Saturday, September 22, 2012

Recent Poverty Reports Indicates Economic Picture For African Americans Geting Worse.

Last week the US Census Bureau released its annual poverty report. The findings are startling and in many ways in contrast to what have been proffered by the Obama Administration as it pertains to economic improvement and growth in the US economy. The new figures show that things are getting worse for American families.

Findings indicate that those classified by the government as poor remained at record highs in 2011 while the gap between rich and poor increased. One in five American children was poor in 2011 and the poverty rate of young adults age 25-34 living with their parents, based on their own income alone, was 43.7 percent – a reduction of fallen by about 12 percent after you adjust for inflation since the year 2000. In addition, the median household income declined to $50,054 in 2011 -- a 1.5 percent decline from the previous year, not to mention that the median household income has now fallen for 4 years in a row.

These results are in concert with other studies. The National Employment Law Project recently reported that 58 percent of new jobs during the Great Recession were low-wage, paying between $7.69 and $13.83. Moreover, the Gini coefficient, which is how social scientist and economist measure the level of social inequality in a country, has grown at the fastest rate on records dating back to 1993. During 2010, 42 percent of all single mothers in the United States were on food stamps.

The same is consistent for older Americans.   In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger. As of 2011, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger. Overall about 46.2 million Americans live below the official poverty line in 2011, the highest number in more than half a century. This is troubling given the government’s poverty threshold, set at an annual income of $23,021 for a family of four.

The Census data showed that median household income, adjusted for inflation, fell by 1.5 percent from the previous year. The figure was 8.1 percent lower than in 2007 and 8.9 percent lower than its peak in 1999. The income of the typical US family in 2011 fell for the fourth straight year and sank to levels last seen in 1995.

Some would ask how this is connected with the current administration. First, the wage-cutting initiated by the Obama administration, which imposed an across-the-board 50 percent cut in the wages of newly hired workers as part of its 2009 bailout of General Motors and Chrysler, was a significant reason for the additional reduction in household income due to declining wages. Even with the aforementioned, the Obama administration has stated openly that the poverty rate remained unchanged from 2010 to hail the report as a vindication of its policies.

Given the new round of quantitative easing (QE3), it is clear that the Obama administration’s policy focus has been and remains to protect and increase the wealth of the US corporate elite at the expense of the majority of the population. There was no job growth from the first rounds of QE and another round just means banks will get more money while Wall Street suffers. The Administration states that GOP trickledown economics doesn’t work, yet implements QE which is trickledown economics.

The Census report notes the failure not just of one administration or any political party, but rather how politics is design to serve big corporations. Regardless who wins, one can expect the same - mass unemployment, wage-cutting, poverty and social inequality for most Americans, especially minorities.

 

8 comments:

Quen said...

One solution I can think of is losing dependence on the elite big companies. That's just step one though.

rainywalker said...

Excellent blog. Paying off the national debt would be to simple. Perhaps if we forced large companies to train and hire those in poverty. The economy is shot anyway.

geoff said...

More regulation only helps large companies stay large. Corporate lobbying ensures that those with the best legal team (e.g. big biz) will win every time. IMO, deregulation AND eliminating Too Big To Fail is crucial for ensuring all colors and creeds have a chance to compete and prosper against the big boys...too bad our political environment prevents it.

Flores said...

More regulation only helps large companies stay large. Corporate lobbying ensures that those with the best legal team (e.g. big biz) will win every time. IMO, deregulation AND eliminating Too Big To Fail is crucial for ensuring all colors and creeds have a chance to compete and prosper against the big boys...too bad our political environment prevents it.

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