Growing Poverty and Despair in America

[Spring Onion]

Growing Poverty and Despair in America


By Stephen Lendman

URL of this article: Growing Poverty and Despair in America

Global Research, August 26, 2009


In 1962, Michael Harrington's "The Other America" exposed the nation's dark underside enough for John Kennedy to ask his Council of Economic Advisor chairman, Walter Heller, to look into the problem and for Lyndon Johnson to say (on January 8, 1964) that his administration "today, here and now, declares unconditional war on poverty in America."



In fact, it was little more than a skirmish that fell way short of addressing the real problem in the world's richest nation. Today it's even greater and increasing exponentially under a president who, unlike Johnson, declared war on the poor and disadvantaged to favor privilege over growing needs and essential social change.



In his book, Harrington wrote:



"In morality and in justice every citizen should be committed to abolishing the other America, for it is intolerable that the richest nation in human history should allow such needless suffering. But more than that, if we solve the problem of the other America we will have learned how to solve the problems of all of America." Sadly, we didn't then nor have we now.



Perhaps more than anything, increasing homelessness and hunger highlight the growing problem as, in the face of deteriorating economic conditions and growing human needs, administration policies are indifferent, counterproductive, uncaring and hostile.



In December 2008, Reuters reported that "Homelessness and demand for emergency food are rising in the United States as the economy founders," according to a December 2008 US Conference of Mayor's Task Force on Hunger and Homelessness survey of 25 American cities. Chief causes cited were growing poverty, unemployment, and unaffordable housing costs with greater than ever expected challenges in 2009. At the time, it was reported that "Cities continue to develop aggressive strategies to prevent homelessness" and provide other essential services, but that was then and this is now.



An Epidemic of State Budget Shortfalls



As economic conditions deteriorate, the Center on Budget and Policy Priorities (CBPP)'s July 29 report highlighted the growing problem. Titled "New Fiscal Year Brings No Relief from Unprecedented State Budget Problems," it cited the following issues:



-- at least 48 states "addressed or still face shortfalls in (their FY 2010) budgets," the result of "the worst decline in tax receipts in decades;"



-- at issue is a $163 billion deficit or 24% of their budgets, and these numbers keep rising as conditions worsen;



-- at least 33 states "already anticipate" 2011 deficits that may exceed 2010 ones; and



-- for FYs 2010 and 2011, shortfalls of at least $350 billion are expected, and FY 2012 may bring little or no relief.



In response, deep social service cuts are being implemented, putting the burden on vulnerable Americans to cope and survive. The situation is grave and worsening with at least 21 states cutting "low-income children's or families' eligibility for health insurance or reduce their access to health care services."



Elderly and disabled persons programs are also being reduced or eliminated. So are services for home and child care, rehabilitation, and other essential needs for the poor and low-income households. The most vulnerable of all are affected, yet more cuts are expected as new budget pressures arise.



Pre-school, K-12, and higher education cuts are being made as well. Public payrolls and hours worked are being slashed, exacerbating the growing unemployment problem, worse still by cutting pay for the still-employed. Tax increases may also be considered at the worst possible time.



"Expenditure cuts and tax increases are problematic policies during an economic downturn because they reduce overall demand and can make the downturn deeper. When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals."



Demand is then reduced because households have less to spend. As a result, the economic crisis deepens. CBPP said federal assistance is crucial, yet the Obama administration declined while providing trillions to Wall Street and other corporate favorites. That's the state of governance in America today under Republican and Democrat administrations, each no different from the other.



Hunger in America



On its web site, Feeding America (formerly America's Second Harvest) said in "the land of plenty," one in eight Americans (meaning millions) face growing hunger problems, and not just the poor and unemployed. They're "often hard-working adults, children and seniors who simply cannot make ends meet" and have to forego meals at times, even for days.



Hunger and Poverty Facts


-- in (pre-crisis) 2007, 37.5 million people were impoverished; they comprised:



-- 12.5% of the population and 9.8% of families;



-- 20.3 million or 10.9% of people aged 18 - 64;



-- 13.3 million or 18% of children under age 18; and



-- 3.7 million or 9.7% of seniors aged 65 or older who benefit from Social Security and Medicare.



