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The Mismeasurement of Poverty in America-How the Numbers are Skewed

September 13, 2011 11 comments

 

Is This All?

 

The official poverty rate nationwide has risen to 15.1%, a rate high enough to generate some mainstream ink. According to various news agencies, this is the highest rate since 1983. But, if the poverty rate were known, it would be closer to one in three than one in six, and be the highest since the last depression ended with the entry of the United States into the Second World War.

The poverty rate is set as a multiplier of a “thrifty food basket”, a method implemented in 1962. The method has not changed since then, but everything else has. The poverty line for a family of four is $22,314. For a single person it is $10,830. It is on this basis that I make my claim that the poverty line is set too low, and that the poverty rate is grossly understated.

Let’s look more closely at these figures. For a single person, the official figure breaks down to $902.50 per month. A room in a house is at least $350 in most areas, and closer to $550 in larger urban areas that may have more income opportunities.  So let’s say $450. Food costs to meet the most basic need for sustenance is about $200. That leaves $350 to cover transportation, phone, medical expenses, utilities, clothing, laundry, and sundries. It is clear that meeting even these basic needs cannot be done on this budget. The situation is equally dire for a family of four, whose poverty level income amounts to $1859.50 a month. A family of four must rent a house for about $1000 a month. It will take about $400 to feed the family at a basic level of nutrition. This leaves about $400 dollars for all other expenses. Again, it can’t be done. The food cost may be mitigated by food stamps, but the calculation for the amount is deeply skewed. If an applicant has any income at all the amount of assistance goes down precipitously. Some states also have low income medical care available but these programs are getting squeezed as tax revenues drop. And, they too only provide the bare bones in care. Many have died for lack of decent medical care.

So, how much does it take to live a basic life in America, and where should the poverty line be set to reflect reality? For one person, it should be at about $1800 a month, or $21600. About what it is four a family of four today. And for the family, it should be in the neighborhood of $70,000 a year just to make ends meet, and to provide the children in the family with a basic foundation of good health.

So, what is the true poverty rate? The median income for a family of four was $67,000, which means that half of all families fell below that level.  Using that figure alone, my estimate of one in three is reasonable. This is the story that should be shouted from the rooftops throughout the land. The reason why it is not is grossly political and is tied to the powerful elite class that dominates the public discourse. That is the subject for a later post.These are the numbers. The actual human misery concealed in the numbers is immeasurable.

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How Shame Keeps the Poor in Line

September 1, 2011 4 comments

Home Sweet Home

While I was in Detroit earlier this summer I had a conversation with a wonderful old woman who had been just at the bottom of the middle class all her life. She had gotten by working two, sometimes three hard and under-appreciated food service jobs, making just enough to get by. Now 62 and suffering from several ailments, including diabetes, she was waiting patiently for her unemployment to kick in, so she could stop standing on her feet sixteen hours a day. She had acquired a tiny bit of debt along the way, not enough to amount to lunch money for a rich person, but for her it was like an insurmountable mountain.

As the story goes, she had been almost starving in order to pay those bills, until a good friend convinced her to buy food first, and tell the companies that she was indebted to that they would just have to wait. Like many of the poor and almost poor, she was conscientious to a fault, and had to be convinced to take care of her own basic needs. Never mind that the interest rates she was paying were usurious. Never mind that there are whole industries in the business of exploiting people like her. It had never even occurred to her to miss a payment or negotiate a better deal.

This is just one of the ways that the poor are kept stuck. I have been traveling the country writing about the economic collapse of 2008 and the depression that has followed. It is amazing to me the number of people who have been harmed by these events, or even had their lives destroyed that will not speak out about it. The overwhelming emotion is shame. Shame in the face of a groaning table full of riches meant for others that they will never partake in.

And why are they ashamed, when the abominable condition they find themselves in in clearly not their fault? I believe it comes from an ugly strain of neo-Calvinism that the rich use to justify behavior that no true Christian would tolerate in themselves, and which the poor internalize. The result is massive shame instead of the appropriate emotion-galvanizing rage!

