US Climb To Record Poverty Height
By Farooque Chowdhury
24 July, 2012
Record poverty and unprecedented rich cohabit in the US, the largest, but decaying empire in today’s world. “The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, said an AP report.
Estimates suggest that about 47 million persons or 1 in 6 were poor in the US last year. The highest level on record was 22.4% in 1959, the year the government began calculating poverty, the report said. Citing analysts it said: the poorest poor, defined as those at 50% or less of the poverty level, will remain near its peak level of 6.7%. It is also apprehended that child poverty will increase from its 22% level in 2010.
“Poverty is spreading at record levels across many groups,” the AP report said, “from underemployed workers and suburban families to the poorest poor. More discouraged workers are giving up on the job market, leaving them vulnerable […]”
Poverty in the US suburbs, according to AP, is increasing. In areas “voters are […] living hand to mouth.”
The situation turns worse, “as unemployment aid begins to run out.” There is apprehension that “[m]illions could fall through the cracks as government aid from unemployment insurance, Medicaid, welfare and food stamps diminishes.”
The news agency surveyed more than a dozen economists, think tanks and academics. The surveyed economists and others included nonpartisans, liberals and conservatives. There was “a broad consensus: The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.”
Debate and discussions are now not only concentrated on poverty rate. Fundamental questions are being raised. The AP report quoted Peter Edelman, director of the Georgetown Center on Poverty, Inequality and Public Policy:
“The issues aren’t just with public benefits. We have some deep problems in the economy.”
It has also been mentioned: “Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson’s war on poverty, launched in 1964, that created Medicaid, Medicare and other social welfare programs.”
Facts are repeatedly showing deeper problems in the mature capitalist economy. Perception of the people is also turning sharp. A Public Religion Research Institute/RNS Religion News survey from November 2011 found about 79% of Americans perceive the rich-poor gap has grown in the past two decades.
Based on separate AP interviews, supplemented with research on suburban poverty of the Brookings Institution and an analysis by the Congressional Research Service and of the Economic Policy Institute the predictions for 2011 were made.
Despite improvement in the unemployment rate from 9.6% in 2010 to 8.9% in 2011, the employment-population ratio remained largely unchanged.
Citing demographers the report said:
“Poverty will remain above the pre-recession level of 12.5 percent for many more years. Several predicted that peak poverty levels — 15 percent to 16 percent — will last at least until 2014, due to expiring unemployment benefits, a jobless rate persistently above 6 percent and weak wage growth. Suburban poverty, already at a record level of 11.8 percent, will increase again in 2011.”
The news agency cited Jose Gorrin, who left Cuba and arrived in Miami in 1980 and is now “surviving on the occasional odd job. His unemployment aid has run out, and he’s too young to draw Social Security.” “I already left Cuba. I don’t know where else I can go”, said Gorrin.
Capitalism provides functional and practical lessons with political-economy that were impossible for others to impart, and the more advanced the economy the more advanced will be the lesson.
Facts from life tell facts of capitalism, which are cruel-facts. Information is essential to know capitalism with its proper face and character.
Citing Richard Cohen, president of Southern Poverty Law Center President, Liz Goodwin, National Affairs Reporter, The Lookout, informed in early February, 2012 (“American kids denied food stamps in Alabama under immigration law”):
“Some U.S.-born children with parents who are illegal immigrants have been denied food stamps under Alabama’s new immigration law”.
Five persons informed the group “they were denied food stamps because they couldn’t prove they were legal residents, even though the food stamps are for their children, who are citizens.”
There are legal questions and law suits related to the issue. But the fact that comes out is: In capitalism, law is above hunger, above hungry children.
Liz’s report said:
“Illegal immigrants are prohibited from accessing most welfare benefits, including food stamps, non-emergency Medicaid and cash welfare programs.
“Last month, Kansas kicked more than 1,000 mixed-status families off its food stamp program when it joined three other states in adopting a stricter food stamp eligibility policy.”
So one finds Joseph Stiglitz telling:
“[T]he American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country for which there are data.
“This is one of the reasons that America has the highest level of inequality of any of the advanced countries – and its gap with the rest has been widening. In the ‘recovery’ of 2009-2010, the top 1% of US income earners captured 93% of the income growth. Other inequality indicators – like wealth, health, and life expectancy – are as bad or even worse.” (“The Price of Inequality and the Myth of Opportunity”, Project Syndicate, June 6, 2012)
He cites “increasing poverty at the bottom.”
He mentions rent-seeking at the top: “[S]ome have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).”
The fact of exploiting the poor can’t be escaped now.
So, Stiglitz writes:
“[P]art of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.
“America has become a country not ‘with justice for all,’ but rather with favoritism for the rich and justice for those who can afford it – so evident in the foreclosure crisis, in which the big banks believed that they were too big not only to fail, but also to be held accountable.”
“America can no longer regard itself as the land of opportunity that it once was. But it does not have to be this way: it is not too late for the American dream to be restored”, said Stiglitz.
The data, the facts, the observations, all are from the mainstream. The facts are so stark that the mainstream now can’t deny the facts of capitalism. Thus they are providing learning material.
Farooque Chowdhury is Dhaka-based free lancer.
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