U.S. Poverty Rate, 1 in 6, at Highest Level in Years

[manasia]

U.S. Poverty Rate, 1 in 6, at Highest Level in Years
By SABRINA TAVERNISE
The portion of Americans living in poverty last year rose to the highest level since 1993, the Census Bureau reported Tuesday, fresh evidence that the sluggish economic recovery has done nothing for the country’s poorest citizens.

An additional 2.6 million people slipped below the poverty line in 2010, census officials said, making 46.2 million people in poverty in the United States, the highest number in the 52 years the Census Bureau has been tracking it, said Trudi Renwick, chief of the Poverty Statistic Branch at the Census Bureau.

That figure represented 15.1 percent of the country.

The poverty line in 2010 was at $22,113 for a family of four.

“It was a surprising large increase in the overall poverty rate,” said Arloc Sherman, senior researcher at the Center on Budget and Policy Priorities. “We see record numbers and percentages of Americans in deep poverty.”

And in new evidence of economic distress among the middle class, real median household incomes declined by 2.3 percent in 2010 from the previous year, to $49,400. That was 7 percent less than the peak in 1999 of $53,252.

“A full year into recovery, there were no signs of it affecting the well being of a typical American family,” said Lawrence Katz, an economics professor at Harvard. “We are well below where incomes were in the late 1990s.”

According to the census figures, the median annual income for a male full-time, year-round worker in 2010 â€" $47,715 â€" was virtually unchanged from its level in 1973, when the level was $49,065, in 2010 dollars, said Sheldon H. Danziger, professor of public policy at the University of Michigan.

“That’s not about the poor and unemployed, that’s full time, year round,” Professor Danziger said. Particularly hard hit, he said, have been those who do not have college degrees. “The median, full-time male worker has made no progress on average.”

The youngest members of households â€" those ages 15 to 24 â€" lost out the most, with their median income dropping by 9 percent. The recession continued to push Americans to double up in households with friends and relatives, especially those ages 25 to 34, a group that experienced a 25 percent increase in the period between 2007, when the recession began, and 2011. Of that group, 45.3 percent were living below the poverty line, when their parents’ incomes were not taken into account.

“We’re risking a new underclass,” said Timothy Smeeding, director of the Institute for Research and Poverty at the University of Wisconsin, Madison. “Young, less educated adults, mainly men, can’t support their children and form stable families because they are jobless.”

This article has been revised to reflect the following correction:

Correction: September 13, 2011


An earlier version of this article gave an incorrect figure for the number of people the Census Bureau found to be in poverty in the Unites States. The number is 46.2 million people, not 56.2 million.

[mtraininjax]

Without jobs for americans, it is only going to get worse.

[FayeforCure]

I love your signature line manasia!

If only we would know we are all vulnerable to bad luck, no matter how prepared we think we are.

[FayeforCure]

On the Human Poverty Index, the US rates abysmal:

17th, behind all western european nations and Australia.

Something no doubt Republicans are proud of............it shows survival of the fittest to the max in the US.

The US only rates higher than Ireland and Italy.........no wonder the Italians and Irish have been flocking to this country in far larger numbers than other europeans.

http://en.wikipedia.org/wiki/Human_Poverty_Index

[Brian Siebenschuh]

Yeah, nobody saw this coming like 25 years ago. 

http://www.time.com/time/magazine/article/0,9171,962753,00.html

[manasia]

Yeah, nobody saw this coming like 25 years ago. 

http://www.time.com/time/magazine/article/0,9171,962753,00.html

Brian all I can say is WOW.

Thank you Faye.

[John P]

Thanks Brian

[Non-RedNeck Westsider]

This is one of the better definitions of 'the middle class' that I've seen....

Says Lawrence Lindsey, assistant professor of economics at Harvard: "A middle-class person is someone who expects to be self-reliant, unlike the upper class with its unearned wealth or the lower class with its dependency on society. Far from declining, the middle class is bigger than ever, and its ethic is alive and well."

and while the so-called 'middle class' may be diminishing it's not due to quality of life, imo.  IE - I know I ONLY make $30k per year, but I really want a 60" Aquos LCD and a Mercedes.  Fucking, live within your means or better yourself, quit complaining and bitching about 'having it rough' because you ONLY have a 36" Vizeo and a Honda.

