Millions of Americans will be forced into poverty in the coming years even as the US hauls itself out of the longest and deepest recession since the second world war.
A study from Indiana University, released on Wednesday, says the number of Americans living below the poverty line surged by 27% since the beginning of what it calls the "Great Recession" in 2006, driving 10 million more people into poverty.
The report warns that the numbers will continue to rise, because although the recession is technically over, its continued impact on cuts to welfare budgets and the quality of new, often poorly paid, jobs can be expected to force many more people in to poverty. It is also difficult for those already under water to get back up again.
"Poverty in America is remarkably widespread," concludes the study, At Risk: America's Poor During and After the Great Recession. "The number of people living in poverty is increasing and is expected to increase further, despite the recovery."
The white paper, drafted by the university's school of public and environmental affairs, which is among the best ranked schools of its kind in the US, says that six years ago, 36.5 million Americans fell below the poverty line. By 2010, the number of people living in poverty rose to 46.2 million and continued to grow over the past year.
"The Great Recession has left behind the largest number of long-term unemployed people since records were first kept in 1948. More than 4 million Americans report that they have been unemployed for more than 12 months," said the report.
John Graham, dean of the school and one of the authors of the report, said that the numbers of "new poor" will continue to rise.
"One of the big surprises is that poverty in the United States is likely to continue to increase even as the economic recovery unfolds," said Graham. "The unique feature of the great recession is not just the high rate of unemployment, but the long duration of unemployment that millions of Americans have experienced. [For] a lot of these long-term unemployed, the job that they had won't exist when they go back in to the labour market."
Graham said that many of those who once held well-paid jobs will be forced to settle for lower paying work, trapping some in a permanent cycle of poverty.
"As a consequence they will be poor or near poor for a substantial period of time," he said.
The latest census data shows that nearly one in two of the US's 300 million citizens are now officially classified as having a low income or living in poverty. One in five families earns less than $15,000 (£9,600) a year.
The Indiana University study says that the numbers of people falling into poverty is also likely to grow because of severe cuts to state and federal welfare budgets.
"The states by their constitutions all have to have a balanced budget each year. A lot of states are already in the process of cutting back their safety net programmes at the same time that poverty is increasing," said Graham. "Their needs are going up but the programmes are receiving less support. It's going to continue because the revenues of state governments are not increasing as rapidly as is needed and the federal government will be under a lot of pressure because of its large deficit to decrease funding given to the states."
The report warns that the situation is likely to become even worse if the long-term unemployed lose their jobless benefits. Congress extended them for two months at the end of the year, but it is unlikely they will be continued indefinitely.
Among the most severely affected states are Florida, Nevada and Arizona, which have been particularly badly hit by the housing foreclosure crisis, and Michigan and Ohio, which have seen the collapse of traditional manufacturing.
Minorities are among the hardest hit. More than one in four African Americans and Hispanics is officially recorded as living in poverty. About one in 10 white Americans fall below the poverty line.
"We can expect to find that the most vulnerable parts of our society are the ones who will recover most slowly from a deep recession like this. More have gone in to poverty and they'll be slower coming out of it," said Graham. "If you look at the educational levels and skill levels of African Americans and Hispanics, they are more vulnerable as the job market tightens. They don't have either the extra edge in education or skills that white Americans do."
The report says that the situation would have been much worse had it not been for the Obama administration's 2009 federal stimulus package, which increased child health insurance for poorer families, and cut taxes for low income workers.
Still, the study says that although unemployment is officially falling, that may not be the whole story. Some workers give up looking for jobs and are no longer counted in the unemployment rate.
"Although the official rate of unemployment is declining, much of this apparent progress is attributable to the fact that many adults are giving up on the search for a job," it said.
The report argues that a better measure of how well an economy is creating employment is the "jobs-to-people ratio". It says that in a healthy economy the range is between 0.60 and 0.70. The US fell within that range until it fell to 0.582 at the end of 2009. It had risen only to 0.585 in November 2011.
