Why Homelessness Won’t Be Solved by Itself

The San Francisco Chronicle ran an admirable series on homelessness—on the front page. Like everywhere else, the city has spent many millions to help solve the problem, and it has only gotten worse. That’s because homelessness is not a city problem. It’s not even a national problem. At base, it’s a global problem, closely related to the concentration of the nation’s and the world’s wealth in the hands of a few people who have absolutely no use for it.

Homelessness is not one single problem. Locally, the two most significant factors are unemployment and substance abuse. The former is no doubt the far bigger factor, in spite of what some people think. To those people, mostly white conservatives who believe because they were always able to find work, anyone unemployed is simply not trying hard enough. Oddly enough, the same people also believe that all homeless are addicts. In neither case do they think that economic conditions might have something to do with it.

Homelessness is not caused by the homeless. It is caused by the economy.

I will leave addiction for another time. The biggest element of homelessness is unemployment, and many of the personal tales are heartbreaking. Millions of people with decades of dependable skilled work were tossed aside when factories closed, their jobs shipped off to poor countries where the bosses pay a fraction of US wages, and workers are too desperate to demand more.

The newly jobless family is unable to find equivalent work, and falls behind on the mortgage and bills. Eventually they settle for beginning-level wages, which don’t pay the bills. They downsize, sometimes unable to sell their house in a down market, which is then seized by the bank. Sometimes they can’t find work because they are “too old”, which can be anything from 40 on up. Sometimes everything fails, and they have no choice but to live in their car, or a tent.

However, the loss of work because of modernization is a greater factor than outsourcing jobs to the Third World, although they are related. As I have said here and here, more and more of the work we depended on is being done by robots and computers. Some of this modernization calls for employees with new skills, but many more jobs simply vaporize, their workers pushed out to fend for themselves. Jobs in management aren’t shielded from this trend, either, if for no other reason than the analytical work by management, as well as software coding, can be done at 25% of the cost by workers in India and elsewhere.

Not all is lost, however. Effort in at least four areas can create higher levels of employment. These are: (1) a shorter work week; (2) better laws that provide universal citizen needs at greater efficiency; (3) laws that keep jobs and money in the country; (4) and changes that attenuate the greed of the very rich and the corporate bosses.

As I have said before, my half-humorous suggestion for determining the work week was to divide the grand total of hours of work available by the grand total number of workers. In principle it’s actually a good idea. It would give us a work week of 20 hours or so, which would give us some of the benefits that modernization should provide.

Getting to a 20-hour week is not simple, because workers can neither suddenly be paid half as much nor can they be paid the same for half the work. But we did it to arrive at the 40-hour week from 60 hours, so it is quite possible.

The federal government can do numerous things to make living under the new situation comfortable. Conservatives who believe that a sort of anarchy with few laws and minimal government is the best way are simply wrong. That would give us more crime and less efficiency.

We have laws because not everyone can be trusted to behave for the common benefit, obviously. Besides individual criminals, corporations and the very rich dependably behave in ways that reduce everyone else’s wealth and wellbeing while increasing their own. This has given us the current plutocracy, which, if we are to restore our democracy, must be overthrown one way or another. But that will not happen as long as the very rich and their congressional pets control the government. The once-reasonable Republican party has gone berserk, and is no help. It will take great Democratic strength to rescue the country from itself.

The laws that have taken away from the common good must simply be ended. If a practice cannot be shown to be socially worthwhile, it should be outlawed. It’s not hard to think of examples. Flash trading and hedge funds have no social utility at all; they do not benefit the country in any way. Giant banks must return to boring old banking, and shed their investment services. This is something the Great Depression taught us, but we forgot. Corporations must not be able to avoid their fair share of taxes by setting up a shell headquarters in some low-tax country. All the tax dodges set up by the very wealthy and their congressional pets must be ended. There is no reason the very rich should own such a huge part of the national wealth, because the only place it can come from is the rest of us.

Rather than clutching their pearls and watching corporate bosses rake in multi-millions for sending jobs to poor countries, Congress should enact any number of laws that discourage them from shipping jobs out and closing the mill. Simply requiring all foods to be pure and without known chemicals and impurities, and labeled GMO if they are, would not only improve the quality of our food, but would eliminate carelessly produced foods from overseas. Modernizing factories could be encouraged with financial incentives. Many small steps would improve the employment picture.

