CONTENTS

INTRODUCTION

CHAPTER ONE - The Mall

Glitz and desperation in a Bangkok divided by income Two sides of Connecticut’s economic divide reveal price of inequality

CHAPTER TWO - Race and Education

Brazil’s ‘educational apartheid’ cements inequality early in life In Selma, income inequality, education and race still deeply intertwined

CHAPTER THREE - Health Care

Health care disparity reveals Russia’s income inequality crisis Inauguration Day: DC elites prosper amid America’s rising income inequality

CHAPTER FOUR - Migrant Labor

In Beijing, migrants remain in the shadow of China’s rise to wealth For new immigrants, an ‘American nightmare’ in Los Angeles

CHAPTER FIVE - The Middle Class

England’s shrinking middle class struggles to hold on American Dream endures in one of country’s most equal areas

CHAPTER SIX - The President

Glaring class disparity gains attention ahead of Kenya’s presidential election State of the Union: In Topeka, Kansas, a ‘new generation of poverty’ feels rising inequality

CHAPTER SEVEN - Oil

In Nigeria, oil divides the rich and poor Big Spring, Texas: Where ‘oil is God’

C H A P T E R E I G H T - Wa t e r

In India, water and inequality are intertwined After the housing boom, opportunity dries up in Fernley, Nevada

CHAPTER NINE - Golf

‘Heaven and hell’ side by side in Burma In Palm Beach, Donald Trump’s exclusive golf resort sits next to county jail

CHAPTER TEN - Conclusion

Looking back, we should have seen it coming. Confidence Game
THE TEAM

ACKNOWLEDGEMENTS

This project was made possible by support from the Ford Foundation and Bake Family Trust.

©2013 The GroundTruth Project

By Michael Moran - December 30, 2013

Y

ou couldn’t see it coming in those days, back in the mid-1970s, when I was coming of age in the town of Fairfield in Connecticut’s Fairfield County.

It felt like the middle-class jobs at the factories that fueled the county’s prosperity would never disappear; that families like ours moving up the rungs of the American Dream would keep steadily climbing; and that the dads who’d made it in their three-piece suits would keep on boarding that 7:38 a.m. train to head 57 miles south to Manhattan’s Grand Central Station and then back home with a rhythm as steady as the sound of the steel wheels on the Metro North tracks. Nobody would have guessed that Fairfield County would see its middle class virtually disappear, the ladder pulled up on so many unsuspecting families, and that Fairfield of all places would become America’s ground zero for income inequality, a graveyard for the American Dream. But that’s what happened. Trying to understand how this happened, what is the global impact of the economic trends that caused it, and how towns like Fairfield fit into a global perspective have been the drivers for a team of reporters and photographers for GlobalPost who have produced this Special Report titled “The Great Divide: Rising Income Inequality and Its Cost.” If the problem escaped many people before 2008, the financial crisis opened eyes by destroying some of the false prosperity that masked the trend. The credit bubble that grew as the financial industry made it easier and easier to turn theoretical real estate equity into cash made many feel a good deal richer than they really were. That all came tumbling down with the collapse of Lehman Brothers. By 2012, President Obama had made income inequality the centerpiece of his reelection campaign, calling the issue in his 2012 State of the Union “the defining issue of our time … No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same set of rules.” But the support for tax reforms and transfers that might reverse the trend have escaped him, and there is no immediate evidence of a swell of grassroots support for any radical revision of either. Polling by ABC News during the recession consistently showed a majority favored “government steps to address the gap.” But when specific policy prescriptions were added, such as higher rates on upper middle class Americans, expansion of food and educational benefits for the poor, support dropped away. Some believe that the US may have to flirt with a genuine social crisis before a solution will be found. As the Nobel Prize-winning economist Joseph Stiglitz put it: “The rich do not exist in a vacuum. They need a functioning society around them to sustain their position. Widely unequal societies do not function efficiently and their economies are.”

For us, back in in the late 1970s, back in the town of Fairfield – on the western end of Fairfield County — life seemed good and life went on. My dad was an Irish immigrant who delivered us from the gritty, industrial town of Kearny, New Jersey to the bedroom community of Fairfield. He had made it. Mom worked too — she was a travel agent, though the “one-income home” was still very common back then. I arrived in Fairfield as a teen-ager and so for me life meant high school sports, my rock band, and driving around in old cars looking for hidden parking lots or disused dirt roads. And all of us — everyone I knew at least — had a job after school. My dad had slashed and fought his way up the ladder through various Jersey suburbs during my youth dragging my mom, my two little brothers and baby sister through town after town, each just a bit less shabby, but none quite up to his goal. Not until we moved to Connecticut. It might as well have been nirvana, to hear my dad tell it. “Leafy”, he kept saying, as though that were sufficient to explain this latest uprooting. Leafy it was: One of my fondest memories of that time involves my little brother Chris on day after we arrived in Connecticut. That first morning, he worked the woods that stood between our doorstep and the street with a rake, making tiny piles between the trees. He had no context for a wooded front yard. To us, leaves on the ground meant work to be done, “the woods” something in a storybook. In Jersey, you made a pile of them, played in it for a while, and then pushed it over the curb into the street where a truck would come haul them away. As novel as Fairfield County seemed to my family in the mid-1970s, it was hardly alien. It had its cities and rural areas, a shoreline, hill country mansions, and a New York-leaning commuter and media culture. It was New Jersey with more trees. Individual towns varied, but most had a degree of ethnic diversity, blacks, whites, Hispanics and Asians, Catholics, Protestants and Jews, rich kids, poor kids and mostly, kids that fell somewhere in between. I left at 19 for college and never returned. But many of my high school friends, and my brother Chris, stayed put and learned a trade; some brought their college credentials back and hung a shingle in their hometown. Through them I felt I still knew the place.

So when Charlie Sennott, GlobalPost’s co-founder and editor-at-large , asked me to take a fresh look at Fairfield County as part of a series of stories that focused on income inequality around the world, I was skeptical. The idea was to report from metropolitan areas around the world that shared comparable levels of income disparity according to the Gini coefficient, the measurement of income variables most widely used by economists. It sounded like apples and oranges, if not an outright statistical anomaly.

I knew the private equity and hedge fund industries had set down roots in Fairfield County in the 1990s, and that many major corporate headquarters had decamped from New York for tax breaks on offer in the Chestnut State. But still, how could income inequality in the urban cauldrons of the developing world be compared to conditions in the wealthy suburbs of America’s greatest city, in the nation with the most powerful economy on Earth, the land of opportunity? As we discussed the series, my eye went immediately to this pairing, in which 0 represents a perfectly equal society and 1 represents a society where one person makes all the income: Bridgeport, Connecticut metropolitan area: 0.539 Bangkok, Thailand: 0.536 The numbers are clear: the Bridgeport metropolitan area — which includes Fairfield, small cities like Stamford and Danbury, as well as enclaves of wealth and influence like Greenwich, Westport, and New Canaan — scores slightly worse on the Gini scale than the capital of Thailand, a Southeast Asian nation where political violence has been touched off by inequality. High-end shopping malls have been burned in protest while poverty and child sex clubs remain stubbornly entrenched despite two decades of rapid economic growth. So with a team of GlobalPost correspondents, including Patrick Winn in Bangkok and others around the world, I took up Charlie’s challenge and set out to explore the idea that ran through this Special Report. What I discovered dispelled my

skepticism. They say you can never go home. I always wondered exactly what that meant. But I think I now know: I can’t afford to. And chances are, unless you’re willing to live on the edge of poverty with substandard schools and policing, or can afford a half million dollar home so you can keep up with neighbors who make an average of $99,000 a year, you can’t afford it either. It is not difficult to experience the kind of economic gap I’m describing. Get off Amtrak’s northbound trains in Bridgeport and walk two blocks to Main Street, and the struggling merchants, homeless men and general sense of depression is soon apparent. Inside the city’s neighborhoods, decrepit housing projects and dismal row houses sit amid the ruins of America’s 20th century industrial infrastructure. The roster of great corporations that abandoned the city reads like a slice of the Dow Jones Industrial Average, circa 1935: Wheeler & Wilson, which produced sewing machines and exported them throughout the world, Remington UMC, Bridgeport Brass, General Electric Company, American Graphophone Company (Columbia Records), Warner Brothers Corset Company (Warnaco) and the Locomobile Company of America, builder of one of the premier automobiles in the early years of the century. All are now gone and the hulking abandoned factories are crumbling like weathered and broken grave stones in an ill-kept cemetery. Just a 10-minute drive in either direction lands the traveler on a completely different planet: the New England coastal charm of Southport, the funky hedge fund wealth of Westport, where Paul Newman and Martha Stewart, among others, made their home, and further south toward New York, Greenwich. If New York is the Oz of global finance, Greenwich is where its children go to escape the gritty realities of Gotham. Where Dunkin’ Donuts barely holds on along Bridgeport’s main thoroughfare, an Apple store, designer boutiques and four-star restaurants grace Greenwich Avenue. You get the feeling the police might ticket you for violating the laws of fashion. “Apples and oranges,” some will say, and indeed the comparisons seem unfair. Yet at their core, both involve human beings living in the same state with the same theoretical rights and advantages. And yet the results, increasingly, have taken on an economic profile similar to that of a developed world metropolis. Case in point: Bangkok. My colleague Patrick Winn traced the hard realities of the Thai capital’s slum dwellers a stone’s throw away from the downtown shopping area of the elite, where one shopping mall includes a Rolls-Royce dealer, Swarovski outlet and a host of other global luxury outlets. Again and again, we found disturbing echoes of the modern American experience in striving emerging market cities. Topeka, Kansas has virtually the same Gini ranking as Nairobi. Moscow matched Washington, DC. Los Angeles and Beijing, Selma, Alabama and slum-ringed Rio. That’s not to say life is harder or even similar in these global cities than their American Gini twins. But the relative gap between the rich and poor is nearly identical, and that is worth thinking about given the decades long trend that has American income inequality growing into a yawning gap. Our research and on-the-ground reporting between America and the developing world had led us to realize that there was indeed a ‘Great Divide’ in America, a pulling apart of the fabric out of which the American Dream had been woven.

CHAPTER ONE - The Mall

The distance from Fairfield County, Connecticut to Bangkok, Thailand is 8,639 miles. But then, it depends what one means by the word “distance.” By some measures there is not much distance at all. Take the Gini Index, the scale that economists use to measure income equality, with zero equaling perfect equality and 1 representing absolute inequality in which one person owns everything. Thailand, where Bangkok is the bustling capital city of one of Southeast Asia’s fast growing “Tiger economies,” comes in at 0.536. Fairfield County – an area that includes urban Bridgeport and the wealthy enclave of Greenwich — is slightly worse at 0.539. So while many think of Bangkok’s slums and its glamorous shopping malls as embodying the rich-poor divide of the developing world, few realize that some American metropolitan areas are beginning to mirror that same level of extreme inequality.

Glitz and desperation in a Bangkok divided by income
Americans think of Bangkok as embodying the rich-poor divide of the developing world, but some US areas are beginning to rival it. By Patrick Winn - January 16, 2013

B

ANGKOK, Thailand — Most male drop-outs living in Bangkok’s most notorious slum, Klong Toei, are presented with two principal career paths: speed dealer or stevedore.

The first involves ducking cops, consorting with junkies and hardening your neighborhood’s rep as a crime-infested nogo zone. Klong Toei’s reputation for selling “ya ba” — pink meth tabs that smell like cotton candy when smoked — is second only to its reputation for catching on fire. Flames easily leap between dwellings in the slum, a labyrinth of buildings packed so tight that alleys remain dim under the Thai noontime sun. In lieu of meth, Boat Thammongkul, 20, has chosen to work the nearby docks. “We move heavy stuff at the pier for 500 baht a day,” Boat said. That’s roughly $16 for nine hours at the Klong Toei wharf, a critical hub in Thailand’s export economy and the chief employer of nearby slum dwellers. “Just because people around me sell drugs doesn’t mean we have to,” he said. “Besides, I have a dream. One day, I want to work at a job indoors. With air-conditioning.” Small dreams and hard labor define the view from Klong Toei. But in Bangkok, a city divided by wealth and class, a mere five miles separates the slums from a glam shopping paradise feeding the appetites of an emerging middle class and a rising upper class. Inside the crown jewel of the Thai capital’s malls, Siam Paragon, a second-floor showcase displays a Rolls-Royce Ghost. (Sticker price: $942,000.) Downstairs, Swarovski sells a glittering Hello Kitty pendant chiseled from fine crystal. Weight-conscious ladies can choose from multiple outlets promising to eradicate cellulite with acoustic waves or, for $700, destroy belly fat with a freezing electronic wand. CEOs set on enhancing their karaoke skills can shell out $650 for singing lessons tailored for corporate executives. This is a world unknown to Boat and his friends, a crew sporting the signature look of the Klong Toei dude: shirtless, scribbled up with tattoo ink, lean-muscled bodies shaped by manual labor and a diet of cheap noodles. “You say ‘Klong Toei’ and all people see are junkies,” said Kwan Khetpratum, another 20-year-old dock worker who lives near Boat. “If I walked into the malls, the fancy people would look at me strangely. I’ve never even thought of going there.”

Scenes from the slum of Klong Toei in Bangkok, Thailand on Dec. 10, 2012. - Photo: Ed Kashi/VII

Double standards

M

ost Americans will find it easy to write off Thailand’s rich-poor class divide as predictable in a distant, developing country known for cheap holidays and military coups.

But perhaps they shouldn’t. When it comes to income inequality, Thailand and the US bear a startling statistical resemblance. According to US government figures, America’s wealthiest 20 percent control a bit more than half of the national income. The same is true in Thailand, according to the World Bank.

Rich Americans’ counterparts at the bottom, the poorest 20 percent, take in 3 percent of the national income. In Thailand, the corresponding figure is nearly the same: 4 percent. The world’s premier measure of income disparity, the Gini coefficient, suggests that Thailand’s nationwide wealth disparity is equivalent to that of Bridgeport, Connecticut, or Washington, DC. Thailand has been transformed by its tiger economy boom years — the 1980s and 1990s — when the nation grew into what the World Bank now calls an “upper-middle income” economy. From 1980 to 2011, Thailand’s per capita GDP soared from $680 to nearly $5,000. As the nation grows more prosperous, the ranks of the superrich keep swelling. According to the Switzerland-based Julius Baer group, which tracks wealth, Thailand’s stock of 47,000 millionaires in 2010 could swell to as many as 136,000 by 2015. Thais even have a homespun word for their modern, moneyed jet set: “hi-so,” inspired by the English term “high society.” The vast chasm between the superrich and struggling poor shows few signs of narrowing, according to Thai economist Pasuk Phongpaichit, who wrote in a recent analysis that “inequity will continue to be Thailand’s achilles heel.” A United Nations report on Thailand, which was officially endorsed by the Thai government, was written by researcher Gwi-Yeop Son, In the report, Son attributes the gap, in part, to “the overhang of patron-client ties, the culture of deference and inequities reinforced by the petty rituals of everyday life.” Thailand, she contends, is a “very unequal society” with a “growing awareness that inequality lies at the root of several forms of human insecurity, including rising political conflict.” In both America and Thailand, a national debate over this division of wealth has spilled onto the streets. Albeit with very different degrees of intensity. The US has seen Occupy Wall Street, the ill-defined, sit-in movement that cast America’s top earners as a gluttonous “one percent.” Thailand’s self-proclaimed have-nots are the Red Shirts street faction, which contends the US-backed democracy more closely resembles a feudal serfdom lorded over by aristocrats. The Red Shirts have been involved in sustained, violent clashes against government troops which erupted two years ago, a heated conflict that seems to be simmering on a lower burner now. In Thailand, “song matratan” — translation: double standards — has become the go-to shorthand for those who believe wealth and connections typically trump the rule of law. The phrase, popularized by the Red Shirts, has sunken into the national consciousness. But even senior politicians with sympathies towards the protest movement are apt to belittle grumblings over “double standards,” which suggest their entire system is broken. “This has become a way of thinking in Thai society,” said Nikom Wairatpanij, the president of Thailand’s senate. “If people see they’re losing out, they’ll say it’s ‘double standards.’ If they’re getting their way, they’ll admit there’s a single standard.” “People probably do this everywhere,” Nikom said. “But maybe it doesn’t manifest itself as violently as it does here.”

Scenes from the slum of Klong Toei in Bangkok, Thailand on Dec. 10, 2012. - Photo: Ed Kashi/VII

Class war at the mall

F

rom within Central World, perhaps Bangkok’s hippest mall, there is little to suggest that the complex was recently the scene of Thailand’s worst political violence in decades.

On May 19, 2010, its facade was swallowed by orange flames. The mall’s glass exterior panes exploded into shards, sprinkling the plaza below. The muzak was replaced by squealing fire alarms. Black smoke swept across the downtown skyline. Among mall-goers, the image of this chic emporium ablaze has come to symbolize class rage run amok. “What they did, it was horrible. It was economic violence,” said Aek Wiyasak, a 27-year-old tourism officer who frequents the mall district.

“The world looked on, afraid to come to our country, probably thinking Thailand is a horrible place.” The shopping district, lined with glowing Gucci and Burberry storefronts, was the Red Shirts’ chosen site for their largest-ever protest encampment. Their faithful ringed it with razor wire and bamboo spikes and refused to leave until the government called new elections. By the time the anti-establishment movement was finally crushed by guns-blazing infantry units, the chaos left behind nearly 100 corpses, 2,000 injuries and a series of buildings torched by arsonists widely assumed to have come from the Red Shirts’ embittered ranks. But like the wounded limb of a starfish, the mall’s torched wing has re-grown as if never attacked. Today, after an $88 million reconstruction project, shoppers pouring in and out of Central World face few reminders of the blaze that nearly burned the mall to the ground. Unless, of course, they come to shop during an appearance by Sawitseree Rorbruu, a 60-something Red Shirt sympathizer who occasionally sets up a public address system by the mall. She and like-minded political agitators are bent on telling shoppers that, instead of lamenting their handbag shops going up in smoke, they should still be mourning the scores of protesters killed during Thai army raids. “These hi-so people look down at us,” Sawitseree said. “If they see us crying out, they’ll say ‘These damned people, these weeds, they’re poor and stupid and have no schooling.’ We are not like them. We are the ones who eat curry by the roadside for 20 baht (65 cents). They eat their curry on the mall’s top floor for 60 baht ($1.95).” Many of Thailand’s upper classes — high society especially — roll their eyes at the movement’s peasants-vs.-aristocrats rhetoric. They insist the protesters were pawns paid by politicians to raise hell and hold the economy hostage. The movement was funded and goaded on by ex-premier Thaksin Shinawatra, a billionaire mogul ousted in a 2006 army coup. His younger sister, Yingluck, now serves as prime minister. “Obviously, someone told them to burn down the mall,” said Udaiwan Niyomseree, a Siam Paragon regular. “They are just little people fighting. But their actions affect the entire country.” Appearance-wise, the 26-year-old embodies the hi-so: milky skin, twinkling jewelry, an auburn dye job and an educated Thai’s command of English. But she rejects the label. “The hi-so are pretty people, buying lots of stuff, never thinking of the price,” Udaiwan said. “My family is just not rich enough.”

A drug addict slumps against a wall in the slum of Klong Toei in Bangkok, Thailand on Dec. 10, 2012. - Photo: Ed Kashi/VII

Scenes in the slum of Klong Toei, in Bangkok, Thailand on Dec. 8, 2012. - Photo: Ed Kashi/VII

Scenes at Central World mall in downtown Bangkok, Thailand on Dec. 7, 2012. This is one of the largest malls in Asia and represents the haves of Bangkok. - Photo: Ed Kashi/VII

Scenes around the Central World Mall in downtown Bangkok, Thailand on Dec. 9, 2012. - Photo: Ed Kashi/VII

The Maserati store in the upscale Siam Paragon Mall in Bangkok, Thailand on Dec. 11, 2012. - Photo: Ed Kashi/VII

Returning home

T

hough the size of Thailand’s wealth gap mirrors that of the US, its poverty is far more raw. The brackets measuring both high and low income in Thailand are significantly lower than the brackets of high and low income, for exam-

ple, in Connecticut. Street dogs, their flesh eaten by lesions, skulk through Klong Toei’s alleys. Fetid sewage canals cut through the slum like jagged scars. After dark, by the railroad tracks, men go boozing in shacks decorated with twinkling lights and hostesses caked in rouge.

How difficult it is for Thais to navigate their way from a slum like Klong Toei to a better life on the upper end of the economic scale is a central question in comparing the inequality in Thailand to that of Connecticut. A young woman named Jiraporn Suthaithum, from the slums of Klong Toei, was asked about this. She was born to a mother and father who were paid to wash the blood off butchered pigs in a slaughterhouse. She relied on Catholic charities to fund her boarding school tuition in Thailand. She later graduated from an American college — Methodist University in North Carolina — an almost unheard-of feat for a kid from Klong Toei. She is one of very few Klong Toei natives ever fortunate enough to have traveled overseas. “I remember, in grade eight, telling my friend that I’m from Klong Toei. She was shocked and said, ‘I heard about the drugs. And all the fires because you’re stacked on top of each other,’” Jiraporn said. “So I knew I was poor. I just sucked it up and got used to it.” Jiraporn’s brushes with the upper class have disabused any sense that deluxe malls and spoiled teenagers are intimidating. “Of course they buy nice cars and handbags,” she said. “Anyone with money would do the same.” Blaming the rich for Klong Toei’s poverty is futile, Jiraporn said. The bigger enemy, she said, is the limited worldview worsened by Klong Toei teenagers’ tendency to quit school and start making money on the docks or the streets. “People think small here. Even my own brother thinks short term. Day to day. If he has a little money, he’ll just buy a new cell phone,” she said. “I think, ‘What do I want to do in the next five years?’ Then I’ll start setting goals.” Even many Klong Toei dwellers without her advantages are unmoved by messages of class struggle. Cambodian immigrant Tone Mana, a 38-year-old dockworker who lives near Jiraporn, could give a damn about Thailand’s never-ending protests and their angry sermonizing. Double standards are a fact of life, he said, and nothing to throw a molotov cocktail over. “The rich and poor live on totally different levels. I never had their opportunities. Look at them, look at me, and you’ll see we have nothing in common,” Tone said. “But it doesn’t upset me.” Despite Jiraporn’s American college degree — an achievement also unattained by many upper-class Thais — she is back where she began. Jiraporn lives with her parents in her childhood home, a wooden dwelling planted in a slum teeming with 100,000 other residents. She works up the block at the Mercy Centre, a charity offering shelter to urchins, health care to HIV-positive locals and other aid. The foundation is headed by a US-born Catholic priest, Joe Maier, who helped put Jiraporn through school. She is happy to give back. In America, infrastructure and government aid help inoculate the poor from Bangkok-style slum ugliness. Even in Anacostia, the infamously poor quarter in Washington, DC, the sewers are not exposed and the air-conditioning is plentiful. But Klong Toei, for all its setbacks, is not cursed with American-style gun crime and gang warfare. Most locals are reluctant to label the slum as dangerous. Still, Jiraporn would like to relocate her parents to nicer environs. Despite her best efforts, she cannot convince her mother to leave the slum. “Her life is here,” she said. “I respect that.” So, until she marries, she will remain among the dark alleys and bedraggled street dogs, living in a world considered hell by high society and home to her loved ones. “Klong Toei, to me, it’s really one big family,” Jiraporn said. “Even the drug addicts are pretty nice.”

Views of Greenwich, CT on Nov. 26, 2012. - Photo: Ed Kashi/VII

Two sides of Connecticut’s economic divide reveal price of inequality
America’s wealthiest metropolitan area is also one of the country’s least equal. By Michael Moran - January 16

B

RIDGEPORT, Conn. — The fragile peace of Ogden Street, of the houses facing Washington Park, of the families along Brook and Stillman and Arctic, is interrupted night after night by gunfire and sirens and the shouting of

young men. In the past six months, nine residents of Bridgeport’s Eastside neighborhood were gunned down, many at random, four before their 16th birthday. In two separate incidents this summer, 15-year-olds were killed after leaving ‘sweet sixteen’ parties, police say, by boys ejected for fighting. But the boys came back. “They just drive up and open up on a house,” said a woman from Ogden Street whose neighbor lost her daughter in one of the murders. “It’s children killing children, they got nothing better to do.” Asked for her name, she added, “What, so they can come shoot me down? Hell no!” Welcome to Fairfield County, Connecticut, the wealthiest metropolitan area in the country, according to the Labor Department’s Bureau of Economic Analysis, but also among the most unequal in terms in income distribution. Down the highway headed south, in another Fairfield County community, gritty Bridgeport seems an awfully long way away. The 61,000 residents of Greenwich are oriented to the southwest — toward Manhattan, with its haute culture and financial district. The idea that Greenwich residents should feel somehow responsible, or even concerned, about the plight of 145,000 people in Bridgeport strikes many as odd — if not absurd. “I don’t think of it at all,” said Karen Schiff, a well-dressed young woman heading home from Greenwich train station from her job in New York. “I don’t think I’ve ever even met someone from there. Maybe I drove through, I don’t know.” Beside her, waiting at a bus stop just across the street from the Greenwich station was Clara Bing, who commutes each day from the nearby town of Norwalk to work at a local dry cleaning business. Bing used to make the same trip from Bridgeport, her hometown, but moved closer to work to cut down on commuting time. “Funny thing is that lady probably meets someone from Bridgeport every day,” Bing said. Turning toward Greenwich Avenue, with its Baccarat jewelry shop, Apple store and dozens of expensive boutiques, she said, “I used to ride in from Bridgeport with the people who work in those stores every day. As long as we go home at night, I guess, it’s okay. It’s like we’re invisible.” The distance between these two places is not much, about 20 miles, but the gulf that separates them often seems too great to navigate for many residents on both sides of the divide. The vastly different experience of growing up in either — cannot be exaggerated. Bridgeport with its dilapidated factories and graffiti-scarred public housing projects is a world away from the half-dozen other affluent communities that line the Connecticut shoreline between them, such as Westport and New Canaan. But the affluent enclave of Greenwich tops them all. Swimming in the wealth extracted from Wall Street the hedge fund and private equity groups nestled in the downtown business districts anchor communities centered around lavish country clubs, colonial mansions and public schools that send dozens of children to the Ivy League each year. All except Bridgeport, that is. To walk down Bridgeport’s deserted Main Street, with its boarded up stores and hard-luck hotels, and then stroll down Greenwich Avenue later that day, is to experience different planets. The crime rate is high in Bridgeport. Gun violence is a fact of life and too often death. That’s true not only in Bridgeport, but also across the economic divide, as the school shooting in nearby Newtown so tragically proved. Though there is crime on both sides of this county, the nature of lawbreaking seems different in Greenwich, where a series of high-profile white collar crimes have been in the news. Steven A. Cohen, founder of SAC Capital Advisors, is facing multiple insider trading investigations into his $14 billion fund. Or his neighbor, Walter Noel, founder of a hedge fund, Fairfield Greenwich Group, that was the largest single beneficiary of the infamous Bernie Madoff fraud. It’s a good bet some sleep was lost at the $10.8 million mansion of Dick Fuld,

former CEO of Lehman Brothers. But for high-priced defense attorneys, a membership at the Greenwich Country Club and getaways to St. Bart’s can take the sting out of such things. For the residents of Bridgeport’s Eastside, escape is not so easy.

The abandoned General Electric factory in East Bridgeport, CT on Nov. 26, 2012. - Photo: Ed Kashi/VII

The Gatsby Effect

W

hile Bridgeport and Greenwich represent two extremes, economists — backed by a growing body of statistical evidence — suggest their radically different trajectories reflect a new reality in America.

The American Dream, that touchstone of social mobility, opportunity and justice for all, has slipped beyond the grasp of an increasingly large proportion of American society as unequal origins increasingly fuel unequal outcomes. “Inequality of opportunity has increased in recent decades,” writes University of Arizona researcher Lane Kenworthy in the current edition of Foreign Affairs magazine, whose coverage of this domestic topic is in itself indicative of the

broader and global implications. “[A]vailable compilations of test scores, years of schooling completed, occupations, and incomes of parents and their children strongly suggest that the opportunity gap, which was narrowing until the 1970s, is now widening.” Put simply, in today’s America, the children of today’s rich will very likely get richer, poor kids will probably remain so, and those in the vast middle class will be challenged, even in two-income households, to just tread water. How can this be? The world still beats a path to America’s door after all, and from all corners of American society it is still possible to point out the rags-to-riches stories that underpin so many people’s faith in the country. True, indeed: Oprah Winfrey, born in rural Mississippi, is one of the world’s richest people. Xerox CEO Ursula Burns grew up in a gang-infested housing project in Lower Manhattan. Sheldon Adelson, who gained notoriety as the founder of a right-wing “Super PAC” in the 2012 election, was a Chicago cab driver’s son before founding a casino empire. James Cayne was a struggling card shark when he was discovered by a senior executive at Bear Stearns, the investment bank. Cayne was CEO on the day in 2008 when Bear Stearns collapsed and walked way with at least $200 million. But increasingly, these are the exceptions that prove the trend economists have variously dubbed as the Great Gatsby Curve or the opportunity gap: since 1971, the likelihood of someone born in the bottom five “quintiles” of the American income spectrum rising into the top two has drastically decreased. Household incomes in those bottom quintiles (representing 60 percent of all Americans) have barely grown. Meanwhile, household income among those in the top two has soared — by 75 percent for those in the top 20 percent, for those earning in the top 5 percent of Americans, the increase is even more dramatic: 95 percent. In the limited political debate that took place on this topic over the past election cycle, taxation — and competing plans to reform the way income tax is collected and its revenues spent — dominated the conversation. But in Bridgeport, where incomes hover overwhelmingly in the bottom two quintiles, residents see their ills as going far beyond tax reform. Once a leading industrial city, with huge factories that produced Singer sewing machines, Remington rifles, Sikorsky helicopters, engines and electronics for General Electric and components for the wartime Manhattan Project that produced the atomic bomb, Bridgeport has failed to reinvent itself. As late as the mid-1970s, says Jeff Kohut, a lifelong resident and civic activist, “you could leave a job in the morning and have another after lunch. The factories were working at full capacity. Times were that good.” But with changing tax incentives and the loss of major industry, Bridgeport just couldn’t keep up. In many ways, given the implications of the Gatsby Curve, its timing could not have been worse.