[ChriswUfGator]

This is one of the better definitions of 'the middle class' that I've seen....

Says Lawrence Lindsey, assistant professor of economics at Harvard: "A middle-class person is someone who expects to be self-reliant, unlike the upper class with its unearned wealth or the lower class with its dependency on society. Far from declining, the middle class is bigger than ever, and its ethic is alive and well."

and while the so-called 'middle class' may be diminishing it's not due to quality of life, imo.  IE - I know I ONLY make $30k per year, but I really want a 60" Aquos LCD and a Mercedes.  Fucking, live within your means or better yourself, quit complaining and bitching about 'having it rough' because you ONLY have a 36" Vizeo and a Honda.

It's not about that.

Along with such deep bifurcation comes societal and political instability. At some point if you want to maintain order, it can't simply be 10% rich guys and the other 90% are living in slums. Look back through history, every time a developed country has wound up in that situation, the inevitable result is revolution. Your political ideals aside for a second, this country, no country, can or will survive the situation that is developing. It may take awhile to happen, as they say the gristmills of the gods grind slowly, but they grind finely. Any cursory review of history should show you where we're heading, if something isn't done to correct the wealth imbalance.

[Non-RedNeck Westsider]

My thought on this matter isn't political, it's just life.

Society has been divided into three classes, and there is being a disinction made in the disparity from the top to the middle and the bottom to the middle - that the middle is sliding towards the bottom.  Why?  Maybe the top is just doing what it has always done, just they're doing it better. 

Idealogically, Middle Class to me is a state of mind.  Sure I envy those with high paying jobs or inheritances or those that win millions in the lottery.  I know that I could make the sacrifices to get there.  Get an MBA, pass the Series 7 and go to the legal casino.  Maybe I should have pursued a medical degree.  Maybe I should have taken some more chances on opportunities that I thought were really risky when I had less to lose.  I didn't and I'm not going to now.  I may be envious, but I don't really see myself living the mansion on the river and watching my bank account grow exponentially type of lifestyle.  (Maybe, but it's going to take more than a $5/wk lottery habit) 

On the flip side, I don't ever see myself so destitute that I have the government paying for my existence.  I have too many job skills, too much education and too much damn pride to accept that lifestyle. 

I see myself as the eternal middle class.  Content.  Not too concernced with how much richer the rich keep getting.  And not too concerned with how the bottom gets along. 

[finehoe]

Why Inequality is the Real Cause of Our Ongoing Terrible Economy

THE 5 percent of Americans with the highest incomes now account for 37 percent of all consumer purchases, according to the latest research from Moody’s Analytics. That should come as no surprise. Our society has become more and more unequal.

When so much income goes to the top, the middle class doesn’t have enough purchasing power to keep the economy going without sinking ever more deeply into debt â€" which, as we’ve seen, ends badly. An economy so dependent on the spending of a few is also prone to great booms and busts. The rich splurge and speculate when their savings are doing well. But when the values of their assets tumble, they pull back. That can lead to wild gyrations. Sound familiar?

The economy won’t really bounce back until America’s surge toward inequality is reversed. Even if by some miracle President Obama gets support for a second big stimulus while Ben S. Bernanke’s Fed keeps interest rates near zero, neither will do the trick without a middle class capable of spending. Pump-priming works only when a well contains enough water.

Look back over the last hundred years and you’ll see the pattern. During periods when the very rich took home a much smaller proportion of total income â€" as in the Great Prosperity between 1947 and 1977 â€" the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats.

During periods when the very rich took home a larger proportion â€" as between 1918 and 1933, and in the Great Regression from 1981 to the present day â€" growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007 â€" the two years just preceding the biggest downturns.

Starting in the late 1970s, the middle class began to weaken. Although productivity continued to grow and the economy continued to expand, wages began flattening in the 1970s because new technologies â€" container ships, satellite communications, eventually computers and the Internet â€" started to undermine any American job that could be automated or done more cheaply abroad. The same technologies bestowed ever larger rewards on people who could use them to innovate and solve problems. Some were product entrepreneurs; a growing number were financial entrepreneurs. The pay of graduates of prestigious colleges and M.B.A. programs â€" the “talent” who reached the pinnacles of power in executive suites and on Wall Street â€" soared.

