Why Are a Record Number of Americans Living in Poverty?

The answer can be found in this story I wrote several days ago

http://keepamericaatwork.com/?p=9428

Respectfully,

Virgil
http://www.KeepAmericaAtWork.com

Income inequality has nothing to do with the point of your article about the increase in poverty. According to same GINI census data,

http://www.census.gov/newsroom/releases/pdf/09-16-10_slides.pdf

(see pdf page 15, or document page 13),

the 1967 GINI was also .37. So over 43 years, inequality as measured by GINI increased by 22 percent, as poverty has generally declined in the US.

Until this recent recession, poverty in the US has been declining. As you correctly point out, the extended amount of unemployment and the lack of jobs are causing the increase in poverty.

The increase in the GINI index since the early 1980s is directly related to the changing nature of the household and the decrease in the average number of people per household.

The census GINI numbers are measured per household. With the increase in divorce, out of wedlock births by adults and the resulting increase in single parent households, naturally household GINI inequality measures will increase. A substantial part of the increase in household GINI is a cultural phenomenon having nothing to do with the increasing income of the upper ten percent.

The increase in single wage earner households, and single working mothers due to divorce and out of wedlock births has led to an increase in GINI and stagnation in household and per capita income.

It easy for the press to blame and insinuate that the increase in income inequality is due to the increasing income and income share of the wealthier US households. If there were fewer single parent households and fewer divorces, the income of the middle and lower tier of households would also have increased and GINI would have decreased.

Divorced women and single parent mothers are most likely poor as are their children. It has always been the case, and there increasing numbers, increases childhood poverty rates and the overall poverty rates. The poverty rate for a female householder without a husband present is close to 40 percent, according to the US Census Bureau.

Our lifestyle explains more about our overall poverty rates then does any GINI index that measures income inequality between the upper 10 percent and the lower 10 percent.

The problem with labeling income inequality as a reason for poverty is: That label can lead to the conclusion soaking the rich, to reduce inequality, will reduce poverty. I tend to agree with miltonrecht who lists multiple reasons for poverty (including the very definition of “poverty”).
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I wonder why liberals seem play the class warfare card at every opportunity, especially since raising taxes on the rich tends to hurt the poor more than the rich. (Remember the yacht tax?)
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Rodger Malcolm Mitchell

Stephen I agree with what you said in your last paragraph, theres a whole can of worms to look into.

Virgil I read your blog and parts of your web site very nicely done, I will certinly go back for more.

The yacht tax should have been phased in over a long period. While you can put off buying that new yacht for a few years, anything longer tends to put a wrinkle in your lifestyle. At the time I was a peon in the boating industry and yes it crashed, but it wasen’t only the yacht sales that sunk it was all the family boats. Which was probably due to a recession near that time. We have so many of them its hard to keep track.

Yes, stephenpoo, one recession on average every five years. They tend to come when deficit growth declines and are cured when deficit growth increases. Interesting coincidence.
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But for a truly interesting coincidence, take a look at when depressions tend to occur. http://rodgermmitchell.wordpress.com/2009/09/07/introduction/ (Item 3) — after a period of federal debt reduction. And yes, they disappear when debt grows fastest.
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Those who either do not understand why or who deny the reasons why, will treat us to a continuing one-recession-every-five-years.
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By the way, are you saying the yacht tax hurt the rich and helped the poor? That seems to be President Obama’s position.
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Rodger Malcolm Mitchell

Why?

We’re in a depression, and industrial civilization has reached the limits of growth.

You can’t have infinite non-renewable resource based growth on a finite planet.

The industrial economy will never recover. Hopefully we can replace it with a sustainable, non-growth oriented economy.

It is in the the interest of the government to inflate poverty numbers so they can tax the middle class under the pretense of helping the poor. The benefits for most welfare recipients are so good that hungry Mexicans are swimming the Rio Grandee just for a chance to share choice steaks and an apartment with some overweight lady on welfare.

“…GINI index that measures income inequality between the upper 10 percent and the lower 10 percent.”

Hum…. No.

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

In addition, let me state two *facts*: (a) Upper-income households DO earn a much larger share of total income than they did a few decades ago, and (b) the Gini index of the US is the highest of developed countries, while its social model (income earners/household, etc.) is not that different.

I do not dismiss the concept that social change may affect income distribution, but I would like to see the numbers before accepting that as a prime explanation.

“I wonder why liberals seem play the class warfare card at every opportunity, especially since raising taxes on the rich tends to hurt the poor more than the rich.”

It all depends how you tax and what you do with the money. That said, it is typical of US politics that whatever Washington does harms the poor more than the rich….

