Poor Prospects in a “Middle Class” Society

Gary Lapon sets out the facts about a country where ‘have-nots’ outnumber ‘haves’.

One of the biggest myths about the United States is that it’s a mostly “middle class” society, with poverty confined to a minority of the population.

The reality is exactly the opposite: The vast majority of people in the United States will experience poverty and economic insecurity for a significant portion of their lives.

A recent Associated Press feature article—relying on data from an exhaustive survey to be published next year by Oxford University Press—has put this in stark terms: Around four out of every five people in the U.S. will endure unemployment, receive food stamps and other forms of government aid, and/or have an income below 150 percent of the official poverty line for at least one year of their lives before age 60.

That startling statistic shows the truth about a society where there are a lot more have-nots or have-littles than have-enoughs. But there are so many other myths and misconceptions about poverty in America. For example, the AP and Oxford statistics show that while people of color suffer economic difficulties at disproportionately high rates, large numbers of whites fall into the same category. Similarly, more whites benefit from social programs such as welfare and food stamps than any other group.

These facts contradict the racist stereotypes about who is poor or at risk of falling into poverty. And they underline the reality that the vast majority of Americans of all races are in the same boat—they scramble to get by, at best—while only a small minority of people live comfortably throughout their lives, and a tiny few are obscenely rich.

The official government statistics measuring poverty often obscure more than they reveal.

According to the U.S. Census Bureau, in 2011, there were 46.2 million people living below the federal poverty level—15 percent of the 308 million people living in the United States.

If this statistic were an accurate reflection of the number of people living in poverty, it would still represent a crisis. However, actual levels of economic and social deprivation and insecurity are much higher than the official figures show—because they are based on outdated measures that greatly underestimate the true level of impoverishment in the richest country in the world.

For example, in 2013, an individual living in the continental U.S. must make less than $11,490 a year to be counted as officially poor. For a family of four, the poverty level is $23,550.

Those are paltry sums, as anyone reading this article knows. Even the figure used in the AP and Oxford research of 150 percent of the federal government’s poverty level—$17,235 for an individual and $35,325 for a family of four—is painfully low. In many parts of the country, making ends meet on twice the federal poverty threshold is difficult if not impossible.

That’s what the Economic Policy Institute (EPI) found when its researchers developed their “Family Budget Calculator,” which, unlike the federal measures, takes into account specific regional differences in the prices of necessities. The EPI looks at the costs of a variety of goods and services—housing, food, health care, child care, transportation and other basic needs – to determine what a family in a given area would need to earn “in order to attain a secure yet modest living standard.”

Regional variations can be extreme. For example, average rent in New York City is now over $3,000, compared to just under $600 in Oklahoma City. But according to EPI, its calculator shows that families everywhere “need more than twice the amount of the federal poverty line to get by.”

Nationally, four in 10 people live at or below 200 percent of the federal poverty level. Thus, the number of people in the U.S. who would be classified as poor based on this more accurate standard is more than two-and-a-half times greater than the official figure.

The survey data reported by AP reveal even more widespread experiences with poverty—79 percent of everyone in the U.S. will spend at least one year of their lives facing “periodic joblessness, reliance on government aid such as food stamps or income below 150 percent of the poverty line.”

The researchers who calculated that statistics believe things will only get worse if current trends continue—by 2030, they expect that percentage to reach 85 percent.

So economic insecurity isn’t the exception, but the rule. Another recent survey found that:

Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50 percent of those surveyed have less than a three-month cushion and 27 percent had no savings at all.

The consequences of all this plays out in numerous ways in people’s day-to-day lives.

For example, bouts of unemployment can have serious, lasting impacts on those affected, even for those who find another job. Unemployment is associated with mental health issues such as depression and anxiety, as well as chronic diseases such as diabetes and high blood pressure.

For children, “poverty experienced at any stage of the child’s development is associated with reduced cognitive outcomes,” according to researchers at the University of Queensland in Australia.

Increasingly, a period of unemployment can trigger a longer term, if not permanent, drop in living standards. According to the National Employment Law Project, during the Great Recession, 60 percent of lost jobs were at the middle level of wages, paying between $13.84 and $21.13 an hour, but only 22 percent of new jobs in the recover fell into this category. By contrast, low-wage jobs accounted for 58 percent of all new jobs created in the recovery.

