All societies will always stigmatize some conditions and some behaviors because doing so provides for group solidarity by delineating "outsiders" from "insiders" -Gerhard Falk
In this new era that has seen a shift in social stigmatization from people that don't work to people that do, the process is helping to create a new class of underperformers that expect more and over achievers that brace to end up with less. Sure, there are a lot of people that would like to work hard or work in low paying jobs that find themselves lumped in with the former. But the trend is so powerful that more and more folks on the fringes, working in low-paying jobs but seeking better are slipping into the murky caldron of those that do not work - but do not work in the most prideful manner.
While it is true stigmas can hurt and lead to discrimination or worse, here is certain behavior that should be labeled as a threat to society at large.
But an amazing thing has happened over the past two decades. America has gone from a nation that worried about Willie Horton being released from prison too soon to one that resents moderately successful individuals and couples unless they can sing, dance or catch a football. That couple on the typical wedding cake, if they earn more than $250,000, were the centerpiece of a negative election campaign aimed at making them villains - their success the bane of our nation and sole source of its frustrations. That couple is hogging all the money and working all the overtime. For many they now pose a greater threat than old Willie.
Part of this shift in social stigma is to form an instant belief taxpayers aren't paying their fair share while those on government assistance are getting the short end of the stick. Somehow the social contract has created a new mantra which I mention often:
"The Harder I Work the More I Owe, The Less I Work the More That's Owed to Me!"
Stereotypes & Social Stigmas
The outcome has been the Dropout Nation where it is easier to sit on the sidelines or make a low salary and qualify for a gang of benefits. There is a wide gulf to cross before a higher income means larger net income once government benefits begin to fade. On this note, I want to mention the story of Woonsocket, Rhode Island. Much has been written about this town in the last few days because one third of its residents are recipients of food stamps. The situation has put the entire town in a state of dependency and a vicious cycle of monthly booms and busts.
The thing is from all the reading I've done the town is still only penetrating around 70% of its eligibility and there is an effort to get everyone in the mix. (There are a few days for taxpayers to redeem close to $1.0 billion dollars in refunds owed for overpayment, yet for the life of me I have never heard a radio or seen a television commercial urging people to get what is rightfully theirs.) But, while government officials may be doing a jig over this development, the longer term ramifications are underestimated ... or maybe not. The campaign to get more and more people on food stamps has been accompanied by a campaign to remove any social stigma.
It's not your fault even if it is your fault. You watched the factory go from 1,000 workers in 1985 to 800 in 1995 to 400 in 2005, and nowhere along the line did it occur to take some courses on the side or craft a Plan B. The ax came down and this time you got caught and now you're emailing out hundreds of emails, although realistically it was like hundreds the first month but that was over a year ago and you don't really send that many out anymore. In years past there would be a ton of guilt associated with giving up like that but now there is righteous indignation - heck you tried and it's Wall Street's fault, anyway!
Whenever the topic of welfare reform is brought up, the elephant in the room is somehow it would be unfair to black people and somewhat to Hispanics, too. I've always found this to be the work of liberals who seem to assume this is a racial issue. The racial breakdown of Woonsocket:
This was once a proud industrial town with deep roots in French culture that still makes this "the most French city in America." The town is also heavily unionized, as waves of skilled trade workers came in from Belgium during the growth period and good old days. Those days are gone. Like any town so dependent on government, when the checks come in commerce flows, but a week later the town comes to a standstill. But locals with jobs like it better when the food stamps and welfare checks brouhaha fades because Wal-Mart becomes easier to navigate and you can actually find someone willing to cut your grass although too many able-bodied men are at home watching television and waiting for the next time the mailman brings their check.
This is an unavoidable pattern no matter race, nationality or religion... people on government assistance too long sink deeper into a difficult place while self-sufficiency fades.
In the past, the social stigma of embarrassment was a great aid in prying folks off the dole and back into the jobs market. There is a multi-million dollar campaign to make sure living off the public is never something to be ashamed of again. The thing is having trouble from time to time and needing help is nothing to be ashamed of but that's not the story. As part of the greater effort to redistrict responsibility those who are stuck in the system for years are being told it's someone else's fault - often people that made enormous sacrifices for the modicum of success they would like to enjoy - it used to be the promise of America.
While We Celebrate New Stigmas
While the tables turn in America they're turning around the rest of the world, too. Yesterday's big corporate news was Boeing BA losing the largest airplane contract in history to Airbus. Lion Air of Indonesia awarded its $24.0 billion contract to Airbus after giving Boeing its largest ever contract last year, which led everyone to believe this would be a follow-up deal. The deal was announced at the Imperial Palace in France with a gloating Hollande suggesting Airbus as a model for all business in Europe (Airbus is owned by several European governments).
The 234 planes include
> 169 A320s
> 65 A321s
The deal will keep 5,000 Airbus employees busy for a long time, with the first planes scheduled for delivery next year.
When I talk about the rest of the world growing like never before, I get a lot of pushback. But Indonesia will grow at 6.9% and the country, after many false starts, overcoming colonization and a couple of dictatorships, seems focused on real prosperity. I can guarantee people aren't looking for welfare as much as a chance at making big money. Indonesia gained its independence in 1949 just as America was on the cusp of its Golden Age. A lot of social stigmas are gone... so too the old notion of wait until your father gets home... heck he's in the basement watching the Star Trek marathon and waiting for someone to call him for a job.
Who is on the Outs?
While there is a major push to not only treat the working 47% that pay federal income taxes like pariahs and punish them like minorities without rights, the nation doesn't realize that soon America will be on the outside looking in. Each year brings more mega-deals that skip American influence and currency. The basket of victims cobbled together into solidarity that will force a $22.00 hour minimum wage, unlimited unemployment benefits and even higher taxes against the so-called rich will be free of stigma but coated in guilt for the destruction of a nation that once would never lose a giant airplane contract or see proud workers settle for food stamps and welfare.
Tomorrow the mayor of Woonsocket will be on Varney & Co, and I hope to ask him if this reality is reversible, and how much of the predicament falls on those stuck on assistance, as opposed to all of a sudden falling on the insiders or rule-makers crowd. Last month seven homes were sold in the town for an average of $105,286 (the lowest $30,000 and the highest $215,000); in 2000 the median home price was $113,800 and in 2009 $212,583. Those homes may not reflect the current median price but it's not pretty. We need to spiral out of this situation although there are powerful forces and momentum in the way.
The market looks to open slightly higher in part to better than expected data on housing but there is a fair amount of caution in the air. I think we're back to a point where the market needs something to add credence to the rally and something to spark the move higher now that momentum has stalled.