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Charity: answer to inequality

The gap between the incomes of the richest Americans and the poorest has been increasing at such a pace that the country now has the greatest level of inequality of any industrialised country.


Inequality is integral to today's American economy.

MOST Indians are used to giving charitable contributions directly, to beggars on the pavement, or poor people sitting outside temples. Americans have long been used to more indirect means — the principles of mass marketing applied to individual human compassion. They are accustomed to receiving flyers in the mail, seeking contributions of cash or clothing for the poor of the Third World. Oxfam, the Salvation Army, Save the Children, the March of Dimes and other well-known charities have become expert at obtaining mailing lists from magazine subscription departments and sending out heart-rending letters about the plight of less privileged souls in faraway lands whose lives will be transformed by a generous (and, of course, tax-deductible) donation. Such letters fill American mailboxes particularly around this time of year, when the spirit of gift giving is in the air and the givers are in a holiday mood.

The letter that came to me just between Thanksgiving and Christmas, from an organisation called "Food for Survival", at first seemed no different. It spoke of "defeated men and women reduced to begging and plowing through trashcans [for food]". It movingly described the plight of "entire families, young children, frail elderly [people] ... going days at a time without a nourishing meal". It asked, inevitably, for a cheque of at least $25 to help feed these people. But there was one crucial difference from all the other appeals I'd received. The intended beneficiaries of the appeal were not starving Somalis or hungry Haitians. "Food for Survival" feeds New Yorkers.

Almost two million of this city's inhabitants — or so the letter tells me — cannot be sure of a single nourishing meal a day. They include the victims of the current recession, which has thrown the bread-winners of several families out of work; children of single parents (an increasingly common social phenomenon here) whose working mothers can't afford the costs of both food and day care; elderly people who are spending their limited savings on rent rather than meals "The hungry show up every day," the letter goes on, "at the churches and synagogues, food pantries, emergency feeding centers, shelters and rehabilitation programs for the food they need to survive." The organisation that has sent the appeal supplies food to over 900 feeding programmes in the New York area.

Their work is laudable. But it may surprise many foreigners that, in one of the most advanced nations on earth, it is even necessary. And yet poverty is hardly unknown in the United States. The gap between the incomes of the richest and the poorest Americans is now so great that the U.S. has the greatest level of inequality of any industrialised country in the world.

So what, say some experts. Inequality is simply integral to today's American economy, where high-tech skills, education and risk-taking bring ever greater rewards, while janitors and construction workers have to get by on a minimum wage that hasn't grown in years. Of the total gain in "real income" in the U.S. between 1983 and 1986, 47 per cent went to the richest one percent of Americans, while the bottom 80 per cent of the population got just 12 per cent of the extra cash. And high tech alone can't explain this: after all, the television comedian Jerry Seinfeld earned $22 million in 1998, and baseball and basketball stars routinely sign contracts for comparable salaries.

Their low-tech skills also reap extravagant rewards in a country whose most prestigious university, Harvard, pays its cleaners and dining-room staff just $6.25 an hour.

Wages for full-time male workers have grown at just 1.3 per cent in the last dozen years. Poor education, the widespread use of migrant labour and declining levels of unionisation have kept the poor poor. A third of America's children live in households earning less than $25,000 a year; one in five languish in poverty. My twin teenage sons have volunteered for years at a church-run community centre in Manhattan, packing meals for the poor who flock in every weekend. They tell me of handing packages out to people in whose eyes they see more emptiness than hope.

And yet there are opportunities out there for those who will take advantage of them. The U.S. has always been a land where it is up to the individual to seize the main chance. Those who do prosper as few can in other lands; those who don't seize the opportunity, however, get left farther and farther behind. In his book Money, Andrew Hacker describes the 68,000 Americans who make over a million dollars a year — a club that includes, apparently, fully a quarter of the delegates to the Republican National Convention. Other millionaire members: 1,500 Wall Street financiers, 600 company CEOs, 246 footballers, 241 baseball players, and a smattering of movie stars, singers, inventors and inheritors. Doctors and lawyers come in just below the bar, as do football coaches (one at Florida State rakes in $975,000) and university presidents (over $500,000 a year at Boston University, and not much less for the head of the decidedly less famous Adelphi). Somewhat incongruously, this elite group includes the heads of several charitable and philanthropic organisations: the heads of the American Red Cross and the United Way rake in over half a million dollars each, and the President of the Ford Foundation makes $839,139.

In other words, they do well to do good. But their affluence is overshadowed by that of someone like Michael Ovitz, who took home a severance payout of $128 million after 60 weeks at Disney. Hotel clerks thrown out of work after the post-September 11 slump in tourism lost jobs that paid, on average, $15,000 a year; their severance package usually consisted of directions to the nearest unemployment office. So groups like "Food for Survival" will be needed more than ever. Government can provide few solutions in so individualist a nation. For as recently as 1979, the amount of taxes rich Americans paid to the Federal government stood at about 47 per cent; by 1995, the effective rate was 32 per cent, and after the younger President Bush's tax cuts, it has probably dropped below 30 per cent. No wonder the American answer to inequality is charity. The generosity of rich Americans remains the only hope of the poor.

(Shashi Tharoor is the author of the new novel Riot. Visit him at www.shashitharoor.com)

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