The middle class nonetheless continued to spend, at first enabled by the flow of women into the work force. (In the 1960s only 12 percent of married women with young children were working for pay; by the late 1990s, 55 percent were.) When that way of life stopped generating enough income, Americans went deeper into debt. From the late 1990s to 2007, the typical household debt grew by a third. As long as housing values continued to rise it seemed a painless way to get additional money.

Eventually, of course, the bubble burst. That ended the middle class’s remarkable ability to keep spending in the face of near stagnant wages. The puzzle is why so little has been done in the last 40 years to help deal with the subversion of the economic power of the middle class. With the continued gains from economic growth, the nation could have enabled more people to become problem solvers and innovators â€" through early childhood education, better public schools, expanded access to higher education and more efficient public transportation.

We might have enlarged safety nets â€" by having unemployment insurance cover part-time work, by giving transition assistance to move to new jobs in new locations, by creating insurance for communities that lost a major employer. And we could have made Medicare available to anyone.

Big companies could have been required to pay severance to American workers they let go and train them for new jobs. The minimum wage could have been pegged at half the median wage, and we could have insisted that the foreign nations we trade with do the same, so that all citizens could share in gains from trade.

We could have raised taxes on the rich and cut them for poorer Americans.

But starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It cut spending on infrastructure as a percentage of the national economy and shifted more of the costs of public higher education to families. It shredded safety nets. (Only 27 percent of the unemployed are covered by unemployment insurance.) And it allowed companies to bust unions and threaten employees who tried to organize. Fewer than 8 percent of private-sector workers are unionized.

More generally, it stood by as big American companies became global companies with no more loyalty to the United States than a GPS satellite. Meanwhile, the top income tax rate was halved to 35 percent and many of the nation’s richest were allowed to treat their income as capital gains subject to no more than 15 percent tax. Inheritance taxes that affected only the topmost 1.5 percent of earners were sliced. Yet at the same time sales and payroll taxes â€" both taking a bigger chunk out of modest paychecks â€" were increased.

Most telling of all, Washington deregulated Wall Street while insuring it against major losses. In so doing, it allowed finance â€" which until then had been the servant of American industry â€" to become its master, demanding short-term profits over long-term growth and raking in an ever larger portion of the nation’s profits. By 2007, financial companies accounted for over 40 percent of American corporate profits and almost as great a percentage of pay, up from 10 percent during the Great Prosperity.

Some say the regressive lurch occurred because Americans lost confidence in government. But this argument has cause and effect backward. The tax revolts that thundered across America starting in the late 1970s were not so much ideological revolts against government â€" Americans still wanted all the government services they had before, and then some â€" as against paying more taxes on incomes that had stagnated. Inevitably, government services deteriorated and government deficits exploded, confirming the public’s growing cynicism about government’s doing anything right.

Some say we couldn’t have reversed the consequences of globalization and technological change. Yet the experiences of other nations, like Germany, suggest otherwise. Germany has grown faster than the United States for the last 15 years, and the gains have been more widely spread. While Americans’ average hourly pay has risen only 6 percent since 1985, adjusted for inflation, German workers’ pay has risen almost 30 percent. At the same time, the top 1 percent of German households now take home about 11 percent of all income â€" about the same as in 1970. And although in the last months Germany has been hit by the debt crisis of its neighbors, its unemployment is still below where it was when the financial crisis started in 2007.

How has Germany done it? Mainly by focusing like a laser on education (German math scores continue to extend their lead over American), and by maintaining strong labor unions.

THE real reason for America’s Great Regression was political. As income and wealth became more concentrated in fewer hands, American politics reverted to what Marriner S. Eccles, a former chairman of the Federal Reserve, described in the 1920s, when people “with great economic power had an undue influence in making the rules of the economic game.” With hefty campaign contributions and platoons of lobbyists and public relations spinners, America’s executive class has gained lower tax rates while resisting reforms that would spread the gains from growth.

Yet the rich are now being bitten by their own success. Those at the top would be better off with a smaller share of a rapidly growing economy than a large share of one that’s almost dead in the water.