Scenes of urban blight in downtown Bridgeport, CT on November 27, 2012. - Photo: Ed Kashi/VII

A Global Dream

B

ridgeport’s urban middle class, shorn of manufacturing jobs, spooked by rising crime rates and by what appeared to be the city’s inability to do anything about it, fled for leafier towns beyond the city limits.

What followed produced a profound alienation between residents of the city and the towns around it. In a pattern repeated around the industrial Northeast and Midwest, fast-growing communities outside the city limits hooked up to highway networks, water and sewer lines developed by the cities, then lobbied to break their bonds with the declining urban centers.

In Connecticut, this process was supercharged when, in 1960, the suburban interests succeeded in changing the state constitution to abolish Connecticut’s eight county governments, eliminating any hope that the affluence surrounding Bridgeport or other struggling cities could be harnessed for redevelopment. Bridgeport natives like Kohut view this as a betrayal. The migration of more prosperous residents that fed the growth of neighboring towns like Stratford, Trumbull and Fairfield — “colonies of Bridgeport, if you will,” says Kohut — encouraged a selfishness that exacerbated his hometown’s decline. “They needed the urban workforce and they needed to engineer the fate of Bridgeport in their favor,” he said. The result: “a de facto apartheid … a segregation based on race and class. It’s been deliberately maintained to keep an affordable labor force that maintains the life style and tax base that has evolved in the wealthy suburbs.” The coup de grace, he said, came in the form of shopping malls. In 1964, Trumbull finished its connection to Bridgeport’s municipal water and sewer systems and built the first “mall” in Connecticut: the Trumbull Shopping Park. Within five years, much of downtown Bridgeport’s own shopping district along Main Street had been shuttered. The idea that Bridgeport’s neighbors have deliberately conspired to keep Bridgeport down may seem far-fetched. But ask anyone around town, and they’ll remind you that the current president of the county’s chamber of commerce, Christopher Bruhl, has opposed one redevelopment scheme after another over the years. In one case that still rankles Bridgeport residents, politicians from neighboring towns united to kill a plan by Las Vegas developer Steve Wynn of Mirage Resorts, which wanted to put a casino in an area called Steel Point that would have employed up to 7,000 people, according to state labor estimates. As the debate raged, Bruhl was quoted at a chamber breakfast saying the county couldn’t afford to allow such projects, which threatened to “take away our cheap Bridgeport workforce…” But the failure of Bridgeport to revitalize cannot be laid completely at its neighbors’ doorsteps, of course. Deep-seated corruption in Bridgeport’s city government has been the cause of more than one grand plan’s implosion. Todd Addison, a Greenwich resident who runs a plastics manufacturing company in Brooklyn, New York, has some sympathy for the city up the highway. “It’s a unique place,” Addison said of Bridgeport, a city he knows relatively well from his days living in nearby Trumbull. “It’s located on the coast, on the water in Connecticut, and yet it’s a place where people don’t want to go. Back in the 1980s, a rock band from Fairfield had a local hit with a song featuring the chorus, “I Don’t Want to Live in Bridgeport.” Addison chuckles at the mention of it. “They’ve had opportunities to rehabilitate — casino plans, programs to redevelop manufacturing sites But they never rally.” Addison blames poor government in Bridgeport and at the state level for failing to take advantage of these opportunities. Like many who turn humble roots into financial success, Addison remains optimistic about the American Dream. After all, he’s living it. “I think the American Dream does still exist,” he says. “It probably requires more work than it used to. It’s also a global dream now, we’re not just competing with other Americans, we’re competing with China, with India, with other developing nations.” Competing, and winning, was the story of Bridgeport in generations past. Subway, the sandwich restaurant chain, was founded here. The Frisbee, too, has its roots here, as did more serious innovations that advanced the technology of the day from sewing machines to aircraft engines to the wartime development of the atomic bomb, whose fuses were partial-

ly fashioned in the city.

A homeless woman looks for food in Bridgeport, CT on Nov. 26, 2012. - Photo: Ed Kashi/VII

In the machine tool industry, a Bridgeport milling machine is as familiar and interchangeable with the product as Kleenex is with tissues. The main difference: Bridgeport Milling Company factory, moribund for years, was demolished in 2010. Today, the walls of the great industrial plants that GE, Carpenter Steel, Remington and others once operated are now caving in on themselves. Bridgeport seems more isolated than ever. Longtime residents like Kohut stubbornly pursue the idea that manufacturing, perhaps in a lighter, more friendly form, could still be Bridgeport’s salvation. General Electric, which itself abandoned Bridgeport to build its global headquarters in neighboring Fairfield decades ago, had been considering plans to build the largest solar panel factory in America on

the former site of the most notorious housing project in the Northeast, Father Panik Village. In the end, GE chose to put the plant in Colorado. Walking amid the rubble of the old housing project — a place so violent during the 1980s that police and firefighters often refused to answer calls there — Kohut points to the hulk of GE’s moribund Boston Avenue factory complex. “I’ll never understand why the city and the state don’t do more to bring real jobs here,” Kohut says. “Instead, they’re going to build nice little houses here, which is great, except that the people in those nice little houses won’t have any place where they can earn a living wage. They might as well build them in a desert.” Elevated highways and rail lines seem to wall the city in as the world whips by at 70 miles per hour, mostly without stopping. City politics rarely come up in polite conversation beyond the Bridgeport city limits. Even its newspaper, the Bridgeport Post, which traces its roots back to the city’s golden age in 1908, changed its name to the Connecticut Post in the 1990s. Most of its circulation is in the suburbs. Connecticut Post columnist Keila Torres Ocasio, fed up with the visceral reaction she gets when people hear where she hails from, suggested a name change might be just the thing for the city, too. She put forward “Park City,” already the city’s nickname, in part due to the beauty of its Beardley Park, designed in 1881 by the same man who laid out New York’s Central Park, Frederick Law Olmstead. “Let’s face it, Bridgeport’s industrial past is gone and the city needs a fresh start,” Ocasio said. “A clean slate.” If it were only that easy.

CHAPTER TWO - Race and Education

Education lies at the heart of inequality — economic and racial — in America and around the world. As parents know all too well, the difference between enrolling a child in a well-resourced school and a neglected one is often the difference between a prosperous life and a difficult one. Two cities still grappling with that lesson are Rio de Janeiro and Selma, Alabama. These cities share a history of inequality rooted in a legacy of slavery, still operating two-tiered school systems reinforced by racial discrimination that Rio’s education secretary likened to “educational apartheid.” Leaders in Selma say segregation never ended. And both places also share a close ranking for economic inequality on the Gini Index: 0.523 (Selma) and 0.519 (Brazil). With a renewed focus on education in Brazil, can cities like Rio build the kind of diverse middle class that the United States appears to be losing? And can racially divided American cities like Selma find a way to repair themselves even though blacks and Hispanics continue to be disproportionately poor and undereducated?

Stair connecting the balcony to the roofing in Adilson Mendes Junior, 34, house. The roofing is known by favela dwellers as laje, January 14, 2013 - Photo: Marizilda Cruppe.

Brazil’s ‘educational apartheid’ cements inequality early in life
Brazilian government initiatives now bring schooling to the masses, but the country’s deep racial divide has only been reinforced. By John Otis - January 17, 2013

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IO DE JANEIRO — One of Rio de Janeiro’s finest private schools, the Colegio Teresiano is surrounded by tropical rainforest. Brazilian poetry and novels by Gabriel Garcia Marquez fill the library. Florid works of naïve art decorate

the hallways.

This resplendent setting provides an intellectual jump start for children of middle and upper-class families who can afford the $700-a-month tuition. 2011 World Bank stats puts annual per capita GDP in Brazil at $11,640, or $970 per month. That’s why it’s jarring to find an 11-year-old slum-dweller wearing the Teresiano’s blue-and-white uniform. The student, fifth-grader Lucas Junior, hails from Rocinha, a mountaintop ghetto, or “favela,” whose red-brick shacks are visible from the Teresiano school’s top-floor balcony and where many people get by on a few dollars a day. In Rocinha, public schools are overcrowded and lessons are sometimes interrupted by drug shootouts. But Lucas sidestepped that dead-end scenario because his father works at the Teresiano as a hall monitor and family scholarships are an employee benefit. “My son is learning things here that kids don’t learn until two years later in public school,” said Adilson Junior, 34, while taking a break in the school snack bar. “Lucas has a golden opportunity. But all children should have this opportunity and an equal shot at success.” An equal shot. That was the holy grail for 19th century US school reformer Horace Mann, who promoted equality in schools as the key to upward mobility for the lower rungs of society. One of the earliest advocates of universal public education, Mann lobbied for public schools to bring children of all social classes together in order to give them a common learning experience. But in Brazil, a rising global power which sees itself as a peer of the United States, many experts say the two-tiered education system accentuates the country’s huge gap between rich and poor. Despite recent improvements, in 2009 Brazil scored 0.557 in the Gini Index, which placed it as the world’s tenth most unequal nation. In 2012, the Gini coefficient for Brazil was 0.519, according to the CIA World Factbook. This inequality — whether in schools or in economic opportunity — also cuts along a sharp racial divide. Brazil has a brutal history of slavery, was late in accepting the abolition movement, then did little to help freed slaves — and it shows. Today, Brazilians who identify themselves as black or brown represent slightly more than 50 percent of the population, and their income level is half that of whites, according to IPEA, a government-linked think tank. Given this racial divide, it is revealing that the Gini coefficient for the country of Brazil mirrors that of Selma, Alabama, a city that became synonymous with the struggle for civil rights and voting rights in America. To some degree, this movement was a reaction to a profoundly racist and unfair system of schooling, known as “separate but equal,” which the US Supreme Court finally overturned in the historic 1954 ruling in Brown v. Board of Education. Education has been at the heart of rising inequality — racial and economic — in America and around the world. Brazil’s class divisions start hardening around the age of five. That’s because, depending on their economic status, Brazilian children are either funneled into rundown public schools that often prep them for mediocrity, or into high-quality private institutions that nurture great expectations and lay the groundwork for achievement. “This amounts to educational apartheid,” Claudia Costin, the education secretary for the city of Rio de Janeiro, told GlobalPost. Education and economic success are closely linked. Costin cited studies indicating that each additional year of schooling can provide an income boost of about 15 percent. But even though more children from the Brazilian underclass are now attending public schools, second-rate teachers, badly equipped buildings, short school days, and lack of parental guidance combine to produce legions of dropouts and ill-prepared graduates. That’s especially worrisome because Brazil is now the world’s sixth largest economy. Yet largely due to its education woes the country lacks qualified applicants for many high-tech jobs. In some cases, Costin says, headhunters have had to look

outside the country for qualified personnel which means fewer Brazilians can move up the economic ladder. It’s not just a Brazilian storyline. Parallel rich/poor school systems that help maintain a lopsided status quo are the norm throughout Latin America, the region of the world where according to the Gini Index inequality is highest. “When a society becomes more and more divided, it becomes increasingly class-driven,” Nobel-Prize-winning economist Joseph Siglitz told GlobalPost. “And it’s very hard for democratic processes to work well in that kind of society.” Thanks in part to deteriorating public schools, the United States is increasingly turning into “that kind of society.” For the past generation, many parents who could afford it have been removing their kids from public institutions and placing them in private academies. Education isn’t the only factor, but this shift coincides with an alarming jump in income inequality. Between 1980 and 2007, the portion of national income held by the top 1 percent of Americans went from 10 percent to 24 percent. “Which leads to a question for the United States: why would you allow that to happen, when we in Latin America can show you how difficult it is to achieve the kind of exemplary middle class that you invented in the first place?” wrote Jorge Castañeda, a former Mexican foreign minister who now teaches at New York University. “So before the United States continues on its current road of dismantling its version of the welfare state, of shredding its social safety net, of expanding the gap between rich and poor,” Castañeda writes, “Americans might do well to glance south.”

Lucas Cherpe de Abreu, 11, in front of his school, Colegio Teresiano, in Gavea, Rio de Janeiro. Lucas is able to study in this upper class private school thanks to his father, Adilson Mendes Junior, 34, a school employee. Junior is a hall inspector of Teresiano school since 6 years, January 13, 2013 - Photo: Marizilda Cruppe.

Yes We Can?

I

f Americans fixed their eyes on Brazil, and in particular the northern fringes of Rio de Janeiro, they might spot the Monteiro Lobato K-12 public school. And unlike the palm-fringed courtyards of the Colegio Teresiano, it’s a barren

landscape for learning. The school is framed by dusty streets where drug dealers sell crack. During a recent visit, the toilets didn’t flush due to a lack of water and lunch service had been cancelled. In the 90 degree heat, electric fans struggled to cool the classrooms.

“If I had kids, I would not send them here,” said an exasperated Vivian Fadel, the school principal. But for many poor children, Monteiro Lobato is the only option. Some of the students were gathered in a cramped outdoor courtyard that doubles as the school gymnasium. When asked about their aspirations, one of them, a curly-haired 13-year-old named Ingrid, said she wanted to be a fashion designer or an architect. But it seems like a stretch. Ingrid, who comes from a broken family, has never met her father. In fact, 400 of the 1,300 students at the school do not have a father registered on their birth certificates. Ingrid’s mother works as a maid and is gone all day so when she gets home from school there’s no one to help or encourage her to study. And Ingrid spends a lot of time at home because the school day in Brazil lasts just four hours. During that time Ingrid doesn’t absorb much because her teachers, many of whom work at two or three schools to augment their salaries, sometimes fail to show up. Fadel would like to fire half of her teachers but can’t because of union contracts that protect civil servants. Despite her interest in architecture, Ingrid has never heard of the late Oscar Niemeyer, a Rio native and a giant of modern architecture who designed the hyperboloid and flying saucer-like structures of Brasilia. In fact, Ingrid doesn’t even know that Brasilia is her nation’s capital. She’s also unfamiliar with the botanical garden, the theaters and the art galleries of Rio, one of the world’s great cities, because no one at her school ever bothers to organize field trips. A little later, Ingrid and her friends excuse themselves. It turns out four of their nine teachers blew off work today so the students have decided to go home. One of the few professors who does show up is Lenice Loiola. She tries to inspire students like Ingrid to take on the world. But she suspects many of her pupils will go on to become teenaged welfare mothers or gang members. Given the barriers to deep learning at the nation’s public schools, Loiola has come to a stark conclusion: “Brazil,” she says, “wants its poor people to remain ignorant.” For much of the nation’s history, that was the quasi-official policy. Organized as a slave colony for Portugal, Brazil imported as many as 3 million Africans captives to labor in mines and on sugar cane plantations. Brazil was the last nation in the hemisphere to abolish slavery — in 1888 — and when it did there was little effort to educate black, Indian and mixed-blood Brazilians who made up the majority of the population. Many European immigrants to southern Brazil valued education. But the country’s public schools were so bad that they took it upon themselves to found their own private and religious schools. The concept of universal public education was ignored. “Argentina and Chile and other countries were promoting universal education back in the 19th century but in Brazil you had nothing like that,” Simon Schwartzman, a Rio-based political analyst, told GlobalPost. “Even in the 1950s, half of all Brazilians were illiterate.” During the country’s military dictatorship that lasted from 1964-85, Brazil’s leaders focused on building highways, ports and other infrastructure rather than schools. The drive to educate all Brazilians finally took hold in the 1990s and became a top priority following the 2002 election of President Luiz Inacio Lula da Silva. Ironically, Lula, a former shoeshine boy who dropped out after fourth grade, was one of Brazil’s least educated presidents. Yet he became an inspiration for the underclass, a yes-we-can example of upward mobility. Lula doubled per-student spending on education and introduced Bolsa Familia, a program that provides monthly cash stipends to poor families who keep their children in school. Today, according to UNESCO, 95 percent of Brazilian children, aged 7-14, have access to primary and middle school education.

In a 2010 speech shortly before he stepped down following two terms in office, Lula declared: “I want every child to study much more than I could, much more.”

Lucas Cherpe de Abreu, 11, school uniform in the drawer. Lucas is on summer vacation and one of his favorite distractions is playing soccer, January 14, 2013 - Photo: Marizilda Cruppe.

Failing class

such a large ship of state has proven to be extremely difficult. Indeed, Brazil’s public education system now appears to have grown too big too fast and experts say that educational quality has suffered. For starters, there aren’t enough buildings to hold all the new students. Many schools operate on a series of four-and-a-

A

s if cramming for a final exam after a semester of sloth, Brazil under Lula and his successor, President Dilma Rousseff, has been in a headlong rush to make up for past inaction by bringing education to the masses. But turning

half-hour shifts, with the first students arriving at 7 am and last departing at 10 pm. Classrooms are sometimes jammed with 40 or more students. At the Colegio Teresiano and other private schools, classrooms are often half that size. Many students are being taught by less-qualified professors because the best and brightest are no longer interested in working at public schools. Costin cited one recent study showing that 60 percent of Brazil’s public school teachers were not in the habit of reading books. Some policies have just plain backfired. For instance, to encourage underperforming kids to stay in school, the Rio city government issued a no-fail policy for elementary school. But as the lagging students advanced, the result was 28,000 illiterate fourth, fifth and sixth graders, Constin said. Part of the problem is generational. Universal public education is so new that many families have little notion of its value while illiterate parents, who never went to school, may find it impossible to help their kids with homework, Schwartzman says. This will likely change with time. But for now, Brazil continues to rank near the bottom of international student surveys. In 2010, for example, students from 65 nations took part in the Program for International Student Assessment. Brazilian students ranked 53rd in reading and science and 57th in math. All of this has hastened the ongoing flight of tax-paying middle and upper class families to private schools and produced a vicious circle because their exodus has reduced the pressure on elected officials to improve public education. By contrast, impoverished Brazilians pay no income taxes and that makes them less likely to hold officials accountable for decrepit public schools, Schwartzman said. “Education is supposed to provide equal opportunities for all,” Costin says. “But this concept is turning into a myth, a utopia.” Brazil’s slow and frustrating effort to reduce inequality through education and other means stands as a cautionary tale for the United States. As Castañeda points out, “Once inequality becomes entrenched, reversing it becomes incredibly difficult.” And if its middle class withers, what might the United States look like? The answer, Castañeda says, is “what Latin America used to be, and in some ways still struggles to stop being.” Back at the Colegio Teresiano, Brazilian journalist Patricia Lopes momentarily draws a blank when asked what she’d do if she lacked the wherewithal to send Clara, her freckle-faced six-year-old, to this private Roman Catholic school. Rather than risk sending Clara to a public school, Lopes finally replies, her family would likely leave the country. “I look at my child and I know she will have a good future. She will be able to go to college and maybe become a doctor or a lawyer,” Lopes said. “But most kids in Brazil are badly educated and have no future. I feel bad about that.”

University of Wiscounsin students taking a Slavery Reenactment, lesson on Slavery from the Slavery Museum in Selma, Alabama. - Photo: Christopher Morris/VII

In Selma, income inequality, education and race still deeply intertwined
For poor African-American students with little hope for a better future, the Civil Rights Movement is unfinished. By Elizabeth Tuttle - January 17, 2013

S

ELMA, Alabama — The steel bridge over the Alabama River spans American history, the place where in 1965 peaceful protestors were brutally beaten with billy clubs and choked with tear gas, bringing widespread attention to the Civil

Rights Movement. On March 8, 2010, forty-five years after that ‘Bloody Sunday’ which touched off Martin Luther King Jr.’s march from Selma to Montgomery, President Obama’s Secretary of Education Arne Duncan came to the Edmund Pettus Bridge, as the landmark is known. He spoke about the battle the bridge represents, the progress made and the enduring promise it holds. “Yet for all that unquestionable progress, no one can testify to what happened here without being reminded that the dream of equal opportunity in America has yet to be realized. As a nation, we are still a long way from reaching Martin Luther King’s dream,” Duncan said, his words carrying out across the bridge to a large crowd that had assembled, many of whom had also been present as protesters on Bloody Sunday. Secretary Duncan’s speech, entitled “Crossing the Next Bridge,” unveiled a new national agenda to close the achievement gap within public education. He said education was the next great civil rights issue facing the nation. Referencing American education reformer Horace Mann, he highlighted education’s potential to service as the nation’s “great equalizer.” But three years on, as the nation’s first African-American president begins his second White House term, many in Selma say the expectations that Obama created and the promises that Secretary Duncan made are far from being fulfilled. They worry that progress in race relations is challenged by rising income inequality, a reality that cuts across racial lines but that economists say affects the black population in America far more acutely than whites. State Senator Hank Sanders and his wife Faya Rose Touré huddled close to the podium. For the past thirty years, the two have fought for education reform and civil rights in Selma despite bomb threats and assassination attempts. They felt validated and hopeful. Looking back on that day now, Senator Sanders feels great disappointment. “I think it was a very powerful experience to have the Secretary of Education come to Selma. I really thought he was onto something, but I’ve never seen any material follow-up to his declarations. We have not seen evidence of him treating education as a civil rights issue, and when you rise that high in your hopes, then the fall is much greater.”

Abandoned homes and businesses in Selma, Alabama. - Photo: Christopher Morris/VII

‘Like a bomb went off’

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f Selma stands as an emblem of the Civil Rights Movement’s achievements, it also symbolizes its failures and the many challenges that lie ahead.

Crossing the bridge into Selma’s small downtown reveals rows of boarded-up buildings. Side streets lead to housing projects, where kids sit and watch inside a maze of trap houses for a gang-led drug market. “It’s like a bomb went off, isn’t it?” said Afriye We-Kandodis, a Chicago native who leads slavery reenactment tours and started a community art space in town. “When you look at other places that went through the marches – Birmingham,

Montgomery – they’re growing. But Selma, she’s the child that should have kept her mouth shut.” On the other side of a set of railroad tracks is a more prosperous and largely white neighborhood where alarm systems and watchdogs protect homes that are circled together in cul-de-sacs. Selma’s country club has yet to effectively desegregate, and on this side of town, people of color exist mostly as employees within the service sector. The racial divide has always been an economic divide. But, as the data illustrates, with income inequality on the rise in America, the two sides of this town seem more pulled apart than ever. The city mirrors national trends. According to the National Poverty Center, 27 percent of black Americans, and 38 percent of black kids, are poor. Compare this to the 9.9 percent of whites, and 12 percent of white children, who live below the poverty line. In other words, poverty hits the black population nearly three times as hard as the white population, including among children. As of the new year, 14 percent of blacks are unemployed in America, compared to seven percent of whites. And the median wealth of white households is twenty times that of black households. A similar helix of race and class that has formed Selma is alive in Brazil. Though Selma’s population of 20,000 would make up only a quarter of Rocinha, Rio de Janeiro’s largest slum, these two places — Selma and Brazil — have something in common. They share very similar Gini coefficients (0.523 for Selma and 0.519 for Brazil), meaning that they experience a comparable wealth disparity. It is especially shocking for Selma to match up with Brazil’s Rio, home to some of the planet’s wealthiest individuals. There, an influx of oil wealth translates into extravagant penthouses along Ipanema Beach, shadowed by mountainside favelas where basic human rights still elude many. Divides are carved in black-and-white across Rio’s geography. Afro-Brazilians have faced notorious and systematic barriers to economic parity, despite being a demographic majority in Brazil. In one recent instance, an upscale shopping mall in Rio made a habit of escorting out black Brazilians who weren’t wearing nanny uniforms. This is perhaps the type of discrepancy one might expect from Brazil, the tenth most unequal nation on the planet and the last in the western hemisphere to abolish slavery, but not from a city like Selma, whose very mention recalls the hallowed ghosts of a racial struggle America largely credits itself as overcoming. President Obama recently posited that class has eclipsed race as the nation’s greatest social divide. Many in Selma, however, feel that little has changed since the “separate but equal” status quo of the 1960s. “Segregation isn’t an opinion, it’s a fact and a reality through all areas and aspects of Selma,” says Aqullia James, who grew up in the area. Senator Sanders agrees, “You have two completely separate systems: one black and one white, one public and one private ... one poor and one rich.” Nowhere is this division more starkly represented than in Selma’s education system. At Selma High School, there is not a single white student, despite the fact that Caucasians make up a full 20 percent of the population. And it wasn’t until 2008 that Selma’s largest private school accepted its first African-American student.

Private support

T

he largest and most prestigious private school in Selma, Morgan Academy sits at the edge of city limits. A full trophy case greets visitors in the main office. Accolades run the gamut, from cheerleading and football championships to

robotics team awards. On a colorful bulletin board hangs a constellation of stars, each star representing a different college that a member of the senior class will be attending. Names crowd the board. Morgan Academy provides its 478 students K-12 with a fantastic education. After school, students receive check-up calls from a dedicated guidance counselor. Virtually all students graduate, and almost all head on to college. “Morgan feels like a school used to feel in the old days, where the whole community supports the child,” says Director of Instruction Karim Oaks, a 1979 Morgan graduate whose parents served on the school’s founding board. Most importantly, a Morgan education offers socio-economic mobility and hometown opportunity. School administrators say that an increasing number of Morgan graduates are returning to Selma to start successful careers. One recent graduate, for example, returned to take over the orthodontic practice of a retiring Morgan alum. Administrators are quick to acknowledge that Morgan, like most other private schools in the area, began as a response to desegregation. However, they insist that the racial motivations underlying the school’s nascent years no longer come to bear on the Academy. Headmistress McKnight reports that, though the vast majority of students at Morgan are white, the school now has several students of color, including African-Americans. Race, she says, no longer plays a role in ad-

missions. “I’ll bet that Morgan is the most diverse school in Selma,” she says. McKnight feels that racial tensions no longer define Selma schools today. “I grew up with a black lady that was our housekeeper and our maid, and I’ll bet you that a majority of students in this area did, too,” she said. “I don’t see color ... If you live with a different race, you learn to love them. These divides that people put in just don’t exist.” Morgan Academy costs about $4,000 per student per year. The school offers no financial aid. Private school tuitions elsewhere in the country dwarf this figure, but in Selma, where the average annual income hits at around $21,000, affording a Morgan education remains a distant possibility for most.

Abandoned homes and businesses in Selma, Alabama. - Photo: Christopher Morris/VII

‘They don’t hear us’

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rincipal Wanda Jean Lomax-McCall stoops to pick up a stray gum wrapper on the otherwise spotless atrium floor of the newly rebuilt Selma High School.

This past August, SHS opened its doors after receiving $27 million in national stimulus funding toward a new school. Now in her fourth year as principal, McCall is attempting to free Selma High of its past reputation. Over the last decade, Alabama’s public school systems have been consistently ranked as among the worst in the nation, and Selma High has long placed squarely at the bottom of statewide achievement barometers.

According to Principal McCall, “all or almost all” students qualify for free federal lunches, eligible for households reporting at or below 130 percent of the poverty line. The dropout rate hovers at 25 percent. Gang skirmishes within the community often overflow into school hours. This year, Principal McCall has brought in more extracurricular opportunities for the student body, including the first-ever school newspaper and a pre-professional mentoring program. Still, despite the new building and Principal McCall’s best efforts, many feel that Selma High lacks the state- and local-level funding necessary to provide students with a competitive or even passable education. And as SHS struggles to reach its annual yearly progress benchmarks, high-need and high-achieving students alike lack necessary support. Between class, bubbly 18-year-old Whitney Strong uses the new media center to look at prom dresses with her friends. Unlike most of her classmates, she will leave Selma to pursue a degree in nursing. Though she calls her teachers and administration “amazing...doing their very best,” she describes Selma High as just “average,” a place that only “kinda-sorta” provided her with professional preparedness. For Whitney, graduating means that she can finally put Selma in her rearview. The only kids who stay here, she says, are those that already have children – a significant portion of her class – as there “really aren’t jobs” here. Gwen Brown of the Freedom Foundation, which provides supplemental educational opportunities to at-risk students, recalled a recent SHS graduate who approached the Foundation after failing the Air Force admittance exam. He was reading at below a first-grade reading level. “I have no idea how that happened,” she said. “He literally could not read, and he walked across the stage and received a diploma.” “Our public schools are chronically underfunded,” said Senator Sanders, who has served the longest tenure in history on Alabama’s Finance and Taxation Committee. In Dallas County, the district to which Selma city schools belong, citizens pay the state minimum in taxes toward public education, and as much as four times less than in other districts in Alabama. Principal McCall affirms that securing state-level funding has also proven particularly difficult. It was easier a decade ago, when SHS boasted almost double their current enrollment and when white students still attended. Now, she says, the challenges have grown: “Being in a rural area, small school, majority blacks...that makes a big difference. They don’t hear us.” Alabama made national education news last year when legislators tried to remove language in the state’s constitution requiring the government to guarantee its citizens “a liberal system of public schools.” The amendment didn’t pass, but if it had, it would have denied Alabamians the right to a public education. Senator Sanders believes that racial dynamics contribute to state- and local-level antipathy. As he sees it, white residents simply don’t send their kids to public schools. And though private schools in the city offer no financial aid, “even the poor white people who can’t afford a private education somehow get one rather than going to a public school,” he said. “Nearly all the businesses are owned by whites,” Sanders said. “That means that the economic system does not support public schools in the way it should. So when you’re trying to get additional funding or to create a community atmosphere that supports education, you don’t have the buy-in.” “The economic and political power lies with white people, the people who run the segregated country club,” said Touré, who served as Alabama’s first African-American female judge. “That’s why it’s so hard to make any systemic change be-

cause for years they have kept progressive reform out of Selma. People say that overcoming slavery was our greatest challenge, but education has proven to be the greatest struggle. What’s remarkable is how little has changed.” Even for those who receive a SHS diploma, Selma’s job climate offers little encouragement. Nearby factories like International Paper, Hyundai and Bush Hog have historically provided many middle-class opportunities in the area, but national cutbacks have resulted in shrinking departments. Brenda, who has worked at one such factory for fifteen years, was the first African-American hired to her department. “They put a hangman noose on the rafter to threaten me,” she recalls. Though the climate has since shifted, she feels that higher-level opportunities still elude African-Americans. “You never see black managers. You don’t see black people moving anything above low-level supervisor positions.”