"These data suggest that the reported progress in reducing the rate of unemployment may not be as encouraging as we think since increasing numbers of the unemployed may simply be giving up on the search for a job," the report said.
Comments
Sign in to comment or to join the conversation
11 January 2012 5:53PM
"The latest census data shows that nearly one in two of the US's 300 million citizens are now officially classified as having a low income or living in poverty. One in five families earns less than $15,000 (£9,600) a year."
Great article. Why am I having to read this on a UK site? Why is this not a debate question for our candidates? Better question: Why did the UK go down the road of austerity? All her citizens can simply look across the ocean and see the disastrous results.
I am surrounded by citizens who are one major medical event away from losing everything even with private insurance. I am surrounded by churches who now despise the poor and preach prosperity. I am surrounded by utopian nuts who think this is capitlism working properly. And I am disparaged because the poor only attack one another in a desperate circle fighting over the tiniest of scraps blind to those who hold the strings.
11 January 2012 6:40PM
The rich get richer as the poor get poorer thanks to our fabulously unfair greed driven morally corrupt totalitarian system with a lying president who now has the right in law to murder his own citizens. Welcome to the land of the free and home of the brave. The funny thing is they still believe it is worth exporting!
11 January 2012 6:45PM
Ed Pilkington, writing with regard to Gitmo, Bagram, and our other "black sites" elsewhere in today's Guardian, refers to "a stain on America's conscience." Well, at least the headline writer does. But this implies America has a conscience. As this article also demonstrates, this simply is not the case.
11 January 2012 6:57PM
If this is how the richest nation on earth decides to distribute its undeniable wealth then heaven help the planet.
Not that I believe in God or anything like that...clearly no-one's going to help because the only people who can help are too busy counting their billions.
11 January 2012 7:26PM
WOW! Poverty gets worse in a recession?? And it's likely to get worse as the recession goes on??
Who woulda thunk it. Revolutionary stuff here.
11 January 2012 7:28PM
Just out of curiosity, is poverty getting worse in in other western nations hit by the recession?? I really hope not, it would be absolutely shocking to find out that countries that have weakened economies had more poverty, who ever could predict that that would be a consequence of recession??
11 January 2012 7:30PM
@lostalex
If that's all you think the article said then may I suggest you read it again.
11 January 2012 7:44PM
51% of working aged adults in America pay NO income tax. Something wrong with that picture- the rest are left to pay for the majority. There are jobs out the wazooo in the newspaper, on-line, everywhere. Only ones who can't find a job are those who don't want to work. We need to kill that 99 weeks of unemployment bullshit.
And the top 10% of earners pay 90% of the taxes already. I'm tired of seeing hos in line at the grocery with a pile of steaks and paying with EBT. They got their nails and hair all done, have a cell phone (not the free crap either) and go get into a nice car.
We need the EIC and section 8 housing cancelled- pay people to warehouse unwanted kids? We're subsidizing what we don't want.
11 January 2012 7:48PM
The article says who is doing all the work and who is receiving the benefits, they don't want to work! Get out of your high-and-mighty classroom study center, down to a ghetto, they're all standing on the corners selling or buying drugs, prostitution and weapons. Do us a favor and take an ass-kicking while you're there, get some real world.
"More than one in four African Americans and Hispanics is officially recorded as living in poverty. About one in 10 white Americans fall below the poverty line."
11 January 2012 7:51PM
And, you so conveniently forgot to add, are surrounded by people who do not want to go to school, never did, don't want to work, would rather live in crap with a little gubmint check.
11 January 2012 7:54PM
@grendel65che
So you're saying 46% of Americans are "standing on the corners selling or buying drugs, prostitution and weapons".
Wow!!
If that's true - there's a much bigger story here which is being ignored!
11 January 2012 8:05PM
Grendel65che,
The "half of Americans pay no taxes" talking point you're regurgitating is extremely misleading.
