverty would hit the West Midlands and North East very hard. But its the North of Ireland that would destitution could hit the hardest:
The government: creating a crisis
The NIESR report paints a bleak picture of the next year. As it summed up:
The costs-of-living crisis is hitting the lowest income households hardest, as they spend a greater proportion of their income on fuel and food, while neither wage growth nor welfare benefits compensate for fast-rising inflation.
It also noted that the impact among the lowest income households would vary. This is because, as NIESR said, government changes to social security and the minimum wage:
benefit a slightly different segment of the population – not the poorest who are without stable jobs and falling through the cracks of the welfare system, but the poor yet slightly better off households who are lucky to retain their jobs.
However, even this small gain for this segment will soon be wiped out by increases in National Insurance contributions
2022-23 will see a perfect storm of destitution – created by the government – hit the poorest people in the UK. The economic and social shock will be huge. But the physical and mental impact of this on people already struggling will be even greater. Community will be everything – and as a community, we need to come together to support each other in the face of the government’s economic and social carnage.
One million Afghan children may die from starvation over the next several months, according to the United Nations. Nearly 23 million Afghans are facing “crisis levels of hunger” and 8.7 million are on the “brink of starvation.” This mass hunger has rendered millions of Afghans on the “verge of death,” according to UN Secretary-General António Guterres. Alongside looming mass starvation, Afghans face below-freezing temperatures, severe shortages of life-saving medical supplies, and extreme poverty, making conditions in Afghanistan among the gravest of human rights crises on Earth.
This is not a natural disaster, nor is it the result of conflict internal to Afghanistan. This a human-made humanitarian catastrophe. United States-made, specifically.
The U.S.-allied Afghan government, most recently under the rule of Ashraf Ghani, was heavily dependent on foreign aid. Following the Taliban takeover in mid-August 2021, the Biden administration and the UN Security Council instituted devastating sanctions, sharply reducing foreign aid. The Biden administration froze 9.5 billion dollars’ worth of Afghanistan’s foreign currency reserves, roughly equivalent to 40 percent of the country’s gross domestic product.
Journalists Ryan Grim and Sara Sirota recently reported that the White House has “urged European partners and multilateral institutions like the World Bank and International Monetary Fund to similarly starve the nation of capital.” This has led to the total collapse of Afghanistan’s economy, creating “an almost globally unprecedented level of economic shock.” Unemployment has skyrocketed, and the country’s health care infrastructure has been decimated.
As experts have noted, more Afghans are poised to die from U.S. sanctions over the next few months alone than have died at the hands of the Taliban and U.S. military forces over the last 20 years combined — by a significant margin. Yet, as journalist Murtaza Hussain recently wrote, U.S. establishment politicians and intellectuals who decried the humanitarian crisis during the fall of Kabul are seemingly unbothered by imminent mass starvation, imposed by us.
The Biden administration — which routinely laments human rights violations perpetrated by China, Iran, Russia, and other adversaries — is ignoring desperate pleas from humanitarian organizations and UN human rights bodies, choosing instead to maintain policies virtually guaranteed to cause mass starvation and death of civilians, especially children. Yet it is important to note, and remember, that as a matter of policy, this is not particularly new; the U.S. has often imposed harsh economic sanctions, causing mass civilian death. A previous imposition of sanctions resulted in one of the worst humanitarian catastrophes, one largely forgotten in mainstream historical memory.
In 1990, the U.S. imposed sanctions on Iraq through the UN following the Iraqi invasion of Kuwait. These sanctions continued for more than a decade after Iraq withdrew from Kuwait, and had horrific humanitarian consequences eerily similar to the imminent mass starvation of Afghan civilians. The sanctions regime against Iraq — which began under President George H.W. Bush but was primarily administered by President Bill Clinton’s administration — froze Iraq’s foreign assets, virtually banned trade, and sharply limited imports.
These sanctions crashed the Iraqi economy and blocked the import of humanitarian supplies, medicine, food, and other basic necessities, killing scores of civilians. The respected international diplomat, Nobel Peace Prize laureate, and former Finnish president, Martti Ahtisaari, led the first UN delegation to Iraq shortly after the imposition of sanctions. The delegation reported that, “Nothing that we had seen or read had quite prepared us for the particular form of devastation which has now befallen the country.” The sanctions had produced “near apocalyptic results.”
