Money is like manure; it's not worth a thing unless it's spread around
encouraging young things to grow. ~ Thornton Wilder
Towards the end of the school year, the SF bay area high school economics classes I work with have a project where 2-person teams of students pick a "lesser-developed country" (LDC), gather a fair amount of information about this nation, and design a specific project to further the nation's development. Each team prepares a class presentation/proposal for funding their project by the World Bank. I think this process is pretty clever in that the students get to apply their development economics knowledge by creating a particular project that best addresses their country's development needs. In the jargon of consultants, they craft a "best and final" presentation for the teacher and several of their classmates to judge whether it's worthy of the World Bank money they've requested.
The students' projects have included a wide variety of smart ideas and approaches. This spring the development projects included building power plants in Vietnam, mobile phone systems in Sierra Leone, distributing medicines and health services in The Congo, modernizing port facilities in the Union of the Comoros, building roads in Honduras and installing irrigation systems in Mozambique.
To give the students a sense of what their presentations should include, I show to them a development project I've designed. During the past several years, I've done one assisting Liberia. For my presentation next year I plan to go "outside the box" by creating a development project inside the US, in several counties that typify the undeveloped areas of the USA. What, there are undeveloped areas here in the USA? Unfortunately, yes.
Over at least the last decade we have witnessed personal economic standing in the USA becoming much more uneven, depending in large part where on the income and wealth scale you fall. An executive summary description of this trend is: as the rich get richer, the poorer get the (empty) bag.
Essentially, the USA encompasses two (2) nations. The first is one we know best (USA-1), a most successful post-industrial society and a world-leader in many economic, cultural and social arenas. It's the USA we live in. This USA needs no World Bank assistance. In fact, this USA makes the largest single contribution to the World Bank's budget (about 17%). When you and I think of our country, we see the image of USA-1.
The other (USA-2) is comprised of chronically undeveloped, usually unspoken-about areas suffering from unremitting under-investment in human capital, infrastructure and citizens’ welfare. USA-2 needs substantive development assistance. USA-2 is the undeveloped USA; in effect, a domestic LDC.
Recognizing this, I examined several undeveloped areas of USA-2 for my next project/presentation. It’s these people and the areas they live in – including rural and inner-city areas, the de-developed, or more likely undeveloped areas of within the USA – that need generous development assistance.
More than most nations, the USA’s recent history has demonstrated an increasing trend of bifurcation in the economic and social status of its citizens. A small number of citizens have continued to dramatically increase their economic well-being from living in the world’s leading economy – I’ll call this group the “Top 1%ers.” Their income, wealth and position have steadily and significantly grown. Today, the Top 1% of income-earners (folks who average $1 million per year) now receives 20% of total USA income and account for 33% of total USA wealth. The “Bottom 50%ers” – folks making on average less than $25,000 per year (that's about $12/hr) – account for 13% of all income. These people have found their economic standing at best stagnated, if not deteriorated over the recent past (median real USA income has declined since 2002). The Bottom 50%ers – including working class, lower middle-class, urban and rural poor, dropouts, unemployed and homeless people – have become increasingly unsupported through their own actions or by federal, state, and local government programs.
The plight of these USA-2 dwellers confirms that "trickle down" economics exists only in textbooks and speeches, not in reality. If the dyspeptic, plutocratic Republicans have their way, the Bottom 50%ers will suffer even more from the severe consequences of disappearing government, becoming more isolated from USA-1, as well as facing ever-smaller prospects of getting even a part-time minimum-wage job (if they're lucky).
So, my development project focuses on a sliver of undeveloped USA-2: two (2) counties in South Dakota and one (1) county in Texas. These three (3) counties have the lowest per-capita income in the nation and typify USA-2. The table below presents characteristics of Buffalo County, SD; Shannon County, SD; and Starr County, TX. These counties' characteristics are contrasted with those of Alameda County, CA – my local standard of USA-1.