In addition:



-- 36.2 million Americans are food insecure, including 12.4 million children;



-- they comprise 13 million or 11.1% of households;



-- 4.7 million households experience "very low food security" meaning hunger is a persistent problem;



-- households with children have double the food insecurity as ones with none;



-- single women-headed households are worst off with 30.2% of them insecure; and



-- 53.9% of food-insecure households rely on one or more of the following federal programs - food stamps, the National School Lunch Program, and the Special Supplement Nutrition Program for Women, Infants and Children (WIC); in addition, Feeding America (in 2007) provided emergency food aid to about 25 million low-income people, 8% more than in 2001.



On August 6, the US Department of Agriculture reported a record 34.4 million Americans (one in nine) receiving food stamps in May as unemployment keeps surging. It was the sixth consecutive monthly record, and every state showed an increase as economic conditions worsen.



On September 10, the Commerce Department will release 2008 census data expected to show around another 1.5 million people added to the poverty rolls over 2007 figures - a total of nearly 39 million representing 12.7% of Americans. According to Rebecca Blank, Economic Affairs Undersecretary, final numbers aren't yet in and may be worse than expected because of how bad things are for growing numbers in the country. She believes if (U-3) unemployment hits 10% (up from 9.4% now), poverty could reach 14.8% this year and rising because of jobs and homes lost, savings exhausted, and the sharpest ever decline in personal wealth between mid-2007 and December 2008.



Worst of all, conditions for most people are deteriorating as businesses, states, and local governments shed workers and cut budgets at the worst possible time. It promises harder times ahead and potentially millions more impoverished.





Homelessness Facts



Annually, two - three million Americans, including 1.3 million children, experience homelessness and many more are at risk. Most vulnerable are those losing jobs, homes, and the millions of low-income workers paying 50% or more of their income in rent so that a missed paycheck, health emergency, or unexpected financial burden makes them vulnerable to homelessness at a time government aid is being cut.



Criminalizing the Homeless


In the face of a growing burden on society's most needy, the National Law Center on Homelessness and Poverty reported that "many cities use the criminal justice system to punish people living on the street for doing" what they must to survive. Local ordinances prohibit sleeping, camping, eating, sharing food, sitting, loitering, and/or begging in public places with criminal penalties imposed on offenders. Some cities even punish organizations and individuals for helping, and the idea always is to keep the unwanted out of sight, mind, and preferably out of cities, at least in or near more affluent areas or business districts.



As economic conditions deteriorate, the problem will grow and so will the plight of the homeless as cities crack down harder in violation of constitutional and international human rights laws.



The OECD's 2008 Report, "Growing Unequal?: Income Distribution and Poverty in OECD Countries



It states that America "is the country with the highest inequality level and poverty rate" among the 30 OECD countries, ranking only ahead of Mexico and Turkey. In addition, since 2000, inequality grew rapidly, "continuing a long-term trend (going) back to the 1970s" when inflation-adjusted household incomes began falling. Other data cited includes:



-- the gap between rich and middle and poorer income groups widened;



-- government redistribution of income "plays a relatively minor role in the United States," partly because social service spending is low and falling; in 2008 America, it was 9% of household incomes compared to 22% on average in OECD countries;



-- social mobility in America is low, and children of poor families are less likely to become rich; and



-- "wealth is distributed much more unequally than income: the top 1% controls some 25 - 33% of total net worth and the top 10% holds 71%;" other estimates place these disparities much higher and widening as social inequalities increase, high-paying jobs disappear, the middle class keeps shrinking, poverty grows, and federal and state governments cut essential services in the face of increasing need among greater numbers of people.



The Working Poor Keep Getting Poorer



The Working Poor Families Project October 2008 study highlighted similar problems from 2002 through 2006. Titled "Still Working Hard, Still Falling Short: New Findings on the Challenges Confronting America's Working Families," it reported:



-- jobs paying poverty-level wages rose by 4.7 million;



-- low-income working families (earning less than double the Census definition of poverty) increased by 350,000;



-- below poverty-level jobs rose to 29.4 million and comprise 22% of all jobs compared to 19% in 2002;



-- most disturbing is that this happened during a period of economic growth, but at the same time wages haven't kept pace with the cost of living;



-- low income family numbers rose to nearly 9.6 million or 28% of the population;



-- children in them number 21 million;



-- 72% of low-income families with working adults in them performed the equivalent of one and one-quarter jobs - a far greater burden than in other OECD countries; and



-- income inequality is highest in New York; California is fourth, but all states are in a race to the bottom as conditions deteriorate everywhere, so all rankings are disturbing compared to the late 1990s.