Two years later, the World Food Program reported that the continuing sanctions had “virtually paralyzed the whole economy and generated persistent deprivation, chronic hunger, endemic undernutrition, massive unemployment, [and] widespread human suffering…. A grave humanitarian tragedy is unfolding.”
The consequences of the sanctions for Iraq’s health care system were dramatic. Journalist Jeremy Scahill extensively covered Iraq under these sanctions and reported that, “Every pediatric hospital felt like a death row for infants.” Highly trained Iraqi doctors had the knowledge to save these infants, but the sanctions blocked them from acquiring basic medical supplies and pharmaceuticals, forcing doctors to reuse syringes multiples times and ultimately watch children die of perfectly treatable ailments. Iraqi hospitals “reeked of gasoline,” Scahill recalled, since desperate doctors were forced to substitute gasoline for sterilizer, disinfectant and bleach.
UN Humanitarian Coordinator for Iraq Denis Halliday resigned his post in protest of the sanctions after serving as a UN diplomat for more than 30 years. During his resignation, he told the press that, “four thousand to five thousand children are dying unnecessarily every month due to the impact of sanctions because of the breakdown of water and sanitation, inadequate diet and the bad internal health situation.” He went on to label the U.S.-imposed sanctions “genocide.” His successor, German Diplomat Hans von Sponeck, also resigned in protest after fewer than two years, calling the sanctions a “true human tragedy that needs to be ended.”
A report by the UN Commission on Human Rights studying the impact of the sanctions on Iraq estimated the civilian death toll to be in the “range from half a million to a million and a half, with the majority of the dead being children.” Clinton’s secretary of state, Madeleine Albright, was confronted with this shocking statistic on “60 Minutes,” which led to this now-infamous exchange:
Lesley Stahl: We have heard that half-a-million children have died. I mean, that’s more children than died in Hiroshima. And, you know, is the price worth it?
Madelaine Albright: I think this is a very hard choice. But the price — we think — the price is worth it.
During this era of sanctions, then-Sen. Joe Biden was a member, and eventually chair, of the Senate Foreign Relations Committee. Senator Biden strongly supported the sanctions and advocated for even more aggressive policies toward Iraq. Biden was not then, and is not now, known for his humanitarian impulses or dovish foreign policy stances. The same cannot be said for Samantha Power.
Power is the current head of the U.S. Agency for International Development (USAID), who was brought into the Biden administration to be a champion of human rights, “lifting up the vulnerable” and “ushering in a new era of human progress and development,” according to Biden’s nomination statement. Power was the founding director of the Carr Center for Human Rights Policy at Harvard, served as the Obama administration’s UN ambassador, and has a long list of human rights accolades. The nomination of this “human rights crusader,” as Politicoput it, was widely praised in the human rights community. Yet Power’s record on U.S. imposed sanctions — first in scholarship and then practice — is abysmal.
In her Pulitzer Prize-winning book, A Problem from Hell: America and the Age of Genocide, describes the U.S. response to genocides of the 20th century, arguing that U.S. power should have been used to prevent atrocities and protect civilians. In the chapters surveying the 1990s, Power condemns the Clinton administration’s failure to intervene in Rwanda, intervene soon enough in the Balkans, and use U.S. military force to curb atrocities elsewhere.
Yet the U.S. sanctions regime that caused mass devastation to Iraqi civilians was conspicuously absent — it does not get a single mention in the book. For someone so dedicated to using U.S. power to protect civilians and stop atrocities, Power’s silence on the hundreds of thousands of children dead from U.S. sanctions is telling. Power is unrelenting — and rightfully so — in her condemnation of human rights abuses carried out by other countries. Yet even though the death toll of the U.S.-imposed sanctions rivaled or even exceeded the contemporaneous atrocities and genocides Power depicted in her book, when the U.S. was the perpetrator, she was silent. Unfortunately, her silence on sanctions, and their devastating human consequences, persists.
