[asia-apec 1419] ADJUSTING AMERICA

[Anuradha Mittal]

ADJUSTING AMERICA

The Structural Adjusment Programs Imposed by the IMF & the
World Bank Are Hitting the U.S. too!

by Anuradha Mittal


There is enough evidence on how policies of the World Bank, 
International Monetary Fund (IMF) and the World Trade Organization (WTO) 
have come to connote colonialism and a dominating world capitalist 
system for the Third World. The unregulated flow of global capital has 
placed the fate of developing economies at the mercy of Wall Street 
traders. However, nations of the South are not the only victims of this 
process. There is also a "South" in the North-right here in the United 
States, that is being harmed by domestic policies of the U.S. 
government, such as the ‘Contract With America’ and the ‘welfare 
reform.’ These policies are part of the same package of policies imposed 
by the World Bank and the IMF on developing countries.

With the rise of "neoliberalism" on a worldwide scale, the Third World 
countries have faced rampant privatization and the removal of barriers 
to trade via structural adjustment programs imposed by the World Bank 
and the IMF. In the U.S., supply-side economics, or ‘Reaganomics’ have 
continued unimterrupted under Bush and Clinton administration. In 
England it was called "Thatcherism" but has continued virtually 
uninterrupted under the "new Labor" government. Regardless of where it 
has taken place, the onslaught has been remarkably similar: debts and 
deficits accumulated through military overspending and tax cuts to the 
rich are being repaid on the backs of the poor, women, immigrants, 
people of color and workers.

Though a triumphant view dominates media coverage of the U.S. economy, 
but never before poor working families have been forced to wage their 
daily struggles amid pervasive chatter about unprecedented prosperity. 
In both rich and poor nations, dislocations from economic and corporate 
restructuring, and from dismantling the institutions of social 
protection, have resulted in greater insecurity in jobs and incomes.


The ‘Third Worldization’ of America

The double squeeze by corporate America and a U.S. government catering 
to corporate interest, has forced Americans to give back quite a bit. 
For example:

o Despite glowing media reports on our booming economy, as estimated 46 
million Americans, nearly 17% of the population, live below the poverty 
line.

o The top 2.7 million people have as much income as the bottom 100 
million. In other words, the richest 1 percent of Americans is projected 
to have as much income as the bottom 38 percent. Wealth is even more 
concentrated, with the wealthiest 1 percent of households owning nearly 
40 percent of the nation’s wealth. The bottom 80 percent own just 16 
percent of the nation’s wealth. To further widen this inequality, CEOs 
of U.S. corporations pocketed 419 times the average wage of a blue 
collar worker in 1998.

 o According to the Report on Household Food Security put out by the 
USDA in 1999, an estimated 36 million Americans in 10.5 million 
households do not have access to adequate food.

o  The strong economy, celebrated by administration is not reducing 
hunger because even though more households are in workforce, their 
take-home pay is not enough to feed their families. A full-time worker 
at minimum wage earns $9,512 a year. For a family of four, that puts the 
family income well below the federal poverty line of $17,072.

o A survey of 26 cities released in December 1999 by the U.S. Conference 
of Mayors shows that hunger and homelessness has grown unabated, despite 
an expanding national economy. Among 2 key findings of the 1999 Status 
Report on Hunger and Homelessness in America’s cities, demand for 
emergency food related assistance during 1999 grew at the highest level 
since 1992 (18 percent over the previous year), and demand for emergency 
housing related assistance grew at the highest level since 1994. 21 
percent of requests for food are estimated to have gone unmet.

o The government has responded to this crisis by passing legislation 
such as welfare reform which has resulted in 11 million families, 
including 8 million with children, losing their income. This happened 
when total federal spending for food programs before welfare reform was 
only 2.5 percent of the federal budget. More than half of the $54 
billion in welfare cuts are coming from food stamps that 25 million poor 
Americans depended upon. Over 80 percent of food stamps go to families 
with children. This has resulted in increased hunger.

