The latest figures from the US Census Bureau reveal that the nation’s poverty rate has hit 14.3% of the population, or nearly 44m people. The poverty threshold is defined as an income less than $21,954 for a family of four and $10,956 for an individual. This is a very low figure. Many Americans with incomes above this are struggling to make ends meet. So this poverty rate is very conservative.
Even so, the poverty rate is now at its highest level since 1994; still not back at the highs of the early 1980s, but not far off. In effect, America’s poor are just as large a proportion of the population as they were nearly 30 years ago and, in absolute terms, there are now another 15m Americans who must rely on welfare payments. medicare and food stamps (the last two non-cash items are not accounted for in the data).
The Great Recession has seen the loss of 8m jobs, probably never to come back again, plus huge cuts in wage rates, hours of work, pension payouts. That has driven this poverty rate up.
It is now expected to reach an all-time record of 16% before the end of this decade, according to a new study by Isabel Sawhill and Emily Monea of the Brookings Institution (http://www.brookings.edu/papers/2010/0916_poverty_monea_sawhill.aspx).
Look what these poverty experts concluded:
According to new data recently released by the Census Bureau, 14.3 percent of Americans were living in poverty in 2009. In September of 2009 we performed an analysis in which we simulated what would happen to the poverty rate over the next several years based on projections of the unemployment rate and the estimated relationship between the poverty rate and the unemployment rate. We provide a brief update to that analysis here. The bottom line of this analysis is that the recession is likely to have a dramatic impact on poverty over the next several years. Our simulations suggest that the overall poverty rate will increase from 12.5 percent in 2007 to nearly 16 percent by 2014 and that the child poverty rate will increase from 18 percent in 2007 to nearly 26 percent in 2014, adding about 10 million people total and 6 million children to the ranks of the poor by the middle of the current decade. Despite the fact that our simulation accurately predicted the poverty rate for 2009, we emphasize that there is a strong possibility that the estimates we present here are conservative, given that we do not know how dramatic of an effect the current recession will have on structural unemployment in the future.
What could be a more appalling indictment of the capitalist system in the ‘greatest free market economy in the world’?