The "Politics of Poverty" and the Lower-Middle Class

    When it is said here in Puerto Rico that 60% of the population falls below the poverty line, as if by itself that fact were justification enough to increase spending on social services to the poor, I am sometimes tempted to respond whether they want the other 40% to fall by the wayside as well.  The large majority of these (around 75%) are middle class.

    Ever since Luis Muñoz Marin's landslide Partido Popular victory at mid century, the political parties that have existed since that time have preyed on the 'politics of poverty'--attempting in some way or other to appeal to the broadest base possible in order to avoid electoral defeat.  This has been as true of the PPD as for the statehood party, who under Pedro Rossello tilted the scale to its favor.  The same might be said of Jorge Santini, PNP mayor of San Juan, who clearly knows how to woo this segment of the population.  The independent party, the PIP, seem to have been too obsessed with "intellectual issues" pertaining to the political sovereignty to really worry about reaching out to this audience, but I might be wrong on this.  The socialists have similarly been 'all talk', but principally because they have never held any measure of political power in the island.

    While this rhetoric, authentic or not, might be a successful strategy to avoid electoral defeat and obtain political power in this small "nation-state", by and large it has been an extremely poor and ill-conceived strategy in moving the island to where it should be going.  Although I am loathe to cite Texan sayings, given their generally uncultured approach to all sorts of issues (particularly if we take good ol' Pres. Bush as an example), there is one which is suitably apt to this topic: "the road to hell is paved with good intentions".  

    We might ask ourselves whether the claim is a valid one, as well as question whether it stands as a solid basis for the genuine future economic growth of the island.  On both counts, the answer veers towards the negative.

    A quick, and admittedly superficial, perusal demonstrates that the lower class segments have de facto standards of living that approach those of the middle classes; one might even suggest that living for the middle classes, particularly the lower-middle class, is significantly more difficult than it is for the poor.   The rhetoric of poverty not adapted itself to the shifting socioeconomic realities of the island, but rather has tended to model itself by a distant past or the realities of other neighboring nations.

    For one, the lower classes generally receive free housing, while the middle classes have to spend at least 1/3 of their income in order to have a roof under their heads--which they might lose at any moment during an economic downturn (as seen recently).  We might put this at $1,000 for a  monthly mortgage for a decent-but-relatively-modest home.  (Some of the middle class use short-sighted tactics to afford better housing by lying about their income, but do not realize that they are in fact end up depressing even further their limited monthly cash flow.)   When I see the government giving away a "llave de tu hogar" (translated as "key to your home"), I wonder where I have to stand in line to get such a good deal: a solid "wooden shack" (concrete) built by the government.   (If you think about it, the differences between a 'luxury apartment' and a 'residencial' are mainly superficial differences in color, style, and neighborly conduct which have nothing to do with the construction per se of the residence.) To top it off, utility services to these households are actually subsidized by those in the middle class.   While a single individual might see himself frugally spending some 120 dollars solely on electricity, the lower classes are being charged $5 to $10 a month; similar scales apply to water as well.  If that were not enough, the government also provides an allotment for food, while a single mid-income individual might have to spend some $300 each month to 'stay alive'.  These very superficial calculations add up to a general difference of some $1,500 monthly as basic living differentials between the two classes.  

    The lower class, of course, are also favored by lower social expectations.  Unlike the middle classes, they do not have to spend on keeping a relatively decent wardrobe and the other accouterments expected of that certain lifestyle 'appropriate' to the middle class.  While this might sound like a superficial observation, it is not; perhaps by nature, given their middle status and the ambition to rise onto higher levels, the middle class is generally driven towards a much higher level of daily spending, which acts to depress the totality of disposable income available to them.  If one truly cares for one's kids, and really wants them to get a good educational base, there are many 'unnecessary' costs such as special classes and extracurricular activities as team sports and the like--which further depress middle class income, particularly so when one considers the many miscellaneous expenses involved.  While lower class kids generally are sent to free public schools, the desire to provide a good education for their kids drives the middle class to the costly tuition of better private schools; continued educational ambition of college again forces deeper cuts into middle class wallets due to the required savings needed long before this education actually beings.  The examples as to the added costs of middle class status are endless, and it is no wonder that the general level of indebtedness in the island is so high.  The middle classes are caught between social stratas, and the simple 'act of living' is much more difficult that is generally presumed or characterized in the media--and this is not considering the added costs of trying to 'get ahead' at work or in business.  

    If we presume a modest yearly salary of $36,000, this leaves an individual of middle class income with about the same disposable income as that of a low class individual who works at Pollo Tropical.  