Many of these new jobs are in retail and fast food, where workers are often forced to work multiple jobs and still fail to make ends meet. As Terrance Wise, a worker at Pizza Hut and Burger King in Kansas City, who went on strike this month to demand $15 per hour, told Democracy Now!:

I have three lovely daughters and an equally lovable fiancée. And I’m working two jobs at about 50, 60 hours a week, so I’m leaving in the morning…and my daughters were still sleeping. When I get off tonight, they will probably be asleep again. So it’s consecutive days where I don’t get to see my daughters… That’s one element that’s really the hardest…

It’s just an everyday hustle. I use public transportation every day, so I have to leave early to get to work. So I’m gone 15, 17 hours a day. It’s just really hard—a struggle every day.

The flip side of that struggle—and of the fact that vast majority of people in the country live in poverty now, have lived in poverty in the past, or will in the future—is that a relatively small minority has amassed such fantastic wealth that they will never have to worry about going without, even if they never earn another cent.

The 400 richest Americans, with a total net worth of $1.7 trillion as of last year, were worth an average of $4.2 billion each, enough to support over 89,000 families of four at 200 percent of the poverty level for an entire year.

It is no coincidence that overall corporate profits, measured as a share of the gross domestic product, are at record highs while overall wages are at record lows as a percentage of the GDP. The threat of economic insecurity is an important part of discouraging workers’ struggles and increasing profits at the expense of the living standards of the vast majority. The personal experience of going without—and the constant reminder from seeing family, friends and others in the community deal with stretches of poverty and unemployment—sends the message that workers who step out of line can face the same fate.

The research covered in the AP feature shows growth in the rates of white poverty, something often overlooked in mainstream media accounts. According to AP:

By race, nonwhites still have a higher risk of being economically insecure, at 90 percent. But compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76 percent enduring periods of joblessness, life on welfare or near-poverty.

According to the Census Bureau, there were more than 19 million non-Latino whites living below the poverty line in 2011, compared to 11 million African Americans and 13 million Latinos.

The U.S. Department of Agriculture reports that 36.9 percent of food stamp recipients are non-Latino whites, while 22.8 percent are Black and 9.6 percent are Latino(the race of recipients was unknown in 18.4 percent of cases, according to the USDA). Blacks, whites and Latinos each accounted for roughly the same percentage—between 30 and 32 percent—of recipients of the main welfare program, Temporary Assistance for Needy Families.

Despite these facts, poverty in the U.S. is often racialized by political leaders—more often and more brazenly by Republicans, but by Democrats, too. The common stereotype about these government programs is that they benefit an “undeserving” (read: Black) minority, not workers of all races.

Ronald Reagan, for example, explicitly made race a part of his caricature of Cadillac-driving (Black) “welfare queens” and “young bucks” who were taking advantage of hard-working (white) “taxpayers.” During the 2012 Republican primaries, Newt Gingrich recycled the same racist filth when he called Obama the “food stamp president.”

But Democrats have latched on to the same stereotypes when they were the ones wielding the budget act. It was a Democrat, Bill Clinton, who promised to “end welfare as we have come to know it”—and carried through his campaign pledge when he signed the “Personal Responsibility and Work Opportunity Act.” Likewise, Hillary Clinton, in her losing bid for the 2008 Democratic presidential nomination, was playing the same racist game when she claimed she was better positioned than Barack Obama to win the support of “hard-working Americans, white Americans.”

The facts, however, undermine these commonly used stereotypes. As the AP pointed out, “For the first time since 1975, the number of white single-mother households living in poverty with children surpassed or equaled Black ones in the past decade, spurred by job losses and faster rates of out-of-wedlock births among whites.”

The fact that widespread poverty and insecurity crosses racial lines on the one hand, but that racist stereotypes are used to justify attacks on social programs that benefit the majority on the other, means that struggles for economic and racial justice must be intertwined in order for either one to be successful. Those who seek to defend and extend unemployment insurance, welfare, food stamps and other benefits that help working people must challenge the racism used to undermine them—while those who seek racial justice must also struggle for economic justice.

On this 50th anniversary of the 1963 March on Washington, it is important to remember that the civil rights demonstrators were demanding jobs and freedom. The calls for racial and economic justice were linked, as they were again in the Poor Peoples’ Campaign that Martin Luther King Jr. would help launch a few years later. Speaking of the campaign, King called it “a new co-operation, understanding, and a determination by poor people of all colors and backgrounds to assert and win their right to a decent life and respect for their culture and dignity.”

That struggle for the right to a decent life is still with us today.