The Depression is Lumpy

May 16, 2011 4 comments

Depression? It Depends on Where you Live

Most of the time, when we speak of the economy, our language seems to represent it as a sort of national monolith. As if we all experienced the current situation the same way. Nothing could be further from the truth. In fact there are several economies in America, and which one you are a member of will determine whether you are living through a depression, a recovery, or the one of the biggest booms of all time.

The Recovery

For a certain group of people in the upper middle and upper class, there was a fairly steep recession, a terrible scare in the market, and then, for the last couple of years, a slow but steady recovery as stock market prices climbed back to their pre-crash condition. Though this group still suffers from the general malaise of the real estate market, in general they are out there buying things again.

Let the Good Times Roll

Another very small group of 1%ers made obscene profits from the housing and market crashes. These self-styled “masters of the universe” have grown fat on fraud and the misery of others, and have no intention of stopping now. Paying no taxes and avoiding the prison sentences they justly deserve, they are, at this very moment, engaging in further speculation of the type that fuels inflation that none of the rest of us can afford, and causes grave harm to society.

Main Street

For the rest of us, it depends on where you live. When we see articles in print and online touting the “recovery” it is this fact that they rely on. Statistics are easy enough to skew. What we focus on determines what we see. That is why the employment numbers posted by the government are so confusing and at times misleading. It is common knowledge that the official definition of the word “unemployed” serves to skew the figures right from the start. Add to that the excitement whipped up over the job creation figures when many of these new jobs are not at all comparable to the old (lost) jobs, and we have a very murky picture.  It is true that if you happen to live in a state with comparatively low unemployment you probably aren’t catching the worst of the depression. But what would happen if we all moved to these few states?

The Rest of Us

For all of us regular citizens that have the bad luck to be denizens of the more unlucky regions of the country, such as the south, the rust belt, or the whole state of California, the depression is an obvious daily fact of life. In fact, sinse I began using the term “depression” about three years ago, not one person from any of these places has challenged me. I think of this every time I see a headline once again proclaiming that we are in “recovery” from the “great recession”.

The Poor

This final group has been living in depressed conditions forever. The reasons that a certain number of Americans have always lived in poverty are complex, but with enough will on our part it would be possible to reduce these numbers to near zero. Instead, under the flawed logic of supply side economics, that great and cruel experiment in social engineering brought to you by Ronald Reagan and the billionaires club, the number living in misery is actually growing. Soon it won’t matter what state you live in.

Food Insecurity and What we can do About it

May 12, 2011 3 comments

When These Squash Mature They will Feed us all Summer

One thing that keeps coming up over and over again as I travel the country and as I hang out in my Sonoma County home is the lack of food security for those living in poverty in the United States. Food security is an issue everywhere as large corporations have colonized both our supply and our production capacity. But, as prices skyrocket, the system now in place hurts poor people first, and hurts them worst. There are many right now that must choose between food and electricity.

What can be done? The first line of defense is to grow a garden, whether it is on land you control, or in little containers. Whether you do it alone, or with friends and neighbors.  Just get out there and grow some food. This is the weekend for the 350 Garden challenge. All over the country people are starting first-time gardens and taking control of their own supply of fresh produce. For more information on this movement, here is a link: http://www.350.org/en/about/blogs/growing-bigger-350-home-garden-challenge

If you don’t know how to grow your own food now is a good time to start learning. There are master gardener groups in many areas that can help answer questions. The people at your local seed supply will be able to suggest good plants for your eco-system. There may be a free or very cheap class at your local junior college. Or, you could just ask around till you find someone in your world that is a class A gardener. Gardeners love to talk about what they do. Just ask.

Once you get the garden in, there are a few other things you can do. Join or start a locally sourced meat-buying collective. Shop at local grocers and at farmer’s markets. Get to know the people that feed you. Even if you live in the city you can ask questions about where your food comes from, and make wise decisions accordingly.