Characteristic | 1. Buffalo County, SD | 2. Shannon County, SD | 3. Starr County, TX | Alameda County, CA |
Per Capita Income | $5,213 Dominican Republic (84th) | $6,286 Columbia (75th) | $7,069 Suriname (72nd) | $33,831 New Zealand (24th) |
Population | 1,912 (2010); 2,032 (2000) | 13,586 (2010); 12,466 (2000) | 60,968 (2010); 53,600 (2000) | 1,491,482 (2009) |
Median Age | 23 yrs. | 21 yrs. | 26 yrs. | 34.5 |
Largest Ethnic Group (% pop.) | Native American (81.6%) | Native American (94.2%) | Hispanic (97.5%) | White, non-Hispanic (37.1%) |
Unemployment Rate | 57% | 15% | 17.9% | 10.8% |
Pop. Below Poverty Line | 56.9% | 52.3% | 50.9% | 10.7% |
Sources: U.S. Census Bureau, Wikipedia
The national per-capita income is $47,200. In the table, the nations cited after each county's per-capita income are countries whose per capita income is equivalent to each of these counties, together with the rankings by the International Monetary Fund of these nations' per-capita income (shown in parentheses) out of 183 nations. Thus, Buffalo County’s per-capita income of $5,213 is equivalent to that of the Dominican Republic, ranked 84th in the world.
The project will target educational development in Buffalo, Shannon and Starr counties. As shown, each of them is small and has a very young, very ethnic demographic. You easily see these areas suffer from significant undevelopment; the majority of each county's population lives below the poverty line; their unemployment rates are all elevated above the US national rate of 9.1% (May 2011).
It is virtually certain USA-2 areas will further deteriorate over the next year or two when federal, state and local funding contracts. For example, Texas will reduce its education expenditures by $4 billion. Unfortunately other fiscally-challenged states, like California, are doing the same thing due to fiscal imbalances. California's just-enacted budget includes $2.8 billion in deferrals to K-12 schools and community colleges, $150 million cuts to the University of California and $150 million reductions to California State University. USA-2 will continue to be at the very end of the long line when funding requests are pleaded. USA-2 covers many parts of the nation. The 100 poorest counties in the USA include 17 in Texas; 16 in Kentucky; 14 in Mississippi; 10 in South Dakota; 4 in Montana; and 4 in New Mexico. At the other end of the scale, New York (Manhattan) county’s per capita income is $147,000, the highest in the USA. That's over 28 times Buffalo county’s. From the table it's obvious these 3 counties are much different from (most of) Alameda County. And yet they are all part of the USA – prime examples of the undeveloped USA-2. The most dynamic resource of our nation, the one that forms the strongest basis for our nation's economic and social potential, is our people. But USA-2’s indigenous labor remains unskilled and outmoded compared to USA-1 – hence the characteristic high unemployment. In my opinion the greatest impediment for development in USA-2 is something we all mostly take for granted: an effective and capable formal education system. My development project thus focuses on education because USA-2’s human capital desperately needs to be considerably strengthened and advanced.
My proposed development project will improve educational capabilities and performance in Buffalo, Shannon and Starr counties (BSS). How will this happen? I propose 3 mechanisms for success:
1. Strengthen BSS’s primary and secondary educational infrastructure. Repair & construct K-8 & High Schools. Nine (9) new schools will be built;
2. Enhance BSS’s teacher training, skills, recruitment and retention; and
3. Create and implement suitable curricula for BSS schools that focus on developing marketable, employable skills.
My 4-year project would receive funding both from the World Bank and USA-1 (principally from the Department of Education). Will this project eradicate these counties' educational and economic deficits? No; but hopefully it can provide a needed initial step towards more secure and sustainable development.
What's the likelihood that such a project would actually get started? Zero. As I've said in other posts, the Republicans have bowled over the timid, spineless Democrats to define now as a time of government shrinkage. Federal Education Dept. expenditures will likely shrivel, not expand to help undeveloped areas in USA-2. And, given Congress's growing international isolation – thanks mostly to xenophobic Republicans – it would take a very brave group of politicians (Do they exist anymore? I think not.) to consider receiving World Bank funding for a domestic project, even if it's fully justified and worthy.
With these prospects, my project will remain only an idea for a small number of high school economics students – not a real project helping needful children and youth in USA-2. USA-1 helps fund World Bank projects throughout the world of under-developed nations, but not within its borders. That's a tragedy for today and many tomorrows.