While it's true that the top 1 percent of wage earners paid 38 percent of the federal income taxes in 2008 (the most recent year for which data is available), income tax is less than half of federal taxes and account for less than 20% of all taxes collected in the US, the rest of which is mostly made up by deeply regressive taxes like Social Security and Medicare.
Social Security, Medicare and unemployment insurance taxes (payroll taxes) are paid mostly by the bottom 90 percent of wage earners. That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.
The poor do actually pay taxes, and lots of them—just not lots of federal income taxes, and that total burden is greater than what the wealthy pay. If you need me to cite sources and want numbers, I'll do it, but the burden on the poor is heavier than the burden on the rich in almost every state in the union.
Facts are a bitch.
11 January 2012 8:16PM
Forsworn;11 January 2012 5:53PM
Hi, This is not on a US site because the US is a corporate state where the media suits the interests of corporate USA.
These sort of stats would be very hard to circulate through the mass daily media of UK also; we live in dumbed down times. I believe TV to be responsible for that; when people had to read ideas from newspapers and that was their only access to information; then newspapers were better also but the working man was better educated I believe.
The great scandal is that with these stats corporate USA is still prepared to have armed forces bigger than the next 10 nations at 45% of tax take.
Thats corporate fascism.
11 January 2012 8:25PM
46 million Americans live below the poverty line? Oh, please....There was a book published in the 1950's called "How To Lie With Statistics", with which I am certain many of these academics--all employed, and determined to remain so by pushing numbers that support their research--have more than a passing familiarity. Certainly, there are a number of Americans who may fall below the poverty line in terms of income (which determines how much a person takes in, not how much they have) but they are disproportionately located in certain areas of the country. Twenty-five percent unemployment in the ghetto is no more a reflection of reality for the nation than is the reported five percent unemployment among college graduates. Are there problems? Absolutely. Are they unacceptable? Absolutely. Is it blanketed evenly across the US? Absolutely not. And even if, by some stroke of academic luck, that 46 million figure--not, LaughingNoam, 46%--is reasonably accurate, understand that even in the best of times, a significant proportion of the population will always be under the poverty line...due to bad choices, unseen calamity, the ebb and flow of commerce, or various combinations thereof.
11 January 2012 8:45PM
They need to do a survey here on people who were on unemployment and now are no longer. Also a survey of people who are on unemployment for 12 months or more and find out why. It is absolutely crazy here. I am one of those over 12 months AND I have a master's and I am a licensed professional. But I came home from another state and this caused complications. Too much discrimination because your experience is not local, your license is new to the state, your background is similiar but not exact, and then there is the normal closed-mindedness. I have found a group of people working independently and they are helping me to be able to work on my own - which is weaning me off of unemployment. I couldn't get a job, so I was forced into private practice. It isn't a bad thing if you have a lot of money saved up in preparation but if you weren't ready for it, well it isn't easy. I am grateful and lucky that I am able to have the qualifications so that I could do such a thing.
Meanwhile, our government president wannabees are doing absolutely nothing except hemming and hawing about each other. No one is really dealing with unemployment here but I do see a lot of government officials taking credit for lower unemployment rates even though they made no contributions to the decrease. It was pure luck on their part and stupidity of the audience believing things are better.
11 January 2012 9:28PM
Social Security, medicare are ENTITLEMENTS NOT TAXES, check your invalid statements. Why? Because of age, income etc., people are entitled to them. And you are dead wrong on federal income tax NOT being the federal govt.s largest source of income, it is by far.
TRUTH is a bitch, huh?
11 January 2012 9:35PM
Honorable people like Adam Smith, Ludwig von Mises, Frederich Hayek must have forgotten to calculate, or not even dreamed of calculating in, people and events such as Madoff, Enron, Lehman, derivatives, day trading, etc.
I voted for Libertarian Ron Paul in 1988. I have, since then, "awakened from the medication" and realized capitalism IS the problem -- war, xenophobia, racism, sexism, voters supporting their own subjugation, mortgage scams, etc.