Selma, Alabama. - Photo: Christopher Morris/VII

In search of a future

a lack of education perpetuated poverty. “Time and time again, we’re seeing twelve-year-old girls getting pregnant just so they can get welfare checks,” Brown said. She estimates that 98 percent of the students with whom she’s worked don’t have a reliable father figure, and that the majority of them have suffered from sexual or physical abuse.

A

s president of the Freedom Foundation, Gwen Brown works to provide at-risk children with educational opportunities through tutoring and the arts. When she came to Selma six years ago, she was shocked at the extent to which

“Everywhere these kids look, they’re being taught they don’t have a future,” says Brown. When driving around the city with her theater group, she often passes by Selma Country Club. “I still don’t know what to tell kids when they ask me why they aren’t welcome there.” Seventeen-year-old Austin was one of the first students to join the Foundation’s Selma program. At a lanky six-foot-seven, most people expected him to play basketball – it’s one of the only tickets out of town for a black kid in Selma, he said. Joining the Foundation’s Random Acts of Theater Company, he discovered a love of public speaking. Now, he’s looking at civil rights law and hopes to return to Selma. These success stories could be far more common, Brown feels, if more students felt they deserved a fighting chance.

Unmet expectations

O

n that day in 2010 when Secretary of Education Duncan came to town, an expectation was created. Many here in Selma feel it is an expectation that has been largely unmet.

In the back of the crowd, Brown remembers being suddenly struck by a simple fact: aside from the other members of the Foundation and the media covering the event, she saw no other white faces in the crowd. “I remember thinking, why wouldn’t the whole city come to this, especially something so big, in the tiny town of Selma? But I’ve learned that’s just how it goes here.”

CHAPTER THREE - Health Care

As President Barack Obama was inaugurated to his second term in January, he vowed, “Our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class.” But residents of neighborhoods like Anacostia, just blocks away from Capitol Hill, are part of a “growing many” finding that even affording basic health care is out of reach while some of the country’s best hospitals in its richest zip codes ring the capital, fed by federal procurement spending. The Gini Index of Washington, DC (0.435) is actually slightly worse than that of Russia (0.420), where a health care epidemic grips the capital of Moscow. Muscovites say that the years of capitalism following the Soviet collapse has mostly boosted the standard of living of the wealthy. All others must wait in line.

Moscow , Russia - Photo: Yuri Kozyrev / NOOR

Health care disparity reveals Russia’s income inequality crisis
When citizens become patients, the country’s growing economic divide is painfully evident. By Tom Balmforth - January 20, 2013

M

OSCOW — Pensioner Galina Nikolaeva, 65, cries with affection when she recalls how she was looked after when she suffered a seizure on New Year’s Eve.

“If I hadn’t made it to this hospital, I wouldn’t be alive anymore. I’m sure of this. I believe the Lord sent me here,” says Nikolaeva, whose 8000-ruble ($264) monthly pension does not allow her to afford even low-budget state care. Nikolaeva was admitted to Saint Alexei, a respected Moscow hospital financed by the state and the Russian Orthodox Church that provides free medical care. She doesn’t think she would have survived her latest run of bad health without what she calls the “dedication” and “love” of the medical staff. “This isn’t empty praise,” Nikolaeva says. “I am just saying what it is like. And I am in a position to judge — I’ve been in and out of hospitals for the last 25 years.” Russia’s Constitution guarantees free health care for everyone, but many Russians say the reality is not so egalitarian. They say that health care is divided into two camps: those who can afford private clinics or paid state treatment; and those who must queue for crowded and second-rate care if they cannot draw together the necessary funds. Since the Soviet collapse, years of unbridled western-style capitalism driven by high oil prices have transformed Russia, still the world’s largest energy exporter, but many believe it has mostly enriched the wealthiest slice of society while the majority remains little better off. Though in Soviet times personal wealth was kept well out of sight, Russia today is rife with ostentatious displays of personal riches. The disparity in health care access reflects what analysts call a widening gulf between the rich and the poor in a country with a minimum wage of $170 a month but which has almost a hundred ‘dollar billionaires.’ Those billionaires own 30 percent of all the country’s personal assets, according to the Credit Suisse Global Wealth Report. Russia’s Gini coefficient — the standard measure of income inequality — ranks Russia as more equal than the United States and the four other BRICS countries. But Russia performs well on this ranking in part because the government handed citizens their apartments in a mass privatization effort after the Soviet Union’s collapse. In the last two decades, trust in Russia’s free health care has plummeted, spurring the rise of private clinics, some of which are world-class and have attracted foreign investors — tens and even hundreds of millions of dollars at a time. But millions of Russians like Nikolaeva have never set foot in such a clinic. Fearing they are left with no real safety net, poor sections of society like pensioners are thankful for charity organizations like the Sisters of Mercy who contribute staff to the Saint Alexei hospital. They know how lucky they are to get in the door.

Moscow , Russia - Photo: Yuri Kozyrev / NOOR

Sisters of Mercy

T

he Sisters are an international religious movement that sprung up in the mid-1800s. But in Russia they are thought of primarily as the Orthodox Tsarist-era nurses who treated the wounded during the Crimean War, later morphing

into a national movement that saw communities helping the poor, homeless and sick across the country. These communities went underground in atheist Soviet Russia, but they have returned after the Soviet collapse just over two decades ago and operate a number of programs to treat the poor. Their nurses, who once again wear traditional nurses’ head scarves, elicit glowing praise from patients in Saint Alexei,

many of them Orthodox Christian pensioners. Svetlana Prokofeva, 74, who is recovering from stomach poisoning and pneumonia, says the hospital’s dedicated care has made her feel like “she has made it into heaven.” But for every patient receiving top care in a reputable Moscow hospital, there are thousands facing long queues, sub-standard treatment, outdated medical equipment in the regions or not able to afford treatment at all. Irina, an elegant 70-year-old pensioner with a shock of white hair, sporting modest makeup and a smart black coat, cut a peculiar figure behind the wheel of a taxi on Moscow’s snowy roads this month. A widow, Irina says that cab fares are the only way she can make enough money to get treatment for her daughter. She brushes away tears with apparent embarrassment as she explains that her divorced 33-year-old daughter, a German-Russian translator, has advanced leukemia and urgently requires a blood transfusion to replace platelets in her blood stream. “I am not getting out of this car until I have 5000 rubles,” Irina says. “That’s what it costs for a donor for a single day. They say that if she doesn’t get this blood, it will be too late and the illness will become irreversible. This is quite literally a matter of life and death.” Irina gets a monthly pension of 13,000 rubles as a former civil servant who retired from the Foreign Ministry a decade ago. She says she has no one to turn to for help. “If anyone tries to tell me that we have good medical health care, what can I say? It is bad. Where can I get 5,000 rubles in a day? Tell me — where?” She declines to give her surname or be photographed out of apparent shame for herself and her daughter. “I’m not healthy either,” she says. “I am disabled and I have problems with my lungs. And I’m driving I’m earning money. I’m ashamed. I’m so unbelievably ashamed. When you see a woman of my age driving a taxi… it is shame. Pure shame.” “I really wish care wasn’t so expensive,” says Lyubov Mitichkina, a Sister of Mercy and senior nurse at Saint Alexei. “The vulnerable section of society really need the government’s help as they can only receive free care to a very limited extent.” Queues and corruption Alexander Saversky, head of the Patients’ Rights Protection League, said the health care system is increasingly focused on paid treatment. He says that state hospitals offer paid services in parallel with free services, which he claims makes it profitable for doctors to pressure patients into paying for treatment. “We have queues because the top doctors want to earn more money and create queues so that for patients get to treatment they have to pay money,” said Saversky. He explained that the health care system has not recovered from the lows of the turbulent 1990s that followed the Soviet collapse. He pointed to the World Health Organization’s 2000 report that ranked Russia in 130th. He said Russia’s system had deteriorated faster than its post Soviet neighbors Kazakhstan and Belarus, which ranked 64th and 72nd respectively. Research from the ROMIR center found last year that 65 percent of Russians paid for medical services and 20 percent of patients made informal payments to doctors. One estimate put these shadow patients at $5.5 billion last year. Natalya Bondarenko of the Levada Center said that every year there is a larger portion of Russians who say the health care situation is worsening. In 2012, polls showed it was a bigger national bugbear than corruption, one of the main drivers of the last year of street protests against President Vladimir Putin. “It is a larger concern than the problem of corruption and improvement of the police force. That’s a pretty significant indicator,” said Bondarenko.

Fewer Russians who can afford to go private, risk going to state-funded services, according to Elena Prikhodova, 44, the executive director of a fund that allocates health cover for personnel at JSC Medicina. “Free health care in Russia doesn’t exist,” says Prikhodova. “The range of medicines that are available for free are probably not enough. You need more. If you want to be healthy, then you have to pay.” Pirkhodova holds medical insurance at JSC Medicina, an award-winning private clinic in the elite Mayakovskaya district of Moscow established in 1990. A first-time consultation with the doctor costs between $80 and $100. A Maserati is parked outside and a harp player strums in the foyer as receptionists guide patients through spacious, wood-paneled corridors. These lead into immaculate clinics with state-of-the-art equipment. Prikhodova says she recently injured her leg when she slipped while making her children’s beds at home. She says she was rapidly seen by a doctor, X-rayed quickly and received top-class treatment. She squeezed in a subsequent check-up during her lunch break. “Of course,” she says, “a main problem is avoiding long queues.” The clinic has a bustling commercial marketing department, which did not allow GlobalPost to interview patients apart from Prikhodova. It forwarded kitschy promotional images of expansive hotel-style recovery rooms featuring planted patients relaxing in large quilted beds beside faux antique telephones. Its clientele are top managers, cultural figures and politicians, as well as middle managers.

“Haggling” for health

T

he Sisters of Mercy operate a nightly bus of volunteers who reach out to the homeless with shelter, food and treatment during Moscow’s bitter winters. It also helps poor families raise funds for expensive medical care.

Without such charity financing, there is every chance wheelchair-bound 12-year old Dasha Smirnova would not have survived 2012. She was born with cerebral palsy and her mother Polina was told that she would die unless she received risky corrective surgery on her spinal cord. But Russia’s top state institute for this surgery declined to perform the operation, leaving what looked like only one option — to use inexperienced surgeons in Moscow. “I asked them whether they had ever done the operation and they openly admitted that they had only done it twice over a matter of years. Dasha is my only child – I decided to try different options.” Polina Smirnova, 37, is not poor by any stretch in terms of property and income, She owns a 9-floor apartment which she inherited from the mass post-Soviet housing privatization and she earns 40,000 rubles a month ($1,320) as an assistant at a jewelry company. But, she says, the operation, wheelchair, medicine and rehabilitation for her daughter far surpass her insurance coverage. Smirnova applied to various charity support schemes and raised 1.6 million rubles through the Sisters of Mercy, which allowed her to fly Dasha to Germany for the operation. It also afforded her a German-made wheelchair.

Polina knows how lucky she has been to find charity help. Every year thousands of children are handed over to orphanages as parents see health complications such as cerebral palsy as an insurmountable challenge. “The state does not pay for medicine for disabled children. So I have to buy medicine,” said Polina, adding that up to $200 a month goes to stocking up on a pages-long shopping list of medicines. She says she feels abandoned by the state. Saversky of the Patients’ Rights Protection League sums up the health care landscape for Muscovites: “The patient is constantly haggling,” he says. “Do you want the pills that work or do you want the ones that could maim you? Do you want the prosthetic limb that becomes rusty or do you want the one that will last your whole life? The system is always bearing down on the patient.”

Washington, DC - Photo: John Stanmeyer / VII

Inauguration Day: DC elites prosper amid America’s rising income inequality
An unmistakable disparity in life expectancy and access to quality health care have become hallmarks of the Washington, DC area.

By Ben Schreckinger - January 20, 2013

W

ASHINGTON — Two blocks from Capitol Hill, on the day after Congress passed the first significant tax increase on the wealthy in 20 years, Herbert, 63, who parks cars for a living, sits in the waiting room of a doctor’s office.

He pegs his level of concern over the Capitol’s looming spending battles, in which Democrats and Republicans will face off over cuts to the nation’s social safety net, at about a four out of 10. He says he’s in good spirits and good health today, a small miracle for a man addicted to heroin and living in a homeless shelter with a history of considerable health problems. Herbert, who asked that his last name not be used because he did not want to lose his job, receives free access to care provided by the city. It’s been available to him, he said, since he’s decided to start taking care of himself. His visit to the doctor on this day is for lower back pain, and he’s thankful to have some coverage. Herbert’s valet work is for a company that services private events, and he’s parked cars for the likes of Bill Clinton and Donald Rumsfeld. It’s a busy weekend on the party circuit with President Obama’s inauguration. The people at these parties, D.C.’s wealthy, have prospered even as the nation as a whole has not. But Herbert doesn’t resent his clients’ wealth — far from it. Herbert’s something of a stoic. He says he embraces the lot given him by God — “We park the cars,” he says. “You go and have a party.” In the capital of a nation increasingly divided by both class and politics, Herbert’s story offers something of a litmus test. To liberals, Herbert’s a man whose chemical dependency problem has been criminalized by the federal government and who, despite holding down a steady job, cannot escape homelessness. Two blocks from where he seeks health care from a medical center in the basement of the nation’s largest homeless shelter, the House of Representatives has put the country through considerable anxiety to protect tax breaks for people earning $300,000. To staunch conservatives, Herbert’s a black drug addict unable to wean himself from the welfare state. Rush Limbaugh would have loved to hear that Herbert had the nerve to ask for Viagra from the government-funded clinic because life in an all-male shelter has taken a toll on the time for intimacy in his marriage. Washington is a one-horse town, as they say, and just about everything is viewed through the prism of partisan politics. Health care is a lightning-rod issue and one that starkly defines how income inequality has created a society in which the wealthy have the resources for “valet” services that provide them full access to a nation with the greatest medical care in the world. But the poorest are often in peril in a system that may help them scrape by with free clinics like the one Herbert attends, but leaves many in the rungs just above them, the working poor, uncovered and vulnerable. But Washington, D.C. doesn’t just serve as a prime example of rising inequality. It drives much of it. Indeed, there is a broad consensus among liberal and conservative economists that government policy — specifically a tax structure that favors the wealthiest Americans — has been a determinant factor in rising income inequality in America. That machinery, fueled by powerful lobbyists who ensure that these tax breaks remain in place, is what has driven inequality through at least five successive presidencies, Democrats and Republicans, and earned America’s ranking as one of the worst for income inequality among the top, 34 developed countries, according to a 2011 report by the Organization for Economic Cooperation and Development. First in War, First in Peace, Last in Equality

Washington’s poor are some of the sickest people in the country, and their lives among the shortest. Washington’s affluent, meanwhile, enjoy not only a good deal of power but also some of the longest lives of any group in the country. The state of affairs in the capital illustrates the real upshot of what’s at stake in America’s growing class divide: how long you live — and how well. And when it comes to rich and poor in D.C., the difference is black and white. Washington’s racial divide by-and-large corresponds to its class divide, which is wide. At 27 percent, the poverty rate for blacks in D.C. is more than three times that of whites, mirroring national data on the discrepancy between the percentage of poor blacks versus poor whites. The decisive marker of this divide is life expectancy. Blacks in Washington have a life expectancy of 71 years. Whites, mostly educated professionals, have a life expectancy of 83 years. The district’s blacks live shorter lives than blacks in any state while its whites live longer lives than whites in any state. Washington’s Gini coefficient — a single measure that provides a snapshot of income inequality — is nearly the same as Russia’s, where over the last two decades an ideology obsessed with eliminating class has given way to the realities of crony capitalism in which the wealthy and the politically connected are provided for and the poor seem as vulnerable in Moscow as they do in Washington. In Russia, economists and political observers say a mutated health care system that

survived the now-collapsed Soviet system reflects a growing inequality that is pulling apart a nation for whom the Communist slogans of equality ring as hollow as the capitalist assurances that a free market system will be the best way to provide for all.

Washington, DC - Photo: John Stanmeyer / VII

Das Kapital

U

nlike Herbert, Jim Abdo does have a home — and he’s built many more. A housing developer, he’s seen his own fortunes, and a real estate empire, rise with those of D.C.’s affluent class. His personal residence is in Washington’s

wealthy Northwest quadrant. Since its 1996 founding, his company has developed over 30 luxury condo and apartment properties and, Abdo estimates, seen “well over 1000 percent growth.” His developments — “Ultimate Urban Condos” and “Deluxe Apartment Rentals” — cater to the professionals who,

thanks in large part to high-end projects like Abdo’s, have been flocking back to D.C.’s urban core. Abdo’s known for restoring historic buildings, often in once-dilapidated neighborhoods, though demand is so strong that he also creates large new developments from the ground up. Abdo says the renters and buyers his properties are designed for — “CFOs, COOs, partners in law firms”— value his attention to detail. “We create very dramatic living spaces,” he says. Americans love few things more than blaming their problems on Washington, and in the case of inequality they’d be halfright. The benefits of the last 30-odd years of technological advance have accrued almost entirely to the wealthy. Advances in computation, automation, and communications have allowed America’s skilled workers to create ever-more valuable output. At the same time, they’ve nearly eliminated a solidly middle-class category of clerical jobs. This is not the fault of the federal government. But another important factor in the divide is the neoliberal philosophy that has held great sway in the capital since the 1980s. Beginning with Ronald Reagan and running through to Barack Obama, successive administrations have consistently liberalized trade, creating economic growth but also making it easier to outsource manufacturing and other middle-class jobs. Both parties also embraced financial deregulation, spurring growth in a sector where salaries are clustered at the top and fostering the conditions for a financial crash and recession that have hit the bottom and middle the hardest. Over the same period, the federal tax code became easier on the rich, a trend reversed in part by Congress just this month by a last-minute fiscal cliff deal. The net result: Between 1979 and 2007, the average income of the top 1 percent of households increased by 245 percent, while rising just 11 percent for the bottom fifth of households and 19 percent for the middle fifth, according to the non-partisan Economic Policy Institute.

A Tale of Two Cities

I

n D.C., the wealthy not only benefit from national trends they’ve helped create, they benefit locally as well. Abdo credits D.C.’s thriving housing market, and the vibrancy it’s brought to much of the city, to improved municipal

leadership and to people like himself “who took a chance on the District.” But he also has government privatization to thank. Over the past 20 years, it has fueled the creation of wealth in D.C. in a big way. The amount of federal procurement spending going to private firms in the area has quadrupled since 1990 and reached $80 billion in 2011, Reuters reported last month. Because of this outflow of public largesse to private companies, Washington has the highest concentration of America’s fastest-growing companies of any major metropolitan area in the U.S., according to a recent study by the Kauffman Foundation, which notes that half of those companies are in government services. Unemployment in the Washington area is 5.3 percent, well below the national average of 7.9 percent, according to Department of Labor statistics.

Abdo says the trend has benefitted him by unshackling the local economy from the federal government’s pay scale and attracting “the best and the brightest.” On the strength of the local economy, he’s more than recovered from the national housing bust. “We’re as busy as we’ve ever been right now,” he says. Abdo Developments is hard at work on a million square foot project at Catholic University and a city block-sized condominium development just over the Potomac in Virginia — Abdo believes it’s the first such project of its scale in the mid-Atlantic since the housing market collapse. The developments, and they aren’t just Abdo’s, keep going up here because the federal government insulates the region’s economy from the economic shocks felt elsewhere. “This is an area that’s pretty resilient,” he says. This is why D.C.’s own peculiar class of wealthy professionals has also fared extremely well through the economic downturn. At the turn of the last millennium, lobbying the federal government was a $1.5 billion industry, according to data from the Center for Responsive Politics. It’s now a $3.5 billion industry. A stone’s throw from Anacostia, center of an AIDS epidemic that leaves D.C. with a higher rate of HIV infection that most African nations, lobbyists spend this money to influence hundreds of billions of dollars in federal health spending. Most of them go home at night to D.C.’s suburbs, which contain America’s three wealthiest counties and seven of the top 10. Health is in fact the single biggest category of lobbying. It accounted for half a billion dollars in 2011. The health lobby’s clients are pharmaceutical companies, hospitals, professional associations, HMOs, and insurers. Lobbying on behalf of the residents of D.C.’s Ward 8, the city’s poorest and home to Anacostia, is not big business. Here, unemployment hovers above 20 percent. At one point in 2011, Ward 8 had higher unemployment — 25.1 percent — than any metropolitan area in the country of comparable size. “The lobbying dollars are just not there for our population,” says Vincent Keane, the CEO of Unity Health Care, the nonprofit charged with caring for D.C.’s poor regardless of their ability to pay. Seventy-nine percent of Unity’s patients are black and 76 percent live at or below the poverty line. The majority rely on Medicaid and one in five are uninsured. “We certainly can’t compete with the big boys,” Keane says. And so the balance sheets of the insurers and the pharmaceutical companies remain healthier than Unity’s patients. Not that this is all bad news for Herbert. He’s kept his job since 2003, through an economic downturn that hasn’t done much to blunt the capital’s appetite for private parties. The money in politics means more fundraisers. He recalls one he worked in Georgetown for D.C.’s last mayor, Adrian Fenty, as especially glamorous. Herbert takes pride in taking care of partygoers’ Lamborghinis, but he also notes the difficulty of making it to work, doctor appointments, and weekly meetings of Alcoholics Anonymous, Narcotics Anonymous and Cocaine Anonymous without a car of his own. “It makes the timing thing rough,” he says.

Obstacles to Health

I

f you’re sick in Washington, D.C., treatment is available — it’s the making use of it that presents a problem. The city provides free health insurance to people making up to 200 percent of the poverty level, no questions asked. There’s a

public hospital, and Unity serves patients in all eight wards — including at nine homeless shelters and in two jails. It’s Unity that runs the clinic under the Center for Creative Non-Violence homeless shelter where Herbert has come to see a doctor. The room Herbert waits in looks much like those found in doctors’ offices anywhere in Washington — a notice about patient confidentiality and a poster explaining sanitary food preparation on the walls, a television in the corner playing health and safety messages — except for a prominent sign warning, in capital letters, “DRUG USE IN THIS AREA WILL IMMEDIATELY BE REPORTED TO POLICE.” Last year Herbert overdosed on heroin and received treatment at D.C.’s only city-run hospital. Thanks to free testing, Herbert knows he’s HIV negative — at one point, he reaches into his pocket and displays a handful of free condoms in candy-colored wrappers. He recently had a CAT scan of his liver performed at the George Washington University Medical Center and found out he does not have hepatitis C. But today he might not get the treatment he’s seeking for his back. Unity’s staffers know their patients are savvy about obtaining painkillers, which they then re-sell on the street for ready cash. Playing cat-and-mouse over oxycontin prescriptions can strain doctor-patient relationships. It’s not the only challenge of practicing medicine underneath a 1350-bed homeless shelter. Bill Harpster, a former army surgeon who has been practicing with Unity for 16 years, names another one: flooding. Disgruntled residents of the homeless shelter upstairs occasionally sabotage the toilets, flooding the health center below. At one point, the center was finding itself underwater about twice a month. The flooding forces Unity to divert patients to other centers and call in a mobile care unit. Despite such obstacles, Harpster says D.C. does a good job providing health care to the poor. But though care is here, D.C.’s poorest still face obstacles in accessing it that might not even occur to residents of Georgetown. Many who are eligible for free government insurance remain uninsured because they don’t know about their options, they don’t trust government, or they simply lack identification. Herbert is not the only one who finds transportation to appointments to be an obstacle. Relying on transit is more difficult if you work an inflexible shift for an hourly wage, or if your shelter imposes strict curfews. So Unity offers patients transportation to appointments. But, as one Unity administrator points out, just going outside is difficult if you don’t own shoes. So Harpster gets a lot of no-shows. “It does make the schedule chaotic sometimes,” he says, “but their lives are chaotic.” Harpster’s patients are very sick — he estimates one in five are HIV positive — and managing serious medical conditions can be near impossible amidst such chaos. “If you have diabetes and hypertension and HIV, you have to take 15 medications a day,” he says. “I couldn’t do it.” A lobbyist on K Street, with a stable family life and a new BMW, would be much better equipped to access and manage treatments for these conditions, but this is largely a moot point. Not many K Street lobbyists have diabetes, hypertension and AIDS.

Washington, DC - Photo: John Stanmeyer / VII

Chronic Disease

R

egardless of access to treatment, Washington’s poor residents suffer from chronic conditions at a far greater rate than its rich residents.

Though at-risk groups like gay men and white intravenous drug user have turned the tide on HIV, it remains a public health catastrophe for the city’s poorest blacks. And in nearby Montgomery County, Maryland, where many D.C. residents pushed out by rising rents have relocated, blacks visit emergency rooms for both diabetes and hypertension at three times the rate of whites, and they visit for asth-

ma at more than four times the rate. Obesity is a major risk factor for all three conditions. In Washington, only 8 percent of white residents are obese, compared 31 percent of black residents. In this, too, D.C. leads the nation in disparity. These vast gulfs are not explained just by different health care systems — but different ways of living.

Parallel Societies

ous health issues. Abdo’s family enjoys biking, and he notes that his wife runs marathons. The affluent clientele his properties cater to demand the amenities that allow them to live the same type of lifestyle. “It was a tougher sell in the mid-90s as the city was not going through what it has in the last 10 years,” he says. “There weren’t the Whole Foods in the neighborhoods, there weren’t all the yoga studios” And if you want to understand the roots of D.C.’s gross health disparities, a yoga studio is a good place to start. In parts of Georgetown and Glover Parker, where health activist Sariane Leigh once taught yoga and pilates, there are four to a block. But when Leigh began teaching yoga in 2009 in the impoverished neighborhood of Anacostia, she was the only show in town. She still found herself unable to draw customers. “The first person who showed up on one of my first days of classes was a white girl,” she recalls with a laugh. “I was like, ‘this is not for you!’” Leigh says the black women east of the Anacostia River don’t value their health the way her clients in Georgetown do. They may spiritually recharge by going to church, or pamper themselves with a haircut or new purse, but devoting time to the health of their bodies is not a part of their lifestyle. Abdo recognizes the District’s disparities in health care — “Unfortunately, the quality of it depends on income” — But he also remains upbeat about the city where he builds housing. “The opportunities to be active and stay healthy are abundant here, he says.” For for his part, Abdo recommends early childhood education as a remedy to the lifestyle differences that afflict D.C.’s poor. “We’re dealing pretty much with social determinants of health that are way beyond the capacity of health centers or one entity to resolve,” says Keane, Unity’s CEO, of the herculean task facing the nonprofit. Thus its initiatives — like free transportation to appointments and education about healthy eating —aim to widen the services offered in support of well-being. But the net can only be stretched so far. The doctors at Unity’s clinics can’t open grocery stores, or guarantee employment, or build new schools and run the health classes. Leigh can offer yoga classes, but she cannot force anyone to take them. These, and a thousand other things, are part of the real health care system supporting Washington’s affluent class. As long as they exist only west of the Anacostia River, D.C. will remain a city divided by health in a country it’s helped di-

A

bdo, 53, says he and his family enjoy a healthy and active lifestyle — “Doing as well as I am, I could live anywhere and get great health care.” He’s covered by Blue Cross, Blue Shield through his company plan and says he’s avoided seri-

vide by class. And that’s bad news for the capital’s poorest. Not that Herbert’s complaining. He does what he can to take care of himself but feels that what happens to him, like what happens in Congress, is ultimately out of his control. In the most powerful city on Earth, Herbert embraces his powerlessness, and leaves his health in the hands of God. “I’m happy,” he says. “We go through life as He writes it.”

CHAPTER FOUR - Migrant Labor

In two of the world’s top destinations for migrant labor, Los Angeles and Beijing, millions of workers who have left their homes and often their families in search of prosperity find themselves at the very bottom of the socioeconomic ladder. Though China and the United States sit at very different stages in their economic growth, analysts say the two countries closely resemble one another when it comes to income inequality. L.A. ranks among the most unequal American cities by income with a Gini coefficient of 0.485 while China’s score is 0.480. Though immigration has long been a driver of economic growth, the question in a time of surging inequality is whether most migrant workers will ever rise above the bottom rung. In both places, the odds of making a better life are slim and look to be growing slimmer.

Beijing, China - Photo: Sim Chi Yin/VII Mentor Program for Global Post

In Beijing, migrants remain in the shadow of China’s rise to wealth
One-third of China’s workforce is made of migrants, many of whom have effectively become second-class citizens in their own country.

By Kathleen E. McLaughlin - January 27, 2013

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EIJING — On a bright, cold winter morning, the heavy smog of China’s capital has lifted for a spell and the sun glimmers off the rows of new high-rises that line Jinbao Jie.