It is also necessary to get involved politically. The corporations in the factory farming business and in the convenience food business have a vested interest in controlling what you eat. They make periodic attempts at making self-help around food illegal, usually using safety as an excuse. As if human beings haven’t been feeding themselves from this good earth for untold millennia. It is our job as citizens of these United States and this planet to resist these food-control laws. And if they do manage to pass such a law, to use civil disobedience by continuing to produce and share our own food.

The Inflation

April 26, 2011 1 comment

The Inflation Special

I’ve been taking a break from the road for the last three weeks and plan on another ten days or so. The rhythm of life is very different here, but the constant concern with controlling expenses remains the same. I have this in common with at least eighty percent of my fellow citizens. No one but the very rich feel secure in the current economic climate. And the inflation is making it much worse.

During the last depression there was no inflation. But now the price of crude oil is driving up the cost of everything, especially fuel and food. This is tantamount to a very regressive tax, levied not by government, which would presumably give us back the money in the form of programs, but rather by private companies. And, to add insult to injury, the runaway price of oil is being driven not by the invisible hand of the market responding to a shortage but instead by un-regulated Wall Street speculators.

I call it a regressive tax because strong inflation, especially in gasoline, heating fuel, and food, always hurts the poor much more than the rich. A year ago I could buy three bags of basic groceries for about thirty dollars in my local (somewhat upscale but competitive if I shop right) market. Now the same three bags is about forty five dollars. If I don’t have it I must buy less food. The beans and potatoes stay in cart, but the fresh strawberries are traded for a can of pears. A whole chicken will make three meals for two people. The white eggs are a dollar cheaper than the favored brown eggs. I really must get chickens again. I could go to a known discount outlet, but I would have to drive further. Gas is over four dollars a gallon. This cruel calculus is my constant companion. Usually there isn’t quite enough and sometimes there is a dangerous shortfall. And I am lucky because I live in a semi-rural county with a ten month growing season. In the wastelands of the inner city and the rust belt it is so much worse…

Is America in a Recession or a Depression?

March 26, 2011 3 comments

Signs are Everywhere

In the hostel in Madison late one night a few of us were talking about the affairs of the day. I brought my reason for travelling-that is, documenting the depression in America. I was then asked “why do you think this is a depression?” I realized somewhat sheepishly that I have never publicly defended this point of view. So I will now. The available literature is somewhat unclear on the definitions of either term. But all the literature seems to center on the health of the Gross Domestic Product (GNP). But, I would argue that in an economy that has seen tremendous gains in productivity without the need to hire more workers, and that is capable having a “jobless recovery” as we are now, has to come up with a better definition, one that more accurately reflects the human costs of an economic crisis such as this.

I would suggest that we look instead at the true unemployment rate, at the foreclosure rate, at the bankruptcy rate, and at the rate at which small businesses are being forced to close their doors, among other indicators. We could also look at increases in the use of the social safety net such as food stamps, and the increase in homelessness.

A February Gallup poll finds that the official unemployment rate is at 9.8%, which is already quite high, but as we know, the official rate consistently understates the problem. It does not count the 99ers who have exhausted their benefits without finding work, or other “discouraged workers” who have simply given up. It doesn’t count the under-employed worker who lost a job that paid a healthy living wage but now works part time for far less. And it does not count the small business person who has had to close up shop and can’t find any paid work. I don’t know what the exact figure would be if these people were included in the unemployment rate, but I think it would be fair to say it would triple, giving us a rate of 29.4%.

A recent Real Estate Investors Daily states that the foreclosure rates have actually climbed in 2011 from a already alarmingly high rates in the last several years, and warns that “while we are seeing some markets in the US showing signs of “hitting bottom” and some are evening saying some markets have begun a “recovery“, I think we should be very slow and cautious to say the worst is behind us. Perhaps for those markets that had extremely high concentrations of the foreclosure activity (Nevada, Arizona, California and Florida) most of the damage may be done, but for other markets foreclosures are going to continue to put downward pressure on home prices.”

