Economic Realities, Sobering Thoughts
Posted by Lee on December 4, 2009
Some days I sit on the mountain here in Boquete Panama and read the ramblings of others on the Internet. When I am really bored I look at the barrage of emails from the various Yahoo groups that rant about everything from rumors of proposed laws to occasionally solid reality. Today I caught a comment about an article on the Huffington Post about the decline and consolidation of the middle class in the United States, it caught my attention because it resonates with one of many reasons I left the US and is a reason I have no intentions of returning.
In the past I have heard the comments published about poverty in Panama. According to the CIA fact book 28.6% of Panamanians live blow the poverty line. Household income or consumption the lowest 10% consumes 0.8% and the highest 10% 41.4% (2006) . The same source says 12% of Americans live below the poverty line and the same consumption numbers in 2007 were the lowest 10% consumes 2% and the highest 10%, 30%. What does all of this mean?
In an article published in the Latin American Business Chronicle Jan 8 2007, Robert Baker raised a very interesting point.
“Food for thought. What is poverty? Is a quality lifestyle accurately measured by each country? To different societies poverty comes in different forms. Is there a yardstick by which we can measure real poverty or should we accept it at face value based on dollars earned? Perhaps if your family cannot afford a car you are considered poor. Others might feel that one less gasoline-burning engine is good for the environment.
It seems that different people in different cultures consider poverty from various viewpoints, some that are socially relevant and others that are not so relevant. If your government can provide you with schools and medical clinics your subsequent lifestyle would be a personal choice. Do you want the big city and what goes with it such as traffic, congestion, pollution, high prices, etc., or do you want the outlying areas that are quiet and cleaner?”
Is consumption or even the acquisition of money a real measure of poverty? If it is then the US middle class is entering poverty while much of the rest of the word is trying to escape from it. There is a great leveling of the world economy into two classes, absurdly rich and people struggling to survive.
In an update of his 2003 paper in the Quarterly Journal of Economics entitled Income Inequality in the United States 1913-1998, Emmanuel Saez shows that the inequality is increasing. The center, the middle class is eroding.
Why is this relevant to Boquete Panama? In the past the unwashed masses fled into the United States where there was opportunity. Now many of those same people and their decedents are looking both for greener pastures and a place for affordable retirement.
The current economic crisis in the US rippled throughout the world. I has effected every country, Panama included. Panama’s growth rate has slowed from over 9% in 2008 but it is still growing. This is a great place to retire and start a business. It is not perfect but the current government is making every effort to make it better for residents and immigrants alike.
Efforts to reform property laws, improve education and clean up corruption will go far to make Panama an ideal place for a small number of refugees. I am grateful that I live in Boquete Panama where I can still afford the simple pleasures and the beauty of nature while looking for increasing opportunities.
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Lee,
Everytime I return to the states to resume my place as another cog in the ever grinding wheel of production and consumption, I marvel anew at how much “crap” I’ve accumulated here for no logical reason. The first week back is always spent shaking my head and throwing things out while thinking about how ridiculously spoiled & wasteful our culture is. And even in Boquete, on garbage days, I have bags on top of bags set out for the trucks, while my neighbors put out one very small one. I’ve often thought about my priorities—and how in Boquete I am happy with my tiny casita and sitting outside in a plastic chair waving at passersby. Then, as a few weeks pass back in the states, I’m filled again with feelings of longing that my house isn’t larger, or my car fancier, or my job more prestigious. In a documentary I recently saw on one of the public TV channels, I remember the narrator asking why it is that he can walk though any poor neighborhood in any third world country and be greeted with smiles and acceptance from those residing in [what appears to be] abject poverty. He couldn’t understand what these people had to be happy about. It’s true that the dichotomy between the “haves” and “have nots” in developed countries is substantially widening. I tend to believe populations are also gravitating to the ends of the spectrum based upon their beliefs of what “having” versus “not having” entails. An erosion of the middle class IS occuring when viewed in terms of material wealth. Its impact on global markets is something for economists to ponder. For me, poverty is having to budget time with your children so one can spend it earning income to get them the clothes, electronics, and status symbols needed to be accepted by their peers in a society of conspicuous consumption. Others see this as the middle class.