This is Beijing’s showpiece lane of wealth, lined with extravagant hotels, top-end international luxury brands and flashy displays designed to draw in the very richest of China’s moneyed elite. On this single street, you can buy an Aston Martin or a Lamborghini, shop for Gucci suits and bags or duck into a business meeting at the exclusive Beijing clubhouse of the Hong Kong Jockey Club. Around the corner from the Aston Martin dealership, where the British automaker offers a model made just for the Chinese market (with a price tag the company does not reveal publicly), 39-year-old Wang Youjun is sweeping the street of trash. He moves slowly on his heavily laden bicycle cart, dodging Audis and BMWs that honk their way up a narrow alley. Working where the super-rich can buy $800,000 cars, Wang makes $180 a month as a garbage collector assigned to keep Jinbao Jie free of debris. This juxtaposition of prosperity and relative poverty is illustrative of China’s striking income inequality, which has expanded alongside its breakneck economic growth and has become a particular sore spot for the country’s central leadership. This month the central government released official Gini coefficient scores — the standard measure of inequality — for the first time since 2005, (presumably it stopped giving out the number because it was too troubling), stirring cynicism and critical comments across the board. There is virtually no transparency on what data China uses to calculate the number, which it estimated at .474 for 2012, roughly equivalent to the city of Los Angeles, and whether the country’s vast “grey income” of corruption is accounted for. The CIA World Factbook pegs China’s Gini score at .480 while some estimates put the country’s inequality at a far higher ranking. On Weibo, Chinese economist Xu Xiaonian joked wryly about being asked by a reporter for comment on the numbers when they were released. “How can I comment on fake numbers?” he wrote. Wang Youjun is but one of the millions of internal migrant workers who has built modern China, toiling long hours for little pay in the shadow of the country’s soaring rise to wealth, building the skyscrapers and subway lines and sweeping away the trash. These migrants, restricted by an outdated household registration system called the hukou that ties most Chinese people to their place of birth for government benefits, have come to China’s cities in droves but rarely realize the same rights as those born here. Effectively second-class citizens in their own country, they are at the bottom of the income gap in Beijing. Wang moved to Beijing from a farm in central China’s Anhui province five years ago, looking for a better life for his two young children. Rent eats up half of his monthly salary, and after school fees for his kids plus food and heating bills, there is nothing left to save. “I came here because my hometown is very poor,” he says. “But my life here is not good. I can’t earn much through this work and it’s very difficult.” “It is so hard to send my children to school. The hukou and other certificates are essential,” he explains, talking about the household registration document that dictates the status every Chinese migrant’s life. “I work for the local government

district, so they give me a special certificate to send my children to school.” On that note, Wang is lucky. China has an estimated 230 million internal migrants, effectively undocumented workers fueling the boom in major cities. The latest official estimates say that one-third of Beijing’s workforce is made of migrants, and though a good share of them are employed in white-collar jobs with benefits, the hukou is a constant concern. Patrick Chovanec, a professor at Tsinghua University’s School of Economics and Management in Beijing who writes a popular blog on China’s economy, said the government’s release of the Gini data was significant, but only tells a fraction of the story. Chovanec said he believes real problem in China is not income inequality but rather an “inequality of privilege.” “What bothers people is that some are getting rich not because of what they do but because of who they know,” he said. “That sense that there’s a set of people who live according to a different set of rules, that power begets wealth and wealth begets power — that is what bothers people.” “Its important because inequality of income is the problem, that’s a market outcome,” said Chovanec. Tang Yuanchao, 57, is another trash collector on Jinbao Jie who came here 10 years ago from Chongqing, Bo’s former territory. A decade ago, Tang believed he could achieve a Chinese dream in Beijing, building a better future for his children and perhaps rising to a different segment of society. But in that decade, the wealth gap grew even wider. Today, Tang has a hard time making ends meet on a monthly salary of less than $200, with skyrocketing rents that force migrants like him to move on a regular basis. “We are treated differently than the people who were born in Beijing,” says Tang. As a migrant worker, even after 10 years in the city, “I earn less money than regular employees who do the same job.” So sensitive is the topic, China’s super-rich are reluctant to speak publicly about their wealth, and even less inclined to reveal how wealthy they actually are. At the intersection of these two worlds is 31-year-old Wang Yu, a young investment banker in Beijing who managed to beat the odds. Wang grew up on a farm in Chongqing, but through extreme hard work and what he describes as many strokes of luck like having great high-school teachers who wanted to help him, he was the only student in his county chosen to attend Peking University in Beijing — one of the country’s most prestigious schools. An education there changes lives, and it did for Wang. He spends his days advising wealthy clients on how to invest their money; his wife works in marketing for Apple. If there is a Chinese equivalent to the American Dream, they might be the living example. But Wang remains keenly aware of his beginnings, as well as how difficult it is for migrants to make it in China. Unlike the wealthy drivers who blare their horns at the trash collectors on Jinbao Jie, he sees them, and thinks about how his life easily might have gone in a very different direction. “Not everybody in China has the equal rights to get this chance. I’m very lucky,” he says over coffee in a café near his apartment. “I attended the best high school in my county. But my teachers went to work for schools in a larger city after I graduated, so even my younger fellow students didn’t have the same opportunity.” China’s new generation of leaders has pledged to address the country’s growing income inequity. Where to begin is a massive challenge. Li Linhui, a sociologist at Peking University, said the government is looking at new strategies, but underlying social tension over the wealth gap is building. He is optimistic.

“I think it will improve because new generation of migrant workers are growing and they are unwilling to go back home,” said Li. “Their voice will definitely be heard and their struggle will make a difference.” The investment banker Wang and his wife make a comfortable living, and he’s been able to acquire the coveted Beijing residence permit. He wants to move his parents to the capital and is planning for a family of his own, yet he retains a unique perspective as someone who has achieved much from little. “I meet a lot of wealthy people in my work. Compared with them, I don’t think I’m wealthy,” says Wang. “Most migrant workers don’t have equal rights to get a chance and choose their lives. I think they need to make their voices be heard.”

Los Anglese, CA - Photo: Sim Chi Yin/VII Mentor Program for Global Post

For new immigrants, an ‘American nightmare’ in Los Angeles
Once a promising destination for foreign jobseekers and war refugees, the City of Angels is rolling up its ladder of opportunity. By Kevin Douglas Grant - January 27, 2013

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OS ANGELES — Customers streamed out of the Home Depot parking lot, a fleet of vehicles from shiny four-wheel drive Cadillac Escalades to new Ford pickup trucks laden with cuts of lumber and stacks of drywall, appliances and

gardening supplies. A small group of day laborers clustered around the exit. Jose Perez, 22, and about a dozen other men whistled, waved and shouted at passing vehicles, hoping to get some work. They’ll do just about anything, Perez said, from landscaping to putting together a swing set. He looked concerned but resilient. He said he hadn’t found work in several days. Then a gray Lexus rolled to a stop and an electric window slid down. The driver extended a manicured finger in Perez’s direction, her blonde perm hardly moving above large, dark sunglasses. “I need someone who can do cabinets!” she shouted, and a group of five men scrambled toward the passenger side door. They lingered in the road, bargaining with the driver in her fur coat. A few more moments passed, and she drove away, the five men still on the street in East Hollywood. “She was offering $60 for the whole day,” Perez said, an incredulous smile on his face. “The lowest we’d go is $120. She sees a lot of people here, she thinks she can get it cheap.” This brief intersection of the rich and the poor on the road to rising inequality in America happens every day in every corner of Los Angeles. It is a defining reality, particularly in cities like L.A. where immigrant workers, many of whom are undocumented, are constantly haggling to keep their pay somewhere close to a survival wage that will allow them and their families to eat — and to try to send some money home. If they are successful, men like Perez are often taken west along Sunset Boulevard into the posh areas of Beverly Hills, Bel-Air and Brentwood to install appliances, paint walls, pour concrete and perform other assorted jobs on the estates of the wealthy or on contractors’ projects. But labor rights activists and the workers themselves, largely from Mexico and Central America, said the road to payday is often treacherous. Wages have been driven down by a poor economy and many impromptu employers exploit laborers’ lack of legal work status to withhold payment altogether, threatening to call police or immigration authorities if they complain. Although Los Angeles has emerged as one of the immigration capitals of the United States, with immigrants now com-

posing a third of the city’s population and nearly half of its workforce, it has also become one of the country’s most unequal. Wealth and poverty are nothing new in the City of Angels, Santa Monica, Hollywood and Skid Row, but the growing chasm between rich and poor means that these days L.A. is looking more like a developing economy than the second-largest city in the world’s largest economy. The Gini coefficient of the L.A. metropolitan area, the standard measure of income inequality, is now .485, among the worst scores for America’s big cities. That puts the level of inequality in this metropolitan area above the level of inequality in the country of China, which registers as high as .480. The US as a country has now hit .450 (up from .408 in 1997), though the US’s per capita income is still roughly three times that of China. In China, as many as 250 million migrant workers now help power the country’s economic boom, flocking from impoverished countryside areas into cities. As in China, L.A.’s day laborers have come from poverty elsewhere and represent the bottom rung on the ladder toward prosperity. The middle rungs for which they strive include full-time employment, health insurance, a comfortable home, a good education for the children — the American Dream. Yet tens of thousands of Mexican, Honduran, Guatemalan, Salvadoran and other immigrant day laborers are lucky if

they can find work even 25 percent of the time. Jobs come with the requirement that the employee carry a Social Security number, a response to aggressive immigration enforcement policies that have continued under the Obama administration. Finding a full-time job is a nearly impossible dream. “In the past, it was very easy to find permanent opportunities,” said Jeronimo Salguero program director at the CARECEN Day Laborer Center in the Pico-Union neighborhood, now a magnet for Central American immigrants. “At this time, it’s really, really bad. When I hear on the news that unemployment is improving, I want to invite them here to the center. Here it’s not 9 percent, it’s 80 percent. It really depends what neighborhood you’re looking at.” Salguero immigrated to Los Angeles from El Salvador in 1990, near the tail end of the Civil War that gripped his country for more than two decades and killed at least 70,000 people. “I didn’t want to come, to be honest,” Salguero said, smiling. “I didn’t want to come because I had dreams in my country. But my family had taken a big loan and we were in danger of losing our property.” He discovered CARECEN — an acronym for Central American Resource Center which translates from Spanish as “they lack” — in 1998 as he tried to get US government permission to return to his home country to visit his ailing father. The permission didn’t come through in time and Salguero wasn’t able to see his father before he died. But the well-built, easygoing 46-year-old said he felt a debt of gratitude to the organization, founded in the early 1980s by Salvadoran refugees. After volunteering at the group’s headquarters for a year, he was offered a full-time position and began working his way up. Then in 2004, the City of Los Angeles asked CARECEN to manage the Day Laborer Center it planned to fund, near another Home Depot in the shadow of L.A.’s downtown skyscrapers. “When they are part of the center, they are protected,” Salguero said, explaining that it was common for large contractors to offer his workers $7 per hour, below California’s minimum wage. CARECEN sets a $10 minimum. “There are many other places like street corners where workers don’t have any protection and employers take advantage of that situation.” Salguero said he has found his calling among the day laborers of Pico-Union, who are often living far away from their families in small apartments packed with 10 or more people. “It’s insane the situation they live in,” Salguero said. “You can open the fridge, and you aren’t going to find anything there. They don’t have the money.” Starting early each morning, the workers can come by the center to register for open positions with rights-friendly employers and to eat donated food. The center also offers English-language classes, a library and a place to sit, chat, and watch TV as they wait for work. Just steps away, groups of other young men forego Salguero’s help and hustle for whatever opportunities they can find in the bright L.A. sun. Even more than 2000 miles from El Salvador, Salguero is reminded of home, which he visits every year now that he is a US citizen. “In El Salvador, we are experiencing the same kinds of situations as here: unemployment; there are many poor people and just a few rich getting the majority of the land and all the good things like that.” Seven miles west in Beverly Hills, away from the crowded flats, pawn shops and street cart vendors, the story is different and yet familiar. To enter its carefully controlled opulence is to enter another world, as beautiful and pristine as a fivestar resort. But it’s only welcoming to those with particular credentials: wealth and status. Founded as a ‘whites-only’ city in 1914 and attracting some of the era’s premier Hollywood stars, the extremely affluent

area remains perfectly kept, its streets featuring rows of tall palm trees, its mansions marvels of architecture, verdant lawns maintained by still more immigrants. The city has assiduously prevented Los Angeles from building public transportation routes from the east, including a subway in the late 1990s and a rapid transit bus line in 2001. Rodeo Drive, one of the world’s glitziest shopping districts, attracts moneyed shoppers from around the globe to feast on Cartier, Louis Vuitton, Dior and Rolex. It also features Bijan, a fashion boutique that has been called the most expensive store in the world. As one of the omnipresent tour buses passed the store, its guide announced that the average purchase at Bijan is $100,000. In short, Beverly Hills is emblematic of ultra-wealthy enclaves around the world where six-figure salaries sit at the low end of a lifestyle that includes hobbies, travel and indulgences with price tags that would make even the petty bourgeoisie blush. Increasingly, such lifestyles take place out of view of the rest of the public, sheltered from the rest of the world by walls, laws and economic barriers. Behind the immaculately clean sidewalks, polished door handles and beaming showrooms of Rodeo Drive are the service alleys where junk haulers, plumbers, car washers and FedEx drivers work, hidden from sight. An older uniformed worker finished hand washing a black-and-yellow Bugatti Veyron (base cost: $1.7 million) with the vanity plate BIJAN as a man in a finely tailored suit got in and revved the engine. Eduardo Martinez, 27, was leading a team disposing of wood scraps for a new location of a chain of restaurants called “The Farm.” The exacting standards of Beverly Hills — and the pretentiousness of the moneyed culture — were not lost on him. “People ask me, ‘Do you have work permits?’” Martinez said. “I say, ‘Of course, it’s Beverly Hills, hello! When we know we’re going to work here, we always do a good job. These people demand it.” Brought to Los Angeles from Honduras by his mother at the age of 18, Martinez now lives in the middle class neighborhood of Van Nuys in the San Fernando Valley and has begun the legalization process. Asked about the wealth of Beverly Hills in comparison to that of poorer LA areas, Martinez shrugged, “I don’t really care about it. I know there’s a population who are rich... I come from a very different society. I just try to do my best at my job.” Down the street, Debbie Wilby, a native of Halifax, England was on vacation as part of a trip around the world. Asked about America’s rising inequality, Wilby had a clear answer as she stood in front of the Beverly Hills sign, a popular spot for picture takers. “Hard work gets you everything,” she said. “I think our country is suffering because of too much immigration. Our whole identity is getting changed. To come to somebody else’s country and change it.... even the British people get the layabouts. They’ll work for practically nothing.” Negative feelings against immigrants are not uncommon in Los Angeles. On Skid Row, the most concentrated population of homeless people in the county and in the country, a handmade sign made by one of the residents reads, “If Mexicans can have homes, why can’t I?” Jeronimo Salguero of the CARECEN Day Laborer Center spoke up for Latin American immigrants in the area, hundreds of thousands of whom are undocumented. “It’s a misunderstanding about immigrants,” he said. “What we ask for is an opportunity to become better members of this society.”

The optimism so often on display among the workers as they bantered and shared fruit conceals a darker new reality, which at times causes the men to group up against one another by nationality. “In the past we used to dream the American Dream, and that was the main thing that brought all these communities here,” said Salguero. “There is a saying in Spanish,” Salguero said. “Ya no existe el sueno Americano. Ahora es la pesadilla Americana.” The rough translation to English: “The American Dream is gone. Now it’s the American nightmare.”

CHAPTER FIVE - The Middle Class

Middlesbrough and Sheboygan both built thriving middle classes over decades of successful manufacturing. In the United Kingdom, income inequality is climbing and threatens to return places like Middlesbrough to an Dickensian age of “haves” and “have-nots.” Sheboygan, with an income inequality level slightly higher than England’s, is proving resilient to a similar trend of middle class erosion across the United States. One key difference: most of Sheboygan’s successful businesses have remained family-owned, with leaders who have remained benefactors of the community. In Middlesbrough, as across both the UK and US, blue-collar workers ail in what feels like a never-ending recession as their increasingly more prosperous neighbors compete for Saturday dinner reservations.

7 January 2012. Middlesborough. England. A burned-out pub in the riverside region of Middlesborough. The area has undergone redevelopment with a football stadium, university and other structures with innovative design.- Photo: Seamus Murphy / VII/GlobalPost

England’s shrinking middle class struggles to hold on
An anxious middle class in the United Kingdom shares many of the same worries that keep the middle class in America up at night. By: Michael Goldfarb February 4, 2013

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IDDLESBROUGH, England — “Born of Iron, Made of Steel.” That inscription is carved into the gates at the site of an old iron works here in this provincial seat of 138,000 in

northeastern England. South Tees Industrial Park is a government-subsidized technology and light-industry development. It employs far fewer people than the old steel works did when this town represented a muscular and growing middle class in England that was forged out of the fires of World War II and tempered by the decades of rebuilding and growth that came after. Today, the residents of Middlesbrough are part of an anxious and withering middle class in the United Kingdom that shares many of the same worries that keep the middle class in America up at night. On a cold, winter’s evening in the courtyard of Middlesbrough Town Hall, anxiety was in the air. The local council was preparing to discuss national government spending cuts and their impact on the municipal budget. Businesses and citizens rely on this government support. It is what holds this place together. Outside, in the below-freezing temperatures, a small knot of workers from Ayresome Industries were demonstrating against the cuts, their faces framed against the darkness by the lights of a local television crew. Their tiny company, which for almost 90 years has provided jobs to disabled workers, was slated to lose its council funding as part of a national austerity plan. Ayresome’s 38 people, who manufacture window frames and industrial brushes, stand to lose their jobs, and given their disabilities and the fact that they live in one of the UK’s highest areas of unemployment, they are unlikely to ever work again. Scenes like this are being played out in town halls around England and Wales. The UK has a budget deficit. The Conservative-led coalition government wants to shrink it via austerity spending cuts. The result is demonstrations like this, people desperately trying to cling to the lifeboat of work in one of the more unequal countries in the developed world. According to the most recent figures from the Organization for Economic Cooperation and Development (OECD), Britain is more unequal than three-quarters of leading industrialized nations. To put the age of growing inequality in context, consider that the amount of annual subsidy Ayresome received from the council was around £400,000 ($646,000). That sustained nearly 40 jobs, while the average Goldman Sachs’ bonus from last year was about $400,000, according to the Guardian newspaper’s business page. Middlesbrough’s mayor, Ray Mallon, arrived at the scene. A colorful local police chief before taking up politics, Mallon listened to the workers, expressed sympathy, then headed up to the council chamber to deliver a report on the cuts he was proposing to the budget. Mallon told the council that in the two years since the government came into office, “We have made £28 million worth of budget reductions, which included 450 job losses.” Middlesbrough is particularly vulnerable to austerity cuts. More than one third of the town’s jobs are in the public sector. And the worst of the austerity measures is apparently not over. Mallon warned, “We have some serious, serious times to come.” Cuts are coming from every direction as the Conservatives seek to shrink the size of Britain’s welfare state. But how can that help a town where, Mallon pointed out, “Two-thirds of welfare recipients in Middlesbrough have jobs. They are working.” It’s just that they don’t earn enough to get by without help from the government. Take that little bit of subsidy away and the people are left wondering and worrying. Where would Middlesbrough be then? Mallon is not a leftist. He is a combative Independent. He is all for deficit reduction and breaking the cycle of welfare dependency. He reminded a reporter that he used to share platforms with British Prime Minister David Cameron, back in

the day. That was when Cameron was seeking office and said, “More unequal countries do worse according to every social indicator,” noting that he wanted to see a Britain that was “more equal.” In 2009, Cameron explained in a speech, “According to almost every quality of life indicator … per capita GDP is much less significant for a country’s life expectancy, crime levels, literacy and health than the size of the gap between the richest and poorest in the population.” But now critics say Cameron is pursuing policies that can only increase inequality. 660,000 public sector workers have lost their jobs since the government came to power in 2010 - a time when the private sector is mostly creating part-time and low paid work. As Mallon put it, the cuts are “too quick, too deep, too savage.” Middlesbrough lies along the banks of the River Tees just before it flows into the North Sea. In the hills just south of the city, ironstone was discovered in the mid-19th century. There were vast deposits of coal in the same area. With a ready supply of fuel, soon giant smelters were built to turn the iron into steel. Teesside became Britain’s industrial powerhouse. Every piece of steel in the Sydney Harbour Bridge was forged in Middlesbrough and shipped to the other side of the world. The ICI chemical factory and the British Steel plant provided full employment. The tangle of massive metal chimneys constantly belching toxic smoke into the lowering clouds reputedly inspired one local boy, film director Ridley Scott, in his designs for Blade Runner. There may have been environmental issues in Teesside, but 40 years ago life in Middlesbrough was better, according to Mike Hopkins, principal of Middlesbrough’s College of Further Education. “Forty years ago, Teesside was the third most prosperous region in the UK, now Middlesbrough town is the 8th poorest in the UK,” Hopkins said. Hopkins pins the town’s decline on British government failures. “Successive governments pursued the wrong policies. Starting in the 80’s, the Thatcher government tilted away from manufacturing towards financial services. Then, during the Labour government they emphasized creative industries.” Gesturing out his window, Hopkins lamented the failure to invest in improved infrastructure for manufacturing. “We’ve got this giant chemistry set around us. It could have and should have been sustained into transition by the UK government,” he said. “That’s what they did in Germany.” Instead, British Steel and ICI no longer exist. They were broken up and parts of them were sold off to private equity firms. There is still steel and chemical manufacturing in Teesside, but these industries employ a fraction of the number of people they used to. Middlesbrough’s recent history perfectly tracks Britain’s history of rising inequality. Forty years ago, when Middlesbrough was prosperous, Britain was a much more equal society, as measured by the Gini coefficient. The Gini Index is a measure for describing wealth inequality. A zero Gini coefficient represents perfect equality. A one on the Gini Index represents one person owning everything. When you get above .330 societies are, by most economists’ assessment, considered to be significantly unequal. The UK has a Gini coefficient of 0.340 and the US figure currently is around .450, according to the CIA World Factbook’s most recent available data. Both the UK and US rank near the bottom of the 34 leading industrialized countries, with the UK at number 25 and the US at number 32 for inequality. Britain’s Gini coefficient was .250 in 1979, according to a 2011 report by the OECD, so income inequality has increased dramatically. To put these numbers into simpler terms, consider this: In 1979, the top one percent of UK earners took home six percent of national income. Today, the top one percent take home 15 percent of national income, according to

OECD figures. How unequal is British society today? Professor John Hills of the London School of Economics, answered the question with another question: “Do you get Downton Abbey in the US? We are back to Downton Abbey levels of wealth inequality.” In 1918, when the denizens of Downton were celebrating victory in WWI, the top 10 percent of rich Britons brought home 37 percent of national income. Today that figure is at 40 percent. But in between were decades when wealth inequality contracted, starting with World War II. Throughout these decades, greater equality created a solid middle class. Britain’s modern era of inequality began in 1979 when Margaret Thatcher was elected Prime Minister. Within a decade, Thatcher cut the top rate of income tax in half, from 83 percent to 40 percent. The figure 83 percent is astounding, but it is accurate and it prompted many of Britain’s wealthiest people to relocate to low-tax countries like Switzerland and Monaco. Middlesbrough’s industrial decline began. Hills pointed out that the richest 10 percent used the extra money in their pockets not to reinvest in the economy and create jobs, but to buy property and shares. Their income increasingly came from rents and dividends, not work. Money earned that way was taxed as capital gains. That tax rate was just 18 percent. So more of the share of the nation’s wealth went into their pockets, explained Hills. When he became the area’s top cop in the early 1990’s, Ray Mallon instituted a zero-tolerance policing program. As a result, when you drive around the town you don’t see the usual signs of economic decline and urban deprivation. There’s no graffiti or smashed-in windows. Litter doesn’t line the gutters. Mallon, who has been mayor since 2002, explained, “It’s not something you can see as you drive around. Inequality shows in high crime, low education attainment and poor public health.” Life expectancy is one of the clearest measures of how inequality affects Mallon’s community. Recent figures show that the most affluent 10 percent of men in Middlesbrough can expect to live about 15 years longer than the least affluent 10 percent. For women, the figure is 11 years. As mayor, Mallon has to deal with the human reality of those living on the wrong side of inequality numbers. The effect of 40 years of progressively deeper impoverishment has led to a generational crisis, with a third generation being born into a world of welfare dependency and low aspiration. “They live for today, they might say tomorrow, but not much further,” he said. “They’re not even thinking about a job they’re existing. No hope, no aspiration, no ambition.” In nearby Grangetown, in the shadow of what was the ICI chemical plant, grandmother Maureen Aiken agrees with Ray Mallon, but only up to a point. “There’s people round here don’t realize what a job’s like. Never had one,” she said. On the surface, Aiken, 58, and her family fit Mallon’s description of generational crisis. Grangetown, on the eastern side of the city, is an area where more than 80 percent of children are raised in poverty. Several of Aiken’s grandchildren have been in and out of foster care. But sitting in her living room, the heat turned off because it is too expensive to run even on the coldest days, she told a story that tracked Britain’s decades-long march towards inequality. Work was plentiful in the early 1970s when Aiken left school at 16 and began her working life. She was 21 when she had her first child, and she had another the following year. When her relationship broke down she returned to York. She never stopped working, although money was often tight.

From 2000 to 2005, the poorest in Britain did relatively better than the wealthiest in gaining a share of the economic pie. The reason was simple: jobs. Unemployment was half of what it is today and taxes on the low paid were light. Those were golden years for Aiken. She was the chef at the Black Bull Pub in York. She earned a little over £500 a week, good money for that time and in that part of England. She had to give the job up, she said, because her teenage daughters, unsupervised, were getting into trouble. They got pregnant. She stopped working to have time to hold her family together. There are few jobs in the local area for those like her with limited skills and no college degree, she said. Now she gets by on £567.30 ($914) a month in welfare benefits. But working is what she has always done, so she volunteers when she can at Thrive, a church-based community-organizing group. She had a question for Ray Mallon: “Where’s he going to get the jobs from?” She fired out the question again, emphasizing each word, “Where Is He Going to Get the Jobs!?” At the other end of the economic scale, life in Middlesbrough is sweet. The A66 at rush hour was sluggish on a recent afternoon as people headed to places like Yarm and Wynyard and other pleasant old villages snuggling up alongside the North York Moors National Park. Here houses can cost a million pounds and the private schools have long waiting lists. “Recession? It’s a load of bollocks,” said Steve Cochrane. “Try booking a top restaurant this Saturday night. You won’t get a table.” Cochrane sat in the William Hunt room of Psyche, his high-end clothing emporium downtown. It’s thirty-five thousand square feet over three floors packed with Boss, Armani and the Savile Row-based Hunt. “Middlesbrough’s a very disparate place,” he smiled. “My customers are very upbeat about the economy.” Cochrane is a local lad made good. A former singer in a punk band, 30 years ago he started selling clothes from a market stall in Redcar, a seaside town 10 miles down the A66. Today his business has a turn over of £5 million a year, and online sales are taking off. He sees upside everywhere. But when asked to look down the ladder and talk about local inequality, he turned the question into a national one. “There is inequality in Britain. It’s in the North-South divide. There’s far too much government investment in London and the Southeast. It’s pissing me off more and more,” he said. There is a shocking disparity between London and the northeast. The crash of 2008 led to an 11.31 percent decline in household wealth in Middlesbrough’s region. London’s average household wealth went up by 17.88 percent during the same period. The prognosis for reducing inequality in Britain seems poor. The economy is not growing. The day of the council meeting, government officials acknowledged austerity measures would continue for at least five years. So Mallon continues to make cuts. Gone is £8.9 million ($14.3 million) from the Working Neighbourhoods Fund, a stream of central government revenue designed to help people get back into employment and to acquire and renovate houses for people in need. It’s precisely the kind of program that could have helped Maureen Aiken. The irony is not lost on people here that $14.3 million is just about equal to the bonus paid last year to Bob Diamond, former head of Barclay’s Bank. He was forced to resign over the bank’s role in the Libor interest rate fixing scandal. Barclay’s led the way in fixing the London interbank lending benchmark so its derivatives traders could make money betting on the rate’s movements. ”I shake my head in disbelief,” said Mallon. “We can’t become fixated on this, we can’t become paralyzed. We have to go

forward.”

