Inequality Crisis: UN Warns 40 Million In Poverty, US Most 'Unequal' Developed Nation

A new report by the U.N. Special Rapporteur on extreme poverty and human rights in the United States finds about 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in Third World conditions.

The 20-page report by Philip Alston, U.N. Special Rapporteur on extreme poverty, warned the U.S. has one of the highest rates of income inequality among Western nations.

He criticized the Trump administration for the $1.5 trillion in debt-fueled tax cuts in December 2017 overwhelmingly benefited the wealthy and worsened inequality among the middle class and poor.

Alston could be right because companies are expected to spend $2.5 trillion this year for financialization purposes, including stock buybacks, dividends, and M&A deals, according to UBS, which does not entirely benefit the real economy.

Alston called the U.S. the most unequal society in the developed world. He said U.S. policies had benefited the rich by hollowing out the middle class.

The Stanford Center on Inequality and Poverty ranks the U.S. 18th out of 21 wealthy countries regarding labor markets, poverty rates, safety nets, wealth inequality and economic mobility.

For more than four-decades, economic policies in the U.S. have  neglected the middle class. However, the report said policies enacted during the Trump administration seem “deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship.”

According to the report, the visit of the Special Rapporteur coincided with the dramatic shift of the nation’s policies under the current adminstration. Some of the important shifts include:

  • Provide unprecedentedly high tax breaks and financial windfalls to the very wealthy and the largest corporations;

  • Pay for these partly by reducing welfare benefits for the poor;

  • Undertake a radical programme of financial, environmental, health and safety deregulation that eliminates protections mainly benefiting the middle classes and the poor;

  • Seek to add over 20 million poor and middle-class persons to the ranks of those without health insurance;

  • Restrict eligibility for many welfare benefits while increasing the obstacles required to be overcome by those eligible;

  • Dramatically increase spending on defence, while rejecting requested improvements in key veterans’ benefits;

  • Do not provide adequate additional funding to address an opioid crisis that is decimating parts of the country; and

  • Make no effort to tackle the structural racism that keeps a large percentage of non-Whites in poverty and near poverty.

Alston further referenced the International Monetary Fund’s (IMF) 2017 report emphasizing the economy “is delivering better living standards for only the few”, and that “household incomes are stagnating for a large share of the population, job opportunities are deteriorating, prospects for upward mobility are waning, and economic gains are increasingly accruing to those that are already wealthy.”

As shown below, the wealth of the top .01 percent of the population has exploded since 1980, thanks to the financialization of corporate America. Meanwhile, the bottom 90 percent or the middle class and the poor, have been systematically hollowed out.

Alston said debt-fueled tax reform “will worsen this situation and ensure that the United States remains the most unequal society in the developed world.”

This situation does not look good for the bottom 90 percent of Americans, but for society as a whole, with high poverty levels “creating disparities in the education system, hampering human capital formation and eating into future productivity,” said Alston.

There are also global consequences. The debt-fueled tax cuts will reduce the revenues needed by Governments to ensure basic social protection and meet their human rights obligations.

The U.S. withdrew last week from the U.N. Human Rights Council, describing it as a “cesspool of political bias.” It marked the first time that any country has exited the council since its inception in 2006.

U.S. Ambassador to the U.N. Nikki Haley called the council a “hypocritical and self-serving” group. She also criticized the U.N. report and said the council should focus on impoverished countries like Burundi and the Congo Republic.

Bernie Sanders, I-Vt. called upon the Trump administration to provide Congress with a plan to tackle the wealth inequality crisis stated in the U.N. report.

“It is patently ridiculous for the United Nations to examine poverty in America,” Haley said in a letter to Sanders last Thursday.

However, Haley in her response to Sanders slammed the report as “misleading and politically motivated.”

“The report categorically misstated the progress the United States has made in addressing poverty and purposely used misleading facts and figures in its biased reporting,” Haley wrote.

“There is no question that poverty in America remains a serious concern, but it does no one any good to inaccurately describe its prevalence or its causes.”

Sanders responded to Haley, saying he believes “it is totally appropriate” for the U.N. to publish a report on poverty in America.

“I hope you will agree that in a nation in which the top three people own more wealth than the bottom half, we can and must do much better than that,” Sanders wrote in his reply.