Power, as administrator of USAID, is now an active participant in the starvation of Afghan civilians. In response to pleas from the UN and humanitarian organizations working in Afghanistan, USAID increased humanitarian aid. But as experts have noted, meagerly increasing aid while imposing devastating sanctions and freezing nearly all of Afghanistan’s foreign assets will do nearly nothing to stop the “unprecedented level of economic shock.” There is near consensus among numerous humanitarian coordinators that the only way to curb the collapse of Afghanistan’s economy and prevent furthering the major humanitarian disaster already underway is to lift the sanctions. Unfortunately, Power, the celebrated defender of human rights, refuses to call for a lifting of the sanctions, and instead remains uncritical.
The devastating human toll of sanctions on Iraqi civilians in the ‘90s is a grim warning for what lies ahead if current U.S. policy continues. The Clinton administration’s sanctions caused mass death and suffering, and the Biden administration is dangerously close to following in their footsteps. The “human rights hawks” who lamented the humanitarian consequences of the fall of Kabul are now silent in the face of U.S.-imposed mass starvation, and the “human rights crusader” within the administration is complicit.
We must listen to the chorus of humanitarian organizations and pressure the Biden administration to immediately lift the sanctions before it is too late. Afghans have suffered at the hands of the U.S. for long enough.
Less than one year ago, the United States government enacted one of the most effective anti-poverty programs in modern history. The Child Tax Credit (CTC), originally established in 1997, was expanded through the American Rescue Plan to provide families with children substantially larger payments, delivered monthly, while making low-income families eligible for the full benefits. This expansion changed the face of child poverty in the United States, lifting over 4 million children above the poverty line—a decrease in poverty of more than 40% — and decreasing food insufficiency for families with children by an estimated 26%.
Unfortunately, despite its transformative impact, the expansion of the CTC is now at risk of being lost.
Like most countries, the Republic of South Sudan is a complex nation of shifting alliances and external influences.
Recently, President Salva Kiir, who sports a Stetson hat gifted him by George W. Bush, signed a peace agreement with old enemies, the Sudan People’s Liberation Army-In Opposition. Around the same time, the so-called Embassy Troika consisting of the US, Britain, and Norway facilitated International Monetary Fund (IMF) programs for South Sudan.
When China proposes investment schemes, US politicians call it “debt-trap diplomacy.” As has been seen in South Sudan, when Western corporations seek to plunder poor, resource-rich nations, they call it “development.”
The West’s interest in South Sudan is oil. Invoking the colonial-era “white man’s burden” of 19th century imperialists, the US government-backed Voice of America recently justified foreign interference in South Sudan by pointing out that the country’s 3.5 billion proven barrels of crude cannot be easily exported due to the lack of pipeline infrastructure and financial mismanagement.
Some readers responded to one of my earlier columns urging the national progressive civic groups, with millions of members back home, to overcome the dominance of giant corporatism with a Ten-Year Plan1 budgeted at $1 billion a year (See, “Think Big to Overcome Losing Big to Corporatism,” January 7, 2022). Readers wanted to know more about the Plan and where the money would come from to implement this grand initiative.
New billionaires are proliferating in numbers reflecting the record stock market surges. Some are enlightened and worried enough to gather with citizen group leaders to review the Plan, the strategy, timetable, and required budget. Those who count themselves in, and want to back the Plan, would pledge to contribute the total pledges of $10 billion for the ten-year effort. After the funding is secured, (possibly augmented with internet crowdfunding), the Plan commences in several coterminous stages.
The First Stage is to get through Congress, vetoproof if necessary, the long overdue necessities for half of the U.S. population, which is poor, with collateral benefits for the entire country.
A Brain Trust will expertly draft legislation addressing the elements of ending endemic poverty. These include a living wage, Medicare for All insurance (already well drafted in H.R.1976 and supported by over 118 co-sponsors), affordable housing, adequate nutrition that abolishes hunger in America, personal and environmental health care with emphasis on prevention, necessary public services for families and communities, and a system of private retirement savings to supplement Social Security.
These conditions for good livelihoods, which were mostly secured years ago by some Western countries, lead to larger market demand, have consistent left/right support in Europe and in the U.S., and they make for strong economies. (See, Reframing the Politics of Polarization by Hazel Henderson, August 4, 2021).