The US Labor Department's latest productivity report highlights the plight of workers even more. It rose 6.4% in Q 2, the largest gain since 2003, while workers' compensation fell sharply, 2.2% on an annualized basis. According to Mark Vitner of Wells Fargo Bank, the productivity increase "is almost entirely the result of cost-cutting, not improved ways of producing goods and providing services." It also shows how powerless workers are at a time of massive job cuts, so staying employed takes precedence over wages paid and benefits. The result is profits up, pay down, benefits disappearing, and American workers transitioning to serfs.



More confirmation comes from the latest Internal Revenue Service statistics for 2007 showing that the income disparity between the top 10% and bottom 90% reached "a higher level than any other year since 1917 and even surpasses 1928, the peak of the stock market bubble in the 'roaring' 1920s," according to data from University of California economist Emmanuel Saez. He noted that "2007 was an incredibly good year for the super rich" and added:



"Based on the US historical record, falls in income concentration due to recessions are temporary unless drastic policy changes such as financial regulation or significantly more progressive taxation are implemented and prevent income concentration from coming back."



But these are no ordinary times as the US sinks slowly into depression. The super-rich are exploiting it to their advantage, while millions of working Americans are losing jobs, homes, benefits, savings, futures, and safety net protections. The 2007 data reflected the peak of the current cycle. What's ahead will be far more grim, disturbing, and reflective of an America that is no more.



The Economic Policy Institute's (EPI) State of Working America - 2008/2009



As the economy contracted in 2008, job losses and unemployment accelerated, but EPI's report missed the worst of it from early 2009 to the present. It cited:



-- wages losing ground to inflation;



-- high energy costs;



-- the burst housing bubble;



-- millions of defaults on home loans followed by foreclosures;



-- declining financial markets and frozen credit;



-- less health care coverage and fewer higher-paying jobs with good benefits; and



-- "for the first time since the mid-1940s, the real incomes of middle-class families are lower at the end of this business cycle than they were when it started;" as a result, "prosperity is eluding working families" as they fall further behind, now more than ever as depression takes hold.



EPI calls family income "the core building block of American living standards." Yet during the last business cycle, significant productivity growth was accompanied by stagnant or falling real incomes. "That has never happened before." The latest economic recovery bypassed the middle class and created greater income inequality. The Bush administration's tax cuts exacerbated the problem by helping the top 1% mostly, the middle class marginally, and low-income families not at all.



Clear racial disparities show whites consistently better off than blacks and Hispanics, men doing better than women, huge class distinctions, and mobility up the income ladder bypasses most at lower levels. One study showed that about 60% of families starting out in the bottom fifth stratum were still there a decade later. At the same time, over half the top income ones kept their position.



EPI concludes that "where you start out in the income scale has a strong influence (over) where you end up (so) the rate of economic mobility is low" in the richest country in the world where the select few alone benefit. All others lose out as their incomes don't keep pace with inflation and their living standards erode.



Another study implies that a poor family of four with two children needs nine to 10 generations to reach middle-income status. It means where you're born is where you'll stay. So-called rags-to-riches tales are just folklore, and stagnant or downward mobility today is more serious than ever.



Wages and salaries comprise three-fourths of family income, and for the middle class, it's even higher. Yet since 2002, they didn't grow at all despite historically high productivity, meaning business benefitted, not workers who fell further behind. Women and minorities fare worst plus everyone in lower income categories. During the 2002 - 07 recovery, no progress was made "in reducing the share of workers with low earnings (in) all race/ethnic groups and for both genders....The very highest earners have done considerably better than other workers for at least (the past) 30 years, but they (did) extraordinarily well over the last 10 years."