The economy cannot possibly get out of its current doldrums without a strategy to revive the purchasing power of America’s vast middle class. The spending of the richest 5 percent alone will not lead to a virtuous cycle of more jobs and higher living standards. Nor can we rely on exports to fill the gap. It is impossible for every large economy, including the United States, to become a net exporter.

Reviving the middle class requires that we reverse the nation’s decades-long trend toward widening inequality. This is possible notwithstanding the political power of the executive class. So many people are now being hit by job losses, sagging incomes and declining home values that Americans could be mobilized.

Moreover, an economy is not a zero-sum game. Even the executive class has an enlightened self-interest in reversing the trend; just as a rising tide lifts all boats, the ebbing tide is now threatening to beach many of the yachts. The question is whether, and when, we will summon the political will. We have summoned it before in even bleaker times.

As the historian James Truslow Adams defined the American Dream when he coined the term at the depths of the Great Depression, what we seek is “a land in which life should be better and richer and fuller for everyone.”

That dream is still within our grasp.

http://robertreich.org/

[ChriswUfGator]

My thought on this matter isn't political, it's just life.

Society has been divided into three classes, and there is being a disinction made in the disparity from the top to the middle and the bottom to the middle - that the middle is sliding towards the bottom.  Why?  Maybe the top is just doing what it has always done, just they're doing it better. 

Idealogically, Middle Class to me is a state of mind.  Sure I envy those with high paying jobs or inheritances or those that win millions in the lottery.  I know that I could make the sacrifices to get there.  Get an MBA, pass the Series 7 and go to the legal casino.  Maybe I should have pursued a medical degree.  Maybe I should have taken some more chances on opportunities that I thought were really risky when I had less to lose.  I didn't and I'm not going to now.  I may be envious, but I don't really see myself living the mansion on the river and watching my bank account grow exponentially type of lifestyle.  (Maybe, but it's going to take more than a $5/wk lottery habit) 

On the flip side, I don't ever see myself so destitute that I have the government paying for my existence.  I have too many job skills, too much education and too much damn pride to accept that lifestyle. 

I see myself as the eternal middle class.  Content.  Not too concernced with how much richer the rich keep getting.  And not too concerned with how the bottom gets along. 

It's not about how you see yourself, or how you see others for that matter.

The problem is that there is really a very short list of things that are absolutely destined to destabilize a country, and a catastrophic wealth imbalance happens to be one of them. If we head too far in this direction, we risk losing everything. Again, look back through history, nearly every time this situation developed anywhere across the globe the result has generally been revolution. Haven't you watched any of the news on the middle east lately? This has by and large been their chief complaint. It can and will happen here, given enough time, if this imbalance grows severe enough.

[MusicMan]

Stephen Dare posted a video by Bob Rubin that pretty much explained what has happened in this country since 1980. The rich have had more and more access to politicians therefore more and more policy tilted in their favor,
especially in terms of income taxes.

I think it is bizarre that Warren Buffet and Bill Gates have combined their vast fortunes into a trust (Bill and Melinda Gates Foundation) that is designed to help Third World Countries deal with the difficult issues they are facing. Maybe that Fund should be spent here in the USA.

[Non-RedNeck Westsider]

Haven't you watched any of the news on the middle east lately? This has by and large been their chief complaint. It can and will happen here, given enough time, if this imbalance grows severe enough.

And why are they revolting?  Lack of religious tolerance?  Lack of governmental assitance?  Lack of self-identity?  We, as a majority, don't have those issues here.  The poorest of the poor still have the opportunity to get a meal, have a roof over their heads, avenues for self-improvement, etc...  We have it pretty good collectively.

[ChriswUfGator]

Haven't you watched any of the news on the middle east lately? This has by and large been their chief complaint. It can and will happen here, given enough time, if this imbalance grows severe enough.

And why are they revolting?  Lack of religious tolerance?  Lack of governmental assitance?  Lack of self-identity?  We, as a majority, don't have those issues here.  The poorest of the poor still have the opportunity to get a meal, have a roof over their heads, avenues for self-improvement, etc...  We have it pretty good collectively.

Actually, the wealth disparities are the actual cause, especially in Egypt.