The driving pressure to implement the Plan would come from civic offices staffed by two full-time people in each of the 435 Congressional Districts and for US Senators in all fifty states plus territories. Groups would be established with an expanding corps of citizen volunteers committing 500 hours and $500 annually forming a grassroots juggernaut. These citizen groups would focus intensely on their members of Congress, using precise petition-backed citizen summonses to their Senators and Representatives to appear at Town Meetings, which these organizers arrange with detailed and broadly supported agendas.
The yearly cost to establish these offices and recruit significant numbers of volunteers as the ever-deepening force is about $100 million a year. This sum would include inter-district coordinators and other facilities to organize the self-funded, expanding volunteer corps.
Passage of vital and overdue bills is less difficult than assumed by a society that is presently AWOL from the playing field of legislation. Such catch-up legislation can already count on the overt support of about thirty percent of Congress, with the latent support of at least a quarter of Congress once the organized rumble from the People is heard. (That was the case with Nixon Republicans in the 1960s and early 70s.)
Once the political tea leaves become clear, lawmakers become responsive. This is what happened in corporate President Richard Nixon’s first term, sometimes leading to great majorities behind environmental, consumer, and labor bills. Nixon even sent to Congress a basic minimum-income plan, a better health insurance proposal than Clinton offered as President, and congressional voting rights legislation for the District of Columbia. Congress did not pass these three reforms coming from a Republican White House. Nonetheless, Nixon felt he had to propose these bills.
The Second Stage, parallel to the first, is to create facilities that invite and enable an accelerated banding together of willing people in their various roles. People can have rights and remedies under the law, but without organized groups they are mostly not used, defended, or improved. Whether you are customers of insurance, utility and banking companies, or tenants, or consumers of food, energy, transportation, and healthcare or using government services, or have been wrongfully injured, membership in these “communities,” as organized advocacy groups is essential. Such groups would work to fundamentally change existing dysfunctional systems, extending to protections of children, services for students, and corporate control of the vast commons (public lands, public airwaves, etc.) that we the people already own.
Daily seeking their own interests, corporations are organized to the teeth by comparison to millions of citizens. This is why corporations control the major sectors of our government, our economy, and other societal institutions day by day. The large drug companies have 500 full-time lobbyists regularly working on Congress with large industry backup forces. The people are vastly outmatched. So what do we expect without a strong citizen team on the field?
Corporate power stems not from votes (corporations don’t vote, yet) nor so much from the campaign money. It comes as a byproduct of the almost wholly unorganized populace not utilizing its powerful exclusive sovereignty (“We the People”) under our Constitution. In our country’s history, it is remarkable what a small percentage of people (often under one percent) when organized and representing broad public concerns, have achieved against all odds. (See my book, Breaking Through Power: It’s Easier Than We Think, 2016).
Much of the conceptual work on these legislated facilities has been developed and used to produce pilot projects vis-à-vis electric utility giants years ago by citizen organizations. (See, Banding Together: How Check Offs Will Revolutionize the Consumer Movement by Andrew Sharpless and Sarah Gallup, 1981).
To get these facilities set up and into action all around the country, with seed money for ten years, would annually cost about another $100 million. They would put the people and their expert champions at the table in more ways than one, with near immediate results. Right now, for example, according to consumer advocate, actuary, and former Federal Insurance Commissioner, Robert Hunter, about $30 billion is not being returned as state laws require, to motor vehicle owners by auto insurers that received a windfall when the pandemic reduced auto traffic and claims. Without state-by-state insurance consumer organizations, there will be few of these refunds.
Forthcoming columns will describe the uses for the remainder of the $800 million in the first of ten years.
Richard Parker, Here, the People Rule: A Constitutional Populist Manifesto, Cambridge: Harvard University Press, 1998.
On January 15, 1968, Martin Luther King, Jr. was leaving a planning meeting for the Poor People’s Campaign when he was called back into the room. It was his birthday — his last, it would turn out.
The staff of the Southern Christian Leadership Conference would usually give King a new suit, but this year they wanted to make him laugh.
Xernona Clayton teased, “We know how fond you are of our president Lyndon Johnson,” which got a laugh. Then she pulled out a metal cup engraved: “We are cooperating with Lyndon’s War on Poverty. Drop coins and bills in cup.”
