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Analysts: Rich, Poor Far Apart in US

Rich, Poor Are Far Apart in USi
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January 30, 2014
Many analysts agree there is a wide economic divide in the United States between the destitute and the wealthy, and they say it's not getting any better. But there are differing opinions about what led the country to this divide, and whether President Barack Obama can do anything to close the gap, as he suggested Tuesday in his State of the Union address. VOA’s Carolyn Presutti went out to examine this divide between rich and poor.

Rich, Poor Are Far Apart in US

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— Many analysts agree there is a wide economic divide in the United States between the destitute and the wealthy.  And they say it's not getting any better.  But there are differing opinions about what led the country to this divide, and whether President Obama can do anything to close the gap, as he suggested in his State of the Union address Tuesday.

Ameyah doesn’t understand why her mother has to pay bills.

But Tiffany Beroid can think of little else as she struggles to make ends meet. She works part-time, making minimum wage at Walmart.  If she takes a full-time job, she won’t be able to afford child care for her two daughters.

Beroid calls herself “the working poor.”   And she recently added the label of sole breadwinner, because her husband just got laid off.   

“It makes it very very tough for us now, so now we have to really buckle down  and there’s nothing extra that we can afford," she said.  "After we buy diapers and things for the girls, that’s just it.”

Beroid works at her neighborhood Walmart in Prince George’s County, Maryland.  Here, there are no boutiques and no places to stroll.

But 29 kilometers away, life is far different in upscale Chevy Chase, Maryland.

Locals refer to an area in the center of the suburban city as the “Rodeo Drive of Maryland,” named after the famous celebrity shopping district in Beverly Hills, California.  The main shopping district is lined with high-end stores for people who can afford them.

People in this neighborhood live in houses that doubled their median value in the past decade - to nearly $1 million.

A University of California Berkeley study says the salaries of America's top 1 percent wage earners soared by 30 percent over three years.  While everyone else's salary grew less than half a percent

Peter Cappelli, who is with the Wharton School of Business at the University of Pennsylvania, blames the outsourcing of union jobs as paychecks ballooned in the financial sector.

"The big question is are things going on that have kind of changed the rules and stacked the deck further in favor of people who are already pretty wealthy," he said.

Back in Chevy Chase, another explanation.

“In the last few years because of the economic crisis I would think a lot of people lost jobs,” one woman said.

“Because of greed in the world,” a man added.

Beroid is fighting Walmart to raise its minimum wage. Walmart says its wages are higher than average.  As a private employer, the store would not be affected by the president's expected order to raise wages for federal contractors.

Obama had pushed to raise the minimum for all workers, but Congress argued that higher wages would lead to more layoffs.

Cappelli says raising wages is only a short-term fix.

“I don’t think anybody would choose this as the best way to help the working poor, but it’s in place," he said. "We can increase the minimum wage more easily than we could put in place an entirely new program.”

Capelli says the country should focus on future generations and preserving America's middle ground, because that's what it's losing.

Carolyn Presutti

Carolyn Presutti is an award-winning television reporter who works out of VOA’s Washington headquarters.  She has won an Emmy, many Associated Press awards, and a Clarion for her coverage of Haiti,  national politics, the southern economy, and the 9/11 bombing anniversary.  In 2013, Carolyn aired exclusive stories on the Syrian medical crisis and the Asiana plane crash, and was VOA’s chief reporter from the Boston Marathon bombing.

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