o In 1997, Second Harvest, the country’s largest chain of food banks 
provided food for almost 26 million people, nearly 10 percent of 
America’s population. Even then it had to turn away 2.3 million people. 
To compensate fully for the government cuts, each of the 350,000 
churches in the U.S. would have to contribute an additional $150,000 and 
many churches do not have a budget this big. To make up for the 
shortfall, the non-profit sector would have to distribute a total of 
24.5 billion pounds of food over the next 6 years, four times more then 
the current distribution and enough to fill 5 million Army National 
Guard Trucks.

o The number of Americans who lack health insurance continues to 
increase, climbing to 44.3 million in spite of a prosperous economy.

o An estimated 7 to 8 million Americans are homeless.

o In the Unites States approximately 20.7% of the population age 16 to 
65 is functionally illiterate, the majority of whom are low-paid workers 
such as farm workers, domestic workers and other who labor long hours in 
low-paying jobs.

Indeed, structural adjustment Washington-style is giving the U.S. a 
Third World appearance: rising poverty, widespread homelessness, greater 
inequality and social polarization. But perhaps it is the state of 
children that most starkly captures the ‘Third Worldization’ of America. 
Today United States has the highest rate of child poverty among the 
industrialized countries, with one in every five children growing up in 
poverty. The number of children living at or below one-half of the 
poverty line increased by 426,000 between 1996 and 1997. About 20 
percent of all children under the age of 18, or 14 million, live in food 
insecure homes.

Direct Impact of IMF/World Bank Policies on Americans 

o The U.S. trade deficit has mushroomed from about $107 billion in 1990 
to more than $270 billion in 1999.  A study by the Institute for Policy 
Studies shows how World Bank/IMF policy lending has contributed to the 
increase of the U.S. trade deficit by prescribing currency devaluations, 
which make U.S. imports more expensive and by prescribing cuts in 
government spending, which lead to job loss and reduced purchasing power 
of people to buy U.S. goods.

o Although U.S. unemployment is at a record low, the fact that U.S. 
imports are far outstripping exports, has displaced U.S. jobs, 
particularly in the manufacturing sector. More than 530,000 U.S. 
manufacturing jobs were lost between March 1998 and September 1999. This 
is significant because manufacturing jobs as a whole pay better and more 
often offer fringe benefits such as health insurance and pension 
coverage than in other industries that employ non-college graduates.

o World Bank and IMF programs have also contributed to downward pressure 
on U.S. wages by prescribing the lifting of controls on investment and 
so-called "labor market flexibility" measures that weaken unions.  These 
policies have contributed to the mobility of global corporations, 
increasing their power to bargain down wages and working conditions here 
in the United States.  Although real wages in the United States rose 
slightly in 1998 and 1999, low-income workers, including large numbers 
of people of color and women saw their wages erode during the decade of 
the 1990s.  Even some globalization proponents admit that 20-25 percent 
of the increase in U.S. inequality may be due to import competition and 
employers moving (or threatening to move) to developing countries where 
they can take advantage of lax enforcement of worker rights.

Corporate-driven structural adjustment has triggered sever social stress 
and strain in both the North and the South. United States, after 
dismantling many of the social mechanisms of the New Deal state, has 
addressed the discontent through punitive measures. US expenditures on 
criminal justice have increased four times faster than the budget for 
education, and twice as fast as outlays on hospitals and health. Today 
the US has achieved the distinction of imprisoning a larger share of its 
population than any other nation.

To counter this wave of corporate driven structural adjustment, it is 
essential that we promote the common interests of the peoples of the 
South and the North. This entails forging, across borders, an 
alternative economic vision, one that brings the economy back under the 
control of the community, one that fosters solidarity instead of 
polarization idealized by market economy.


By:
Anuradha Mittal
Institute for Food and Development Policy - Food First
398 60th Street, Oakland, CA 94618 USA
Phone: (510) 654-4400 http://www.foodfirst.org



MOBILIZATION FOR GLOBAL JUSTICE!  
Join the convergence and direct action opposing the IMF and World Bank - 
Washington, DC
Week of teach-ins, trainings, and cultural events April 8-15, 2000
Direct Action at the Spring Meetings of the IMF & World Bank April 
16-17, 2000

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