In addition, eroding "employer-provided benefits, most notably pensions and health insurance, is an important aspect of the deterioration in job quality (and economic security) for many workers." Most harmed are young workers facing bleak prospects, older ones losing jobs and not wanted, and the erosion of unionization since the 1950s, especially since the late 1970s.



Overall, 2002 - 07 growth was a jobless recovery followed by the subsequent wiping out of five years of modest gains. From 2000 - 2007, average annual job growth was an anemic 0.6%, well below the 1990s 1.8% figure. In addition, the unemployment rate rose 0.7% from March 2001 (the last business cycle's peak) to December 2007 even though average workers age increased and the labor force participation rate shrank - "both of which should have put downward pressure on the" unemployment rate. The great American job creation machine faltered badly in the new millennium and now has collapsed.



Net family wealth also determines household well-being, particularly from income and financial assets, including real estate. Yet in America, the top 1% controls more than the bottom 90% combined and the disparity is growing. In 1962, the bottom 80%'s share was 19.1%. In 2004, it was 15.3%, the difference shifting to the top 5%.



In addition, until the current downturn, average household debt grew much faster than income, fueled by increases in mortgages, home equity loans, and high credit card balances. Since the housing bubble burst and home prices collapsed, the damage done has been enormous with still more to come.



The result is growing poverty levels as discussed above with numbers increasing as economic conditions weaken. "The backsliding against poverty in the 2000s is most notable among the least advantaged," especially blacks, Hispanics, mother-only families, and the poor unable to keep pace.



It shows up in inequality in health security in the form of inadequate or no insurance, lower life expectancies for poor and lower income households, and an eroding safety net for the most needy. Rising health care costs, lost or no benefits, and an economic crisis have increased the plight of millions of the country's least advantaged.



EPI's report highlights a nation of growing inequality, lower wages, fewer benefits, diminished worker bargaining power, and disempowered unions v. market fundamentalists, complicit government officials, and their "You're-on-Your-Own" (YOYO) ideology against which they're powerless.



They believe markets know best so let them, arguing that alternatives "will create the wrong incentives." Recent decades reveal the folly of this approach on American workers' living standards. Exposing the "ownership society" myth, all household security measures, including net worth, have fallen despite a few years of late 1990s progress.



Today, "The macro-economy is in serious disrepair, beset by the spillovers from the bursting....housing bubble, high energy prices, and unsustainable levels of household indebtedness" causing economic collapse and the possibility of a deep, protracted depression. So far, remedial measures have been patchwork and counterproductive as growing millions face greater uncertainties with no imminent signs of relief and federal and state governments not caring or helping.



In 2009, the State of Working America is dire and worsening enough for millions of households to face greater than ever challenges on their own with government indifferent to their plight.



Concluding an early 1980s edition of his book, Michael Harrington sensed what "Other Americans" were up against in writing:



"I end this review, then, on an ambivalent note. There was progress; there could have been more progress; the poor need not always be with us. But it will take political movements much more imaginative and militant than those in existence in 1980 to bring that progress about. Until that happens, the poor will be with us." And today, in exponentially growing far greater numbers because nothing is being done to reverse them.



Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.



Also visit his blog site at SteveLendmanBlog and listen to The Global Research News Hour on RepublicBroadcasting.org Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

 

[Spring Onion]

"It states that America "is the country with the highest inequality level and poverty rate" among the 30 OECD countries, ranking only ahead of Mexico and Turkey"


is that true ???

 

[gambit]

Yeah...Castro is seeing a mad rush by Floridians in rickety homemade rafts floating across the Florida Straits to Cuba.

 

[Spring Onion]

Yeah...Castro is seeing a mad rush by Floridians in rickety homemade rafts floating across the Florida Straits to Cuba.

yeh Stephen Lendman is Castro's brother and Chicago is in Cuba

 

[gpit]

These years, there are too many bad omens for USA: Iraqi war, financial crisis, ...

As if it were not bad enough, now America is being compared with Cuba!

Will America be compared with Somalia next year?

 

[Developereo]

I wouldn't write off the US just yet.
The Americans are going through a period of greed and sloth, addicted to an unaffordable life on credit.
It will probably take another Great Depression to shock them out of this complacency. They built a world empire before. It is possible they can do it again.