Corporations have taken to setting up an office in a low tax country and calling that the corporate headquarters to avoid paying taxes. There are many ways that could be curbed, including designating such companies foreign companies, subject to taxes and duties greater than those for domestic companies. The global economy is complex, but our laws should not allow the US to suffer for the benefit of corporate officers.

In all cases of universal citizen need, the federal government must manage that need, because profit-making interests will always cost significantly more. Every such step we take improves the wellbeing and wealth of the country. National health care is the most obvious instance. National health care insurance would provide the average equivalent of a seven percent raise. The simplest example of benefit here is the avoidance of unnecessary death from untreated disease. An adult who dies unnecessarily costs the country a lot, which falls on the deficit side of the national accounting. There are many other possibilities for national services besides health care that would improve the financial security of all citizens.

These things are so obviously beneficial for the country it is ridiculous to believe we’d be better off without them, as Republicans claim. The federal government is efficient, in spite of what Ronald Reagan claimed, and requires fewer people to do the same work, without the severely bloated wages of corporate bosses.

Right now the government seems to have no understanding of what causes homelessness, nor have more than a handful of people suggested what we can do about it. I believe that the ways I have suggested are well worth discussion and development. I believe they would cure or improve several serious problems. Unfortunately, one political party, the one that caused most of the problems in the first place, would rather defend the plutocracy.

The Essence of the Work Problem

There are two intolerable conditions affecting the world of work in the United States. The first is in full flower. The second  will worsen over time. Solving both conditions would restore true democracy and fix our record-setting inequality. It won’t be easy, but the alternative is pretty grim.

The first problem is that workers at the low end of the income scale are grossly underpaid. The second, which will become increasingly disrupting, is that worker productivity is markedly improving, but we have made no social accommodation of this fact.

There are two intolerable conditions
affecting the world of work in the United States.

As many have noted, the United States is the richest country in history. There is well more than enough wealth to provide for every person. But this wealth is so unevenly distributed that millions of citizens with full time jobs live below the poverty level and cannot get out of it. Retailers earn $21K per year; health insurance costs $15K, leaving $5K for all other expenses. Check out this study from Demos.

Although we also have an extraordinary class of the super-wealthy, whose wealth has grown by some 300% in recent decades, this wealth is not the primary problem. The primary problem, the generator of our all-time high inequality, is at the opposite end of the wealth scale. The problem, as I and many others have said, is that those people are paid so poorly they cannot provide the essentials of a modern American life for themselves and their families. Nor can they escape poverty.

The poverty level is set by the government, which calculates the income necessary to be above poverty. But this level does not include two of the most important elements of a decent modern life: health care and savings for old age.

There is more than a little irony that so many people on the political right object to government money being used to protect the poor, the ill, and the aged, yet they also do not want these people to be able to earn these things for themselves.

People on the political right object to government
money being used to protect the poor,
yet they do not want these people
to earn these things for themselves.

Such people apparently do not believe work that is poorly paid is valuable enough that the earners should earn enough to stay out of poverty. But it is. We in the US have a pretty strong hierarchy of work and pay. This is reasonable to some extent. You’d rather have a skilled electrician install new wiring, because saving a few bucks on someone unqualified may burn your house down. But the so-called “unskilled” work such as cleaning also requires some ability to do the job well, and how to pace oneself to endure. Moreover, dependability is one of the most important factors in any job. Yet we want to pay a dependable unskilled worker poverty wages he can’t live on, and then we object to making up for it with payments from our taxes while we call him lazy and unproductive.

We have been feeling the effects of accelerating worker productivity for a long time. Inspection of any chart of productivity vs. pay will show a rising curve of productivity, but virtually no increase in wages for a long time. Increased worker productivity always means some become unemployed.

The gross number of hours of work has decreased,
yet forty hours per week is still
the standard work week.

The largest part of increased worker productivity has come from increased computer use in every part of the working world. Work that formerly required a separate work force to manage things like inventory is done by sales clerks, with the inventory automatically adjusted by computer as the sale is recorded. The typing pool vanished a long time ago when the bosses realized they could record and transmit their communications directly. So computerization has meant, and continues to mean, that increasing numbers of workers become redundant. Overall, the gross number of hours of work in the country has sharply decreased, and continues to decrease, yet we still maintain forty hours per week as the standard work week.

The two problems conflict with each other. While it will be necessary to reduce the hours of the work week, low-pay workers are already grossly underpaid. How we address these interrelated problems will determine the quality of our democracy, and especially our level of equality.