The Most Unequal Place in America

Nov
1
2013

Written by Caitlin Endyke

In 1994, Time Magazine set out to identify the poorest place in America.  They settled on Lake Providence Parish, a small community in rural Louisiana where they note that, “the median annual household income in Block Numbering Area 9903, which covers the southern two-thirds of Lake Providence and three-quarters of its population, was only $6,536 — less than half the official poverty level of $14,764 for a family of four and the lowest in the U.S.”

Almost a decade later, the data on the southern edge of Lake Providence remains largely unchanged.  Median income for the town now is a little over $13,000, still well below the current federal poverty level . But calling Lake Providence the “poorest place in America” doesn’t seem to be entirely accurate either.  While the southern edge of town battles with a 16% unemployment rate and the bottom 5% of earners make under $7,000 per year, the top 5% of earners, who reside almost entirely along the Lake’s northern edge, make an average of $611,000 annually.  Perhaps “the most unequal place in America” would be a better title.

This is the angle that CNN reporter John Sutter focuses on in his detailed examination of Lake Providence today- a town where the income gap is so wide that those on either side “can no longer see across”.

Sutter notes that those on the northern side of the lake, who hold most of the region’s wealth, are largely high level farm workers or owners who feel as though they’ve achieved the American dream by making their own way toward the top, a mentality he refers to as “the bootstrap ethic”.  He follows one particular business man who built a wildly successful seed-storage empire largely on his own.  Sutter allows that he must be an extremely good businessman who can be proud of his accomplishments, but makes sure to point out that he didn’t exactly build up from the ground floor. The son of a doctor, he took over a part-family-owned seed business with a loan his father financed and, after he had made some payments, partially forgave”, a situation that those located on the south side of town can hardly envision. 

The Time magazine piece from 1994 features a profile of a town official who derides various entitlement programs, arguing that the town’s poor lose incentive to work because of government handouts. While Sutter goes to great lengths to debunk this popular myth, he also illustrates how the poor are far from the only ones accepting federal assistance. While 45% of Lake Providence’s residents receive food stamps or SNAP benefits (amounting to about $1,492 payout per person per year), the majority of government funding to this area comes through farm and agriculture subsidies.  $12.3 million dollars was allocated for the Parish in 2012 alone.  The average payout for farmers per year? Over $20,000.

What this means in real life is that those on the north side of the lake remain comfortable, attending good schools with near-perfect graduation rates and reaping the benefits of class (and, usually, race) privilege.  All the while, those on the south side struggle to meet basic needs and can barely envision a way out of the cycle of poverty in which their community is so entrenched.

While Sutter’s piece is a great expose of a small pocket where the problem of income inequality is particularly pronounced, it sheds light on an increasing trend nationwide.  I’ve written before about how today in America, a country that was once regarded as the leader in economic mobility, it is harder to escape the social class of your birth than it is in Europe.  Structural factors like legacy admissions at top universities, poor public school performance, mounting costs of higher education and moves to de-unionize certain labor sectors have all contributed to the fact that those in the lower, working, and middle classes find it harder and harder to move up.

And this isn’t an accident or merely a consequence of a recent economic downturn.  It’s a direct result of policies that are being enacted across the country. In just the past two years, New Hampshire legislators voted to repeal the state’s minimum wage law, Wisconsin abolished the right to sick leave that the state established in 2008, and sixteen other states imposed limits on unemployment benefits.

It’s clear that there are certain things we can do to decrease the rate of income inequality in America, both ensuring that those on the bottom have access to a better life, but also improving the economic outlook for the nation as a whole.  And some of us are making progress.  California recently passed breakthrough legislation that ensures domestic workers are paid overtime wages.  Voters in Washington State, seeking to top their own record for highest in the nation, will vote this November on whether to raise minimum wage to a livable rate of $15 an hour. It’s not enough, but it’s the start of a potential movement to bring back some of the protections American workers enjoyed 60 years ago, when maybe a move to the North side of town didn’t seem like a dream that was so far out of the realm of possibility.

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