Les Nouveaux Pauvres
by John Lawrence, January 9, 2020
The new poor are basically millennials who have gone to college and acquired a huge amount of student loan debt. They were promised that graduating college would catapult them into the middle class. Instead, whatever job they were fortunate enough to get (and many of them landed at Starbucks or equivalent) does not pay enough to make debt payments and also provide the normal amenities of life. Most of their budget consists of paying interest on their debts. Student loan debt has soared from $260 billion in 2004 to $1.4 trillion in 2017; average debt jumped from $18,650 to $38,000 over that same period; and the number of people over 60 with student loan debt has quadrupled in the last decade from 700,000 to 2.8 million.
It used to be that the majority of the working class were either farmers or unionized manufacturing workers who were protected by unions. Then the propaganda machine got busy and told all those farm children that they would be much better off, instead of going to work on their father's farm, going to college instead. Many proudly became "the first in their family to graduate college." What did it matter that, in order to do so, they had to take out massive student loans. Workers, who had lost their unionized jobs, were told the same thing. Go to college and become part of the new (nonunionized) economy because everyone knows that college graduates don't need unions. While farmland may stretch far and wide, farmers and ranchers themselves make up just 1.3% of the employed US population, totaling around 2.6 million people. Today, there are about 2 million farms in operation in the US, a steep decline from 1935, when the number of farms peaked at nearly 7 million. Why milk cows and shovel manure when you can have a professional desk job!
Manufacturing historically created good paying jobs for workers without a college education, particularly for men. The jobs paid well enough so that women did not have to work when they had young children. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments and significant on the job training. Such jobs are much less available in the post-2001 era in the U.S. though they remain available in Germany, Switzerland and Japan. So the solution we are told is for those workers and especially their childrenn since there is no future in being a worker in the manufacturing sphere, to go to college. It's the American way. Each generation has to move a step up the ladder, and the step up for children of manufacturing workers without college educations is to be "the first in their families" to get one. Of course this necessitates their taking on a huge amount of student loan debt, but no worries, this step up will make them better off even if their spouse has to work to afford a house and pay off student loan debt.
However, much student loan debt goes into default because the debt burden is just too big a load to carry. More than 1 million student loan borrowers each year go into default. For many, the payments are proving unmanageable. By 2023, nearly 40 percent of borrowers are expected to default on their student loans. That’s when a person has not made a payment toward their education debt in roughly a year, triggering it being sent to a third-party collection agency. They are les nouveaux pauvres, the New Poor. That's in contrast to les nouveaux riches, the likes of Jeff Bezos and Mark Zuckerberg who have made billions off the high tech industry. But for many whose parents were farmers or manufacturing workers, they were sold a bill of goods that getting a college degree would not only resolve the stigma of being "uneducated," it would also land them a good paying job. Today most plumbers and electricians are doing better precisely because they don't have student loan debt.
Instead, many young people, and millennials especially, have not only a gargantuan load of student loan debt but credit card debt, and car loan debt as well. It's no surprise that the New Poor are mainly young people who can't afford either to buy a house or pay skyrocketing rents. Their parents and grandparents, however, are sitting pretty with assets consisting of a house which is skyrocketing in value and either a defined benefit pension (nonexistent today) or a 401k consisting of stocks which have also skyrocketed in value.They will naturally vote for Trump because of a booming economy (for them).
Meanwhile, the Democratic party, whose base used to consist of farmers and unionized workers, has lost them due to a change in demographics. Their new base naturally should be the New Poor, young people, millennials, student loan debtors and those who are concerned about the planet they're inheriting after climate change ravages it. They are turning to the progressive Democrats like Bernie Sanders and Elizabeth Warren. They are smart enough to figure out that every other advanced industrialized country has a government sponsored public health care plane. They know that the rich are not paying their fair share of taxes which would alleviate them from some of the horrendous economic burdens they are now experiencing, that is if those increased taxes on the rich were used by government to pay for college and health care for all. They want government expanded to provide more benefits not contracted to the point where you could drown it in the bathtub which arch conservative Grover Norquist so famously said.
Les nouveaux pauvres want a Green New Deal, relief from student loan debt, a New Economy. They aren't committed to the capitalism which has made three billionaires more wealthy than 150 million lower income Americans. They want the elimination of the fossil fuel economy replacing it with renewable energy. They want the end of a military-industrial complex which has spent a trillion dollars on disastrous wars in the Middle East. There is a better way these New Poor millennials are finally figuring out, a way out of the mess created by short term profits and rugged individualism, a way that might just win back America's high moral position and leadership in the world.