Fine those US companies who move plants overseas? How.....when legislators take bribes, oh, sorry, "corporate donations". Limit executive salaries to a percentage of corporate profits? How.....when execs and legislators give themselves raises and REFUSE to raise the minimum wage?
Yes, if only the poor could "pull themselves up by their bootstraps"! Then just who would make Herman Cain's pizzas?
Socialist Labor Party USA
http://www.slp.org/
And for my British proletariat:
Socialist Labour Party UK
http://www.socialist-labour-party.org.uk/
11 January 2012 10:04PM
Articles like these dealing with statistics need to actually state the poverty line in dollars, numbers, and percentage w/ an "N".
Also, Social Security and Medicare are social insurance programs - not "Entltlement" programs. As I have previously pointed out on numerous occaisions, the term "Entitlement" is an ideologically loaded term in American political discourse.
11 January 2012 10:21PM
It may be helpful to understand that the "Poverty Line" is arbitrary. From the US Census Department
Poverty in the US is a complex issue, as it lumps together people truly in need with those who live off the system. Also, the calculations for poverty do not account for Government assistance such as Food Stamps and housing assistance. Rates of child hunger are appalling, even though there are many government programs that directly address this. Is the child hungry because they are poor, or because there parents are criminally negligent? It is not an exaggeration to point out that many, if not most, of the US "poor" have cell-phones (frequently paid for by Government programs), have cars, have cable TV, etc. A poor person in the US would be considered quite wealthy by most world standards.
So a better question would be the relative poverty rate. This chart gives a better idea of poverty over time.
I've seen the truly poor. Take a drive through West Virginia or Alabama, that's real poverty. But the "poverty" in many large cities is only relative.
11 January 2012 10:35PM
"51% of working aged adults in America pay NO income tax. Something wrong with that picture- the rest are left to pay for the majority."
This is a BS distinction used by the right-wingers. Almost all Americans who work for wages pay a payroll tax that is withheld from their taxable wages. Income Tax is for people who earn income other than payroll wages, like investors, etc. And investors pay a much lower tax rate ( as Warren Buffet has pointed out). The wealthy also have lost of loopholes to protect them from taxes. Remember most members of Congress are millionaires, and they write the tax law, so who do you think it will favor? And almost everyone pays sales taxes, and social security taxes (which the righties are trying hard to steal from those who have paid for their lifetimes). There is no minority subsidizing the majority. Only the poorest don't pay any form of income tax, as everything they had withheld is refunded. The only distinction is the type of from you file with the IRS.
11 January 2012 10:44PM
"Social Security, medicare are ENTITLEMENTS NOT TAXES..."
More BS - in order to collect Social Security you must be at least 62 and you must have paid into the fund. How much you collect depends on how much you have paid into the fund, just like any pension. It is not an entitlement to everyone. Medicare is only available to people over 65.
11 January 2012 10:47PM
Posting in caps doesn't make your truths any truthier. But, by all means, feel free to keep on posting in them if you want. Don't let me stop you.
And please tell me how social security and medicare don't function exactly the same, from a paycheck standpoint, as income tax, except that contributions cease once you make a certain amount of money? Have you ever worked in the US?
11 January 2012 10:49PM
Actually, you are incorrect. You are confusing Federal withholding, where you decide how much money to be withheld from your income to pay income tax, with FICA, the Social Security "tax."
It is true that 51% of Americans pay no Federal Income Tax, in fact many receive money as part of the Earned Income Tax Credit. It is untrue to say these people pay no tax, as they still pay things like sales tax and usage fees. FICA, Medicare, and Unemployment insurance are not technically taxes.
Personally, I think everyone should pay some income tax, just so they have a direct interest in how much money is raised and how it is spent.
11 January 2012 11:00PM
Again, not exactly true. People who have worked very little in their lives may not have enough income for the maximum Social Security payment, but that threshold is very low. Its actually based on income relative to the median over 35 years.