The city of Sheboygan, Wisconsin and surrounding towns have the smallest gap between rich and poor for any city in America. Kristopher Panick, 35 walks along the ice in Sheboygan Harbor while ice fishing for trout. Sheboygan,Wisc., Friday, February 18, 2013. - Photo: Richard Sennott

American Dream endures in one of country’s most equal areas
Sheboygan, Wisconsin has one of the most even distributions of income in the US, but the middle class now fights to preserve its prosperity. By Adam Belz - February 4, 2013

SHEBOYGAN, Wisconsin — Lake Michigan was wide and blue and a little menacing in the distance as a hard wind chopped at the lake off the breakwater near the mouth of the Sheboygan River. But inside the harbor, where wind and waves were blunted by land, Kristopher Panick, a laid-off construction worker, found his ice fishing spot. He knelt over a hole he’d bored through six inches of ice, dropped a line baited with a silver minnow, stood and then cracked open a freezing beer. Winter is quiet for roofers and siders in Sheboygan, and this winter has been quieter than most. Panick, 35, wearing glasses and a couple layers of hooded sweatshirts, has no health insurance and lives paycheck to paycheck. He draws on unemployment when he must. “Lately it’s been hard to come by work,” he said. “I’ve never seen it so slow.” Panick’s small refuge, a patch of ice atop the dark, frigid water of a Great Lake, is a bit like Sheboygan itself. The town of 50,000 is a spot of relative economic calm and security amid a cold, forbidding economic landscape in America, where the income gap is growing and the middle class is shrinking. Just halfway up the west coast of Lake Michigan, the dream of a prosperous and growing American middle class has somehow survived. In 2010, Sheboygan County had the most even distribution of wealth for a metropolitan area in the United States, according to a formula for income inequality developed by Italian economist Corrado Gini. Sheboygan County, it turns out, is on par internationally with European countries like the United Kingdom. And in this part of GlobalPost’s ongoing series, The Great Divide, we set out to compare Sheboygan with Middlesbrough, an English industrial town on the North Sea about an hour south of Newcastle. They share an industrial past, a hardworking people and an anxious middle class hanging on even as the ground shifts beneath it. Sheboygan has a few advantages in preserving its ideal self as a Midwestern middle class archetype. It’s small. It also has a booming food industry that economists say is largely resistant to recession. And Sheboygan’s middle class depends on at least one other force: The private business empires that dominate the regional economy. Names like Kohler, Vollrath, Stayer, Gentine, Sartori, Bemis and Brotz carry weight in Sheboygan County, because those families built companies that have provided jobs and sustained the towns of Plymouth, Sheboygan Falls and Sheboygan. These businesses are all private, often run by the descendants of founders. The families who founded Kohler Company, Sargento Foods and Johnsonville Sausage don’t have to answer to shareholders or pay dividends. They build golf courses and marinas, art museums and shopping centers and they spend money on their businesses. “It’s these strong, family-owned businesses that really can look beyond quarter to quarter, that really look down the road,” said Dave Sachse, a native of Sheboygan and serial industrialist who now owns a company called Nutrients, Inc., which makes vinegar. “Most of these guys who ran those places were very benevolent to the community.” Corrado Gini figured out a way to measure income distribution across a population so that a score of zero indicates perfect income equality and a score of one means perfect inequality. The U.S. average is about .450, and Sheboygan County’s index is .390, the best of all US metro areas in 2010. Four of the ten most equal cities in the United States by this measure are in Wisconsin, including Appleton, Wausau and Janesville. The question, of course, is how long this will last. Company towns run by family companies have suffered across the Midwest for decades. Views within a family shift, or ownership changes hands. Sheboygan County may always have its benevolent oligarchy, but how long will it have its middle class? The county is equitable by American standards, but the best Gini score in the US is still almost twice as high as the na-

tional average in Sweden. America has been growing less equal since World War II, according to the US Census Bureau. Midwestern states were among the earliest and most enthusiastic participants in the second industrial revolution. From Detroit to Milwaukee to Mankato, people built foundries and steel mills and factories. They built the crucial machines of the 20th century – cars, cameras, backhoes, pacemakers, tractors, radios, motorcycles, washing machines and airplanes. The auto industry in Detroit led the way, but its supply chain reached into towns across the region, including Sheboygan. And the Midwest was the nation’s breadbasket too. It had the best farmland on the continent and giant food companies like Archer Daniels Midland, Cargill and General Mills. Workers could expect to graduate from high school, get a job at a factory, raise a family, send their kids to a Big Ten university and retire comfortably. The Midwest was the “place that created the American mass middle class,” Lou Glazer, president of the economic and public policy group Michigan Future, wrote. “Largely because of high-paid, unionized factory jobs this was the place where if you worked hard you were most likely to realize the American Dream.” The future of human consumption is anyone’s guess, but one thing is certain: $30 per hour on the assembly line will be tough to come by. What workers expected and received in the Midwest after World War II – which Glazer refers to as the “American Dream” – looks now like a highly specific moment in human history, one that doesn’t translate to the future.

Sheboygan’s Roots

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he Sheboygan River winds its way across the level land to the big lake, and the first residents of the city settled on its banks in the 1830s. The first wave of German immigrants came in the 1840s, bringing with them an enduring rep-

utation for thrift, industry and sausage-making. Sawmills, flour mills and cheese factories sprang up across the region. The city’s south pier eventually came to serve as a dock where large lake boats unloaded coal onto smaller boats that could make their way to other towns further inland by navigating the little rivers that empty into the lake. (It is now a resort and hotel.) The Kohler Company was founded in 1873 by an Austrian immigrant named John Michael Kohler, when he and a partner bought a foundry that made field plows and feed cutters for farmers. Kohler introduced enameled steel bathtubs to American consumers in the 1880s. Now the company sells all kinds of bathroom fixtures and motors and owns resorts and golf courses in Wisconsin and Scotland. The firm is one of the largest privately held companies in America and employs about a tenth of metro Sheboygan’s workforce. The front office at Kohler looks like an administrative building at an Ivy League college. There’s a clock tower and a green lawn out front. Behind that is a complex of factories and parking lots stretching nearly a mile to the east. Opposite the office, on the other side of the street, stands the American Club, where bellhops in red coats and black bowler hats carry bags for tourists from Chicago. The club was built in 1918 as a dormitory for immigrant workers. Now it is an elaborate resort where people stay when they come to Sheboygan to play golf. A wood fire burned in a waiting room and women at the front desk were handing out champagne on a Saturday in January. The company’s tagline is “gracious living.” “I don’t work for the money,” says Herbert Vollrath Kohler Jr., president of the company, in a promotional video at the Kohler Design Center. “I work to advance living environments, if you will, and I get very excited about that, whether it’s a golf course, whether it’s the interior of a house, whatever.” The Kohlers have built their own little “living environment” around Sheboygan, including the American Club, an art center downtown adjoining the founder’s original home, and some famous golf courses. Whistling Straits, a traditional

links course among man-made dunes next to the lake north of Sheboygan, has twice hosted the PGA Championship.

This family lives with in walking distance to the Kohler headquarters and was out for a walk on Saturday. Sheboygan,Wisc., Saturday, February 19, 2013. - Photo: Richard Sennott

They Call Themselves ‘Cheeseheads’

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ver in Plymouth, Mayor Don Pohlman was bragging about his town and one of its companies, Sargento Cheese. It was Friday night at City Club, a bar in the middle of town. Waitresses were serving fried perch and Brandy Old

Fashioneds garnished with olives. Pohlman noted his town’s work ethic, its high wages and its output of cheese. Sargento, founded in 1953, cuts and packages cheese. If you live in America and shop for groceries, you’ve probably seen the name. The business generated a billion dollars in revenue in 2011. “You don’t go there and goof off. You go there and work!” said the mayor. “There are no $20,000-a-year jobs at these

cheese factories, they don’t exist.” As sure as the sideburns that stretch down below his ears, Pohlman is confident in the family-held businesses that employ most of the citizens of his town. He tells stories about leaders from Sargento and Sartori remembering the birthday of a line employee, or showing up to a worker’s funeral. The companies pay well and they’re loyal, he said. They might not be if they weren’t owned by local families. “If Sargento was owned by stockholders, the money would be moving out of town,” Pohlman said.

Sheboygan’s Fragile Future
And yet money is already moving out of the community, in the sense that Sheboygan County has lost the earning and spending power of thousands of manufacturing jobs over the past dozen years. All the private commerce in the world doesn’t exempt the area from the fact that labor is being automated and moving to countries where lower wages are acceptable. Sheboygan is exactly the type of city that’s vulnerable. In 1990, two of every five jobs in the county was in a factory, and those positions paid about $47,000 per year. As recently as January, the Business Journal in Milwaukee reported that 46 percent of Sheboygan’s earnings are in manufacturing. The county lost 8,400 – or 31 percent – of its manufacturing jobs between 2000 and 2011. Thomas Industries and Pentair left town. Auto parts maker J.L. French was bought by an Italian company. Hundreds more jobs were lost at Kohler. The 20th century’s golden age of factory jobs has been sliding for decades and the recession crystallized the shift by erasing 2.7 million manufacturing jobs in the United States between 2004 and 2011, according to the Bureau of Labor Statistics. Improvements in information technology and artificial intelligence will almost certainly replace more workers in the future. “Wages for average workers have basically been stagnant in spite of the fact that we’ve seen increases in productivity,” said Martin Ford, author of Lights in the Tunnel, a book predicting massive US job losses in the face of defter and more capable information technology. “The job market is polarized.” The middle class in America lost both its factory jobs and a third of the value of its homes during the recession. That’s changed how the class defines itself, said Ken King, president of the Family Services Association, a credit counseling service. “The middle class has gotten to the point where you can’t define it any more,” said King, who lives in a beige-and-brick house on a street that tees into a park in north Sheboygan. “We used to look at middle class as being a standard of living which is I have a house, I have a car and I have some toys.”

Alyssa Medina, 24, has a 1-year-old daughter and is homeless in Sheboygan. Sheboygan,Wisc., Friday, February 18, 2013. - Photo: Richard Sennott

Not All in Sheboygan are Holding on

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he ranks of the poor in town have grown as the population in the middle is gradually eliminated. Alyssa Medina and her 1-year-old daughter had just checked into a homeless shelter on a little hill just north of the

Sheboygan River. Medina, 24, grew up in a trailer park with her mother and now has three children of her own. She also has health problems. She had been a temporary worker for Old Wisconsin Sausage, but was diagnosed with multiple sclerosis, stopped working and lost her apartment. “My situation in itself is pretty complicated right now,” she said. She handed a bottle to her daughter Elicia, a curious girl with curly brown hair. If Medina took classes to re-certify herself as a nurses’ assistant she could get a job at a nursing home making between $11 and $12 per hour. But that requires arranging for child care, and she says because of the M.S., she can’t see well. “There’s ups and downs to your life and right now I’m in a down part,” Medina said. She believes she will get things straightened out, but she knows it will be difficult. “You need a good education to get a good job,” she said, wistfully.

Sausage and Vinegar

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he building is full of meat in various stages of undress. Deer are slaughtered there, meat cut into steaks and chops, and a machine whips dollops of ground meat into casings and shoots out sausages.

Sausage of all kinds gets hung on racks and rolled into a smoker before its tossed behind the glass of the store’s 80-foot meat counter, filled with bratwursts, chops, wieners, steaks and summer sausages. Miesfeld’s Meat offers up to 3,000 items, but has not always been thus. Chuck Miesfeld’s father died suddenly when the store was still a small downtown butcher shop. Miesfeld decided to borrow the money to move the shop and its eight employees to the edge of town in 2000. It was a huge risk, Miesfeld said. “Those are my nuts on the line, not the people who work here,” said Miesfeld. “You wouldn’t believe the sleepless nights I had.” It’s worked out well for everyone. Go to the Charcoal Inn, a little joint in north Sheboygan, and you can order a Miesfeld bratwurst that’s been sliced open before it’s grilled and served with sauteed onions and sauerkraut and mustard on a fresh bun (they call it a “hard roll”) from Johnston’s Bakery a mile to the south.

Miesfeld now employs 43 people, and sells meat to 110 restaurants and 45 supermarkets. So when people say they can’t find a job, Miesfeld tells them to look for something better: “You’ve got to work at things. You can be whatever you want to be, but you’ve got to go out and grab it.”

Grabbing Opportunity

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ne man who has gone out and “grabbed it” is Dave Sachse. He buys and sells industrial companies, and he probably wouldn’t mind if you called him an industrialist.

He has an office building on the outskirts of Sheboygan that he bought at a discount after the group of realtors that built it lost all their money in the recession. He was there at his desk at 8 a.m. on a Saturday. The flat screen on the wall was tuned to SportsCenter, the volume was down low. The building has an office for Sachse’s son and an analyst they hired, and it’s full of memorabilia. Signed Green Bay Packers helmets, signed jerseys from Michael Jordan, Magic Johnson and Larry Bird. Another piece of memorabilia hangs above the door inside the bathroom. The name on the blue-and-red baseball cap is Darosa, Inc., a venture that didn’t work out for Sachse. It drives home the razor-sharp edge between success and failure for anyone sitting on the office toilet. “I keep that to remind me they don’t always work,” Sachse said. He grew up in Sheboygan, where his parents ran a longstanding luggage and leather goods business. He went to Marquette University to study dentistry but found it didn’t interest him. He ended up in sales at Kohler for 15 years and learned about power systems. He bought an acoustic ceiling and wall panel company in Chicago and then a wall panel company in Ladysmith, Wis. He combined the companies and then sold them to Owens Corning. Voilà. He’s been buying and selling businesses ever since. Now he is at least part owner of a vinegar maker, an industrial coatings company, Milwaukee Forge and a metal-stamping business in Sheboygan Falls. His son is trying to launch an online business. “God has been very good to me,” Sachse said. “I made a lot of money and I was very lucky.” He’s optimistic. He doesn’t think labor is always the key cost of manufacturing, and he thinks the US competes well in other ways. The market is always in flux, and people like Sachse, with quick brains and capital and connections to spare, are ready. “I think our best years are coming,” he said.

Waiting Over the Hole

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ristopher Panick, ice fishing at the marina, is less prepared. He’s a complicated mix of cheerful and worried when he talks about the economy.

He gets paid $18.50 per hour when there’s work. It’s an employer’s market, he said, and he worries about the immigrant

roof and siding contractors who underbid his firm. The wind shot snow across the ice and the flag on one of his tip-ups popped into the air. He thought it might be a northern pike, or a lake trout. He walked to the hole and pulled up the line. No bite, just a squirming minnow. Panick has a girlfriend, but he has a hard time making ends meet just for him and his three dogs. Last year he made $30,000 and was thrilled about it. “That’s really good for me,” he said. All around him are financial struggles. One of his brothers has been out of work for 18 months. One of his friends has maxed out six credit cards. Yet Panick doesn’t begrudge anyone for making money. He believes hard work is rewarded. He believes in his skills, and trusts his boss to find jobs that will allow him to put food on his table. “There’s always going to be the people in charge who have the money,” he said.

CHAPTER SIX - The President

President Obama’s mother was from Kansas, and his father was from Kenya. As Obama works through a second term that has seen the economic recession ease for a prosperous few but not for the majority of Americans, stories of income inequality from Topeka and Nairobi offer insight into two distant places with nearly identical Gini coefficients (0.425 in Topeka and 0.428 in Kenya) where many hope Obama can help reverse a global trend of rising inequality — while others see it as beyond his reach or responsibility. Kenya elected President Uhuru Kenyatta in March in a disputed election shadowed by tribal violence. Ethnicity and tribal affiliation in Kenya is closely tied with economic success — which many argue is not so different than in the United States.

A bartender helps a client, who has just flown in from Dubai, with a light for his cigar. The rooftop lounge at the Sankara Hotel in Nairobi’s upscale Westlands neighborhood is a popular nighttime spot for the city’s privileged. - Photo: Nichole Sobecki / GlobalPost

Glaring class disparity gains attention ahead of Kenya’s presidential election
President Obama’s focus on income inequality in America resonates with many in the land of his father. By Nichole Sobecki - February 11, 2013

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AIROBI, Kenya — Dusty morning light glints off the tracks, the rusted beams forming the main artery into Kenya’s largest slum. Crushed together, thousands begin their trek along the rails to the offices and factories of Nairobi’s

city center. Just below the crowds, hidden amid a mountain of waste and discarded objects, Philip Mbithi has already begun his day’s work. He is one of the millions who survive within Nairobi’s massive informal sector, which employs over 80 percent of Kenyans according to the Kenya National Bureau of Statistics’ recent 2012 Economic Survey. Mbithi’s body is wiry and work-hunched; his face set as he methodically sifts through the most wretched of materials. For the past few years this has been his every day, collecting and selling to recyclers the things that others threw away. On a good day he’ll bring in $5, but usually it’s closer to $3. Without a waste management system, Kibera’s landscape seems made for this work. Bands of trash crisscross the twomiles-by-a-half-mile stretch of land — along the rails, between the low-slung tin structures that form homes and busi-

nesses, under bridges, and within the slum’s winding, polluted streams. Wrestling his way through the trash, Mbithi tosses the thong of a sandal into a sack slung loosely over his shoulder. “My daily bread,” he says, soon adding a medicine bottle, several caps and a mess of wire to his stash. No one knows for sure how many call Kibera home — most estimates land somewhere around a million people. They exist outside even the most rudimentary network of state support. Water, roads, hospitals, schools, sanitation, electricity — on every count the government has utterly failed to meet the needs of the slum’s residents, labeled squatters in official logs. “The government has never helped me, they don’t know me,” said Mbithi. “Here in Kibera we’re invisible.”

Kenya’s native son

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enya has a Gini coefficient — the most commonly used measure of income inequality — of 0.428, and the divide separating Nairobi’s ultra wealthy from the slum-bound here in the capital is massive. Economists say such a wide

disparity doesn’t just hurt the 50 percent of Nairobians living in poverty, but actually hinders the growth of a national economy still recovering from prolonged political violence that claimed more than 1,100 lives and displaced 600,000 people following the contested 2007 presidential election. Across the Atlantic, the wide, groomed highways and tree-lined residential areas that form Kansas’ small, midwestern capital of Topeka appear worlds away from this sprawling mess of a metropolis. Just 15 percent of Topeka’s residents live in poverty, well below Nairobi’s rate. Yet, Topeka’s Gini coefficient is .425, making it almost as unequal as this East African nation. Topeka and Nairobi share another, unexpected bond: President Barack Obama. While Obama’s mother is from Kansas, his father’s roots lie in a tiny farming village in western Kenya, where the president’s grandmother still lives. While four years in office has reshaped the president’s image at home, in Kenya his message of hope and change remain potent. “For a long time Africans were intimidated by the rest of the world,” said Dorcas Havene, a monolith of a woman who has sold githeri, a traditional meal of maize and beans, from the same corner in Kibera for the last two decades. “But if someone with blood from here can rule the world, it reminds us that we all stand a chance.” As Obama was sworn into office last month, elated Kenyans took to the streets of Nairobi in celebration. From his podium in Washington, the president used his second inaugural address to reinforce his message that government must

play a larger role in creating equal opportunity, and building a bridge across the canyon that rests between the haves and have-nots of the world. “For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it,” Obama said. For a population that tends to view their own government as if from across a great distance — “they don’t know where I am,” “we’re too far away” and “the government doesn’t know me,” were common explanations from Kibera’s residents for the absence of any tangible state presence in their lives — this American president is viewed with a surprising immediacy by many here. “Obama is our neighbor, he understands what we are going through,” said Rosaline Amondi, known as “Mama Fish,” who owns a modest restaurant on one of Kibera’s main avenues. Less than a month before Kenyans head to the polls, Obama drew on his connection here in a video posted last week urging voters to conduct peaceful, fair elections on March 4. The video calls for Kenyans to “come together” to avoid the bloodshed that marred its last election. Much of that chaos was orchestrated by leading politicians, who capitalized on the tribalism that has long plagued the country. The question of ethnicity, though, is closely tied to economics here. Kenya has more than 40 tribes, but the largest group, the Kikuyus, have dominated business and politics since the country won independence from Britain in 1963. This sense of favoritism mixed with gross poverty makes a volatile cocktail that Kenya is scrambling to put a lid on before votes are cast and counted. In Nairobi especially, argued Catherine Wambua-Soi, a producer for Al Jazeera, in a recent blog post, the battle lines of this election are being drawn between the rich and the poor. “Arguably, for the first time in the history of multi-party politics here, Nairobi’s county elections will be more along class lines rather than the traditional tribal blocs,” she said, detailing politicians’ efforts to connect with the capital’s slum dwellers by wearing ripped clothing, handing out food and bragging about being “from the hood.”

The Muthaiga Country Club, which dates back to 1913, is an exclusive, members-only club in a wealthy suburb of Nairobi. - Photo: Nichole Sobecki / GlobalPost

The Junction

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tle.

ncircling Kibera, and serving the city’s elite, are the manicured lawns of the Royal Nairobi Golf Club, a handful of gated embassies, and a mile and a half down the road the upscale Junction Mall. Though named for a point of con-

vergence, the traffic barriers and security checks make the Junction as impenetrable for Kibera’s residents as a feudal cas-

In the tasting room at WWW Shop and Bar, Christopher Muthuko is spending his Saturday afternoon catching up with a friend. Nairobi’s first wine bar, WWW Shop is one of many such swank establishments that have popped up in the past

few years. They serve elaborate “bitings,” and for the deep-pocketed romantics, “precious stone cocktails” which offer one’s date the choice of a drink and a rock: tanzanite, pink topaz or diamond. Muthuko, who owns a farm in western Kenya, leans back in his leather booth, polished glasses set casually atop a shaved head. He thinks Obama can help by bringing attention to the issue of income inequality, which until now has been seen here as “just something inevitable.” “The politicians need to see this as a platform for unifying the country, and the more attention Obama can bring to it, the more likely things will be brought to the table,” he said. Across the booth, Kojo Acquaisie, a political advisor for the United Nations, disagrees: “He has his issues to deal with in America, and our problems, they are for us to solve.” This edge of survival Nairobi is the economic heart of Kenya, accounting for 45 percent of GDP. Yet two out of three of the city’s residents live in slums and informal settlements, half of them in Kibera. The line here between formal and informal work is not drawn neatly between planned neighborhoods and slums, but a strong correlation does exist. State investment in wealthier neighborhoods is much higher in Nairobi, even when poorer areas are much more densely populated. Access to capital is also key. Most banks won’t lend to those with nothing to leverage against a loan, often not even a permanent address. In the shade of a makeshift awning, Kyalo Mungudi is orchestrating a rhythmic flow of water delivery. The jingle of coins changing hands, then the thunk of water hitting hollow plastic sounds on endless repeat through this narrow pathway. A lean teenager in sandals made from recycled tires, Mungudi operates this water point for its owner, who moved out of Kibera long ago. At a stakeholders’ workshop last year Martin Mascinde, a fiscal analyst with the Parliamentary Budget Office, said that the Kenya Revenue Authority has lost more than 200 billion Kenyan shillings, or over $22 million, in three years due to the government’s inability to tax the informal sector. “If the underground economy remains untaxed, the government will continue losing billions of shillings… it will become increasingly difficult for the government to hit its revenue targets,” he said. For Mungudi too, the issue of taxation is central to progress. “When the government collects taxes they can put more water points in Kibera,” he said. “We should pay so the country can develop.” For now, the government delivers water to only a tiny portion of Kibera, leaving most reliant on hawked water from private taps, where they pay two to ten times what is paid by a Nairobi resident outside the slums. “We are the ones helping ourselves, we’re forgotten by the government,” said Mary Okoth, who has come with three jerry cans to be filled. Scoffing at the idea of paying taxes to a government she never sees, she shrugs her shoulders: “For what?” From her office on the top floor of the University of Nairobi, Dr. Mary Njeri Kinyanjui, a senior research fellow at the Institute for Development Studies, shares a similar skepticism. “An industrialist will boast about his contributions to the national economy by paying tax, yet most of his workers can’t afford the goods he produces,” she said. For Kinyanjui, though, the solution lies not solely on tax reform, but on wages: “We are a labor surplus economy so we

keep our wages low, but meanwhile people are living just on this edge of survival. How can we grow like that?” Jua kali: Swahili for innovation The development world has long viewed the informal economy as second-rate, or simply backwards, but here in Kenya many are beginning to view places like Kibera for what they are: consummate machines of production and creativity. “Western industrialization has failed to respect informality,” said Kinyanjui, who believes that the solution to inequality here rests not on imposing formalization, but rather in supporting the informal sector as an indigenous advantage. In Swahili, this informal spirit is known as jua kali, which means “hot sun,” and was originally applied to artisans who labored all day in the open air. Folding his hands together, Acquaisie argues that the jua kali needs to be better supported by the state. “These traditional mechanisms help pull society together,” he said. “But these ideas need to be institutionalized. We need to mainstream ideas that already exist in our society, and we need government policy and legislation to back them.” Technology has also been used as a bridge between the formal and informal economies. Following the explosion of access to mobile phones, Kenya’s Safaricom developed M-Pesa, an innovative system that allows those without a bank account to transfer funds with the ease of a text message. On both large and small scales, such creativity is often born of necessity. Beams of light flood into the Cana Children’s Center through holes in the corrugated metal roof. Three classes crowd together in a single room, their lessons coming from community members who are little more than volunteers. Yet three years ago, before the Cana Center was built, none of these children attended school, and many spent days without a hot meal. “There’s just too much need, and too little being offered by the state,” said Martha Ayuma, the founder and principle of Cana Children’s Center. “Bit by bit, though, we are building something new.”

John Todd, one of Topeka’s many homeless, lives in his car in the backyard of his mother’s house. - Photo: Nichole Sobecki / GlobalPost

State of the Union: In Topeka, Kansas, a ‘new generation of poverty’ feels rising inequality
In a deeply red state that is also part of President Obama’s heritage, residents grapple with the government’s inability to stem America’s rising inequality.

By Nichole Sobecki - February 11, 2013

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OPEKA, Kansas — The roar of passing cars and trucks echo beneath the Kansas Bridge, the drivers unaware that just below their wheels lies a makeshift encampment where half a dozen homeless men and women have found

shelter. “You get used to it,” said Steve, who asked to be identified by his first name only, gesturing towards the reverberating thunder above. His worn face is half-hidden beneath a blue knit cap as he lights a cigarette. Two years ago, Steve lost his factory job, and a year later his house. Winter in Topeka brings a dry, biting cold, and the winds whip beneath the tunnel even in the warmest part of the day. Jackets, some canned food, a broken computer monitor and an empty toolbox lay stacked against a nearby support beam, the meager belongings of those who call this lonely outpost home. While nationwide homelessness actually decreased by one percent between 2009 and 2011 — the result of significant federal investment — the tattered ranks of Kansas’ homeless and hungry are swelling, especially among families. During those same years the total meals served at the Topeka Rescue Mission rose 25 percent, and those seeking shelter rose 15 percent. Unable to accommodate the growing need, the Mission is adding on a new building with 170 additional beds. “It’s indicative of what’s going on here,” says Mark DeGroff, director of communications for the Topeka Rescue Mission, who says he worries that rising income inequality is leaving too many Americans without their most important asset — a home.

The defining issue of our time

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ust over a year ago, President Obama spoke to a crowed gathered in the small, eastern Kansas town of Osawatomie, calling growing inequality “the defining issue of our time.” Incomes of the top one percent have more than doubled in

the last decade, while the average income has fallen by six percent. “This is a make-or-break moment for the middle class, and for all those who are fighting to get into the middle class. Because what’s at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, secure their retirement,” Obama said. Osawatomie was chosen for its historic and political resonance. More than a century ago Teddy Roosevelt issued a sounding call for progressive reforms from this same town to a crowd of more than 30,000. The former president called for government regulation of business and labor, and a “graduated income tax on big fortunes,” ideas Obama has also pushed. The setting also put a spotlight on Obama’s Kansas roots – his mother was from Wichita, her father from El Dorado, and her mother from Augusta. Many here lay claim to Obama as a native son, an identification the 44th president sought to capitalize on: “I like to say that I got my name from my father, but I got my accent — and my values — from my mother.” On an average morning in Kenya’s capital the streets buzz with the call of matatu drivers, Nairobi’s informal system of minibuses, hawkers selling magazines and chewing gum, and the hiss of oil as raw dough hits the frying pan that an aproned woman has set up on the sidewalk. On the surface this frenetic activity has little in common with Topeka’s understated, orderly industry, yet both places share a Gini coefficient — the standard measure of inequality — of .43.

Obama, too, links these two disparate places. His father was born on the shores of Lake Victoria in western Kenya, before attending college in the United States where he met and married the president’s mother.

Separate and unequal

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n Auburn-Washburn, one of Topeka’s most affluent neighborhoods, towering reconstructions of English Tudor estates butt up against French-inspired chateaus, each opening out onto a private, manmade lake. Lenice Massey, now

94 and a great grandmother, has owned three homes in the neighborhood since she first moved here in 1951. “The better homes have always been on this side,” she said, referring to the area east of Topeka Blvd., “but things have changed elsewhere.” “The people who hurt the most are those just below me, you know, the middle class.” When Massey first moved to Topeka in the early 1950s, the economy was booming for the first time in almost 30 years and the Civil Rights movement was mobilizing. Topeka became famous that year as the home of Linda Brown, an 8-yearold girl whose father sued the Topeka school board in the case responsible for eliminating the standard of “separate but equal” in American public schools: Brown v. Board of Education. Women like Sheila McDonald, one of the few African-Americans to attend her university at the time, bear legacy to that landmark decision. Now a social worker at Topeka’s Robinson Middle School, McDonald thinks today’s most essential civil rights issue is no longer race. “We have middle class families that are now poor, living below the poverty line,” said McDonald. “Whereas before it was racial, now it’s economic. We’ve got a new generation of poverty.” Only 40 percent of American neighborhoods now have an average income within 20 percent of the national median, compared with 60 percent in the 1970s.

A new conservatism

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ast in an afternoon glow in front of the Capitol last month, the president used his inauguration speech to reframe the inequality argument again, praising the value of proactive government, and refuting the idea voiced by conserv-

ative opponents that America is in danger of becoming “a nation of takers.” “We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few,” Obama said. How to extend that happiness, though, is a point of stark divisions. Kansas is a primarily blue-collar state that always votes red. Only once since 1936 has the state gone to a Democrat — Lyndon Johnson’s 1964 landslide victory, and even then they had one of the closest margins in the country. In Obama’s Osawatomie speech he blasted the theory of “trickle-down economics” — the idea that tax breaks and economic perks given to the top few will help create jobs for the rest of society, but many here remain loyal to the principles of low taxes and small government. “You gotta get more people working, and get that going again,” said Dan Collins, a business owner whose wife has

worked as a social worker for the state of Kansas for more than 30 years. “And you can’t get that by taxing these businesses too heavily. “ Kansas today is painted a darker shade of red than ever before. Since conservative Republicans took full control of the state in 2010 there have been major cuts to education and mental health care services. Just this month a bill that cuts state income tax by roughly $3.7 billion over five years came into effect. Last month a new bill was introduced that would eliminate the state’s individual income tax altogether. From across a polished wood conference table in Topeka’s Chamber of Commerce, Marsha Sheahan, the Chamber’s vice president, expressed support for the state’s new direction, citing concern that the social welfare safety net has been choking their society. “We have allowed some people in our society to not thrive, we have not set those expectations,” Sheahan said. “We have

not expected them to learn to fish because we’ve always given them these social supports.” Many who favor the ‘you’re on your own’ economics of the Republican Party share Sheahan’s fears. “I didn’t come from a wealthy family,” said Douglas Kinsinger, the president of the Chamber, leaning forward in his leather chair. “But every individual has the opportunity to succeed if they work hard enough.”