At the same time, the U.S. economic expansion has become the nation’s second-longest on record, as the Central Bank-fueled bubble enters the late stage of the credit cycle. While equity markets have faded from all-time highs, President Trump is peddling propaganda on Twitter calling “this is the great economy in the history of America and the best time ever to look for a job”!

When you start hearing government advertising that sunny days are here, well, you should run.


OverTheHedge Chris2 Thu, 06/28/2018 - 00:52 Permalink



And still can't afford anywhere to live, the worthless scum!

Actually, this article could be construed as good news: if you want the revolution to start, it needs to be with people who have nothing to lose. The French Revolution, the Russian Revolution: both had starving peasants who had no other alternative but to change the national system. If you are looking to break eggs, then this would be a good place to start.

However, you will get an utterly amoral authoritarian dictatorship at the other end, standing upon the heaps of dead and dispossessed. Those liberty-seekers amoung you might want to think about finding a more egalitarian way forward, before it all goes wrong. Could this be why the Europeans, who have had more revolutions than hot dinners, have such an extensive welfare system?

In reply to by Chris2

techpriest just the tip Wed, 06/27/2018 - 22:55 Permalink

China is pretty developed - you can even buy $7 USD coffees from pretentious shops in downtown Beijing if that is your thing.

They are also vastly more unequal - if you visit the countryside, or if you try a black market bus ride.

Lots of other countries like that.

How come the UN didn't put them on the list? Who gets to define "developed?" Maybe its because UNICEF is right across the street from all the Beijing stripper bars and they are too busy to do anything else?

In reply to by just the tip

techpriest scrone Wed, 06/27/2018 - 23:55 Permalink

Yep. I have been several times, and that is kind of the point. While the Tier 1 cities are comparable to any major city anywhere, and the Tier 2 cities are livable for locals, but the inequality after that is staggering. But, the UN is playing definition games because they aren't ready to admit that the countries practicing socialism without the benefit of a prior period of capitalism to feed on, are not only poorer but vastly more unequal.

You are being promised Sweden (which according to some measures is more capitalist than the USA), but you are going to get Venezuela. At least the D/RNC leadership will still get to live high at your expense.

In reply to by scrone

brooklinite8 techpriest Wed, 06/27/2018 - 23:13 Permalink

Do you know that if you get hurt and go to a hospital you could literally walk out with pennies being charged ...and also Russia, Cuba...I can't imagine getting sick or lose a job in the good old USA. Social safety nets are a thing in the past. People don't give a shit about any one any more in the good old USA. Displaying selfishness at its best

In reply to by techpriest

techpriest brooklinite8 Thu, 06/28/2018 - 00:08 Permalink

I have been in and out of Chinese hospitals a couple of times, and I know an epidemiologist that got to work in Cuban hospitals, and here's how it tends to go in countries like this:

If you have a minor illness or injury, its great. You go in, get some medicine or a quick treatment, and you are back out for less than $50.

If you are old and no longer a net benefit to society, and you require expensive treatment they will (based on the chart we read for this poor old woman) 1) arbitrarily stop feeding you for days at a time, 2) administer drugs that you are allergic to, and if need be 3) strap you down to the bed when you keep pulling the tubes out.

You are not a person in a socialist healthcare system: your treatment is purely a matter of ROI, and poor ROI = they come up with a creative way to kill you while making it look like a medical accident.

American hospitals are artificially expensive thanks to bad policy, but at least they are clean, and you are guaranteed stabilizing treatment, even if you are homeless or a drug addict and constantly running up the bill for everyone else.

In reply to by brooklinite8

Iskiab general ambivalent Thu, 06/28/2018 - 09:03 Permalink

Agreed, as the saying goes, ‘Every country gets the government they deserve’ - Maistre, copied by Lincoln.

Stories like this are more important for the future of American dominance than stories of tech, financial, trade, etc...

The EU, Canada, UK, etc have loyalty to the US because of shared values.  The more the US pulls away from those values and runs itself like a third world country the faster they’ll break away.  

The only argument that’s pro-US right now is the US is better than China and other countries.  Why that matters for trade I have no idea, but that’s the argument.

In reply to by general ambivalent

skinwalker Wed, 06/27/2018 - 22:51 Permalink

The UN is an absolute cancer upon the planet. If there were any justice everyone who works there would be hung by the genitals until dead, and the building turned into a prison for illegals.