United States of poverty

Posted: 17 September 2010 in Uncategorized
Tags: , , , , ,

Poverty in the United States is rising—and pundits are falling all over themselves arguing either that it’s not as bad as it seems and/or might have been.

Robert Greenstein, to consider but one example, offers both arguments:

Poverty would have risen much higher without the temporary expansions in unemployment insurance benefits provided by the Recovery Act and other legislation. In 2008, unemployment benefits kept 900,000 Americans out of poverty. In 2009, by contrast, unemployment benefits kept 3.3 million Americans out of poverty, an analysis of today’s data shows. The majority of the increase in UI benefits in 2009 came from the Recovery Act. . .

the official poverty figures do not count tax credits or non-cash benefits as income — and as a result, do not reflect the poverty-reducing impact of the Recovery Act’s substantial increases in tax credits for low-income working families and food stamp benefits. A broader poverty measure that Census will issue later this year, which most analysts favor and which counts these benefits, will almost certainly show a considerably smaller — although still quite substantial — increase in poverty in 2009.

That means he doesn’t have to consider the long-term trends of poverty in the United States or the links between poverty and both inequality and race. In other words, he (like all the other pundits I’ve read or listened to since the Census Bureau released its figures) can avoid analyzing what the latest poverty numbers say about the conditions and consequences of U.S. capitalism.

Let’s start with a few simple numbers—the percent of people by ratio of income to poverty level,* comparing 1975 (the first year for which there’s a comparable series) and 2009 (from Table 5):

Sure, poverty rose between 2007 and 2009 (from 12.5 to 13.2 and then to 14.3 percent). The effects of the current depression are bad enough (it is the largest year-to-year increase since 1980). But also look at the longer term: the percentage of people living below (.5), at (1), or above (1.5 and 2) the official poverty line has mostly risen (with the exception of twice the poverty line) between 1975 and 2009. And, in 2009, 1 in 3 Americans lived at or below twice the poverty line. If that’s not an indictment of what U.S. capitalism has wrought over the course of the past 35 years I don’t know what is!

Now, look at what’s happened to poverty rates by race (from Table 18):

Again over the long term, the percentage of both Whites and Hispanics in poverty has increased, while the rate for Blacks has decreased slightly. But, the rate of poverty for both Blacks and Hispanics in the United States remains high, and continues to be much higher than that for Whites. We can see that, over the course of the past 35 years, the extreme racial disparities of U.S. capitalism have only been reinforced.

And one last set of numbers, concerning overall income inequality. Here’s a look at the incomes of the top 10 percent over the course of the past 100 years:

The continued existence of massive poverty in the United States coincides exactly with the worsening distribution of income since the mid-1970s.

While I do think we need to pay attention to the significant rise in poverty over the course of the past two years, within the current crises of capitalism, we shouldn’t lose sight of the fact that U.S. capitalism has continued to produce massive poverty—overall and with large racial disparities—and an increasingly unequal distribution of income for the past 35 years.

We will be able to say the discussion in economics has become serious when it turns from the current topics of choice—tax cuts, fiscal deficits, Chinese exchange rates, and quantitative easing—to the causes and consequences of the massive poverty suffered by a larger and larger number and percentage of Americans. And, of course, when they begin to seriously consider alternatives to capitalism.

* The official poverty threshold for a family of four with two children was $21,756 in 2009.

  1. […] demographics of the United States of poverty show both that poverty is much worse than the numbers indicate and that poverty can be […]

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