Hard Times in America
Five facts that show half of America is seriously struggling
Happy Monday! S&P 500 now up ten percent 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 five percent.
2. Forty 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 percent 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, healthcare 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 one percent.
4. Lots of new jobs (below
“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 healthcare, retail, and food preparation.
But the jobs that kept the middle class out of poverty—education, construction, social services, transportation, and 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 healthcare and food service, have seen their wages drop six to eight percent (although wages overall rose about two percent in 2014).
5. Our greatest shame: half of the children in 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.
Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.org, PayUpNow.org and RappingHistory.org, and the editor and main author of American Wars: Illusions and Realities (Clarity Press).
—AlterNet, February 8, 2015