John Todd, one of Topeka’s many homeless, lives in his car in the backyard of his mother’s house. - Photo: Nichole Sobecki / GlobalPost

The American reality

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or many, though, the American Dream of economic opportunity and upward mobility is increasingly seen as a myth. Topeka is dotted with vacant lots and abandoned buildings, a sign of the toll the economic challenges of the past few

years have taken on Kansas’ capital city. Businesses like Hallmark, Jostens and Payless have either closed or significantly cut back their plants here in the past year. “There’s this idea that exists for many people still that if you work hard enough in America you can succeed, and if you haven’t succeeded it’s because you’re not working hard enough,” said the social worker McDonald. “But this isn’t the

1950s anymore.” Indeed, the landscape of today’s poverty is unrecognizable from what existed half a century ago. The number of children at shelters has swelled, says Topeka Rescue Mission director Barry Feaker. This past July and August there were for the first time more children staying than adult men — about 90 to 100 kids a night. “The stereotype of the addicted, white male veteran isn’t who is homeless anymore,” said DeGroff. More than a fifth of American children live in poverty — the second worst of all the advanced economies, putting it behind countries like Bulgaria, Latvia and Greece. In Topeka public schools last year, 579 school-aged children were homeless. Statewide, there were more than 8,900 homeless schoolchildren. Even for those who still have a roof over their heads, the economic climate has exacerbated already challenging circumstances. “Some people don’t have water, some don’t have gas. I go to people’s homes where they actually have dirt floors,” said Adrienne Martinez, the only employee of A Hispanic Ministry of the Kansas East Conference United Methodist Church. “And people don’t seem to understand that, people who have these so-called luxuries of electricity and food.”

A matter of faith

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or Martinez, a devout Christian, her work is intimately tied to her faith. Her ministry provides a food bank, English as a second language classes, computer training, help with immigration paperwork, translation and whatever else

Martinez can fit into the limitations of a 24-hour day. “The good Lord put me here to help these people,” she said, her voice breaking. “Now I just have to figure out how.” To much of America, Kansas is abstract. It’s where Dorothy returns, and where Superman grew up. Those who call the state home, though, pride themselves on their individualism, and share a deep skepticism of the so-called “elites” from the country’s coasts, and more than anything, of too much government. “Can the government help?” scoffed Martinez. “Does the government ever help?” From the windows of their homes and churches, people here see their neighbor down the road far more clearly than any support that may be coming from Washington. For Barry Feaker, the solution to his city’s problems is simple: “Just love the one that’s in front of you.” With bowed heads and folded hands, he leads his colleagues in a simple prayer before they begin their day’s work: “Please Lord, give us the strength to help our neighbor, and all those suffering from poverty, mental illness, or just a broken heart.”

CHAPTER SEVEN - Oil

The oil that lies underneath Big Spring, Texas, and Warri, Nigeria, creates economic distance and physical barriers between the workers who extract the crude and their privileged bosses. Big Spring and Nigeria share similar Gini coefficients of .431 (Big Spring) and .437 (Nigeria), though Nigeria’s poverty rate is dramatically higher with a dramatically lower income per capita. Nigerian and expat oil and gas elite enjoy $600-a-night hotel rooms in Warri, conducting business at Chevron, Texaco, Shell with homeless vagrants living right outside. Amid a housing boom for industry leaders, a soaring homeless population outside of Big Spring squats in boarded-up bungalows with toxic gas from the oil fields hanging in the air. For those who haven’t broken into the upper echelon of the oil industry, the message is the same: Keep Out.

A man waits at the bar of the Protea Ekpan Hotel of Warri. Luxury hotels such as the Protea Ekpan in Warri cater to the Nigerian and expat oil and gas elite and to Nigerian politicians with rooms priced between $400-600 pernight. - Photo: Samuel James

In Nigeria, oil divides the rich and poor
In Warri, Nigeria, oil barons bunker themselves off from the desperate poor, who are left without a steady income or basic services. By Samuel James - February 18, 2013

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ARRI, Nigeria — On the outskirts of Warri, the brooding commercial capital of Nigeria’s oil-rich Delta State, the streets leading into brand new multi-million dollar developments reek of crude oil.

In a casual display of excess, gallons of the delta’s “light and sweet” crude — possibly the most valuable commodity on the planet — are dumped daily into the open gutters to suffocate the mosquitoes breeding in the stagnant water. Starting in 2009, when the government enacted an amnesty program that saw several thousand Delta fighters exchange weapons for cash, followed by the election of President Goodluck Jonathan, a native of the Niger Delta, there has been an overall effort to redirect oil wealth back to the communities that host Africa’s largest oil industry. Since then, a small, emerging segment of the population — primarily politicians and former militants with access to government contracts and revenues — has grown spectacularly wealthy and powerful, while most Nigerians remain poor and beholden to the generosity of the elite. In communities like Ubeji, a neighborhood in Warri, wealth from oil rents fuels the construction of mansions at a furious pace, bypassing the building of roads and other public infrastructure, like water and electricity. As a result, there is no urban plan. Bumpy dirt paths weave through a random scattering of lots featuring custom metal gates, electric security fences, private water towers, industrial-sized generators and paved driveways. Black luxury cars with dark tinted windows slink through the jungle maze and disappear into fortresses. “The government doesn’t provide anything,” explained Moses Okotie, a resident of Ubeji who works for a local oil company operating between Warri and the nearby Escravos terminal – Chevron’s largest oil tank firm in the country, one of the largest oil producers in the world. “So we have build it ourselves. We are the government here.” Every morning, throngs of people gather outside the steel gates of these homes to wait for a possible meeting with the community’s “chairmen,” oil barons who sit atop vast hierarchies upon which thousands of people depend, both formally and informally, for a lifeline. Their “boys” man the entrances, dressed in high fashion purchased on recent trips to London, Paris and New York City. Many of the new oil rich here own second homes in Texas, close to expat American oil workers who work on their land. “The people who are here are really trying,” explained another woman lingering at the gate, seeking support for a talent show for disadvantaged youth in Warri. “I’m happy with anyone opportune to penetrate the oil industry here. These are the people that allow our community to eat.” Along with increasing the numbers of mansions, the rise of wealth has increased investments in malls, movie theaters, hotels and mega churches throughout oil boomtowns such as Warri and nearby Port Harcourt. Luxury hotels such as the Protea Ekpan in Warri cater to the Nigerian and expat oil and gas elite and to Nigerian politicians with rooms priced between $400-600 per night. In the evenings, politicians in flowing gowns file into the marble lobby flanked with armed military escorts, rifles doubleand triple-clipped with duct tape – protection against the constant threat of kidnapping and armed robbery, the Delta’s other booming commercial industries. In the hotel’s gourmet restaurant, oil company workers hold muffled conversations with security consultants over champagne and fresh fruit. “We call it padi-padi politics,” explained Ramzen Edema, while waiting on his boss — a local chief and pipeline contractor — to finish a meeting with an oil company representative at the Protea Ekpan bar, “you have to know someone to get something.” “That’s why I am here,” he said. “Education doesn’t mean anything in this country, what’s necessary is loyalty to your chairman. You just do what he says. You don’t think, you don’t argue, you follow the leader.” And while the interior atmosphere matches that of any five-star hotel globally, its back view abuts a smoky, grey expanse

of rusting refineries and constantly burning gas flares. Just outside the gates — along a road lined by the head offices for Chevron, Texaco, Shell and the residential camps of their employees — homeless vagrants live in smoldering refuse dumps between the express lanes. Polio victims crawl on their hands and knees begging for stray bills from cars leaving the garrisoned compounds. The source of this wealth is not far away. The intricate waterways surrounding Warri contain some of the world’s largest deposits of light sweet crude — easily refined and therefore highly sought on the global market. On Warri’s swampy fringes, where new developments sit atop freshly cleared mangroves and dark mud soaked with crude oil, massive tank firms store petroleum products shipped in from the nearby creeks. The firms are owned by the new elites based in the city. Surrounding the tank firms, seagoing vessels line the waterways, waiting to load millions of barrels of raw crude oil before setting forth across the Atlantic. Hundreds of rusty oil tanker trucks line the roads to transport diesel, petrol and kerosene to filling stations across the nation. Despite being Africa’s largest oil producing region and the fifth largest supplier of crude oil to the United States, fuel for daily use is among Nigeria’s scarcest and most expensive commodities. Due to constant power outages, Nigerians who can afford them rely on privately-owned generators for electricity. The poor live in darkness. Oil provides roughly 87 percent of government revenues, 90 percent of foreign exchange earnings, 96 percent of export revenues, and almost half of Gross Domestic Product (GDP). However, despite the fact that the Nigerian exchequer takes in more than $50 billion from oil annually, more than 90 percent of Nigerians live on less than $2 a day and 70 percent live on less than $1 a day. In the Niger Delta, youth unemployment is at 40 percent. Hovering at the fringes of the oil industry are those cut out from the extreme wealth that flows to the politicians and those with connections to them. In the evenings, tanker drivers park their vehicles in line at the tank firms and bathe in nearby ponds coated with the sheen of diesel fuel. Weaving in and out of the waiting trucks are school-age children, hawking goods like satchel water and spiced meat to help support their families and themselves. Godwin, a 15-year-old boy who lives with his uncle in a nearby village, works there every day after school. He sells meat pies from 3 p.m. until everything is sold, usually around 10 p.m., leaving little time for homework. His uncle forces him to work in order to pay for his school fees. “If I don’t work, I don’t go to school,” he explained, straining his neck to keep the heavy load balanced on his head. “I just pray someone can help me to further myself, but I don’t have any connection.” In Nigeria, where unregulated corruption has concentrated extreme oil wealth into the hands of a small group of elites, while systematically denying most of the population access to even the most basic amenities, a great many rely on individuals to fill the safety net where the state has failed. Those without connections to the wealth flowing through the center live a precarious and unrelenting day-to-day struggle for survival. Tucked away throughout back corners of Warri’s new developments are hordes of migrant laborers who have set up nomadic camps in the shells of the half-finished concrete mansions. Most of these young men migrated from Niger within the past two years, fleeing drought. Every morning, they gather at nearby bus stops or construction sites for builders to contract them. Someone walking into these areas can be immediately surrounded by hundreds of desperate faces selling their labor for less than $10 a day. In the evening, after work, they quietly pack away to the unfinished buildings; setting up outdoor campfires where they boil rice in carefully rationed communal vats. A twenty-room unfinished mansion can house up to 100 workers for the night. They sleep scattered on mats, exposed night after night to the ferocious onslaught of the delta’s mosquitoes.

“In our place, the grass doesn’t grow,” explained Kadir Abdul, an 18-year-old from Niger with intricate Fulani tribal marking carved into his face and dressed in tattered rags, “so we had to come to this side, where there is work.” Illegal and looked down upon by Nigerians, who call them “boko,” they are the people helping to build the labor-intensive mansions, doing the most menial jobs of clearing the jungle brush, digging holes in the sandy dirt, laying stone, dredging the swamps. Abdul arrived in Warri about eight months ago, traveling by foot over the porous border in northern Nigeria and then taking the 20-hour bus ride down to the delta from Kano. For the past month, he has been working seven days a week, clearing out a plot of land owned by one of the most powerful businessmen and community leaders in the Niger Delta. With a rented pick axe, shovel and wheelbarrow, Abdul and four others dig away at a strip of overgrown earth next to one of Shell’s high-pressure pipelines—which cuts through the community and is used by locals to burn their refuse and by nomadic herders from Niger to graze their cattle. They are making way for the expansion of the estate — a dozen acre fortress complete with a pool, a separate entertainment center, 15 cars, a driving range, and a private zoo of ostriches, peacocks, and gazelles. This latest addition will serve to house a formidable security detail manning the gilded, 12-foot high entrance to the grounds, a quarter of a mile from the current gate. “There is trouble in this country,” explained a private security consultant who is overseeing the construction. “And this town is very volatile, we have many armed robbers, thieves, kidnappers… They are brutal. They can do anything to penetrate the gates, that is why we need to build them higher and higher.” Nevertheless, it is where people will wait, farther down the road, for a chance to see the “chairman” — and possibly find a lifeline.

West Texas “roughnecks” - oil drilling rig laborers - work on an oil drilling rig in the oil fields of the Permian Basin of west Texas. They are preparing the hole for fracking, a hydraulic drilling process that fractures underground rock formations by injecting fluid into cracks to force them further open. The current oil boom in the Permian Basin is largely due to this new hydraulic drilling technology and the high price of oil. - Photo: Samuel James

Big Spring, Texas: Where ‘oil is God’
Rig workers risk their lives to eke out a living, while oil titans thrive in gated communities of million-dollar homes. By Samuel James - February 18, 2013

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IG SPRING, Texas — Well before dawn every morning, Joey Goodwin drives through the worn streets of town picking up his crew of roughnecks — oil drilling rig laborers — before heading to work in the oil fields of the Permian Ba-

sin. As his rusty Acura bellows across a dark expanse of cotton fields, hundreds of oil rigs illuminate the horizon. Still dark in the west Texas winter chill, they climb up the rig where they work. Their job for the next ten hours is to jam 50-foot steel pipes into the earth — one after another after another — until they strike oil, preparing the hole for “fracking,” a hydraulic fracturing drilling process. The rig is loud, slippery and dangerous. The stench of toxic hydrogen sulfide gas hangs over the fields. “You earn a good living, enough to support a family… be a man… but it sure is hard on your body,” said Goodwin, 38. “I’ve broken my back, my neck, never really got either fixed. By now, I’m a pretty much just worn-out chunk of meat.” Forty-five minutes west of Big Spring is Midland, a city of 120,000, which serves as the region’s financial epicenter and the home base of most of the companies that employ men like Goodwin. As high oil prices and “fracking” have ushered in a major boom in the Basin, Midland has emerged as the epicenter for this new wealth. Here, money and oil flow freely. In the downtown district of Midland, buildings erected during the last boom cycle are being torn down and replaced by sparkling glass office towers. Midland’s BMW car dealership of the Permian Basin reported a significant increase in the number of sales, even above last year’s, particularly for the 760Li model, priced at $155,000. As Wes Reeves, a 28-year-old partner in the newly formed Hannathon Petroleum Company, said the boom has attracted some greedy and irresponsible behavior but acknowledged, “In this country, oil is God.” The economy of the Permian Basin, which accounts for 14 percent of the nation’s oil production, is fractured like the earth beneath the drills. It’s a place of extreme wealth and enticing opportunity for roughnecks like Goodwin who risk their lives and their health. Those on the lowest rungs struggle day-to-day and are increasingly priced out of affordable housing as prices rise amid the oil boom. Most of the roughnecks in Big Spring are like Goodwin, who dropped out of school in the 7th grade and has served some time in prison. Working in oil fields since his early teen years, he has been in Big Spring for two years. His leathered skin and calloused hands speak to a lifetime of hard labor. Goodwin, originally from southern Louisiana, is one of thousands of men currently flooding into this part of west Texas, where a boom caused by the high global price of oil and new drilling technology is providing high wages — up to $25 an hour — for those willing to endure the backbreaking labor. In a crossroads like Big Spring, the budget hotels and motels are constantly full as workers pulling 24-hour rotational shifts on the rigs file in and out from the fields. While he earns a good wage, the cost of living has also been driven up steeply by the oil boom, especially the high demand for housing in a market with a shortage in supply. Goodwin, carrying rental and child support payments, is making just enough to get by. “We’re the trash out here,” he said, gazing out from the rig over a dawning horizon, “and a lot of people are making a lot of money off our backs. But I can’t complain, work is work.” Midland’s Texland Estates, a gated congregation of million-dollar homes, brims with green manicured lawns and sparkling fountains. Several mammoth structures are in the process of being erected, in stark contrast to the surrounding desert landscape of brown scrub littered with thousands of teetering oil jack pumps. “The land here isn’t very pretty,” says resident Kristina Johnson, gazing from her half-finished balcony over the estate’s security walls, “but what I love about design is that you can create your own oasis anywhere you are.” Johnson, a Texas A&M-educated architect who specializes in high-end, custom-built homes, designed many of the man-

sions in Texland. “This boom is a blessing, but it’s also overwhelming. At a certain point, I just had to stop taking commissions. It was too much. Last year I had a three-year wait list, just in Midland.” Midland ranked as the second-wealthiest metropolitan area in the nation in per capita personal income in 2011. It has less than a four percent unemployment rate, well below the US national average of 7.8 percent. The only obstacle to building in Midland, Johnson said, was the labor workforce’s struggle to keep up with the increasing demand of the housing market. “For a while there were so many people wanting homes, and simply not enough labor to actually build them.” Married to a petroleum engineer, Johnson is currently building her own home in Texland as a final project before taking time off to raise her two young children. The house is more than 12,000 square feet, complete with a 100-foot long indoor archery range in the basement. She designed the entire upstairs of the home for her daughters — an exact replica of the more modest home where she herself grew up. While the current oil boom has substantially increased incomes for petroleum executives and engineers, it has been a different story for those at the city’s margins, particularly in the service industries. The influx of workers means the cost of housing and living have skyrocketed even more dramatically in Midland than in Big Spring. Many have been forced out of the city, and even out of the Permian Basin, in search of more affordable housing. The crews of plumbers, stone layers, and insulators working on the million-dollar homes cannot afford to live in Midland. Instead, they commute two hours each way from Lubbock, 117 miles north, where housing is comparatively more affordable. One 29-year-old worker on Johnson’s site, Daniel Salaz, earns $10 an hour as a plumber. He explained that the past year has provided a constant stream of new homes to work on, but he still struggles to pay the monthly rent and utilities on the four-room flat in Lubbock he shares with his mother, her boyfriend and four other siblings. His room in Lubbock has holes in the walls and lacks heating and insulation. In the winter months, he and his siblings sleep huddled around a single space heater in a cramped living room. He shares the family’s living costs with his mother, who works as a waitress at a local Denny’s — for $2.13 an hour plus tips — and her boyfriend, who has struggled to maintain a job since being released from prison. “It takes the three of us just to survive day-to-day,” explained his mother, Kristine Ramos Salaz. “Since the recession kicked in, I don’t get tips like I used to. And the little I make usually gets spent that day. Whenever a paycheck comes in, we pay a bill. We’re not saving anything, we’re living day-to-day, literally.” The Salaz family used to live in Midland, but a home comparable to what they have now would cost double, if not triple, what they are paying Lubbock. Korinna Lillis, a case manager at the Helping Hands Center of Midland, explained that the organization has seen a dramatic increase in the number of people rendered homeless since the oil boom. “People are coming here from all over to work, but they simply can’t afford to live here.” For families who cannot double and triple up in the tiny flats surrounding the city, the oil boom is literally forcing them into the street. Oil companies are purchasing the few affordable apartment buildings that exist. Concho Resources, an oil and natural gas company with offices in downtown Midland, recently bought the nearby Ocotillo complex and is converting the 38unit, 18,000-square-foot, low-income housing complex into executive suite apartments for company employees. Residents who had lived there on a month-to-month basis have been left looking for housing, many not knowing where they will go next.

One Ocotillo resident, who works for $10.50 an hour as a server in a private club for second- and third-generation oil families, depended on the $500 monthly rent she was paying at Ocotillo. When Concho purchased the complex in November 2012, she was forced to get a second job to pay for a more expensive apartment — $750 a month — on the south side of Midland, literally the other side of the tracks, crammed between a decrepit halfway house for convicted felons and a trash strewn abandoned lot. In Ocotillo, she could walk to work. The move also forced her to buy a used car — purchased with the generosity of some individual members of the private club — because Midland and the surrounding areas have no public transportation. Yet most residents at Ocotillo are not so fortunate. With eviction looming around the corner, many are likely to join Midland’s soaring homeless population. Although she considers herself lucky to even have found her new apartment, moving back to the city’s poverty-stricken south side provides constant reminders of a life she worked hard to escape. “I feel highly blessed to have found this home,” she said. “It’s a new beginning for me and I’m going to make it beautiful on the inside. But once you step out that door, it’s hard not to feel that depression set in.” While wealthy Midlanders bunker themselves away in gated oases, the south side remains exposed to the Permian Basin’s harsh and unforgiving desert. Stray dogs and roving addicts roam dusty back pathways, overgrown with cactus. The breeze carries traces of the H2S gas from nearby deposits in the surrounding oil fields. The bungalows are boarded up, and the fences are falling apart. “Sometimes I wonder what they are trying to keep out over there,” said one south side resident and single mother of four who cleans homes in the wealthy estates cropping up throughout the city. “I guess it’s us, right?”

C H A P T E R E I G H T - Wa t e r

In the arid climates of Fernley, Nevada and New Delhi, India, water access and quality are matters of life and death. Rivers are life blood. From drinking water to irrigation to sanitation to fishing and recreation, those further from the source — and in some cases denied access altogether — fight among one other to secure liquid “gold.” Fernley and New Delhi are another pair of cities with wildly different levels of wealth but comparable levels of inequality. The Gini coefficient of Fernley is 0.370 while India’s is 0.368, but Fernley’s per capital income ($21,553) dwarfs Delhi’s ($3,700). In both places, the wealthy can afford to waste water as though the supply is endless. And those with little must be clever to get what they can.’

A boy uses the only public toilet for approximately 3000 families in the Kathputli Colony , a slum in New Delhi known for its artisans and puppeteers from Rajasthan. Access to water in the colony is limited to siphoning water off the community taps. Real estate developer - Raheja builders schedule to rehabilitate the slum by building a multi level apartments for the residents along with commercial and residential apartment complexes, Delhi, India, Feb 2013 - Photo: Sami Siva

In India, water and inequality are intertwined
Water access and quality are of grave concern to hundreds of millions of people. By Sonya Fatah - March 4, 2013

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EW DELHI — Water has always flowed through India shaping its caste system, purifying believers and offering a font of political and industrial power.

In Kathputli Colony it trickles into the sprawling slum through a collection of thin pipes and hoses. They snake across potholed roads lined by open sewers, through narrow alleys where children in ragged clothes beg amid the stench of feces and urine carrying an illegal water supply to the people who live there. Not far away, water soaks the sprawling green lawns of beautiful bungalows where corporate elites practice putting on well-watered golf greens all to the constant sound of ticking sprinklers. It’s not uncommon for urban settlements like Kathputli to crop up right beside the golf courses, some of them legal, others on usurped land. In India, the top 10 percent of India’s wage earners make 12 times more than the country’s lowest 10 percent. Two decades ago, the top tier made six times more. As many of the world’s developing economies make progress on income inequality, Kathputli is a window into the reality of many neighborhoods across unevenly growing metros, overflowing with migrants from rural areas and poorer neighboring states as government policy lags behind. “We had no access to water,” says Mohammad Maqsud, 33, the self-appointed people’s representative of one part of Kathputli and an electrician by trade. “So we discovered the city’s main supply line, which was running alongside the railway line. We dug ourselves to an access point and developed our own supply line off it.” Prior to 2005, India had no legislation on mandatory delivery of basic services like water. Hence, those with limited or no access to water found ways to get those resources — whether building illegal lines or organizing politically to offer votes to leaders willing to make a deal. “In reality — although there was no legal framework to provide water to illegal settlements — people did get services through various platforms that they negotiated with full collusion of the authorities,” said Gautam Bhan, who teaches urban poverty, housing and planning theory at the Indian Institute for Human Settlements. Many parts of New Delhi suffer from water supply issues, explains Bhan. “I live in an upper-middle class neighborhood and I get water for 45 minutes in the morning and 45 minutes in the evening. Demanding 24/7 water supply in India is like flying in the air with no feet on the ground.” The story of urban Indians, however, is a mere fraction of the larger reality of accessibility to resources that spans the country. “The 2011 census showed that of India’s 79 million urban households 18.6 percent were without a toilet while for the 168 million rural households it was 69.3 percent,” explained Juan Costain, who heads the World Bank’s Water and Sanitation Program in India. More than 65 percent of the country’s population resides in rural areas where sustainable access to water is an even greater challenge. There is also the issue of quality — urban water is full of pollutants that vary by city. The country’s water lifelines — the Ganges, the Yamuna and the Kaveri rivers — carry waters deeply contaminated by untreated sewage. Towns and cities across India dump untreated domestic waste directly into the rivers. In rural areas, water is laced with chemicals thanks in large part to agricultural practices that are heavily dependent on pesticides. The lack of access also puts the burden of collecting water on the shoulders of women and girls, who spend countess hours walking to far-off water sources and carrying it back for cooking, sanitation and drinking needs. Many girls sacrifice their education as a result, making it far less likely that they will ever be able to climb out of poverty. According to the World Bank, India has made much progress in recent years to improve access to water from 63 percent of the rural population in 1990 to 90 percent in present day. Access to improved sanitation facilities increased to 23 percent over the same period, affecting some 150 million people. This year’s budget also allocated a significant increase in funding towards water and sanitation, reflecting recognition at government levels, that this is an issue of some impor-

tance. This, however, just isn’t enough. Despite healthy and exciting changes and projections in today’s India, and a growth rate that is the envy of many a struggling European economy, the glamorous buildings and the growth of big businesses don’t reflect the reality of basic health conditions across the country. There is not a single city across India that has 24/7 access to water, save for a World Bank project in three cities in Karnataka. Nowhere is this imbalance more visible than in India’s rapidly transforming ‘corporate cities’ – places like Gurgaon in Haryana state, which borders the city of Delhi. Here there are a growing number of luxury developments. As the Delhi-Gurgaon Expressway leads into Gurgaon’s main strip, glass-façade corporate buildings line either side of the road. There are shopping malls aplenty filled with Indian and foreign-brand clothing, accessories and digital technology. There are also abundant new condominium projects offering city views, swimming pools, state-of-the-art gymnasiums and Jacuzzi-fitted bathrooms. Rents for three- to four-bedroom flats at the fancier buildings start at about $3,500 per month. To the naked eye, the shimmering expanse of Gurgaon is a sign of new India, of wealth and success. But this visual of wealth and economic growth is something of a mirage. Behind each glamourous building lie small, messy slums. Electricity to the area’s posh residences is guaranteed only by way of large generator systems. And water can be seen ferried back and forth in large, relatively ancient tankers with drippy faucets carrying 10,000 liters of water for about $40. One of the poshest offerings in Gurgaon is the Oberoi Hotel, where a single room costs about $550 a night. Interested in the Presidential Suite? For $5,500 a night, it’s yours. Catering to India’s growing corporate community and international business travelers, the hotel is built around a dramatic courtyard with reflecting pools and fountains. On one side a glass front Gucci store offers the best in luxury retail. In the early morning workers in gumboots tread carefully with long nets to fish out the day’s casual debris. A Ministry of Urban Development study on 423 cities across India with populations of over 100,000 people discovered that not a single city qualified in the top tier in water and sanitation. According to estimates generated by the World Bank, poor sanitation costs India about 6.4 percent of its GDP every year. Of the 1.1 billion people worldwide who are forced – due to lack of access – to defecate in public, over 600 million are in India. The history of access to resources like water can be tracked to certain exclusionary socio-historical forces. The Society for Promoting Participative Ecosystem Management and the National Conference of Dalit Organizations believe that water has been used as a “weapon to control and subjugate excluded communities.” Historically, villages had a hierarchy of access based on India’s caste system. Water sources such as wells, ponds and rivers were accessible first to higher castes so that members of lower caste communities would not pollute the water sources. The Dalits, or lower castes, built the water systems but could not use them. In urban centers in India today much of this is broken down because of either state-provided resource delivery systems that don’t take caste or class into account. However, in many villages today access is still determined through hierarchy. One of the major challenges India faces in virtually every sector is scale. Its size, population and complicated political and bureaucratic system make it difficult for water projects to have large-scale impact with any speed. However, there are plenty of small and medium-scale projects under way. One example of a successful water project is Arghyam, a public charitable foundation set up by technology and publishing entrepreneur Rohini Nilekani. Nilekani set up the foundation in 2005 with an endowment channeled to “meeting India’s growing water challenges.” Arghyam is a funding agency that collaborates with government, NGOs and other institutions with the objective of achiev-

ing impact and scale. Its projects attempt to bridge the gap between rich and poor by focusing on “quantity, quality and access to domestic water in communities across the country.” Its tagline is “Safe, Sustainable Water For All.” In 2011-2012 fiscal year, Arghyam had funded a range of water projects across 19 states through 53 projects, directly impacting 500,000 people. Ninety percent of Arghyam’s funding goes into rural projects in partnership with NGOs or state players. “The hesitation for funding in the urban space for water and sanitation because urban is a political minefield,” says Priya Desai of Arghyam’s India Water Portal, referring to the complexity of the urban areas where diverse communities compete for physical and political space. “Slums are usually not notified they don’t come under city development plans.” But there has been a gradual shift in attention towards the urban space, as well as plenty of small civil society efforts under way. Soaib Grewal started Waterwalla in 2009 with a business-school team whose main objective was to find a solution to the urban clean water issue. In their drive for sustainability the Waterwalla folks tried to create a market-driven model to sell water filtration systems after educating slum-dwellers in Dharavi, Mumbai about the importance of clean water — some 1,600 people die every day as a result of drinking dirty water. What Grewal and his team learned was this: despite the size of India’s urban slum community, those in the business of making water filtration systems weren’t looking at that segment even as part of their corporate social responsibility programs. The filtration systems were too large for the tiny hut homes, and the literature, almost always in English, was targeted at the middle class. “Then there was also a cost issue. There aren’t enough micro-loan schemes in the urban areas for devices like this,” explained Grewal. “Unilever has been trying it out in rural areas but nothing in the urban areas.” This is changing today, with Tata introducing Swach, a fairly successful cheaper, smaller filtration system aimed at this target market. Others, like Eureka Forbes and Bajaj – all mass market companies creating filtration systems and other electronic items – are also beginning to look at slum communities as buyers and tailoring products like filtration systems to suit their needs. In some parts of the country, there have also been community-driven solutions, like the Sarvajal, an initiative launched by the Ajay Piramal Foundation, which created large central filtration systems and allowed consumers to have cheap access to clean water by way of a Water ATM. “We need to change how we approach the entire issue, says Smita Misra of the World Bank. “There needs to be a statewide action plan on urban water and sanitation which is completely missing today. The states have not designed their own policy for service delivery. The focus has been on infrastructure development but not on service delivery.” “The way forward is decentralization and the right kind of service models at the customer levels – efficient and accountable,” she continues. “There is a huge gap in infrastructure and service delivery in urban water supply and sanitation and rural water supply and sanitation and how to move towards efficient, managed service.” In the absence of a comprehensive, country-wide approach, India will continue to project embarrassing figures for sanitation. It will also continue to suffer from water leakage and theft, as in Kathputli Colony. The entire city of Bangalore is served by the Caurveri River, which lies 100 kilometers away. Along its path to Bangalore the water pipes get punctured in numerous places along the way feeding communities with no official access to water. Like folks in Kathputli, who see little government interest in their community, they take matters into their own hands. Because without water, residents say, comes a loss of dignity. “Why do you identify yourself as a laborer?” shouts out one resident in Kathputli Colony at the community leader. Everyone here recognizes him as easily the most educated man in Kathputli. “You see, these people don’t get it,” he slurs.

half-hiding his magic glass bottle. “As long as they keep identifying themselves as lowly, they’ll always be seen as lowly.”