King laughed deeply, but the joke was all too true.
In 1968, the Vietnam War was costing billions while the War on Poverty fell to the side, like spare change in a cup. Today too, our government has said yes to increasing the military budget to $778 billion for next year alone — and no to $1.7 trillion over 10 years for the Build Back Better Act.
As a Christian ethicist who studies King, I think it’s important to remember that he spent his last months organizing a campaign of the poor to challenge political priorities like these.
He brought together poor people who were already organizing their communities, along with civil rights leaders and faith leaders. The plan was to bring 3,000 poor people of all races to occupy Washington, D.C., and confront the administration and Congress about their failure to address the triple evils of racism, poverty, and war.
Although King was assassinated before the campaign launched, the Poor People’s Campaign went forward in the spirit of King’s words from the year before, when he challenged the idea that coins in a cup were enough.
“True compassion is more than flinging a coin to a beggar,” he said at his famous Riverside Church speech in 1967. “It comes to see that an edifice which produces beggars needs restructuring.”
Calling for “a true revolution of values,” King also warned: “A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.”
His words ring too true today. True compassion is not flinging coins at poverty while spending four times as much on a war budget or watching the wealth of CEOs grow exponentially while workers’ wages lag decades behind.
As in 1968, it will take a campaign of the poor to move us towards the revolution of values we need in these times.
Launched in 2018 on the 50th anniversary of the original, the new Poor People’s Campaign: A National Call for Moral Revival has been growing across 40 states, organizing people impacted by systemic injustice and moral leaders to insist that our elected officials listen to our demands, defend our democracy, and pass a moral budget that restructures our poverty-producing system.
Amid a global pandemic and ongoing attacks on democracy and on the poor, we have asserted our right to far more than change in a cup. We are now organizing for the Mass Poor People’s Assembly and Moral March on Washington on June 18, 2022.
Already there are meetings happening in state coordinating committees across the country to plan massive delegations to Washington, D.C., pulling the 140 million poor and low-income people in the nation together across geography, partisan lines, race, and ethnicity. We are coming to demand that our elected officials make real policies to fully address poverty and low wealth from the bottom up.
We want to observe King’s birthday the way he did — by building the power of the poor for a radical revolution of values.
For six months at the tail end of two tumultuous years, parents received direct payments — no strings attached — of as much as $300 per child in their bank accounts. By many accounts, that money delivered long-awaited relief for 61 million children, dropping rates of poverty and hunger.
This week will mark the first time since July that parents will go without a monthly payment.
The expanded child tax credit fell short of some of its biggest promises: It didn’t quite cut the child poverty rate in half, and millions of the most vulnerable families were still left out of receiving money. The full potential of the credit hinged on extending the new benefits permanently, advocates say — it was never expected to cut child poverty in just six months.
Now, the future of the credit hangs in the balance now as Congress debates whether to include any form of a permanent expansion in the Democrats’ Build Back Better package. Those negotiations are taking place as parents brace for another wave of COVID-19 cases that could shutter schools, limit job opportunities and undo some of the financial breathing room the credit created.
When the credit worked best this year, parents could count on it to manage the soaring cost of child care, pay for food, or cover the unexpected expenses that piled up during the pandemic, like the ones Rosa Walker’s family faced.
From July to December, the Oregon mom of three received $800 a month. It was one of the only moments when the pressure of the pandemic eased: She and her husband were forced to cut back hours at work, and the health of her entire family had suffered — she took six months to recover from COVID-19, her boys struggled with their mental health and her husband broke a rib in a roofing accident. When the new credit first arrived last summer, they had $10,000 in new credit card debt from trying to keep the wheels turning since the start of 2020.
With the credit, the family was able to cover higher child care costs for their 4-year-old. They were also able to budget for opportunities to enrich their children’s lives, allowing her 8- and 10-year-old to go to soccer. Walker, an early intervention occupational therapist who works with young children, said being able to provide those social supports helped ease some of the trauma of the pandemic for her children.
“For me, it’s so clear that this is where to invest, not just because these are going to be our adult leaders, but because they deserve the best as children right now,” she said.