    Yet those who truly fall between the two strata, in that segment known as the lower-middle class and who make $15,000 a year, will have an incredibly hard time in the economy--much more so than a poor person who makes $8,000 or so but who receives numerous federal subsidies.  Being neither middle class nor poor, they will genuinely struggle in every which way possible to survive.  Since they have to pay for housing, they will seek the cheapest possible rentals, usually of sub-par quality.  Home ownership is out of the question.  Having a family will be nearly out of the question as well, as this would tend to depress their status to that below the poverty line.  Their economic position suggests that they might actually constitute an larger than normal percentage of those who commit suicide; given their extremely fragile economic reality, they are much more sensitive to small economic changes in the national economy as these will have a tremendous impact on their well-being.  As small frogs like the coqui, whose genetic sensitivity serves as an overall indicator of global warming, the realities of this group is perhaps the best indicator of our economy.  In the politics of poverty, this group who has neither the safety net of the middle and upper class incomes, nor the governmental guarantees of the lower classes, completely fall by the wayside.  They are completely ignored by the existing politics of poverty.

    While I do not want to get into the 'whose life is worse' debate, what needs to be pointed out is that the relative levels of de-facto wealth are not as drastic as they are often portrayed and presumed to be.  There might be a 'low gain' to being poor in their general scope of activity, but there is also a 'low cost' to that station as well (under our current socioeconomic circumstances).  Proof of this is found in the nature of local crime, as opposed to other places such as Latin America.   Drastic disparities of income level (increases in the Gini coefficient) lead to harsher criminal acts across places like Brazil and Argentina, whose Gini (2002) was 0.639 and 0.590 respectively.  While there is obviously violent crime in Puerto Rico, most of this does not seem to be the direct consequence of poverty but rather is indirectly caused by it--in particular drug addiction and the competition for turf between different rival gangs seeking a 'market monopoly'.  One might even suggest that the new 'culture of poverty' stands on the scaling out of poverty by preying on others in this manner, as often shown in the news.  Drug addiction, like the 'politics of poverty', is utilized as a means by the uneducated to avoid economic defeat.  That it is commonly practiced is obviously a testament to the 'success' of this strategy.  Obviously, this is a short sighted strategy that, if it were ever hypothetically used by the government to promote the economy, it would in fact drive us all into the poor house given its fundamentally unproductive nature.  I am very thankful that former drug dealer "Coquito" is no longer senator Hector Martinez's (PNP) advisor.   The only thing 'new' produced by the drug economy are medical school cadavers.

    However much "feeling sorry for the poor," might be used as a publicly meritorious claim in order to boost our personal righteousness in a Catholic context, this tactic as a public policy will simply not raise the overall economy of the island.  To repeat, it is a strategy to avoid defeat, but it is not one that reaches for success.  We may all boast, and we may all give, but it will not necessarily enhance our overall level.  While all of this might sound harsh (and would obviously not apply to other economies with radically different dynamics and structures) this is our reality.  Lament and success are two very different social strategies.

    An extremist left winged socialist or communist might very validly respond that North American corporations generate millions of dollars by their operation in the island.  As shown by US sugar corporations that swarmed here during the Great Depression, a period in which so many people worldwide suffered drastically, these corporations generated tremendous profits and elevated values for their stockholders in spite of recessions and continued economic depression.  One might even argue that the opposite is the case: recessions might actually stimulate some corporations to make even more money, as has been the case by many oil companies, despite their low social contribution (i.e. tax levels).   The fact of the matter is that Puerto Rico's Gini coefficient is absurdly high: around 0.589 (2000). ("Normal" Gini coefficients should perhaps fall between 0.25 to 0.35.  Canada, a place known for its fair social policies, has a Gini of around 0.30; that of the economically-successful socialist-countries in the  norwegian 'peninsula'  stands at 0.25.  The coefficients for Japan and Denmark are even lower.)

    It at this point that I would completely agree 100% with the left winger.  

    Puerto Rico cannot continue to rely solely on foreign corporations for its economic base.  Genuinely "reducing dependency" means that we need to reject that 'dependency' frame of mind and begin to 'lifting ourselves by our bootstraps', as was originally intentioned some fifty years ago.  We need to drastically increase the number of successful LOCALLY OWNED economic entities that provide goods and services in the island and abroad. It is as simple, and difficult, as that. 

    And by successful, I do not mean imposing the costs of corporate expenditure on the government as had been oddly suggested by William Lockwood (former president of the Banco de Desarrollo Economico), but rather 'creating' new companies that truly produce new goods and services that enhance our daily lives: "value added" in more senses than which it is traditionally used.  Cheating the government, like the drug dealer who cheats his client, is never a successful policy for economic growth over the long run.  Too bad many Republicans and corporate leaders do not seem to know this.

    If we do not as a collectivity, not only will the 60% sink further into genuine poverty, but many in the other 40% fall as well.  In this scenario, we all might end up moving into the nineteenth century world of Karl Marx.

 

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