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US Census poverty data: more poor today than 50 years ago

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Outside a community centre, Los Angeles

Outside a community centre, Los Angeles

A finding of great importance was released this week, of the number of people living in poverty in the United States of America (USA). The data was released by the US Census Bureau, which is carrying out the 2010 census of the USA.

The message is a stark indicator of the acute ill-health of the current global economic system and needs to be treated as such. The number of people living in poverty in the USA rose to 43.6 million in 2009 – this is the largest number since the agency began making such estimates 50 years ago and represents an increase of 3.8 million compared to 2008. As of last year, one in every seven Americans was poor, according to the government’s definition of poverty. The official poverty rate of 14.3% is the highest since 1994.

Handicapped man begging at a traffic light, Los Angeles

Handicapped man begging at a traffic light, Los Angeles

The poverty rate jumped more than a full percentage point, from 13.2% in 2008. There were 8.8 million families living in poverty in 2009, including one child in every five. This is the same rate of child poverty that existed nearly five decades ago, when President Lyndon Johnson announced his “War on Poverty”. With this data, the government of the USA is advised to cease and call off all the other wars it is waging and renew the war on poverty within its own boundaries.

Reflecting the impact of the economic slump and mass layoffs and wage-cutting, the increase in poverty was concentrated among working-age adults and their children – the poverty rate for working-age adults rose from 11.9% to 12.7% percent, for children the poverty rate rose from 19.4% to 20.7%, and the poverty rate for those 65 and older fell from 9.7% to 8.9%.

The new figures on poverty in the USA have powerfully shown that what passes for contemporary economic theory, such as the efficient markets hypothesis, has nothing whatsoever to do with human development. The ‘efficiency’ of markets are a direct expression of the needs of finance capital which has assumed such a powerful role in the world economy over the past three decades.

Food stamps in USAWhy has such devious and destructive theory been turned into policy for so long? Because it serves definite financial interests. Because, without such hypotheses and the support given them by the system we call ‘globalisation’, most of the trading and risk models used by major financial institutions would have to be thrown out.. These figures from the USA – amplified a thousand times in the figures from less industrialised countries – show why the system is choking every species on the planet including our own.

For readers from the USA, there is an objective commentary of the new poverty data here. The actual US Census Bureau data, analysis and supporting information is available here.

The Economic Policy Institute commented: “For the first time on record, the nominal (non-inflation adjusted) income of the median, or typical, household actually fell, from $50,303 in 2008 to $49,777 in 2009. Inflation was negative from 2008 to 2009, dropping by 0.4%, so real (inflation-adjusted) income did slightly better. Real median income declined by $335 from $50,112 in 2008 to $49,777 in 2009, a decline of 0.7%. The real median income of working-age households declined even more, falling by $754 from $56,575 to $55,821. African Americans were hit particularly hard in 2009, with the median African American household income dropping by 4.4%.”

The retail price of fuel advertised at a petrol pump (gas station)

The retail price of fuel advertised at a petrol pump (gas station)

The EPI said the 4.7 million drop in the number of earners working full-time, full-year, was “particularly astonishing”. A disproportionate amount of this decline was among men — the number of men working full-time, full-year dropped by 3.8 million, while there was a 900,000 drop in the number of women working full-time, full-year. The job loss and hours reductions of 2009 meant there was a 3.7 million drop in the number of workers with any earnings at all in 2009, and a 1.1 million increase in the number of workers working part-time and/or part-year.

That’s not all, said the Urban Institute. “This 15-year high still understates the dire straits of many Americans today.” The current recession began in December 2007, and the unemployment rate doubled (from 5 to 10%) between December 2007 and December 2009. The Census poverty estimates are based on family income received during the 2009 calendar year. Since the unemployment rate rose during the year, the 2009 poverty rate understates deprivation at the end of the year.

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