As for personal bankruptcy rates, numerous sources state that they are at a five year high and expected to rise in the coming year. Multiple sources also state that the poverty rate has gone up substantially, and this is poverty defined by an antiquated metric that does not reflect the actual cost of living in the 21st century.

That is why I am calling the economic climate in March 2011 a depression, and not the “great recession” as it has been termed. I may not be an economist, but there are some that agree with me. Columnist Jeff Cox quotes economist David Rosenberg in a 2010 article “Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.” And he is not the only one to say so. The fact that any economist is using the term depression, given the emotional charge of the word and the deeply conservative nature of that profession, should give credence to the feeling that is already shared by millions of Americans.

http://realestateinvestordaily.com/foreclosures/us-foreclosure-rate-and-mortgage-delinquency-rate-continues-to-rise/

http://www.gallup.com/poll/145922/gallup-finds-unemployment-slightly-january.aspx

http://www.mybanktracker.com/bank-news/2011/01/05/personal-bankruptcy-filings-reached-5year-high-2010/

http://www.cnbc.com/id/38831550/Economy_Caught_in_Depression_Not_Recession_Rosenberg

 

Sonoma County in the Twenty-first Century Depression

March 6, 2011 6 comments

A Sign in a Cafe Window in Santa Rosa, CA

This evening I’ll be on a bus from my home in Sonoma County to San Francisco and from there, the rest of California. But today I want to talk about my home county, which is Sonoma. This beautiful little gem sits between the ocean and a string of mountains. It has a varied landscape, including redwood forests, a fertile central plain and breathtaking coastline. The climate is Mediterranean, but around here we just call it great.

But, for all that, Sonoma County is in the world, and the world is in big trouble. As I began to talk about this project with my acquaintances and with passers-by, a different Sonoma began to emerge. First, in the beginning of the melt-down of 2008, there was the mortgage broker I knew from a business net-working group who was losing her own home. As I began to focus on this subject it became more and more visible to me. In a popular Thai spot I was unintentionally eavesdropping on a table full of high-tech employees from a “downsizing” company. The lucky ones who had kept their jobs “for now” were treating their former colleagues to lunch and commiseration.

Then, some of the bigger storefronts began to go dark. Mervyn’s closed but Macy’s remained. Tourism is down all over as people everywhere down-shift their spending habits. The only group that has not down-shifted is the uber-rich. Lucky for Sonoma County, there are features here that are attractive to that demographic. There is a slice of Sonoma County tourism that is doing very well.  As a playground for the wealthy, Sonoma County offers high end restaurants, always full, wineries, quaint little inns, and beautiful scenery. If you can figure out how to be of service to these people you will stay employed.

As I write the official unemployment rate for Sonoma County is 10.5%, which means that if we include 99ers and self-employed people that have closed their doors it is more like 22%. I went down to the food stamp office at the beginning of last year and saw that the line was peppered with the newly impoverished. You can tell the ex-middle class by their dress and demeanor. The demographic that day appeared to be older and female.

Of the people lucky enough to have a job, some really aren’t so lucky after all. I have several friends that lost a job in the last two years only to get another one many months later with longer hours, less pay, and worse working conditions. But, if you want to keep your house you just suck it up. I met a woman the other day who was working a counter at a downtown store. She pointed to her name –tag and said “my father told me, if your name is on a building you are rich. If your name is on a plaque on your desk you are middle class. And if your name is on your shirt—well, you are poor” It turned out that she and her husband had lost a business that had thrived for twenty years in the crash, and then they had lost their house when the bubble burst. She told me that their house had dropped from $900,000 to $500,000. They were willing and able to restructure the debt, but the bank refused. Later the bank sold the property for $250,000 which is half what they were willing to pay. Now a speculator will snap up the house, and she is working retail for $12 an hour. Her husband remains unemployed.