The one-year expansion of the child tax credit through Congress’s coronavirus relief plan of early 2021 was modified to remove an income requirement so that the poorest families in the country, the majority of them Black and Latinx, could access the full amount. It changed the structure to a monthly stipend instead of an annual lump sum. The amount also went up, from a maximum of $2,000 to $3,600, and divvied up in payments from July to December of $300 each for kids under 6, and $250 each for kids 6 to 17. The second half of the payments will come in with taxes this year — if parents are able to successfully claim them. The Internal Revenue Service is expected to face significant pandemic-induced backlogs this filing season.
Many Democrats, the White House and advocates expected the policy to be extended beyond a one-year expansion — but that has now been reduced to little more than a pipe dream. Sen. Joe Manchin of West Virginia, who has been the loudest Democratic opponent to the credit, has said he will not support Congress’s Build Back Better plan, an economic package that includes a permanent expansion of the child tax credit, specifically because he believes that credit should be modified so higher-income families are excluded with an additional requirement that parents be working to receive the money.
Those changes will be major concessions for the Democrats who have pushed for the credit expansion, and time is running out to reach a deal. If the expansion does not become permanent, the child tax credit will revert to what it was before: An annual allowance capped at $2,000 — instead of the $3,600 maximum now per child — that was not available to the poorest families in full.
“It’s almost harder to have [the child tax credit] and have it taken away,” Walker said.
Walker fears the impact of that decision could affect families years later, in tangible ways like less access to nutritional food or enough food at all, and in more intangible ways like the impact of parents’ stress on their family.
“I know as a country we really value children, even if it can sometimes feel like we don’t, but I also think children and families aren’t always the loudest voices and I think it can be very easy to miss the impact of not moving forward with this until much later,” she said.
***
To understand the impact of the child tax credit, it’s important to measure what it was able to do in six months — and where it fell short.
In July, when the first payments went out, the IRS was able to reach 59.3 million children — about 88 percent of all kids in the country — and it increased that amount in subsequent months to more than 61 million.
A study by the Columbia Center on Poverty and Social Policy found that between 3 and 3.8 million children were kept from poverty because of the payments from July to November, at which point the monthly child poverty rate had dropped by 29 percent. The most significant impacts were on Black and Latinx children. By November, Black child poverty had shrunk by 26 percent, and the Latinx child poverty rate was down 30 percent, the center found.
Prior to the expansion, 1 in 2 children of color were not getting the full credit, compared to 1 in 4 White children. These kids were also more likely to need the credit for fundamental needs like food. (Black and Latinx kids experience twice the rate of food insufficiency — a more severe form of food insecurity that measures whether a family has enough to eat — as White children.)
According to survey data from the Census Bureau, most parents who received the child tax credit were likely to spend it rather than save. Food topped the list, followed by essential bills, clothing, housing and school expenses. About 21 percent of parents used the money to pay down debt and about 17 percent saved it, per an analysis from July to August by the Social Policy Institute at Washington University in St. Louis.
The funds were essential for parents like Karla McKinnie, a single mother in Detroit with a 10-year-old and 11-year-old. McKinnie lost her job as a server during the pandemic and was out of work for about six months in 2020, putting her behind on bills and rent. A job she took on as a caregiver for older people while she was out of work helped, but the work was sporadic.
The tax credit during the past year helped her pay the rent on time and provide WiFi for her kids so they could continue to do virtual learning.
“Being a single mom and living check to check — actually day to day, for me — just being able to have that reassurance that it was coming on the 15th [of every month], it made me stress out a lot less,” McKinnie said. “I knew that we would have groceries and it would be OK for me to go grocery shopping and get everything that we needed.”
She also used some of the money to put her daughter in guitar lessons. Now with the credit coming to an end, she is looking back at a time of scarcity.
“It’s back to paying for the necessities,” she said.
***
The greatest poverty-reducing power of the child tax credit was held in its ability to reach the people who had never received the full credit before — families that earned nothing at all or too little to file an income tax, or grandparents or parents with disabilities on a fixed income.
But many of those families weren’t reached at all, or only received partial payments. Researchers previously estimated that about 4 million children were at risk of not receiving the payments because their parents hadn’t filed taxes, would need to take additional steps to do so or faced language or technological barriers. They were most likely to be Black or Latinx kids in the lowest-income families in the nation.
