Normalizing Poverty

A very disturbing article from The Economist caught my eyes over the weekend.  It seems like about as good of a time as any to share this with you.  It’s one of those articles you probably won’t see in the US media because it basically decries the notion that we’re the exceptional nation of opportunity and chance and that all that politically motivated and packaged hope and change has really brought neither to most of us.

It’s about Sarasota, Florida which has the been named meanest city in America by the National Coalition for the Homeless.  There are some amazing trends that we don’t hear too much about here.  For example, do you know that “Arizona now has the second highest poverty rate in the nation, after Mississippi”?  How about this?  Poverty is growing fastest in suburbs and especially sunbelt suburbs.   A third of America’s poor now live in suburban areas according to the article that cites Elizabeth Kneebone of the Brookings Institution.

Here are the poverty statistics for Sarasota which joins Bakersfield, California; Boise, Idaho; Greenville, South Carolina; Lakeland, Florida and Tucson, Arizona as having the fastest climbing poverty in the country.

THE statistics are worthy of Detroit or Newark: almost half the children in the local schools are from families poor enough to be eligible for free or cut-price lunches; a tenth of households qualify for food stamps; one in eight residents gets free meals from soup kitchens or food banks; perhaps one in 12 has suffered a recent spell of homelessness. Yet the spot in question is not a benighted rust-belt city, but Sarasota, Florida—a balmy, palm-studded resort town on the shores of the Gulf of Mexico.

The Sarasota-Bradenton metropolitan area, a two-county sprawl of condominiums, marinas and retirement homes, saw the proportion of people living below the poverty line rise by more between 2007 and 2009 than any other big city in America, from 9.2% to 13.7%, according to the Census Bureau.

The story is filled with tales of citizens surviving in a tent and shed city run by the Catholic Church called Pinellas Hope. The picture you see above shows one of the sheds and a resident.  A small tent city that was supposed to be a six month temporary situation is booming.

Between 200 and 300 people live there at a time, large by shelter standards, but they are just a slice of Pinellas County’s overall homeless population, estimated at nearly 7,000.

Thousands of potential candidates are disqualified by a no-booze, no- drugs policy. Families with children aren’t allowed. Background checks seek to weed out sex offenders and those with violent pasts.

Even among those who do get in, dysfunction can run high.

Before background and sobriety checks improved, Tent City managers twice asked sheriff’s deputies to pose as residents to investigate drug dealing. Dozens were arrested.

Through April, deputies have been called to Tent City 102 times, though serious crimes like assault, drug dealing and grand theft have diminished noticeably over the past year.

Four out of 10 residents get kicked out, land in jail, or simply leave.

Who are American’s poor?  What will happen as the US austerity program pushes more and more people over the edge?  The official poverty rate in the US for 2009 was 14.5% .   You can compare our country with other countries at the CIA World Factbook. The countries with the worst poverty statistics are on the Continent of  Africa. For example, Cameroon has a 48% poverty level.  Canada’s poverty rate is just under 11% as is the poverty rate in Germany.

More information on poverty can be found at the National Poverty Center at the University of Michigan. The 2009 poverty threshold for a family of four was $ 21,756. For a single person under 65 it was $ 11,161.

The poverty rate for all persons masks considerable variation between racial/ethnic subgroups. Poverty rates for blacks and Hispanics greatly exceed the national average. In 2009, 25.8 percent of blacks and 25.3 percent of Hispanics were poor, compared to 9.4 percent of non-Hispanic whites and 12.5 percent of Asians.

Poverty rates are highest for families headed by single women, particularly if they are black or Hispanic. In 2009, 29.9 percent of households headed by single women were poor, while 16.9 percent of households headed by single men and 5.8 percent of married-couple households lived in poverty.

There are also differences between native-born and foreign-born residents. In 2009, 19.0 percent of foreign-born residents lived in poverty, compared to 13.7 percent of residents born in the United States. Foreign-born, non-citizens had an even higher incidence of poverty, at a rate of 25.1 percent.

I think that it’s important we put these numbers out there. The President and Congress are clearly putting ‘entitlements’ on the table.  Any changes will effect these numbers.  There is also a link between unemployment and Poverty.  There is no indication that there are any programs or there is a will in this country to deal with the high unemployment rate that we are now experiencing.  Forecasted GDP growth is not high enough to bring it down any time soon. This article is actually a year old.  See much difference now?

