[Once again, reality is a stunning refutation of the claims of the irresistable American Dream, ever-progressing, of US superiority over all others, greatness, a “gold mountain” for migrants running from poverty and oppression elsewhere. Since most of the statistics cited here come from official sources, which routinely give all such stats a cosmetic “uplifting sheen”, the situation on all fronts is actually many times worse, as the re-proletarianization of the falling middle class becomes the main stream. — Frontlines ed.]
Sobering New Evidence: at Least Half of Americans are Broke
The Contributor, February 10, 2015
“Happy Monday! S&P 500 now up 10% for year” —CNN Money
“Third-quarter U.S. economic growth strongest in 11 years” —Reuters
“The U.S. economy is on a tear” —Wall Street Journal
Half of our nation, by all reasonable estimates of human need, is in poverty. The jubilant headlines above speak for people whose view is distorted by growing financial wealth. The argument for a barely surviving half of America has been made before, but important new data is available to strengthen the case.
1. No Money for Unexpected Bills A recent Bankrate poll found that almost two-thirds of Americans didn’t have savings available to cover a $500 repair bill or a $1,000 emergency room visit. A related Pew survey concluded that over half of U.S. households have less than one month’s income in readily available savings, and that ALL their savings — including retirement funds — amounted to only about four months of income. And young adults? A negative savings rate, as reported by the Wall Street Journal. Before the recession their savings rate was a reasonably healthy 5 percent.
2. 40 Percent Collapse in Household Wealth Over half of Americans have good reason to feel poor. Between 2007 and 2013 median wealth dropped a shocking 40 percent, leaving the poorest half with negative wealth (because of debt), and a full 60% of households owning, in total, about as much as the nation’s 94 richest individuals. People of color fare the worst, with half of black households owning less than $11,000 in total wealth, and Hispanic households less than $14,000. The median net worth for white households is about $142,000.
3. Cost of Living Surges as Income Falls Official poverty measures are based largely on the food costs of the 1950s. But food costs have doubled since 1978, housing has more than tripled, and college tuition is eleven times higher. The cost of raising a child increased by 40 percent between 2000 and 2010. And despite the gains from Obamacare, health care expenses continue to grow. As all these essential costs have been going up, median household income has been going down since 2000, with the greatest drop occurring since 2009, as 95 percent of the post-recession income gains have gone to the richest 1%.
4. Lots of New Jobs (Below Living Wage) “‘Amazing’ jobs report, apart from wages” —Marketwatch Amazing at the top and at the bottom. According to the Federal Reserve Bank, there have been job gains at the highest paid level — engineering, finance, computer analysis; and there have been job gains at the lowest paid level — personal health care, retail, and food preparation. But the jobs that kept the middle class out of poverty — education, construction, social services, transportation, administration — have seen a decline since the recession, especially in the northeast. At a national level jobs gained are paying 23 percent less than jobs lost. Worse yet, the lowest paid workers, those in housekeeping and home health care and food service, have seen their wages drop 6 to 8 percent (although wages overall rose about 2 percent in 2014).
5. Our Greatest Shame: Half of the Children Feeling Poverty Over half of public school students are poor enough to qualify for lunch subsidies. There’s been a stunning 70 percent increase since the recession in the number of children on food stamps. State of Working America reported that almost half of black children under the age of six are living in poverty. The celebratory quotes about a booming economy seem so far away.