America's Extreme Poverty Reality

Ray Dalio, the founder of Bridgewater Associates (the largest hedge fund in the world, which allegedly employs more economists than the Federal Reserve), wrote what amounted to an open letter to the Fed regarding monetary policy, citing “two economies”: one for the top 40% and another for the bottom 60%.

The data in his post on LinkedIn are alarming and compelling. Today the US economy isn’t just unequal, it is being torn asunder. The top 40% are saving more, enjoying life and marriage more, and typically, living longer. The opposite is true for the bottom 60%.

Aside from the shocking data around death rates due to suicide and drugs or the unlikeliness of people born to non-college educated parents becoming college educated and, ultimately, becoming part of the top 40%, is the direction work is going for middle-aged whites.

Some of the information is not news, like the data showing the end of manufacturing jobs. But what lies beneath the information Dalio shares is the work that the bottom 60% are engaged in every day. The answer for some 23 million workers is frontline jobs in retail and hospitality.

America’s working poor are not just being left behind, they are being bludgeoned by the future economy. “Progress” is happening but leaving them on the sidelines as robots take their jobs – first in factories and now in fast-food restaurants.

I spent the first decade of my career (with ThinkImpact and More Than Me) fighting poverty where the poor didn’t have a clean cup of drinking water, a school with a roof or enough money to eat chicken. In this world I was obsessed with the levers that could be pulled to eradicate poverty from health and education to business creation. The vicious cycle of poverty seemed interminable because it ran so deep: without health, people couldn't work, without an education, there couldn’t be quality health systems, without work, there wouldn’t be the tax revenue to support either health or education, and to top it all off, without enlightened self-interest in government, there was no leadership to change the status quo.

Today we are watching our country battle with many of the same debilitating characteristics of extreme poverty. It’s not an exaggerated reaction to feel dread at the data in Dalio’s article. Neither is it easy to dismiss the poor in America as “not really that poor” because they have drinking water or an emergency room to go to. No. Poverty in America is defined by ill-health, lack of access to education throughout life, and now, a jobs-skills mismatch that is causing economic growth to concentrate in the top 40%. Oh, and did I mention, a government without the enlightened self-interest to solve problems for people?

All of these problems cause toxic, unending stress among the people who deal with them every day. Neurobiology proves that this stress undermines people’s ability to act with, what psychotherapist Tina Payne Bryson and psychiatrist Daniel Siegel describe as the “upstairs brain” with reason and thoughtfulness, but rather, pushes people to react with their “downstairs brain” where the amygdala lives – the fight or flight reflex. Humans are unique in their ability to reason, but poverty does not allow for us to thrive.

America is the most powerful country in the world, but it is not the most thriving country in the world. In my work with Unleesh I am focused on ending poverty, though you wouldn’t know it if you visited our website. We focus on skill-building for frontline workers in retail and hospitality because they are the people working for $8-12/hour (not even the poverty line for a family of four) and they are not seeing their future prospects improve. Turnover in these industries for frontline workers is unbelievably high (over 110%) because employees do not feel much loyalty to their employers. Employers too often are despairing, complaining about the “unmotivated people” that work for them.

The truth is that these are problems that both employees and employers need to solve. Turnover rates that high are too costly for many businesses to keep the doors open. Similarly, employees who have not attended any college, like 66% of the frontline workforce in retail and hospitality, are going to be stuck or pushed further down as the knowledge-automation economy continues to barrel forward.

The solution lies in training employees while nurturing their confidence and resilience. The alternative is unpalatable.