Where did you get the idea that welfare benefits are “good”? In PA, a single mother of 2 will get a total of about $350 a month, plus medicaid and food stamps (based on how much the mother pays in rent, utilities). And unless she or one of her child happen to be disabled, there is a limit on how long the adult can remain on welfare. She will still get welfare cash for her children, but her checks will go down, forcing her into the workforce.
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One reason for childhood poverty I know of is that Bush had signed a law making it impossible for women whose husbands happen to be in prison to get any kind of welfare help for her children. I know of one woman who is working minimum wage, never eats a lunch, and picks up all the overtime she can in order to keep a roof her kids heads. The kids can’t even get free meals at school because of Bush’s law. And who does this hurt–certainly not the no-good father who broke the law and went to prison.

America, until we take a stand with and for the millions of out of work Americans that stress each day under the pressure of not earning an honest wage, we will not represent the USA. Nor will we ever be able to defend America?s industry and economy against the challenges of unhelpful importing as one nation.

America, would you consider implementing EAI in the five (5) following States with the highest percent poverty levels?
1. Mississippi 2. Louisiana 3. New Mexico 4. District of Columbia
5. Arkansas

The information mentioned above is an excerpt from the transcript of our national address to Rebuild the backbone of America – A Real Solution for the Unemployment Crisis in America.

Consider viewing the national address by cutting and pasting this link below:

Several folks here made untrue comments about help available for the poor– people are not living well on welfare.

The reason there are so many poor, is that there is almost no safety net or services anymore due to welfare reform, and very popular views that helping the poor is bad — ie they are lazy ect….

Welfare is limited, and other social services, usually require you to apply in person, during working hours … do that while trying to work, you’ll find you can’t keep a job. If you have to send an entire work day waiting in line for say a food stamp application.

Like student loans/aid — welfare is not what you remember from your own youth… there is very little of either available anymore, because the poor are viewed in a very negative light.

Folks might also want to keep in mind, as poverty grows, the middle class is shrinking.. and the income discrepancies are growing, like a south American country… and look how well that is working for them.

Everybody makes mistakes. Winners admit them early, make corrections, and move on. Losers whine and make excuses.

Yes, our Administration did not exactly inherit a flourishing economy, but is it time to fess up that it got some bad advice that merely throwing money at government would accomplish both income redistribution and economic recovery? Our President is the adult and should either convince his academic advisors that hurting business will kill the economy — or publicly throw his economic team under the bus.

My favorite excuse the economists are using is “no one knew how bad the recession was.” For that misunderstanding of how our country works alone, they should be fired!

Or the Administration can give shouting, apologetic, whining speeches that blame somebody two years out of office. President Obama doesn’t impress me as a whiner.

Greed! and Americans fear of Socialism has caused poverty and sickness

The USA is the last western nation that does not guarantee health coverage for EVERY CITIZEN and this is a shame, The reason is greed from the drug makers and FDA.

The drug makers rake in BILLIONS$$$ every year but the people cannot afford to go to the doctor. SHAME!
A fimmaker has been reverisng diabetes and obesity WITHOUT DRUGS and the drug makers do not promote the story
just google SPIRIT HAPPY DIET

@borderline. Anyone who has been to see a physician about their diabetes, or borderline diabetes, should have been advised that appropriate diet and excercise can potentially control type 2 diabetes.

I’m not saying that drug companies aren’t profit driven, but it’s their job to promote their drugs, not to promote diet and excercise. That’s up to the individual.

Rodger I have no problem with deficis to a point. and I don’t belive we are near that point. But what you advocate flys in the face of reason, and universal laws.
First you must change reason itself. Deficits are not hurting now and may never, probably because we enjoy the most trusted currency in the world, maybe that will change someday. We all know as our credit score slips we must pay more to borrow, and now the worlds economies have slipped like ours so theres not a better competator to go with. So no cause for alarm.
Why higher taxes for the wealthy is simple as the Bank robber Willie Sutton once said, I rob banks because thats where the money is.
You can’t get blood out of a turnup, and others.
I know you say tax revenue is not needed, that argument you will have to bring to Washington, Im afraid they will see you as the days perpetual motion machine salemen. We would all love to have that machine.

“A substantial part of the increase in household GINI is a cultural phenomenon having nothing to do with the increasing income of the upper ten percent.”

That’s an interesting argument to make. One could argue equally well that latent poverty before 1980 was masked by the reverse cultural phenomenon of larger families. Income inequality has always been a driver of poverty, only its effects have become more apparent owing to cultural trends that you mention.

There are several definitions for poverty, the poor in rich nations can be rich in the eyes of the abject poor in underdeveloped nations. Perhaps the one adopted by the UN could be more meaningful.

In the US, many poor have reasonable shelters, fairly decent meals, quite adequate healthcare, acceptable education, some even own cars. All these would be the envy of the destitute in Asia, Africa and Latin America.
So, what is poverty?
(btt1943)

To the Editor:

Please fix the typo in 3rd paragraph: should be “losing”, not “loosing”.

The content is fantastic, but whatever happened to proofreading? Spell-Check doesn’t cut it.