From the Social Security website:
11 January 2012 11:04PM
"Also, the calculations for poverty do not account for Government assistance such as Food Stamps and housing assistance. Rates of child hunger are appalling, even though there are many government programs that directly address this. Is the child hungry because they are poor, or because there parents are criminally negligent? It is not an exaggeration to point out that many, if not most, of the US "poor" have cell-phones (frequently paid for by Government programs)..."
You've been watching Fox News. You can't get Food Stamps unless you are below a certain income level, as well as housing assistance and those levels are relatively low. In New York State ( a more or less liberal state) you cannot get Food Stamp assistance if your income is over $1900 per month for 2 people. $1900 per month is not very much money to cover food, housing,utilities, clothing, health insurance etc. I don't know of any government program that pays for cell phones, but even poor people have to have a phone in this day and age - just to have a job. But what is true is that rich people when they go to a restaurant they are served by people who get paid very low hourly wages, and eat food that was harvested by illegal aliens who are paid hardly anything, the same people clean their houses and their yards. And they buy clothes made in the 3rd world by workers how are paid subsistence wages. So in order for the wealthy to live their lifestyle somebody has to give them something that they didn't get paid very much for. Heaven forbid the wealthy people now have to pay taxes so the people they are living off of can have some kind of basic living standards.
11 January 2012 11:09PM
+1 for "truthier".
:)
11 January 2012 11:19PM
1. No, I don't watch Fox News. I get my information from the actual US Government websites.
2. $22,800 (your Food Stamp threshold and about 14 500 pounds) is well over the US poverty line, which rather proves my point. You can get Federal Aid very easily, even above the poverty line. I know a lot of people who would be happy to live off that amount. It may not pay for a Manhattan lifestyle, but that puts one well above the median income for Puerto Rico, and not too far from the median income in Mississippi.
3. The program that provides free cellphones is the Lifeline Assistance Program which you can qualify for at 135% (or more) of the Poverty Rate.
4. Who said the wealthy should not pay taxes? Not me.
11 January 2012 11:28PM
"It is true that 51% of Americans pay no Federal Income Tax, in fact many receive money as part of the Earned Income Tax Credit."
This was originally a response to poverty in America, and your comments make it seem like the middle class and below are the non-payers, but you forget that there are 78,000 tax filers with incomes of $211,000 to $533,000 who will pay no federal income taxes this year. Even more amazingly, there are 24,000 households with incomes of $533,000 to $2.2 million with zero income tax liability, and 3,000 tax filers with incomes above $2.2 million with the same federal income tax liability as most of those with incomes barely above the poverty level. This is what happens when millionaires write the tax code.
11 January 2012 11:35PM
Well, I'd like to see some citations for these numbers, but I heartily agree that our tax code is so complex that it rewards gamesmanship by those wealthy enough to afford tax accountants. They are not paying tax because they are taking advantage of either a. Misguided efforts by the Feds to induce certain types of spending, or b. The aforementioned loopholes they had created by their lackeys. Tomato, tomahto.
But I really don't care how much other people make. On the other hand, I've met a lot of Trustafarians (trust fund babies). If I had my way, we would see a 90% Inheritance Tax over $500 000. But thats not really likely.
11 January 2012 11:36PM
jgallagher - Maybe you should talk to canesOOy21. He seems to have the solutions to New York's woes. :)
11 January 2012 11:45PM
I'll tell you what my friend, you come to New York and try to live with another person with a combined income of $22,800 and see how many cars, and cell phones you have and what kind food you are eating and what kind of housing it gets you and of course forget about any health insurance. And you know what kind of government assistance you will get -zero. Only if you get sick you can get medicaid (if you can find a doctor that will take it) and of course you have to be already sick to qualify.
11 January 2012 11:47PM
Sorry, I already bought the Brooklyn Bridge and am waiting for my first checks for the tolls I've collected.
