2012 issues: Poverty, wealth and inequality

Poverty is real, and it’s not caused by laziness and moral weakness.

Now I hear one of my sisters and at least three of my nieces screaming at me, “Yes, it is! I know this guy who just drinks and won’t work! My friend at work has a next door neighbor who just keeps having one kid after another and doesn’t even try to get a job.” Okay — there are some people who screw up, and some of them are poor because they screw up, but the fact is that poverty is mostly not caused by laziness and moral weakness. 

Who’s poor in the United States?

People in low-wage jobs: Many working people are poor. For people who can find only part-time employment (many food service employees, for example), that might seem understandable. More than 75 percent of families where no one has a full-time, year-around job are in poverty. (Have you looked for a job lately? No? You’re lucky. While the unemployment number is slowly creeping downward, it’s still damned hard to find a job, much less a job that pays a living wage.)

Even people working full-time at minimum wage often fall below the poverty line. From testimony before Congress, published by the Brookings Institution:

“Millions of Americans have low-wage and part-time jobs that do not provide them with enough money to support a family at or above the poverty level. If a lone mother worked year-round, full-time at the minimum wage ($7.25 per hour), with no vacations and no time off for illness or to care for sick children, she would earn $15,080, about $2,500 below the poverty level for a mother and two children.”

Working your way out of poverty is a great idea. If you have kids and daycare costs as much as you can earn, then working your way out of poverty doesn’t work. Think there’s affordable daycare or public subsidies for daycare? Think again — virtually every safety net program, inadequate to begin with, has been cut in recent years. Housing subsidies? Get in line — and wait for years. Childcare assistance? Only for the lucky.

Children: About 35 percent of the people living in poverty in the United States are children: 16.4 million children out of the 46.2 million people living in poverty.

People of color: Black and Hispanic poverty rates dropped to the lowest rates ever in 2000, though still remaining higher than the rest of the population. Then came the recession, and poverty rates for both groups rose again, to about 27 percent, compared to about 15 percent for the overall U.S. population. Historic discrimination, low-wage jobs and last hired/first fired practices contribute to a huge disparity in employment and poverty for black and Hispanic workers.

(For more details on who’s poor, see the website of the Institute for Research on Poverty at the University of Wisconsin.)

What is poverty?

The official poverty line is set very low. The Census figures are:

One person – $11,464
Two people – $14,657
Three persons (including one child) – $18,106
Four persons (including two children) – $22,811

Those numbers include before-tax wages, unemployment, social security, public assistance, child support, alimony, veterans’ benefits, pensions … just about every form of cash income. They don’t include housing subsidies (which are very limited and have years-long waiting lists), or food stamps (about $31.50 per person per week), or other non-cash benefits, such as free or reduced-price school lunches.

Think about what groceries cost for your family. Think about housing costs. In the Twin Cities, the average rental cost for an apartment (not a house) is $951. That’s $11,412 per year — more than half the total, before-tax poverty level income for a family of four.

Families with income up to double the official poverty rate are considered low-income. In 2009, at the height of the recession, one working family out of every three was low-income.

Who’s rich?

The PBS News Hour charts say it well:

In the academic study that preceded the PBS series, 92 percent of the people surveyed wanted to live in “Country B,” where wealth is sort of, but not quite, evenly distributed, rather than “Country C,” where the richest 20 percent of the people own a whopping 84 percent of the wealth. Where, in fact, the richest one percent of the people own more than a third of the country’s wealth.Country C — that would be us.

Yes, the United States is “Country C.” Sweden is “Country B.” (The equal distribution of “Country A” doesn’t exist anywhere in real life — that’s the mythical land of Freedonia.) The PBS series explores, first, rising inequality in the Land of the Free, Home of the Poor, and second, differing opinions on whether that inequality contributed significantly to the recession in Americans Facing More Inequality, More Debt and Now More Trouble?

For more on income inequality and poverty, take a look at these previous posts:

Class warfare: Still nickeled and dimed

Poor and near-poor: Struggling in Minnesota

Class warfare: How much money is middle-class?

[I’m taking time off this weekend for a writing retreat. I’m going to spend time writing about several election issues. In some ways, this feels like a futile exercise — who’s listening to me, anyway? And hasn’t it all been said already? Even so, I’m going to do it, writing what I think and linking to sources I trust, where you can get a lot more information. This post is one of my 2012 issues series.

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