Photo: Kevin Douglas Grant

After the housing boom, opportunity dries up in Fernley, Nevada
Once among the country’s fastest-growing places, a town near the end of the Truckee River hit with economic drought. By Kevin Douglas Grant - March 4, 2013

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ERNLEY, Nevada — Evidence of the crash is everywhere in this high desert town. It’s there on barren cul-de-sacs that jut off from the main commercial strip, a sharp contrast to a newly remodeled

Starbucks, a highly prized Walmart and a sushi restaurant. And it’s there in the “Property Available” signs that litter a forlorn landscape. The glaring words “BANK OWNED” are stamped on many of the signs, a kind of scarlet letter of unpaid debts. In the worst-hit part of town, broken fences guard empty lots where nobody could afford to even start to build. It began while most of the town was sleeping on an early Saturday morning in January 2008. A century-old irrigation levee gave way, unleashing flood waters that left hundreds of recently built homes in low-lying areas under several feet of water. The local Naval Air Base had to scramble helicopters to rescue stranded homeowners. This is ‘big sky’ country, a historically dry plain ringed by mountains about 35 miles east of Reno. The residents here say the levee break marked the beginning of the end of a housing boom that had enticed thousands of eager buyers buoyed by historically low mortgage rates. Then before flood-damaged subdivisions could be fully repaired, Wall Street buckled under the weight of the national housing bubble and Fernley’s homeowners found themselves under water once again. Soon it had the highest foreclosure rate in America as lenders seized a full 25 percent of the town’s homes. Water was what brought the promise of new prosperity to Fernley, and it was what helped wash it all away. After the flood, this town of 20,000 was left with a deep divide between those who have managed to hang on and a new, desperate underclass that has started to move in. It is a scene straight out of Steinbeck, and it has made Fernley a metropolitan area with a Gini coefficient, the metric for income inequality, that is comparable to India — Fernley at .370 and India at .368. In both of these places, the element of water very often defines the quality of life and ends up being a force that parts the rich from the poor. “Nature did what it was going to do,” said Jim Dees, 54, a truck driver turned day trader who moved to Fernley in the 1990s and owns higher-elevation property that was untouched by the flood. “You can’t stop water,” he added. Fernley’s extreme dependence on the Truckee River for agriculture, industry, sanitation and drinking water is a familiar story in the deserts of the American West. Because water from the Truckee, which originates with the picturesque Lake Tahoe, must be divided up among several big upstream users including the city of Reno, residents here — many with a libertarian skepticism of both Democrats and Republicans — keep a sharp eye on the complex economic and political ecosystem of water. “We’re at the end of the road here, the end of the stream,” said Kate Rutan, office manager at the Truckee-Carson Irrigation District, which is responsible for maintaining the region’s irrigation system and was the target of multiple class-action lawsuits filed by flooded-out residents. “That’s our constant battle. Water in Nevada, it’s gold.” Nevadans are a resilient bunch, quick to praise self-made success. But the housing boom briefly opened an express route to a better life for thousands of lower and middle class people, only to close it down just as many thought they’d arrived. Jim and Diane Broullet, sipping drinks and playing electronic slot machines at Mary and Moe’s Wigwam Restaurant & Casino on a Friday night, know well the disappointment that accompanied the evaporation of their desert dream. “We moved here when everything was high,” said Diane, her silver hair adorned with a Native American feather. “Now our house is worth half of what we paid. And we can’t leave because we own the house in full.” The couple moved to Nevada six years ago from Arkansas, choosing Fernley because they couldn’t afford a home in Sparks, just east of Reno. In a place known for its legalized gambling, the Broullets’ real estate bet cost them big, including much of their retirement fund.

“It’s a sad state of affairs,” said Jim, who works from home these days, as does Diane. They don’t drive to Reno much because of the high cost of gasoline. “Fernley is very much hurting right now.” Those who grew up here, like City Councilman Dan McCassie, remember a small farming town with just one traffic signal on Main Street. “It used to be this little town, everybody knew everybody,” McCassie, 47, said from behind the counter of the wellstocked pawn shop he’s owned for several years, Main Street Pawn. “If you lied or did something wrong, it would follow you.” Everything changed in the 2000s as property developers bought up farmland and water rights, seeing an opportunity to transform Fernley from a bedroom community of Reno into a commercial hub. Young couples and retirees flocked from California and the population more than doubled in just a few years. US Census numbers showed that in 2005, the area’s population growth was the third-fastest in the country, as Fernley surged from about 8,500 people in 2000 to at least 20,000. “We gained the pluses of that growth,” McCassie said. “But we also got the negatives. We’re seeing home invasions in Fernley, Nevada. It’s just crazy, we never had that.” And as foreclosures have pushed families out of their homes, investors have swept in to buy them at pennies on the dollar and rent them out. The effect has been to create a new, lower class of residents in a place wary of outsiders. “I think it’s a lower income, it’s a different quality of people,” McCassie said. “You can drive around and tell which one’s a rental. There’s no lawn, there are cars everywhere, there’s trash.” In hindsight, said the day trader Dees — chatting at McCassie’s pawn shop on a weekday morning as the councilman deftly alternated between the conversation, minding the store and fielding calls from his constituents — it’s clear there was too much growth, too fast. But it wasn’t just about how many, but where hundreds of new homes were built: in a dry catch basin where excess water naturally accumulates. “People built houses where they shouldn’t have built them,” Dees said. “When that area flooded in the past, it was all farmland and so it was at worst a minor inconvenience. The city planners should have never granted building permits in the areas where they did.” And in Fernley, residents say, there is plenty of blame to go around. Class-action lawsuits filed by flood-affected residents named the city of Fernley, its surrounding county, the Truckee-Carson Irrigation District (TCID) and companies who built and sold homes in the basin as responsible for the damage. This January, more than four years after the flood, approximately 600 victims received a share of a $10 million settlement that was reached last year. After $3.3 million in attorney’s fees and $700,000 in other fees, the average payout was $10,000 per victim. “When the housing explosion happened, the proverbial carrot got dangled in front of everybody,” Dees said. “All they saw was money and dollar signs. And everybody just lost focus.” Conflict over water is nothing new in Nevada, the driest state in the country. The state government has haggled for decades with California, with which it shares water from Lake Tahoe and the Truckee River. Government entities ranging in size and influence from the Department of Interior to local city councils are all engaged in a tangled battle over not just water access but water quality — including the level of development permitted on the shoreline of the vacationer’s paradise of Tahoe. “It’s a huge quagmire and I’m not even getting into the political part of it,” said TCID’s Rutan, who remains concerned

that powerful players to the west can outmaneuver towns like Fernley. “They’re not our enemy. There’s plenty of water, but not if they take it all.” From resort development along Lake Tahoe to the Truckee Meadows Water Reclamation Facility treating the sewage of Reno and Sparks before pumping the reclaimed water back into the river, Fernley residents say in recent years they’re more worried about what’s in their water than how much of it they own — especially because they now pay extra for it, starting at approximately $400 per year. Over the protestations of homeowners who didn’t want it so close to their properties, Fernley began building a new water treatment plant in 2007 after the Environmental Protection Agency reduced the legally acceptable level of arsenic in drinking water from 50 micrograms per liter to 10 micrograms per liter. The city’s official website warns that “long-term exposure in drinking water, in excess of 10 micrograms per liter, causes increased risk of skin, lung, bladder, and kidney cancer, as well as skin-related problems,” risks that became widely known after the National Research Council published studies on arsenic in 1999 and 2001. The water treatment plant became operational in 2009 with a price tag of $75 million, tens of millions more than initial estimates, causing Fernley to incur debt just at the time its economy was crashing down. As a result, last May the City Council enacted a Water Bond Debt Fee for all customers that may remain in place as long as 30 years — or until the debt is paid off. Many residents still refuse to drink the tap water; those who can afford it buy bottled. The Fernley City Council also passed a resolution in December 2011 guarding its water interests against the residents at the true end of the Truckee, members of the Pyramid Lake Paiute Tribe. The resolution prevents the tribe from purchasing water rights from Fernley. “After years of good faith negotiations between Fernley and the Tribe to ensure the long-term viability of Fernley while restoring water to Pyramid Lake, we are deeply disappointed that the Fernley City Council has reversed course and adopted a provocative, ill-informed resolution maligning the integrity of the Pyramid Lake Paiute Tribe,” said Tribal Chairman Wayne Burke. Along the banks of the Truckee with Highway 80 rolling by in the distance, Reno resident Dave Stanley was teaching two first-timers how to fly-fish for brown and rainbow trout, flicking the long lines back and forth over their heads. The desert sun was partway out, warming the Alpine breeze. “I’ve been making my living on the river for 30 years,” said Stanley, a professional fishing guide. He spoke highly of environmental groups, like the Nature Conservancy, that spent millions of dollars to study and restore large sections of the river. But the economic boom and lingering bust in Fernley and the larger area concern him, he said. “At some point you’ve got to say, ‘Hey, you can’t afford to expand anymore,’” Stanley said. “My personal view is that I hope somebody has done the math. The river can only support so many people.”

CHAPTER NINE - Golf

In the parlance of golf, it’s called ‘playing through.’ And the phrase seems a fitting way to describe how a wealthy, global elite manages to bypass the often harsh inequalities that exist at many of the most expensive, members-only golf clubs around the world. The well-to-do who can afford the expensive course fees only rarely recognize just how vastly different life is for those who toil on the grounds or carry the golf bags and live below the poverty line. We set out to explore this divide in the highest realms of golf, from a course designed by Gary Player on the desperately poor outskirts of Myanmar’s capital Yangon to the Trump International Golf Club in a deeply divided West Palm Beach, Florida. Caddies, for example, who carry the golf bags for members at Trump International are paid a base rate of approximately $100 per day — about $24,000 per year — at Palm Beach with a membership fee of $250,000 reveals a disparity of wealth that is pretty much on par with the up to $1,250 a year that a caddie makes in one of Myanmar’s top courses compared to the $50,000 membership fees there. From the golf courses of Palm Beach to Myanmar, there are jarring levels of inequality between those who can afford membership and those who work on the course.

Scenes along the congested early morning commute into Yangon, Burma on Dec. 17, 2012. - Photo: Ed Kashi/VII

‘Heaven and hell’ side by side in Burma
Modern-day feudalism drives income inequality at Pun Hlaing Golf Estate. By Charles M. Sennott - April 8, 2013

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LAING THARYAR, Myanmar — A sprawling slum clings so close to the Pun Hlaing Golf Estate that errant drives from the tee can sometimes land on the thatched roofs of the shacks where 30,000 desperately poor people live

amid squalor, open sewers and widespread disease. There is one row of hovels in particular that back up to a moat of black slime and garbage and run right up against a thick hedgerow and chain link fence that separate the slum from the golf course. From here, the view offers a glimpse into the lush, green fairway and the $1 million mansions made of stucco and red tile roofs that line Myanmar’s most exclusive course. It was designed by the South African golf legend Gary Player and membership fees start at $50,000. The fetid warrens of the slum lead to the back entry of the golf course and a steel gate which is operated by uniformed guards who slide it open in the morning to allow a small army of laborers — men carrying shovels and rakes and women in cleaning uniforms — into the grounds. And at the end of the day, as the workers trudge back into this slum where they live, the guards slam the gate behind them. The golf estate operates as a kind of feudal system in which plutocrats from China, South Korea, the United Kingdom (and increasingly the United States) come to play golf at approximately $100 a round on a course where the caddies average about $5 a day. The groundskeepers make no more than $3 a day. “Here is heaven and there is hell,” said Chang Lim, a successful South Korean businessman and Pun Hlaing member, nodding to the direction of the slum which was invisible from inside the golf course. “I asked God all the time, ‘What makes it so different for those on the outside and those of us inside living like this?’” said Lim, 61, his arms outstretched to take in the exclusive club’s grass tennis court, the swimming pool and the nearby spa. Myanmar is one of the poorest countries on the planet and through several decades of military rule it has been largely closed off to the world. So there is little economic data that can provide a clear picture of where Myanmar, also known as Burma, lands on the Gini Index, which measures income inequality. But economists here say it is a safe bet that the data will reveal a country that may rank among the very highest in terms of income inequality in the world, a place where Chinese venture capitalists partner with the military elite to operate some of the world’s richest jade and copper mines. Where logging magnates rip through forests of teak and sell it at top dollar around the world. And where the vast majority of people — two-thirds by some estimates — live in deep, rural poverty and scratch out an existence through a dysfunctional agricultural sector that for most is tantamount to subsistence farming. Nearby the gated community of mansions and elegant condos along the golf course, there is the Yangon International School where diplomats and international business executives send their children to school. And there is the new, stateof-the art Pun Hlaing Hospital, which is privately run. These two facilities are reserved for approximately 2,000 people who live inside the estate and some surrounding gated communities and high-end neighborhoods. They are completely out of reach for the tens of thousands who are squatting on land in a shanty town right up on the edge of the golf course and within view of the beautiful new school and hospital. We spoke with one woman in the slum who described losing an infant to dengue fever because she could not get access to the private hospital and the child died before a rickshaw driver could pedal her and the baby to a clinic several miles away. Thant Mynt U., an author and one of Burma’s leading intellectuals and founder of the Yangon Heritage Trust, said, “What you have seen at Pun Hlaing is a very stark example of a new kind of inequality.” Sitting in the lobby of a hotel in Yangon, Thant Mynt U. continued, saying, “Up until the 1990s, there was not such a great level of inequality. In the last ten years I would say we have seen a very rapid rise in this inequality.

“That may be in part because of the sanctions,” he added, referring to the strict sanctions imposed by the United Nations during the brutal crackdown by Burma’s military on the pro-democracy movement prior to the current period of openness and new elections which have ushered Aung San Suu Kyi and other pro-democracy leaders to new levels of power. “Those sanctions empowered a class of cronies and people connected to the military and it left those who were on the other side of that fence slipping deeper and deeper into poverty,” he added. Chang Lim, the South Korean businessman, bought a three-bedroom condo at Pan Hlaing seven years ago for about $90,000. A real estate brochure in the club house confirms the unit would now be worth about $300,000. For a $50,000 club membership fee, Lim can come and relax a few months out of the year and break away from the business he runs building communication network towers around Asia. We ran into Chang Lim inside the estate at a small, pool-side café where he was stretched out in a lounge chair. He was dressed in a lime green golf shirt, reading the Financial Times on an iPad 3 and listening to a play list with ear buds. Most of the time, he said, he lives in Seoul where he runs his company and in another vacation home in Canada. But he comes here to play golf with friends who have bought up the condos which until a few years ago were, he felt, quite reasonably priced. Right now, all of the condo units are sold out. The homes here cost well over $250,000 with some of the units exceeding $1 million. The more expensive homes are sprawling mansions designed in the style of Palm Beach, Florida or Santa Barbara, California, consciously mimicking the architecture with white stucco, and red tile roofs and ornamental gates. The changes in Burma in the last few years, Chang Lim says, are dramatic and they remind him of his native South Korea 30 years ago as it transitioned from military to civilian rule and took off as an economic powerhouse. “Thirty years ago we were in the same situation. Change is coming here in a very rapid way, change for the better,” he says, confidently, stopping a waiter dressed in a black tie and vest for a fresh watermelon juice. “We are a global economy so the country needs to open up to foreign investment. Labor charges are very cheap here,” he said, adding that his own company was considering a position in Myanmar, also known as Burma. Asked about the stark contrast between the poverty of the shacks along the road side that run right up along the fence to the golf course, he said, “The gap between the very rich and the very poor is growing. Absolutely. Growing wider and wider. These days, global commerce allows for some to make money quickly and they are rising quickly. And the poor who are staying poor are left very far down. And they are going further down.” He smiled and checked a Rolex on his left wrist and began looking less comfortable with the conversation. The caddies on the course make about $5 a day. The men who hold shade umbrellas for golfers make about $1 a day. The grounds crew workers typically make about $3 on average. Asked about this economic inequality just as the waiter returned with his watermelon juice in a tall glass, Lim sighed and said, “We can’t change it. We just follow the water’s way.” Later the same day, on the other side of the fence we found Htun Kyaw, 43, who was just passing through the steel-gated laborer’s entrance at the end of a day which began at 6:30 a.m. and was ending just after 5 p.m. Kyaw is a day laborer who earns approximately $3 per day tending to the drainage ditches that ring the golf course. He lives in a shack fashioned out of scraps of wood and thatch taken from palm trees. Through the cracks in the floor board there is a mosquito-infested swamp which he, his wife and four small children use as an open latrine. “It’s the way it is,” he said, balancing his his shovel and pick axe on a rusty bicycle which he was walking through the mud pathways of the slum toward the shack. He carefully wrapped the tools in a soiled towel and hid them in a corner of the

dwelling when he arrived home. He sat on the rough wood floor to a meal of steamed vegetables on rice and we asked about the enormous economic divide between the members of the golf club and those who worked there and lived as he did in the slums. He and his wife looked at each other puzzled for a moment and then laughed slightly at the question. “We are the people on this side. And they are the rich people on the other side. We are small and quiet. We will never catch up to them until death. We will never be equal until death,” said Kyaw. His wife, Nu Nu Khaing, 27, who said she never went to school, underscored her husband’s statement, “When we die, everyone is equal.”

Scenes at the Mar A Lago spa, in Palm Beach, Florida on March 9, 2013. - Photo: Ed Kashi/VII

In Palm Beach, Donald Trump’s exclusive golf resort sits next to county jail
Members who have paid a $250,000 initiation fee play in sight of 1500 inmates living in a modern American slum. By Charles M. Sennott - April 8, 2013

white Bentley owned by ‘The Donald’ himself. Enter the marble foyer with a chandelier of gold and crystal, the antique Venetian cherub statues, the plush leather couches and out onto the back patio where Trump’s private helicopter awaits and where members head out to play on a picture-perfect March morning. Look beyond the practice tees where Donald Trump — clad in his signature red golf cap — is warming up, and peer just over the crest of a perfectly manicured fairway and just behind a grove of mature Acacia trees and there stands the Palm Beach County Jail. From a distance, the white, nine-story jail looks deceptively like an office building with its clean architectural lines and its reflective windows that conceal the steel bars of the cells. It would be hard to know from the vantage point of the fairway of one of the world’s more exclusive golf clubs, where members pay a $250,000 initiation fee, that there were 1,536 inmates inside those invisible cells. It would be impossible to see the inmates shackled in chains as they were being processed into the detention facility that morning, a line of men and women who were mostly black and Hispanic and almost all poor. It would be hard to fathom that just a few hundred yards away, these people were being initiated into a criminal justice system that would in most cases condemn them to further poverty and further desperation. America has the world’s largest prison population and in many ways poverty is hidden by incarceration. The criminal industrial complex with its warehouses of prisons and jails has become a kind of hidden American slum, a way to tuck away behind bars all the poverty and despair and he violence and drugs that come with it. “I guarantee you those guys playing golf, they don’t know about those people in that jail and they don’t even think about those people. They don’t want to see poverty, or see inequality and they do everything they can to be sure they don’t have to see it,” said Harriet Goldin, a member of Trump’s nearby exclusive club Mar-a-Lago and a wealthy widow now remarried, when asked about the stark contrast of the golf club and the jail so close to each other. Inside the golf club, at the members-only grill, there were small clusters of men in pastel colored golf shirts and healthy tans laughing and trading barbs as they eyed a television above a polished oak bar. The CNBC business channel was blaring at an unusually high volume. A ticker at the bottom of the screen flashed a list of stocks with a majority of the small arrows pointing up, indicating a rise in the stock price. The CNBC anchor was broadcasting a healthy day in the market, gleefully asking, “How high can it go? A surge in the Dow today was good news on Wall Street...” The men quickly got back to the jovial conversations and the back slapping of a guys’ day out on the course. None of them wanted to be interviewed. Anna Maria, who came from Venezuela, has worked in the restaurants at several of Trump’s different venues here where he has the golf club, the Mar-a-Lago, the Trump Plaza and several other properties. She was fearful of giving her last name because it could cost her slightly above minimum-wage job for talking to a reporter. She said that the vast disparity of wealth in the US shocked her when she first arrived 10 years ago. “America has the super rich and the super poor and it’s like there are fewer and fewer people who live in the middle. This is the land of opportunity, right? But I don’t know, is it still that?” she asked. Over lunch at the Mar-a-Lago, Goldin reflected on her life, growing up in the middle class in Westchester County, New York and as fate would have it marrying into a wealthy family which has allowed her to raise her three children at a very

W

EST PALM BEACH, Florida — Drive the palm-lined entrance to the Trump International Golf Club to where valets park a line of luxury vehicles that include a Ferrari GT, a Mercedes Benz SLS, a Cadillac Escalade ESV and the

high standard of living and to live in the exclusive enclave of Palm Beach for many years. Goldin explained that her first husband was an auto racer who died young in a crash and his family’s fortune came to her. In recent years, she said, she has traveled in Africa and Asia and seen global poverty up close. “I was just lucky that I ended up with a comfortable life here,” she said. “But with a different set of circumstances who is to say that I wouldn’t have ended up on the other side.” The jail is on that ‘other side,’ and it is truly a world apart. But it is so physically close to the golf club that with a solid 9-iron shot from the far side of the fairway, a practiced golfer could hit up over the cart path, the blossoming plants and the thick hedge that hides a chain-link fence and hit the jail, or at least land the ball in the back parking lot. As a day of golden sunshine faded to a gray dusk on a March evening, that back parking lot of the county jail was lined with a fleet of beat-up old cars: a rusted pickup truck with a rebel flag bumper sticker, a 15-year-old Ford sedan with a broken taillight and a line of several idling taxis. Bail bondsmen carrying briefcases hustled by and clusters of different families waited for loved ones to be released. Trina Morgan, 34, who was looking through the thicket of the hedge and palm grove where occasionally a glimpse of a white golf cart can be seen or the thwack of a golf club or the ticking of sprinklers can be heard, seemed to agree with the wealthy widow Goldin’s point of view. “They don’t even know we are here, and they have no clue how the rest of us are living. There’s always been the rich and there’s always been the poor, and that’s never going to change,” she said. Standing on a cement ramp that leads out of the bank end of the prison, across a mote of fetid water and past a sign that says “Release Point. No Loitering.,” Morgan was waiting for her father to pick her up. She held a clear plastic bag which contained undergarments and a pair of flip flops and the paper work for the conditions of her parole. Morgan said she was pretty sure the 30 days in jail she’d served on a charge she did not want to discuss had cost her a job. She was not sure how she would make a $400 rent payment in the apartment where she lives with her two children. “I guarantee you they have no idea what’s going on inside this building. It’s like a dungeon in there. It looks clean on the outside, but it is filthy and crowded,” said Morgan, shaking her head and exhaling a sharp stream of mentholated smoke from a cigarette she bummed from a taxi driver. “That’s the truth,” said Debra Vadala, 40, from West Palm Beach, who had also just been released and like all the women filing out on this Friday evening when the sheriff’s officers were “processing,” as they put it, specifically female inmates in a facility that is rigidly segregated with men on one side and women on the other. “This is a terrible place. It’s inhumane, really,” she added, with the small line of women all waiting to be picked up nodding in agreement. Vadala was also holding a plastic bag with a few possessions and a packet of yellow paperwork with the terms of a restraining order after she had spent one night in jail and was pending trial on a misdemeanor charge based on what she described as a “domestic incident.” She said she grew up in Connecticut in a middle class family, the daughter of a baker. She has a full time job, but she said she sees the poverty around her and the way in which America is pulling apart. “You’ve got billionaires over there and people who can’t even afford bus fare over here,” she said. Vadala, being released from jail, and Goldin, sitting in Trump’s private club, both hailed form the middle class and both said they were shocked at where America finds itself these days. As Goldin put it, “I have nothing against people who are successful. God bless them. But the disparity has become so

great in this country. It’s become obscene in the last 15 or 20 years. I think we have really lost something with the collapse of the middle class.” “I think we lose our soul, our belief in what makes us the greatest country,” she added. “I don’t think I am radical, but I care. Some people here might get mad at me for saying it, but I really think there is something missing in the hearts of this country.”

CHAPTER TEN - Conclusion

By Michael Moran

Looking back, we should have seen it coming.

G

lobal economic inequality has been on the rise for at least three decades, particularly in the world’s most developed countries with the United States leading the trend due to an historic shift in tax policy that favored the wealthiest

Americans over the middle class and the poor. The dramatic change in what Americans long regarded as their birthright — the upward mobility, opportunity and seemingly inexhaustible miracle that came to be known as the American Dream — was inevitable. For a good portion of the post-colonial history of the United States, rising levels of prosperity, education, global power and “happiness,” that hard-to-define point on the horizon Thomas Jefferson laced into the national psyche with his quill in 1776, flowed primarily from the vast resources of the land conquered by the young state and available to fuel the ambitions of its growing citizenry. Just when that bounty appeared to fail us, during the economic catastrophe known as the Great Depression, war intervened and focused national economic and scientific sinews like no challenge before or since. The result, quite unplanned, was a world in which the United States was not only the largest economy in the world but the only major economy among the allies that was not devastated by the war. In such a world, is it any wonder that America’s industrial giants created jobs that fulfilled the wildest dreams of families for whom the Depression and World War II were recent memories? In 1946, the US economy represented about 50 percent world GDP (nominal) as opposed to just about 20 percent today. From 1950 to 2008, there was only one recession in the US in which unemployment got anywhere near 10 percent (in 1981, when the jobless rate briefly touched 7.5 percent). Today’s Americans have still failed to absorb the fact that the expectations rooted in that time — and the promises of pensions, jobs, opportunities and mobility that became staples of late 20th century American political rhetoric — were but a short chapter in the long story of human economic history, a kind of geopolitical bubble. As the Organization of Economic Security and Development noted in its seminal 2010 report on social mobility in the West, the United States, once the gold standard for “up by the bootstraps” stories of self-made success, has fallen to the bottom of the pile. The Canadian labor economist Miles Corac notes that the United States now ranks 13th in a survey of the world’s 17 most advanced economies in terms of social mobility between generations, sitting just behind Britain, historically a symbol of class alienation and stratification. Without putting too sharp a point on it, the American Dream, the idea that hard work and a little luck would allow any parent to ensure their children would live a better life, may now be just that: a dream.

