Breadlines: The Impact of Budget Cuts on Citizen Wealth

Growing Poverty in London, picture from Breadlines Series in the Guardian

Toronto   If anyone really wants to know what the impact of Congressman Paul Ryan’s budget proposals, Tea Party harangues, and Republic policy propositions would be for working people, it might be worth taking a look at the impact of the current austerity program in Britain under the conservative government there.  A friend in Toronto sent me a note about the “Breadlines” series currently running in the Guardian, which is a sad and tragic eye opener about what happens when politics of cutbacks is implemented.

Make no mistake, these measures are frontal attacks on the efforts of working families, albeit making lower wages, to build any citizen wealth or income security.  Statistics released last week in the USA indicate that family wealth has now fallen to a bit over $100,000 per white household, around $7500 for Hispanic households, and hardly $5000 for African-American households:  a 20-1 gap racially!  No small part of this has been the unaddressed loss of home value which is the key factor in citizen wealth for the majority of working families.  Given the ongoing housing crisis this should not be a surprise, but it still is a shock for those living there, and more pain is being proposed.

In the attack on working families, Britain has already “been there and done that.”  An article in The Guardian series lays out the problem:

The last year has been one of the most difficult in living memory for Britain’s households. The economy continues to falter, and few have enjoyed a pay rise – which, with the spike in the cost of living means millions of wages have fallen in real terms. Employers try to avoid sacking employees by cutting their hours instead – sometimes pushing workers below the requisite number of hours at which they can claim tax credits – and the government has introduced an £18bn programme of welfare cuts.

Living standards have plummeted for many but, say charities, the group that has been particularly hit are those in low-paid or insecure employment. Those on benefits see their income rise in line with inflation but last week, the Institute for Fiscal Studies revealed the sharpest one-year fall in middle incomes since 1981, reversing five years of growth in a single year.

Outnumbering the 5.5 million working-age adults already living in poverty in the UK – officially defined as households with incomes of less than 60% of the median average – those suffering in-work poverty include couples without children who have a gross annual household income of between £12,000 and £29,000, and couples with two children on £17,000 to £41,000.

18 billion pounds in welfare benefit cuts is a huge blow as well.  Amazingly, it is based on something called a “work capability assessment” to see who qualifies and who doesn’t.  For some reason the British contracted that task out to a French outfit, and the process is caught in constant appeals over denial of benefits in what is now a draconian system:

At the centre of the controversy is the work capability assessment (WSA), the test carried out in the UK by the French healthcare firm Atos that is designed to identify people on incapacity benefit who are “fit for work”. Critics say it fails to pick up complex and fluctuating conditions such as mental health. It is widely feared by vulnerable claimants – and for those who are found fit for work, it can trigger a long, stressful cycle of appeals.

What a nightmare!  Coming to a home near yours soon.

Job Centre in London

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