If things get bad, the US can always go protectionist, resurrect its manufacturing base, and rejoin the world economy when it wants to.

I am always impressed how some countries rise from the ashes when under pressure. Germany in 1871, after WWI and WWII. Japan after WWII. etc.

Germany is a wonderland. These guys keep coming back no matter what the world throws at them.

 

[HK-47]

^something to do with discipline I guess.
But aren't economies like mountain ranges?

 

[Developereo]

^something to do with discipline I guess.

Germany has a culture of hard work, discipline, and patriotism.
Also, they place great value on getting the fundamentals right and working from the ground up, instead of taking short cuts and cutting corners.

It is no accident that German engineering is unsurpassed even by Americans and Japanese.

I was reading about it recently and around 1890, Germany had the most advanced physics research institute in the world, one of the highest industrial outputs in Europe, and produced more electricity than Britain, France and Italy combined. And all this within 20 years of its birth as a nation in 1871.

But aren't economies like mountain ranges?

Can you elaborate?

 

[TruthSeeker]

The 2009 Poverty Guidelines (Official US Government Definition of Poverty) for the 48 Contiguous States and the District of Columbia" :

Persons in family , Poverty threshold income $
1, $10,830
2, 14,570
3, 18,310
4, 22,050
5, 25,790
6, 29,530
7, 33,270
8, 37,010

For families with more than 8 persons, add $3,740 for each

Note that a US family of four making less than $22,000 is considered in "poverty" by the US Government.

http://aspe.hhs.gov/poverty/09poverty.shtmladditional person.

 

[HK-47]

Can you elaborate?

what I meant was economies go through booms and falls.correct me if I am wrong though I am not knowledgeable in this field.

 

[TruthSeeker]

The 2009 Poverty Guidelines (Official US Government Definition of Poverty) for the 48 Contiguous States and the District of Columbia" :

Persons in family , Poverty threshold income $
1, $10,830
2, 14,570
3, 18,310
4, 22,050
5, 25,790
6, 29,530
7, 33,270
8, 37,010

For families with more than 8 persons, add $3,740 for each additional person.

http://aspe.hhs.gov/poverty/09poverty.shtml

 

[Patriot]

I don't think US will ever become a poor state why because the elite people are quite intelligent including industrialists, political elites and millitary...If US was not a super power it still would be one of the richest nation.While many Americans are extremely stupid (I am talking about those with limited education and no knowledge about world..those who think Pakistan is in Middle east lol) i would not compare them to educated Americans.OTOH, The majority of people in countries like Japan and Germany are far more then intelligent then Majority of Americans.

 

[Gin ka Pakistan]

I don't think US will ever become a poor state why because the elite people are quite intelligent including industrialists, political elites and millitary...

Yes USA will never become poor but will slow down for recovery and that means other nations will get time to catch up, example: if China is 30 years behind right now the difference might reduce to 15 years because of less spending by US on tech and research in next five to ten years.

 

[Developereo]

what I meant was economies go through booms and falls.correct me if I am wrong though I am not knowledgeable in this field.

True. But the global economic race is tightening and there is no room at the top for slackers.

China, and to a lesser extent India, just proved that the US economy is not as indispensible as people thought. Both countries maintained respectable growth rates over the last year. China is fast developing a domestic market so it is not as dependent on exports.

 

[gpit]

Hunger hits Detroit's middle class

Food has long been an issue in this city without a major supermarket. Now demand for assistance is rising, affecting a whole new set of people.

By Steve Hargreaves, CNNMoney.com staff writer
Last Updated: August 13, 2009: 11:32 AM ET

DETROIT (CNNMoney.com) -- On a side street in an old industrial neighborhood, a delivery man stacks a dolly of goods outside a store. Ten feet away stands another man clad in military fatigues, combat boots and what appears to be a flak jacket. He looks straight out of Baghdad. But this isn't Iraq. It's southeast Detroit, and he's there to guard the groceries.

"No pictures, put the camera down," he yells. My companion and I, on a tour of how people in this city are using urban farms to grow their own food, speed off.