“Lost jobs, falling incomes, and foreclosures will likely compromise the capacity of children to become all that they can be, with the effects of the recession echoing not just across years, but also across generations,” Corac writes. The end of the special conditions that fueled the age of the American Dream did not surprise everyone. Writing in 1954, at the height of America’s post-war dominance of the global economy and political agenda, the historian David Potter seemed to anticipate the anger and self-doubt that might someday arrive when the reservoir that fed the country’s conception of its destiny — open spaces, cheap energy, agricultural bounty and political, entrepreneurial and cultural vitality — began to push up against the kinds of limitations other societies had lived with for decades. “For a country destined, as ours has been, to play such a role [in world affairs] it was a tragic fallacy that we conceived of democracy as an absolute value, largely ideological in content and equally valid in any environment, instead of recognizing that our own democratic system is one of the major byproducts of our abundance, workable primarily because of the extent of our abundance,” Potter wrote. The signs remained invisible to most people nearly a decade later, when I was born, in 1962. The typical American worker (though it must be emphasized that this 1962 worker was white and male, leaving a good portion of society in the margins) was the most productive unit of labor on the planet and much in demand. So many, like Bridgeport, Connecticut resident Jeff Kohut, told GlobalPost how a man in those days “could leave a job in the morning and have another after lunch. The factories were working at full capacity. Times were that good.” The president of the day barely batted an eye as he vowed to put a man on the moon by the end of the 1960s, and to “pay any price, bear any burden” to give the rest of the planet access to the “dream” that most Americans held so dear. Kennedy would not live to see it all unravel — America remained firmly in the middle of the post-war economic boom. And, indeed, Americans walked on the moon in 1969. But back on earth, gravity had a new, more stubborn pull on the American economy and the workers who kept it humming. Economists and policymakers alike flailed throughout the 1970s to find ways to remedy this, and in some ways the deindustrialization of the US that began at that time can be viewed as the seed that ultimately blossomed into the Emerging Markets boom that has seen Shanghai and Seoul and Sao Paulo displace cities like Detroit, Akron, Pittsburgh or Bridgeport as the workshops of the world. As we have noted, it was at about this time – 1979 to be precise – that US macroeconomic statistics show the long period of stable income growth that broadly increased living standards for all segments of American society came to an end. While it is too simplistic to say this is entirely the result of what is now called the “Reagan Revolution,” the cuts in social spending, deterioration of job security through both greater global competition and waning union power, and the slashing of top income tax rates combined to change the social fabric of America. Throughout the 1970s and 1980s, these forces and the competitive calculus of globalization pushed jobs overseas, particularly in the manufacturing sector — traditionally the most powerful engine of US social mobility. It is in manufacturing, after all, where a person born without the benefit of a privileged background could make up for lost advantages through pure exertion, consistency and determination. With many rungs of this ladder taken away at precisely the moment that the children of more fortunate families began to accrue ever more wealth, the disparities in income threatens to turn into a disparity of outcomes. By the 1990s, studies show, the pronounced trends that exacerbated income inequality had also begun showing up in studies of upward mobility Yet today the children of disadvantaged parents in America are far less likely to advance to other income levels than their cohorts in Germany, Sweden, the Netherlands or France. Data released by the Social Security Administration in November, 2013 confirmed the worst: after a short reversal of the

inequality trend, the gap has again started growing. In fact, the very top rungs of American society may never have been as far away for most citizens. The gap was dramatically depicted in a chart by the blog Zero Hedge, ironically a favorite of Wall Street traders, that looks at the distribution of income in 2012:

As Warren Buffett put it in his famous 2012 call to arms in The New York Times: “My gang has been leaving the middle class in the dust.” The world we inhabit today might be called Potter’s Proof: the “American Dream” that propelled generations of immigrants from humble origins through the working and middle class in the past has run out of fuel. The initial signals began to register in the early 1970s, when Europe and Japan began to recover and American industry — not rebuilt after the war because (unlike Europe and Japan) it was not destroyed by the way — found itself saddled with uncompetitive factories and outdated design and labor standards that were themselves the result of “plenty,” in this case, the complacency of the world’s largest domestic market. Contrary to promises of the supply siders of the 1980s that lower tax rates for the rich would “raise all boats,” the tide went out for most Americans over the past three decades as most of the wealth created by the US economy was absorbed

by those at the top. Households in the middle three bands or “quintiles” of US earners — roughly equating to lower middle, middle and upper middle class — all lost ground to the top fifth (20 percent). And the distance between the top and bottom 20 percent is pulling further and further apart. This even as Americans worked longer hours with greater productivity and as their wives joined the workforce en masse. Compounding the problem, American workers found themselves facing global rather than just local competitive pressures. Indeed, the richer you are, the better the story of the past three decades has been. The non-partisan Congressional Budget Office reports that the share of US national income going to the richest 1 percent of Americans has doubled since 1980, from 10 percent to 20 percent, about where it was in 1910. For the super-rich, about 16,000 families with an average annual income of $24 million representing to 0.01 percent, has quadrupled, from just over 1 percent to almost 5 percent. A Congressional Research Service report affirmed that view last year, stating that “US income distribution appears to be among the most unequal of all major industrialized countries and the United States appears to be among the nations experiencing the greatest increases in measures of income dispersion.” Ranked against peer economies — the world’s BRICS and other giants — only in the developing markets of South Africa, Brazil and China was the economic playing field as unbalanced. In The Great Divide, we have tried to go beyond simply pointing out this sad trend to identifying how it happened and what, in the eyes of the world’s leading economists, might be done about it. There is broad agreement on the first question of how three decades of robust US GDP growth and wealth creations wound up in the pockets of society’s wealthiest people. But there is far less agreement among leading economists and government officials about what can be done in the US and other countries where inequality has swollen to historic proportions President Obama and his Democrats argue that much of the solution lay in a reform of the tax code to force the richest households in America to step up and restore a “more level playing field,” as Obama consistently puts it, for the country as a whole. This may or may not be practical given the current political balance — or imbalance — in Washington. Efforts at reaching a “grand compromise” that would trade cherished Democratic ground for Republican demands, for instance, cuts in future Medicare and Social Security benefits in exchange for higher tax revenues appear doomed unless an electoral mandate provides veto-proof majorities for one or the other party in both chambers of Congress and control of the White House. This appears unlikely, and in any case, most economies doubt that tax policy alone can reverse the results of a generation’s worth of wealth transfer from the middle to the upper echelons of society. Paraphrasing complex economic prescriptions is dangerous of course, but here is a look at what several prominent thinkers recommend. Nouriel Roubini, who gained notoriety after predicting with considerable accuracy the financial crisis three years before it occurred, has consistently said the US needs to invest in infrastructure and education “to avoid an acute human capital crisis” — in effect, a future with a population unable to compete in the global economy. To pay for all this, Roubini would propose raising tax rates across the board, known in economics as “broadening the base.” But Roubini and many others argue that the higher rates should focus particularly from the upper middle class onward. He suggests cutting defense and entitlement spending, and making sure corporations and individuals whose income is derived from investments pay taxes commensurate with the benefits they get from the US citizenship. Nobel Prize-winning economist Joseph Stiglitz, in his book “The Price of Inequality,” lays out a similar program, putting more emphasis on curbing “corporate welfare” in the form of subsidies and tax breaks to drug, energy and agri-business

companies. He would eliminate all together the lower rate people who earn money on investments pay, treating such gains as income. In effect, this is a tax break that no average person can hope to take advantage of given that the minimum investment in many hedge funds or private equity groups is generally well above their means. There are others who reject supply-side solutions but also doubt that tax policy alone can address the issue, Kenneth Rogoff, a prominent Harvard economist and co-author of one of the seminal books on the 2008 crisis, “This Time is Different,” emphasizes the combination of globalization and technology as a job-destroying mix that has had a terrible effect on the middle and lower rungs of US society. He warns that the effects — so far mostly focused on those who lost labor-intensive manufacturing jobs — may spread to in medicine, law, finance and even entertainment. Rogoff writes: “Given these developments, there is every reason to believe that technological innovation will lead ultimately to commoditization of many skills that now seem very precious and unique.” Failure to act, he says, is not an option. Eventually, such trends lead to political unrest. “Across Europe, Asia, and the Americas, corporations are bulging with cash,” Rogoff argued in The Guardian last year. “Yet workers’ share of the pie is falling with inequality reaching levels similar to 100 years ago, the status quo has to be vulnerable.”

Confidence Game

I

s this an unintended consequence of putting undue faith in deregulated markets? Or was this class warfare at its most devious, in effect a battle on behalf of the rich fought, like so many wars in the past, by enlisting those far less well off as

its foot soldiers? For many on the Left, it defies credulity to believe policy “errors” made by America’s political and financial elite just happened to have precipitated a historic movement of the aggregate national wealth from the middle to the earners at the pinnacle of US society. Taking aim at the “efficiency of markets” theory, the deep philosophical underpinning of trick-

le-down and supply side economic theory embraced by most of the American policymaking elite by the 1990s, Columbia University Professor Mark C. Taylor sees a confidence game at work. “What seems puzzling in the sober light of the morning is how little resentment excessive wealth provoked,” wrote Taylor in his 2008 book “Confidence Games: Money and Markets in a World Without Redemption.” “Many workers on the lower rungs of the socioeconomic ladder actually seemed to buy into the ideology of trickle-down economics. As money became more and more unreal, everybody seemed to think it was within their grasp. With a vested interest in keeping the game going, the media irresponsibly promoted the myth of the democratization of wealth. While kids wanted to ‘Be Like Mike,’ [the basketball star Michael Jordan], their parents wanted to be like Bill [Gates]. But people pumping gas, punching the time clock, or teaching school had no more chance of cashing in on the market than most inner city kids had of reaching the NBA. The dream of wealth on the part of people who had no realistic possibility of attaining it led them either to support or not to protest policies that were not in their best interest. The ‘efficiency’ markets presupposes such irrational behavior.” Improvements in macroeconomic research methodology over the past 15 years, coupled with the shock of the 2008 financial crisis, have revealed trends that thoroughly discredit the notion — popularized by Margaret Thatcher in Britain and then Ronald Reagan in the US — that cutting taxes on the wealthy leads to economic activity that ultimately “raises all boats.” This, in simplified form, was “trickle down” economics.

Supply-side economics was trumpeted as the death of the interventionist Keynesian school, named for John Maynard Keynes, the great British economist of the early 20th century and philosophical father of Roosevelt’s New Deal and much of the government regulatory activism that followed. This approach was quickly adopted as indisputable fact by the Republican Party and, by the end of the 1990s, but many Democrats too. But was it all a ruse — a palliative to divert attention from the fact that, as rich people’s incomes skyrocketed, the poor lost ground and the middle class — at best — tread water? The debate is raging in think tanks and economic policy circles. Keynesians (and neo-Keynesians, as many prefer to be called), include Nobel laureates like the late James Tobin, Paul Krugman of The New York Times, Princeton’s Christopher Sims and Columbia’s Joseph Stiglitz, and prominent financial economists like Nouriel Roubini and Robert Shiller. There’s a whiff of vindication about them. Arrayed defensively against them within “the academy” are other Nobel laureates, many admirers of the Austrian economist Friedrich von Hayek and the late University of Chicago economist Milton Friedman. These include Nobel laureate Robert Lucas, and prominent thinkers like Stanford’s John Taylor, former Fed chairman Alan Greenspan, and Romney and George W. Bush advisor R. Glenn Hubbard. While the Keynesians are enjoying being back in from the cold, not all of them accent the “trick” in “trickle down.” Deliberate or not, however, the numbers are clear: between 1979 and 2011, most of the “wealth” accrued by the growing American economy went to families in the richest 5 percent of the population, while the middle and lower classes lost ground. “Although inequality has been on the rise for three decades, its political prominence is newer,” wrote Zanny Minton Beddoes in the Economist magazine in October 2012. “During the go-go years before the financial crisis, growing disparities were hardly at the top of politicians’ to-do list. One reason was that asset bubbles and cheap credit eased life for everyone. Financiers were growing fabulously wealthy in the early 2000s, but others could also borrow ever more against the value of their home. That changed after the crash. The bank rescues shone a spotlight on the unfairness of a system in which affluent bankers were bailed out whereas ordinary folk lost their houses and jobs.” Outside professional economic circles, the debate is shrill. Polemicists on the left see a vast right-wing conspiracy, just as many on the right — where the reputations of a generation of supply-side intellectuals remain at stake — cling to the idea that trickle down actually worked. Whatever the truth, and it will be debated for generations, the question of inequality is back on the national political agenda in a way it has not been since Reagan introduced the concept and challenged GOP orthodoxy during his first presidential campaign in 1979. Denounced then as “voodoo economics” by his main Republican rival for the nomination, Reagan did as many before and since: he bought the silence of his chief critic, George H.W. Bush, by making him vice president. The rest, as they say, is history. Not everyone agrees on the severity of the problem that income inequality presents. A number of economists, roughly equating to those who promote supply-side policies, argue that such inequality is the price the United States must pay for having the world’s most dynamic, innovative economy. In effect, these Chicago School adherents, so named for their admiration for the late University of Chicago economist Milton Friedman, believe that economic (GDP) growth, not redistribution on income, is what will benefit the broadest swath of society. Perhaps the leading, living embodiment of Friedman’s views is 1995 Nobel economics laureate Robert Lucas. “Of the tendencies that are harmful to sound economics, the most seductive and … poisonous is to focus on questions of distribu-

tion,” he wrote in 2003. Lucas has since revised his views slightly. For instance, he is full of praise for Ben Bernanke’s performance during the crisis, and voted for Barack Obama in 2008, albeit for civil rights rather than economic reasons. Nonetheless, Lucas remains unconvinced that redistributive policies can do anything but destroy economic growth. He cites the experience of social welfare states like Japan and Europe, where government spending typically accounts for more than 50 percent of GDP, as opposed to about 40 percent in the US. In Europe and Japan, he said in a rare interview with the Wall Street Journal, “the welfare state is so expensive, it just breaks the link between work effort and what you get out of it, your living standard. And it’s really hurting them.” This focus on growth over equality is as old as Left and Right. And nothing that happened in 2008 — or between 1980 and 2013 — has deterred those who believe it. A study last year led by Harvard’s Alberto Alesina concluded that tax cuts and spending reductions would have a greater impact on national debt and promote faster GDP growth than anything else the government can do. Timothy Noah, author of “The Great Divergence: America’s Growing Inequality Problem and What We Can Do About It,” says the fatalistic tone of the debate forgets the lessons of the mid-20th century, when government policy decisively closed the previous yawning gap. “One legacy of changes in tax and entitlement policies since the 1970s is that the federal government redistributes income less than it used to.”

In 1979, for instance, the Economic Policy Institute, a non-profit think tank, estimates that taxes and transfers to the poor, elderly and others lowered the Gini index by about 23 percent. “By 2007, they lowered the Gini index by closer to 17 percent,” Noah writes. “Over time, the government’s weakened commitment to income redistribution exacerbated growth in income inequality.” Statistics like these tend to fall on deaf ears, however, particularly in Washington. The idea that a politician can successfully lead a campaign that would reestablish the tax and benefit structure of President Jimmy Carter’s administration probably is very unrealistic. But if addressing the growing gap does become a national priority, the solutions require intervention. Saying that government policies can diminish or increase the ‘great divide’ that exists around the world, Noah argues, “Don’t blame the Fates. Inequality doesn’t just happen.”

C H A P T E R E L E V E N - T h e Te a m

The Team
Charles M. Sennott
Charles M. Sennott is the Vice President, Editor-at-Large and co-founder of GlobalPost. An award-winning foreign correspondent with 25 years of experience, Sennott has reported on the front lines of wars and insurgencies in at least 15 countries, including the 2011 revolution in Cairo and the Arab Spring. He was among the first journalists on the ground in Afghanistan in the aftermath of the September 11th and has continued reporting there throughout the last decade. He covered the war in Iraq from the invasion through the surge to the beginning of the drawdown of troops. Before joining GlobalPost, Sennott was a longtime foreign correspondent for The Boston Globe. He served as the Globe’s Middle East Bureau Chief based in Jerusalem from 1997 to 2001 and as Europe Bureau Chief based in London from 2001 to 2005. He is the author of two books, “The Body and The Blood” and “Broken Covenant,” and a co-author of a third. In 2005, Sennott was awarded a Nieman Fellowship at Harvard University. In the fall of 2006, he returned to the Globe newsroom as a Staff Writer for Special Projects where he did pioneering work in multimedia. In April, 2008, he and CEO Philip Balboni launched GlobalPost, seeking to produce a new source of original international reporting for the digital age at a time of diminished foreign coverage by American media. Sennott built a stellar team of editors and more than 70 correspondents in 50 countries who since the site’s launch in January 2009 have produced excellent daily coverage that has been widely recognized in the industry. The team has also gained a loyal and growing audience that in early 2011 exceeded three million unique visitors per month. Recently, Sennott has headed up a new non-profit initiative at GlobalPost that is supported by the Ford Foundation and other institutions to carry out in-depth “Special Reports.” Throughout his career, Sennott has broken new ground in reporting across platforms in print, video, audio and where they all come together on the web. His reporting has won numerous journalism prizes including the prestigious Livingston Award for National Reporting and the Foreign Press Association’s “Story of the Year,” and he was named a finalist for the Goldsmith Prize for Investigative Reporting by Harvard University’s Shorenstein Center. For the last two years, Sennott has served as a juror in the “International Reporting” category for the Pulitzer Prize. He also sits on the board of the Overseas Press Club Foundation. Sennott has been a frequent analyst of the Middle East and religious extremism for the BBC, CNN, the PBS NewsHour and NPR. In February 2011, he reported on the revolution in Cairo for PBS FRONTLINE. Sennott is a sought-after public speaker who has given talks at the Council on Foreign Relations, the Salzburg Global Seminar and the Newseum. He has also delivered formal lectures at Harvard, Columbia, Dartmouth, University of Southern California, University of Massachusetts, Amherst, Beijing University and Providence College where he delivered the commencement address and was awarded an honorary doctorate for his reporting on religion amid conflict. He is a graduate of the University of Massachusetts at Amherst (BA, History) and of Columbia University’s Graduate School of Journalism (MS). He lives with his wife and four sons in Harvard, Massachusetts. Sennott writes a regular column as GlobalPost’s Chief Correspondent and blogs at GroundTruth. Sennott can be reached at cmsennott@globalpost. com.

Gary Knight
Gary Knight is an award winning photojournalist and co-founder of VII Photo Agency and the Angkor Photo Festival and Workshops. Mr. Knight is also the Director of the Program for Narrative & Documentary Studies at Tufts University. His work has been widely published and exhibited across the world.

Kevin Douglas Grant
Kevin Douglas Grant is the Senior Editor of Special Reports at GlobalPost. A native of Chicago, he holds an M.A. in Online Journalism from the University of Southern California’s Annenberg School, where he was a Dean’s Scholar, and is the former Operations Director of Web news enricher Inform.com. He was the founding Executive Editor of Annenberg’s thriving 24/7 news site NeonTommy.com. Grant also holds a B.A. in International Studies from DePaul University and has appeared on Salon.com, American Public Media, National Public Radio, Religion News Service, Huffington Post, LA Daily News, Columbia Journalism Review, PBS NewsHour and Truthdig. At GlobalPost, Grant oversees foundation-supported reporting series from around the world. He is the winner of a 2013 Society of American Business Editors and Writers Best in Business Award as well as a 2013 Knight Grant for Reporting on Religion and American Public Life to report on the role of religion in the immigration reform debate in the American Southwest. Grant is also a founding member of The GroundTruth Project, a foundation-supported initiative dedicated to training the next generation of foreign correspondents in the digital age. It is focused on the issues of social justice including human rights, freedom of expression, emerging democracies, the environment, religious affairs and global health: http:// www.thegroundtruthproject.org/

Emily Judem
Emily Judem is GlobalPost’s Multimedia Producer for Special Reports. Previously she worked as a GlobalPost-Kaiser Global Health Reporting Fellow, working on GlobalPost’s Special Report, “AIDS: A Turning Point.” Before joining GlobalPost, Emily worked as Online Communications Manager at Root Capital, an international development organization based in Cambridge, Mass. There she managed the organization’s website and produced multimedia stories about Root Capital’s clients in Latin America and Africa. Emily also spent a year teaching kindergarten in Quito, Ecuador, and six months studying Spanish in Salamanca, Spain. She holds a master’s degree in journalism from Columbia University and a B.A. in American studies from Colby College.

Ed Kashi
Ed Kashi is a photojournalist dedicated to documenting the social and political issues that define our times. A sensitive

eye and an intimate relationship to his subjects are signatures of his work. As a member of VII Photo Agency, Kashi has been recognized for his complex imagery and its compelling rendering of the human condition. In addition to editorial assignments, filmmaking and personal projects, Kashi is an educator who instructs and mentors students of photography, participates in forums and lectures on photojournalism, documentary photography and multimedia storytelling. Along with numerous awards, including the 2011 World Press Photo Contest, UNICEF’s Photo of the Year 2010, a Prix Pictet 2010 Commission and honors from Pictures of the Year International, Communication Arts and American Photography, Kashi’s images have been published and exhibited worldwide, and his editorial assignments and personal projects have generated seven books. His newest book, Photojournalisms, has been recognized as a landmark book in the profession for its candid and personal view into the challenge of balancing the demands of the profession with maintaining a family. As companions to the book, he also produced an app and a short experimental film.

Patrick Winn
Winn is documenting a region in flux, where despots experiment with democracy (Burma/Myanmar), communists excel at capitalism (Vietnam) and cell phones are rife among peasants surviving on $2 a day (half of Indonesia). Southeast Asia’s importance is unquestionable. Its jungles and sea lanes supply China with energy and raw materials. Its factories supply the West with food and cheap goods. Its modern appetites and old codes clash daily as Thailand’s Buddhists pray for winning lottery numbers and Malaysia’s Muslim mall rats color code their sneakers with their hijabs. And as the U.S. and China intensify a diplomatic chess game from Laos to the Philippines and everywhere in between, Southeast Asia’s strategic significance is set to surge. As the “Pacific Century” unfolds, Winn is here to help break down Southeast Asia’s conflicts, trends and absurdities.

Michael Moran
Michael Moran is foreign affairs columnist for GlobalPost and wrote one of the very first pieces ever published by the site when it launched in January 2009. He is also vice president, global risk analysis, for Control Risks, an international political, security and integrity risk consultancy. Moran formerly served as director and editor-in-chief of Renaissance Insights, an initiative of the investment bank Renaissance Capital, headquartered in Moscow. He is author of “The Reckoning: Debt, Democracy and the Future of American Power”, and a co-author of “The Fastest Billion: The Story Behind Africa’s Economic Revolution”. Before joining Control Risks, Moran was executive editor and chief of geostrategic analysis at Roubini Global Economics in New York, and spent four years leading digital strategy at the Council on Foreign Relations as executive editor of CFR. org between 2005-2009, winning a series of Emmy and Overseas Press Club awards for CFR with his “Crisis Guides” series. Throughout his journalistic career, which included correspondent posts for the BBC, Radio Free Europe/Radio Liberty as the head of international news and a columnist for MSNBC.com, Moran has covered the revolutions, elections and other events that have shaped our times. He was also an adjunct professor of international affairs at Bard College (20032001), a member of the communications advisory board of Human Rights Watch and a former board member of the Overseas Press Club. He lives in Hoboken, NJ.

Nicholas Dynan
Front-End Developer / Designer. Lover of multimedia, photojournalism & old motorcycles . Based in Cambridge, MA.

Julie Winokur
Founding Director of Talking Eyes Media, is a writer and documentary film producer whose work has appeared on PBS, National Geographic Magazine, MSNBC and Discovery online, as well as in The Wall Street Journal, The New York Times Magazine, and The Washington Post. Winokur’s latest project, Bring It to the Table, tackles divisive politics in America, and has been featured on NPR and MSNBC. Her film, FIRESTORM, aired on KQED and the Documentary Channel and was nominated for an Emmy Award. Her multi-year projects include the one-hour film Aging in America: The Years Ahead, and its companion book and traveling exhibition, as well as Denied: The Crisis of America’s Uninsured, which won the Jury Prize at the Media That Matters Film Festival and was featured on MNSBC.com. Winokur’s dynamic approach to documentary filmmaking drove her to turn the camera on herself in the short film The Sandwich Generation, in which Winokur and her husband, photojournalist Ed Kashi, chronicled their personal challenges caring for their two children and Winokur’s aging father. The film has been featured on MSNBC.com, AARP.org, MediaStorm, Good Morning America, The New York Times website, in National Geographic Magazine, and has been solicited by various organizations for community outreach and education on caregiving. Winokur’s other short films include, Fast Lane to the Future (National Geographic), documenting India’s new national expressway and its impact on the population, and Curse of the Black Gold, exposing the enormous costs of oil exploitation in the Niger Delta.

John Otis
John Otis is based in Bogota, Colombia, where he also writes for Time magazine. Otis served for eight years as South America Bureau Chief for the Houston Chronicle and also covered the wars in Afghanistan and Iraq for the newspaper. In the 1990s, he reported on Central America for the Miami Herald, the San Francisco Chronicle and United Press International. He was twice honored by the Overseas Press Club for his coverage of Latin American affairs. He is the author of a new book, “Law of the Jungle” — about the kidnapping and rescue of three U.S. military contractors in Colombia.

Elizabeth Tuttle
Elizabeth Tuttle is a Boston-based journalist. In 2012, she lived in Rio de Janeiro, Brazil as a Fulbright research fellow and reporter. She holds a B.A. from Smith College and will be studying human rights law at Harvard Law School.

Kathleen E. McLaughlin
Kathleen E. McLaughlin is an American journalist who has been based in China for more than a decade. She has covered everything from labor abuses to politics, economics and social upheaval in China. A former political reporter in the United States, her work from Asia has appeared in a broad variety of media outlets including the PBS NewsHour, the Christian Science Monitor, San Francisco Chronicle and Foreign Policy, among others.

Dan McCarey
Dan leads the design and development of the Pulitzer Center on Crisis Reporting’s website and provides support to it and its partner organizations. He also creates data visualizations and tools for educational outreach. His work at the Pulitzer Center has contributed to awards for best online journalism from the National Press Foundation, the National Press Club, and the Society of Professional Journalists. Dan became interested in Web publishing while working with a newspaper in Sudan in 2006. His clients have included the Institute for War and Peace Reporting, Alicia Patterson Foundation and the International Center for Journalists. Dan studied International Development and the Study of Religion at the School of Oriental and African Studies (SOAS) at the University of London.

Juliana Schatz
Juliana Schatz is multimedia reporter. She started her career at the award-winning series Frontline, where she contributed to 11 public affairs documentaries. In 2011, she graduated from Columbia University Graduate School of Journalism where she recorded the narratives of immigrants, refugees, and young social media revolutionaries. Juliana recently completed a Kaiser Family Foundation fellowship reporting on public health for The Philadelphia Inquirer. In October 2011 she went to Egypt with 16 other journalists to cover the dramatic changes in Egypt, part of the “Covering a Revolution” Fellowship with GlobalPost and the Open Hands Initiative. She is currently a producer at Sender Films in addition to her work with GlobalPost.

Ben Schreckinger
Ben Schreckinger is an Atlantic Media Fellow reporting for National Journal. He has written and reported for Slate, Boston Globe’s Ideas section, and the Associated Press. He graduated from Brown University, where he was editor-in-chief of The Brown Daily Herald. He can be reached at B.Schreckinger@gmail.com.

Sim Chi Yin

Sim Chi Yin is a photographer based in China and a member of VII Photo Agency’s mentor program. She also shoots regularly for the New York Times. Since becoming a freelancer in 2011, she has also shot for Newsweek, Time Magazine, New York Times Magazine, Financial Times Magazine, Stern Magazine, the International Herald Tribune, the Wall Street Journal and the Los Angeles Times. In 2010, she was awarded a Magnum Foundation fellowship for a summer program in “Photography and Human Rights” at New York University. A Singapore native, Chi Yin worked as a journalist and foreign correspondent for The Straits Times, Singapore for nine years before leaving to return to photography.

Michael Goldfarb
Michael Goldfarb is GlobalPost’s London correspondent. For NPR and the BBC, Goldfarb has covered conflicts and conflict resolution from Northern Ireland to Bosnia to the Middle East to Latin America. He covered the war in Iraq as an unembedded reporter based in Kurdistan. His book on the conflict, “Ahmad’s War, Ahmad’s Peace: Surviving Under Saddam, Dying in the New Iraq” was named one of the New York Times’ Notable Books of 2005. Since Sept. 11, 2001 he has reported extensively on radical Islam from Cairo to Tehran to the streets of London. His report, “British Jihad: Inside Out,” won the Overseas Press Club’s Lowell Thomas Award for Outstanding Radio Journalism. His other major awards include the duPont-Columbia Silver Baton for his report “Surviving Torture: Inside Out,” as well as Edward R. Murrow Awards for “Ahmad’s War: Inside Out” and “Snakeheads and Slavery: Inside Out,” a look at human trafficking in Britain. His most recent book, EMANCIPATION, is published in paperback by Simon and Schuster.

Adam Belz
Adam Belz is a journalist in Minneapolis. He writes about business and the economy for the Star Tribune. A graduate of Covenant College in Lookout Mountain, Georgia, Belz is a native of Iowa and an alum of the Des Moines Register and the Cedar Rapids Gazette. His Twitter handle is @adambelz.

Richard Sennott
Richard Sennott’s assignments have taken him into conflicts in Afghanistan, Bosnia, El Salvador, Iraq and the West Bank. His artful independent documentary work has earned him two McKnight Photography Fellowships and a National Endowment for the Arts grant. Sennott won the 2008 Lowell Thomas Travel Journalism gold medal for photography and writing for a story about Italy’s convents that was centered in Orvieto.

Nichole Sobecki
Nichole Sobecki is an independent photographer and writer based in Nairobi, Kenya. From 2008-2011 Nichole was the Turkey correspondent for GlobalPost, based in Istanbul. During that time she also covered the early days of the Libyan uprising, the birth of South Sudan as a state, the ongoing war in Afghanistan, developmental challenges facing Nepal, and the aftermath of the assassination of Benazir Bhutto. Her work has appeared in publications including The New York Times, The Wall Street Journal, Newsweek, The Guardian, and Le Monde M Magazine.

Samuel James
Samuel James is a photographer, writer and educator from Cincinnati, Ohio. Since 2008, he has been working on an extensive documentary engagement with Nigeria, pursuing long-term, independent projects as well as assignments for the international media. He teaches nonfiction storytelling at the Program for Narrative & Documentary Practice at the Institute for Global Leadership of Tufts University. His photography has been recognized by the VII Photo/Exposure Alexandra Boulat Award, the Blue Earth Alliance and the Sony World Photography Organization Award and the British Journal of Photography, who named him one of the “20 photographers to watch in 2013. He holds a degree in political science from Tufts University and is based in New York City and Lagos, Nigeria.

Sonya Fatah
Sonya Fatah covers religion and Indo-Pak affairs for GlobalPost from New Delhi. Since 2005, Fatah has been covering India, Pakistan and at times, Afghanistan, for Canada’s two most widely read national dailies, the Globe and Mail and the Toronto Star. Her writing has spanned a wide range of topics, including the Pakistan earthquake and its aftermath, Indian businesses’ aggressive buying streak, kidney transplant predator scams across India, the success of unregulated stem cell treatments in India, the rise of the Taliban in Pakistan, the disabled as outcasts in Afghanistan and Pakistan’s first cross-dressing TV host. Her stories have also appeared in Fortune Magazine, the Walrus, Columbia Journalism Review and other publications. Previously, Fatah worked as a reporter in South Africa for a national newspaper, Business Day, and in Pakistan for the English daily, The News. She obtained Master’s degrees from Columbia University’s Graduate School of Journalism, and the School of International and Public Affairs at Columbia University. Fatah has a Bachelors degree from Oberlin College where she studied English Literature and Russian. She has also lived and worked in Russia and China.

ACKNOWLEDGEMENTS

Acknowledgements
This ebook comes out of a GlobalPost Special Report titled “The Great Divide: Global Income Inequality and Its Cost” made possible with support from the Ford Foundation and Bake Family Trust.

GlobalPost is the world news site with outstanding original reporting from country-based journalists in all regions of the world. Noted by The New York Times as “offering a mix of news and features that only a handful of other news organizations can rival,” GlobalPost offers fresh, in-depth perspective on the changing global picture that affects us all by combining traditional journalistic values and the power of new media. GlobalPost has received a number of prestigious journalism awards for its work, including the Peabody Award, the Polk Award, two Edward R. Murrow Awards, and the Overseas Press Club Award.

The GroundTruth Project is a foundation-supported initiative led by GlobalPost co-founder and editor-at-large Charles M. Sennott. GroundTruth is dedicated to training the next generation of foreign correspondents in the digital age and produces Special Reports on GlobalPost. It is focused on issues of social justice including human rights, freedom of expression, emerging democracies, the environment, religious affairs and global health.

© 2013 The GroundTruth Project