Today is Blog Action Day — an effort among bloggers around the world to use this day to draw attention to a social issue that affects all of us, regardless of our race, ethnicity, nationality, or politics. The theme for this year is poverty and for my contribution to this effort, I would like to take a break from focusing primarily on Asian Americans and instead, give a basic lesson in Poverty 101.
Poverty is almost inevitable in any type of economy but because of the nature and structure of the American economic and political system, American poverty seem to be more likely, persistent, and damaging. According to the Census Bureau, as of 2007, the official poverty rate is around 12.5%, which translates into about 37.3 million people living below the official poverty line.
However, many scholars and critics argue that the official rate underestimates the true extent of poverty in the country. In simple terms, the government’s official poverty line is based on their estimate of what it would cost to provide an individual or a family with a “minimally nutritional diet” (MND), multiplied by three (with the assumption that families spend about 1/3 of their income on food).
But critics argue that an MND was intended only for emergency situations, not long-term use and that an adequately nutritional diet would cost more (much more these days as the cost of groceries continues to rise). Further, most low-income families spend less than 1/3 of their income on food — more like 1/5.
Instead, in today’s economic climate, most low-income families need to divert more of their income to other expenses that have risen significantly in recent years, such as fuel/gas, housing, child care, health care, and education, to name just a few.
Therefore, if these considerations were put into effect to create a new poverty line, it would likely show that the real poverty rate would increase from the “official” amount of 12.7% to something closer to 20% (and instead of 37.3 million Americans living in poverty, there would really be about 61 million).
So who are the poor these days? The traditional image that most Americans generally have of someone in poverty is the down-and-out homeless person, sleeping in back alleys and under freeway bridges. But the reality is very different. As scholars will tell you, increasingly, people who live in or very close to poverty generally look like average Americans — you and me.
In fact, sociologists are increasingly focusing on “The New Poor” — people who have been displaced from blue collar jobs and who don’t have the skills/qualifications necessary for well-paying jobs. In today’s postindustrial economy, there aren’t a lot of jobs in the middle levels anymore; the jobs being created are increasingly located either at the bottom or the top (this what sociologists call the “segmented labor market”).
You need lots of education and skills for the ones at the top and the ones at the bottom simply don’t pay enough, are not stable enough, or offer any meaningful benefits to allow workers to achieve social mobility. This situation makes the “New Poor” different from the “Old Poor” — the opportunities to escape poverty are becoming increasing scarce.
Further, many of the “new poor” are also the “Working Poor“: even having a full-time job is not a guarantee from living in poverty. For example let’s use one scenario: a single parent with two kids who works 40 hours/week, for 50 weeks/year, at $7.60/hour (remember that federal minimum wage is $6.55) would still live below the poverty line.
In fact, studies show that one-seventh of all poor people work full-time for the entire year. Some estimates point out that there are about 15 million Americans who work regularly but who still below or near the poverty line. Once again, the reason why poor people who work cannot seem to escape poverty is because they generally work at low-paying dead end jobs at the bottom of the labor market.
The working poor are at a further disadvantage because since they work, they are not eligible for public assistance such as subsidized housing, medical care, and food stamps — they are penalized for trying to be productive citizens. In fact, in contrast to the stereotype of the “welfare queen,” only about 1/4 of all poor families receive any form of public assistance (payments or non-cash such as food stamps, free or reduced lunches, public housing, or Medicaid). In other words, the vast majority of poor people receive absolutely zero public assistance at all.
In further contrast to “traditional” perceptions of the poor, recent Census reports also note that for first time in U.S. history, most people in poverty live in suburbs, not central cities. Also, in terms of age, the group with the highest poverty rates are children (17.6% of all poor are children, or about 13 million) and among all poor people, 36% are children. Children are also the group most likely to be “severely poor” — living in families that are below half the poverty line.
What all of this means is that poverty is much more complex than what we normally see portrayed in movies, television, and other popular media. And increasingly, poverty is an issue that affects not just low-income Americans, but average middle-class Americans as well.
I’ve written elsewhere about how class/wealth inequality is getting worse in the U.S. and how the gap between the rich and everyone else keeps getting bigger. To sum up this situation, you should know that:
- Today, the richest 1% of American households own about 40% of all wealth in the country
- Stated differently, the richest 1% of U.S. families have more wealth than the entire bottom 95% of Americans combined.
- Since 1979, the median family income for the bottom 60% has barely risen at all while for the richest 1%, it’s gone up 201%.
- After adjusting for inflation, in the bottom 60% of U.S. families have less wealth today than in 1973
I hope you can recognize the magnitude of that last point — the bottom 60% of American families are doing worse today than in 1973 — they’ve experienced downward mobility. In other words, for the first time in a very long time, perhaps ever in American history, today’s generation of workers are likely to be doing worse than their parents.
This should explain why so many average, middle class families are struggling to make ends meet these days — why so many can’t seem to escape debt, or to pay their bills on time, and are basically living from paycheck to paycheck.
In other words, these days poverty is not just about the destitute. Their situations are clearly severe, but increasingly, poverty is beginning touch the middle class. And with the economy going down the toilet like it’s been doing, it’s likely to get worse before it gets better. One of my best friends recently told me that because of the recent economic troubles, he’s had to close his restaurant and declare bankruptcy.
Sadly, his situation is become all too common in American society. While I wish I could have written a positive and uplifting post about poverty for Blog Action Day, I will say that we can take action to begin addressing this problem — starting with Election Day on November 4 and who you will choose to be our next President.