The IRS initially sent automatic payments to anyone who had filed a tax return in 2019 or 2020 or signed up through the IRS for a coronavirus stimulus payment. Families who didn’t fall into that category and were earning under $24,800 as a family could sign up for the child tax credit through a simplified form in a portal the IRS set up in June, prior to the start of the first payments.
That sign-up process was cumbersome: The application was confusing, available only in English and did not come in a mobile phone version (low-income people are far more likely to have a phone than a laptop). A new portal in partnership with tech nonprofit Code for America became widely available in September, offering a simplified application that was mobile-friendly and available in Spanish.
More than 100,000 people signed up through that new portal, said Gabriel Zucker, associate policy director for the tax benefits team at Code for America. Most took about 10 minutes to get through the application and the majority used it on their phones. About 4 in 5 users said it was easy or extremely easy to use, he said.
Code for America also helped market the website through benefits agencies, allowing people who didn’t file taxes but did receive some kind of government assistance to become aware of the option.
Realistically though, they never expected to be able to capture everyone in the first year of a program — one of the reasons why Zucker believes an extension of the child tax credit will help it get closer to reaching its original objective.
“What we have shown is that this population can be reached, but it’s going to take time to get to everyone,” he said.
The delays in setting up the portals meant newly eligible families had less time to sign up, and much of the on-the-ground outreach effort was taking place at the community level by small organizations that were overwhelmed with clients.
Families where one family member was an undocumented immigrant with a tax filing number did not receive any payments in July, for example, because of a glitch in the IRS system. Many of those families got the money in two portions in August instead, but others reported never receiving it.
The same happened with parents of newborns who never got the option to claim those children for child tax credit payments this year, said Elaine Maag, a principal research associate at the nonpartisan Tax Policy Center.
“It’s always the case that people that already face the most burdens and complexity in their lives have the least access to the services that are available,” Maag said.
On the ground, agencies helping people sign up for the credit reported a wide swath of problems, including tax forms that were filled out incorrectly by reputable organizations, absent parents who were wrongfully claiming the children instead, and credits that were marked as “issued” even though parents never received the money.
Melanie Malherbe, managing attorney of the welfare law unit at Greater Boston Legal Services, helped sign up low-income families through the portal. She said her caseload was immense — and complicated. Even for her, a trained lawyer, trying to get answers from the IRS and sorting through filing information was challenging, Malherbe said.
“What I’ve observed is that the program could be great — if it was extended. Look at the impact it’s already had on children in poverty,” she said. “But there is an additional level of help and resources needed to extend to people in deep poverty that doesn’t exist.”
The real-life impact of that is that families who expected to get a cash infusion were left in limbo.
Katie Walden and her family saw the upcoming arrival of the credit as an opportunity. Her husband had spent the pandemic trucking to keep the family afloat, work that was on a contract basis, low paid and required punishingly long hours. With the credit coming, they could afford for him to take a lower-paying job that was more stable, they thought.
The Waldens, who have a 3-, 7- and 9-year-old, should have received about $800 — they were eligible for the money and had received it in the past. But the credit never arrived. They couldn’t understand why. In September, they received what they thought was a back payment of $1,000, and then in October their status changed from “eligible” to “pending.” No one at the IRS could tell Walden what had happened.
“It took away the opportunity of feeling fulfilled and feeling like you can be out of panic mode,” Walden said. “I think people don’t really understand what it’s like to put groceries back or say, ‘We can’t get strawberries because they are not on sale.’ To have children have an understanding of, ‘Oh, we are poor,’ that’s really hard to deal with.”
They plan to claim the full amount this year in their taxes, but that money will now go into paying back their parents, who helped them with expenses when the credit didn’t arrive.
“It’s just that demoralizing thing every time you have to ask for help, and we wouldn’t have had to ask for help if it would have worked out,” Walden said.
***
The future of the child tax credit seems to hinge on two major proposed changes to the policy: the introduction of a work requirement and a lower income cap.
While prominent advocates for the expansion say they may be willing to discuss some specific details of the plan, many are adamant that it is functioning as intended. Rep. Rosa DeLauro, the credit’s longtime champion, said in a statement to The 19th that “there is no need to be negotiating on the design.”