In this recession-racked town, the lack of food is a serious problem. It's a theme that comes up again and again in conversations in Detroit. There isn't a single major non-discount chain supermarket in the city, forcing residents to buy food from corner stores or discount chains. Often less healthy, less varied, or more expensive food.

As the area's economy worsens --unemployment was over 16% in July -- food stamp applications and pantry visits have surged.

Detroiters have responded to this crisis. Huge amounts of vacant land has led to a resurgence in urban farming. Volunteers at local food pantries have also increased.

But the food crunch is intensifying, and spreading to people not used to dealing with hunger. As middle class workers lose their jobs, the same folks that used to donate to soup kitchens and pantries have become their fastest growing set of recipients.

"We've seen about a third more people than before," said Jean Hagopian, a volunteer at the New Life food pantry, part of the New Life Assembly of God church in Roseville, a suburb some 20 miles northeast of Detroit. Hagopian said many of the new people seeking assistance are men, former breadwinners now in desperate need of a food basket.

Hagopian is an 83-year old retired school teacher. She works at the pantry four days a week, spending two of those days driving her own minivan around town collecting food from local distributors.

The pantry, housed in the church basement, gives away boxes of food that might feed a family of four for a week. It includes dry and packaged goods like cereals and pasta, peanut butter, canned fruits and vegetables, 7 or 8 pounds of frozen meat (usually chicken or hot dogs), and eight pan pizzas donated from a local Pizza Hut. Most of the other food is purchased from a distributor or donated by the county food program. Last month they gave out 519 boxes.

Hagopian hopes the demand for food doesn't get much worse.

"I hope we're at the top of it because we'll run out of food, and then we'll have to go out and find some more," she said.

She should brace for the worst. Across metro Detroit, social service agencies are reporting a huge spike in demand for food assistance.

Gleaners, an agency that distributes excess food donated from food processors, says their distribution is up 18% from last year. Michigan Department of Human Services, which handles federal food assistance like food stamps, WIC checks and such, has seen a 14% spike in applications since October. Calls to the United Way's help line have tripled in the last year.

"Given the resources, we could double our numbers," said Frank Kubik, food program manager for Focus:Hope, a Detroit aid organization that fed 41,000 mostly elderly people last year. Kubik said his program is restricted by charter and budget from serving more than its current number of clients. But if that were changed, he could certainly serve up more meals.

"There's no doubt about it, there's just so many out there that are really struggling right now," he said.

The changing face of hunger
There have been plenty of people struggling in Detroit for a long time. What makes this recession different is the type of people coming in. It's no longer just the homeless, or the really poor.

Now it's middle class folks who lost their $60,000-a-year auto job, or home owners who got caught on the wrong side of the real estate bubble.

Many of these people have never navigated the public assistance bureaucracy before, and that makes getting aid to them a challenge.

"They have no idea where the DHS office is," said DeWayne Wells, president of Gleaners, the food distributor.

To assist these newly hungry, Wells pointed to the United Way's 211 program, where people can call the hotline and speak to an operator that guides them through a wide range of available social services.

The Michigan Department of Human Services is going digital, rolling out a program where people can apply for food stamps via the Web.

That may help ease another challenge in getting aid to the middle class: pride. Many people feel so bad about having to ask for help that they just don't, or they have issues with it once they do.

"They'll say things like 'I've never had to do this before' and they feel a little uncomfortable," said Hagopian, the retired school teacher. But she says times have changed, the good union jobs are disappearing and it's harder and harder to find work.

"I just tell them society is not what it used to be," she said.

Detroit responds
Actually running out of food doesn't seem to be a problem, so far. In fact, because more people are being affected the response seems to be greater.

"A few years ago it was someone you saw a profile of on TV," said Wells. "Now it's your brother in-law, or the people your kid plays soccer with."

Wells said volunteers are up at Gleaners, as is general community awareness.

The Feds have helped too. Food stamp allowances were increased 14% nationwide under the stimulus plan.

Detroiters are also helping themselves in smaller ways. Thanks to the dearth of big supermarkets in Detroit proper - a phenomenon largely attributed to lack of people - and plenty of vacant land, community gardening has caught on big.

...

Hunger hits Detroit - Aug. 6, 2009