The New Poor
Gentrification, Student Loans, Millennials, and the Myth of Economic Expansion.
Talking shit about the nouveau riche is a favorite pastime of Old Money and the aspirational Middle Class, with the latter hoping to align themselves with good taste by scorning the bad taste of those few peers who made it into the upper echelons. Our contemporary tech stars and entertainment moguls remain fodder for tabloids and news rags because — like all New Rich before them — their conspicuous consumption conjures both horror and envy in the restless rest of us.
But I propose a new class moniker, one that may be a complicating wrench in contemporary class and race discussions that cling to simple Marxist distinctions of workers and owners: the New Poor. The New Poor are characterized by a peculiarly unique combination of intergenerational wealth but individual poverty, accumulation of advanced degrees and education but a lack of opportunity, and are considered coveted consumers even though they have zero to negative net worth.
The New Poor are primarily young, mostly Millennial, and mostly work jobs in the service, freelance, or arts sectors in which they earn less annual income than unionized workers in historically blue collar professions. Despite having less buying power than many people without their years of education — whether due to massive student loan debt, credit card debt, low wages, or a combination of all three — these New Poor are nonetheless featured in the media and are prime targets for advertising.
That these New Poor continue to be favored by the media over other demographic groups with greater buying power speaks more to 20th century class and race distinctions than current reality. The New Poor are mostly white (and/or are minorities with the cultural habits of the educated elite) and they predominantly come from middle class and lower-middle class backgrounds. That their parents were once or are middle class means that while the New Poor do not have purchasing power, they have the ear of those who do. The New Poor are not trust-fund kids (who still enjoy the advantages of enormous intergenerational wealth), but are the class-fallen children of families who enjoyed new prosperity after World War II.
The New Poor are everywhere. They are in rural towns, suburbs, and cities, and in every region of the United States. In urban centers they generally comprise the first wave of gentrifiers in historically impoverished areas. The New Poor move where they move because they cannot afford to live elsewhere, and when real estate developers take advantage of their arrival, the New Poor move on to additional historically impoverished areas, and the cycle begins again. That a first wave of the New Poor ushers in this cycle is a byproduct of several intersecting factors:
1) Unlike the historically poor, the New Poor often have access to capital from their parents, families, banks, and other credit and lending institutions that they can use for the upfront fees and costs associated with geographic mobility.
2) Because the New Poor are mostly white and/or have the cultural habits of the educated elite, their arrival in historically impoverished areas makes these neighborhoods seem more attractive and safe to white moneyed individuals and families.
3) Not only do the New Poor have the same skin color and/or cultural habits of white moneyed individuals and their families, but they are also socially-linked to those individuals and families by virtue of their educational backgrounds.
4) In historically poor neighborhoods, the New Poor benefit from being superficially indistinguishable from moneyed individuals and families, and they therefore elude being targeted by security and police forces who generally enforce the law (especially drug laws) on people of equal or lower social rank (whether by class or race).
The New Poor are the unmentioned truth behind media profiles of Millennial habits. Week after week, articles are written about why Millennials are not participating in the same conspicuous consumption habits of their elders. Two examples of many: In September 2012, the Atlantic called them The Cheapest Generation. In August 2014, the New York Times profiled how marketers are trying to capture their attention, even as Millennials “are putting off major life decisions as well as the big purchases that typically go with them.” In nearly all of these profiles, cultural commentators blame generational narcissism and the recession as the main culprits behind why Millennials just aren’t getting married and having kids already, or why they won’t buy a house or car. Vague hand-waving of this sort is intellectually lazy and inhibits better analyses because such explanations conveniently confirm the biased suspicions of Baby Boomers still enjoying the leftovers of their post-World War II prosperity without asking them to take any responsibility for creating the current situation.
Millennials are one of the most diverse, best educated, and poorest generations in the last 100 years, and this fact is no accident of individual choice, but is a result of historical momentum and national policy. The Civil Rights and Women’s Movements ensured that Millennials grew up in a world where conversations about power and its distribution were an implicit part of the cultural zeitgeist. National immigration policy and greater access to a diverse set of voices through the internet (vs. traditional media outlets such as television, print and radio) have given Millennials a wider, more international, and less class-based and regionalized perspective than previous American generations.
From the late 1990s to the present — as Millennials have completed their primary educations — they have had access to private and government-subsidized loans despite having little to no collateral or future guarantee of earning power. While this access has made a college and graduate education more accessible to millions of students, it has also crippled students’ ability to participate in the national economy after graduation. Whether entering a peak economy or recession, student debt hinders an individual’s ability to participate in a capitalist economy that requires the fluid exchange of money for goods and services, because it ties an individual’s entire earning power to existing debt repayment. Unlike any other kind of debt, student debt is not collateralized by a physical thing of value that can be repossessed or sold in the market. Instead, student debt is essentially a mortgage on an intangible: that is, an individual’s potential value to the economy based on his/her ability to think about new and old ideas.
Meanwhile, the economic value of any given young person continues to decline. Across the country in private companies and institutions of higher learning, wages have continued to increase for the positions occupied by the previous two generations — that is, managers, administrators, and VP and C-level executives — while Millennials have encountered a job market full of unpaid internships, little to no manufacturing or domestic production jobs, wage decline for entry-level positions, a stagnant minimum wage, and tenured professorships being replaced by adjunct positions at a fraction of the pay. Previous generations view these positions as stepping stones to later professional and economic advancement, but the new reality is that the majority of these positions are stepping stones to more of the same. There are too few jobs for too many people, plain and simple.
Millennials are the New Poor, and they are a predictable byproduct of an economic infrastructure that has been built on the myth of perpetual growth and expansion. It is time to begin an honest discourse that acknowledges the limits of economic expansion, the intersectional reality of this generation, and how the economic and social interests of the New Poor closely align with the interests of historically poor and disenfranchised minority groups. The current economic and educational environment is not only unsustainable, it is actively inhibiting future generations from participating in the country as consumers and citizens. That our current political leaders continue to support economic policies that rob young people of the ability to thrive is reprehensible, and if uncorrected, these policies will cripple our nation’s domestic unity and international authority. We need a new model. The old one is wrong.