“What I am laser focused on is the consequences for the families that are harmed by the lack of extension,” DeLauro said, adding that she is optimistic “we can get the child tax credit over the finish line.”
Sen. Michael Bennet, who has also pushed for the credit’s expansion, said told The 19th that Congress has “to find a way to extend it, and I’ll continue to look for any opportunity to do so.”
Still, tax policy experts worry that the proposed changes to the program can make it even less accessible to the families who need it the most, negating the landmark changes that were implemented last year.
Megan Curran, the policy director at Columbia’s Center on Poverty and Social Policy who wrote the report analyzing the monthly payments, said that a work requirement, in particular, would erase some of the gains of a program redesigned specifically for poverty reduction.
The former version of the child tax credit had income minimums for parents to qualify, which rose depending on how many kids were in the family. That resulted in about a third of children not accessing the credit, including half of all Black and Latinx kids whose parents were more likely to fail to meet the income requirements.
“I find it very difficult to make an argument as to why we should be able to return to that when we have been able to fix many of those issues,” Curran said.
Already, more than 95 percent of people who receive the tax credit are working or were recently working, a grandparent caring for a child, a person with a disability who is not working, or a parent of a very young child under 2 who has stopped working.
Studies of the credit have found no evidence it is leading people to stop working, and one study on census data by researchers at Washington University and Appalachian State University found that the rates of parents reporting they are unemployed to care for kids dropped from 26 percent to 20 percent after the credit went out, suggesting parents were using the funds on child care.
The question of changing the income cap has also been a point of contention for some time, with people including Manchin arguing that the program should not in any way help support higher income families. Currently, couples earning up to $400,000 or individuals earning up to $200,000 qualify for a smaller portion of the child tax credit, maximums were instituted during 2017 tax law changes.
Curran argues that the central point of the program was to help kids, regardless of parent’s income status. As the pandemic has shown, that income status can also swing quickly and suddenly.
“It’s meant to be for kids. I think it makes sense that it’s available largely regardless of family economic circumstance,” she said. “There’s not all of a sudden these cliffs that happen if you earn $100 more at a certain point or $1,000 more at a certain point, you lose this.”
The debate over how to incorporate either of the changes Manchin is requesting, however, is still fairly nebulous. It’s unclear what kind of compromise Democrats are considering, and whether it will even be enough.
Meanwhile, the second half of child tax credit payments still need to reach American households. The IRS has begun sending a letter to parents that contains the amount they will need to claim in their 2021 taxes to get their full share, but that process will face its own set of hurdles reaching families who have moved, or who may not have a permanent address.
“That will be confusing for a lot of families — it’s always confusing when the IRS sends a piece of mail to you,” said Maag at the Tax Policy Center. “You are going to have a lot of people who have not interacted with the tax system previously who are going to have to interact with it.”
One thing that may be more readily available this year will be tax filing sites that will open to coincide with the tax season, but because of the pandemic and a rise in Omicron variant cases, it’s likely those sites will be overwhelmed as it is.
And, Malherbe pointed out, the cases of the most vulnerable families are also the most complicated and sites may not have the resources to help people through the process.
Without that aid, something that can’t be added in one year but could in subsequent years if the program was extended, she said, the tax credit’s potential will continue to be stunted.
“I am worried that some of the people who completely have not gotten anything for their kids yet are not going to get it unless there is the kind of level of help we’ve been giving,” Malherbe said. “There are just a lot of potential pitfalls.”
In October 2021, the United Nations Development Programme (UNDP) released a report that received barely any attention: the Global Multidimensional Poverty Index 2021, notably subtitled Unmasking disparities by ethnicity, caste, and gender. ‘Multidimensional poverty’ is a much more precise measurement of poverty than the international poverty line of $1.90 per day. It looks at ten indicators divided along three axes: health (nutrition, child mortality), education (years of schooling, school attendance), and standard of living (cooking fuel, sanitation, drinking water, electricity, housing, assets). The team studied multidimensional poverty across 109 countries, looking at the living conditions of 5.9 billion people. They found that 1.3 billion – one in five people – live in multidimensional poverty.