11 January 2012 11:52PM
$22,800 is well over half the median US income ($41K). Maybe not everyone can live in Manhattan, but as I pointed out, at that income level you DO qualify for a free cell-phone, you DO qualify for Food Stamps, and I suspect you DO qualify for housing assistance. You seem to have an odd idea of what poverty means. I've been laid off in the last few years, and I would have loved to have that income. At one point I was delivering food for restaurants, making a lot less than that living in Tampa, FL. I am no silver spoon scion, I worked to pay for college. As I said, I have seen real poverty, and it wasn't people making over $22K per year.
12 January 2012 2:35AM
Hear! Hear! (Read! Read!)
12 January 2012 2:57AM
And furthermore: Understand! Understand!
12 January 2012 3:24AM
The poverty rates were figured in the 1960s. This is not the 1960s, things are more expensive. The US poverty rates are ridiculous, and anachronistic. We live in a corporate fascist state, just ask grendel65che. He'll tell you, and smile.
12 January 2012 3:25AM
My father lost his job due to injury. He worked his way up in a factory for 25 years, and was laid off when he had surgery on his shoulder from straightening iron all day. He can't go on disability even though he can barely lift his dominant arm because he still has his other one... it's devastating. My dad started delivering auto parts to different car repair places around the area for $8 an hour... that's practically pennies when you're raising a family. We lived in poverty. Having food stamps and Medicaid only solves some of the problems. I experienced this from a teenager's perspective- it was embarrassing when I couldn't go out to the movies with my friends because I didn't have the money. It was painful to go to the mall with my friends and watch them shop for cool clothes from a bench outside the shop because it pained me too much to go in. Now I'm grown up and I have bigger things to worry about. I'm trying to start my life with my long-term boyfriend... we both have these wild ideas about getting engaged and married and leaving the country and adopting children, anywhere but here. But we also work for almost pennies, and it seems like it will never happen. The idea that if you work hard in this country, you will make it is deluded... I work my fingers to the bone. It sometimes takes a little bit of luck and being in the right place at the right time but for the most part it takes having the right name and the right amount of money.
12 January 2012 3:27AM
All of you comparing incomes should remember that the amount actually needed to survive varies greatly from one location to another.
I recently left a job that paid 50% more than the minimum wage in my state. It was not enough to live on, because of the cost of housing in my area. And I don't have a lifestyle where outings, new clothes, expensive vacations, etc feature prominently. As for health insurance - I was offered it by my employer, but could not afford to pay my portion.
It's called being the working poor. And I am one of the fortunate ones - to actually have a job and a roof over my head.
12 January 2012 3:41AM
To combat hunger in my community we started a weekend backpack program to provide food on the weekends to school children in our school district. Every weekend hungry children take home a back pack filled with kid friendly food for the weekend. During the week they receive breakfast and lunch through our free and reduced lunch program. Now they have food for the weekend as well. There is so much we can do to help those in need if we try!!
12 January 2012 3:43AM
FFS we will be lucky if the US and European economies don't completely collapse and most people will be below the poverty line. I think it has something to do with the departure of so many jobs to Asia and stimulating the economy by printing money can't work forever unfortunately. Articles like this that imply if the government would just do the right thing it would make everything ok are just fairy stories.
12 January 2012 3:53AM
It is more important to understand that the idea that 50% of Americans don't have the ability to pay any income tax. In fact large numbers of people can no longer afford things like rent for a place to live, food for their families and certainly not money for health insurance or auto insurance if they happen to own a vehicle. All Americans pay a hefty sales tax for anything they buy already and pay large taxes for each gallon of gasoline ( if they drive a car). If you happen to be buying a home your paying real estate taxes.... the list goes on and on and the reality is that Americans can't pay for the necessities it often takes to realize the American Dream. So from an economic sense there are always choices... which I believe most people do what is most profitable to them. Except of course for paying social security tax which by the way is the tax that goes away once you make say 150000. For too long the government has been borrowing against the future to maintain a royal agenda of American Greed.