The response of state and local governments to this social catastrophe is drastic reductions in social services and job cuts, under conditions where the Obama administration refuses to provide emergency aid to help cover budget deficits.

The total deficit of the states from 2009 to 2012 is now estimated at $460 billion, a figure that is likely to grow as more state capitals adjust estimates for rapidly declining tax revenue.

”Anything and everything’s on the table,” said Todd Haggerty, a policy associate with the National Conference of State Legislators. States have “cut the fat, cut the muscle and are now cutting bone. The easy decisions have already been made.”

The fiscal situation confronting the states is expected to deteriorate sharply next year when funds from the federal economic stimulus package, the American Recovery and Reinvestment Act, are exhausted.

Like the states, the federal government faces a fiscal catastrophe, with cumulative US budget deficits expected to top $10 trillion by the end of the new decade, according to the Obama administration’s rather optimistic forecast. Cuts in spending must be put in place, in part, to convince creditors, especially China, that the US “can get its finances back in order,” the Wall Street Journal wrote Monday in a feature on the annual gathering of the American Economic Association.

The response of the Obama administration is to call for an unprecedented program of fiscal austerity and sharp cuts in social spending, to be announced in his State of the Union address early next month and outlined in the new federal budget proposal shortly thereafter. Obama’s repeated insistence on the need for Americans to reduce their consumption—even as trillions more are allocated for the banks and for ever-expanding wars in Central Asia and the Middle East—is code language for a deepening of the assault on the working class.

The discussion of possible deficit reduction measures includes regressive taxes such as a national sales tax and sweeping cuts in entitlement programs on which millions of people rely, such as Medicare and Social Security.

If this continues, we will see civil unrest.  I am reminded of the tweet from Robert Reich posted by Zaladonis yesterday and another one that I had read earlier.

30 Jan
Robert Reich
RBReich Robert Reich 3.5% ec growth pitiful. We’re in so deep a hole that we need twice that to get jobs back. Don’t believe the Wall St cheerleaders.
30 Jan

RBReich Robert Reich

If you think revolts in Tunis, Egypt, and Yemen are big, wait for coming food and energy shortages around world. US shld take lead now.

16 Comments on “Normalizing Poverty”

  1. bostonboomer says:

    Income equality in the U.S. is worse than in Egypt, where people are in the streets protesting.

    I know you already wrote about this, Dak, but it bears repeating. Excellent, though depressing post.

    • zaladonis says:

      Sort of begs the question – is Democracy really a better system?

      • dakinikat says:

        If we could reawaken democracy here it would probably do some good! Right now, we’ve got plutocracy and elections that require huge amounts of money. Democracy seems to be impotent to stop that which makes your question rhetorical and sadly answerable.

  2. Minkoff Minx says:

    Dak, remember when I said I had a question about unemployment earlier today? Well, this was what I was thinking. About unemployment’s connection with poverty, my question was this…when unemployment rates were up in the late 70’s, did the poverty rates jump like they are doing now? Does the high poverty levels reflect the higher cost of living? (Sorry if this is a dumb question.) There are so many people busting their asses for pathetic wages. When you put it into perspective with how much everything cost, and I am just talking basic stuff here. Just an example, when it takes over 4 hours of work to fill up a tank of gas…and you need to drive 86 miles a day one way to get to that pathetic job…cause that is the only job you can find, how can anyone get out of the bad situation they are in? I don’t know if my question makes any sense. I will repeat it cause I kind of when off on a rant there.

    Does the high poverty levels we are experiencing now have anything to do with the high cost of living? Compared to other times of high unemployment…when the cost of living was not as drastic as it is now.

    • dakinikat says:

      Poverty rates were already high and were coming down because of programs instituted in the 1960s and 1970s. The impact of these programs was an intervening factor. Also, there was a much stronger relationship between strong growth in GDP and decreases in the unemployment rate. The government would direct spending to targeting those issues and they would retreat in response. Our spending, while very high, is not very effective right now in terms of either generating jobs or solving problems like poverty. Because of our propensity to import and an increased propensity for businesses to do foreign direct investment, the stimulus and tax cuts leech out of the country. This is exacerbated by unfair trade practices like China’s dollar pegging. As an example, we now spend an inordinate amount of money on military contractors. Halliburton has moved its HQ and much of its operations to the ME. This spending has no benefit here because those folks don’t spend their money here. They also don’t necessarily buy things to do that job here. So, the deal is that globalization as well as the maturation of our economy and the way we spend our money does not contribute to solving problems like it used to.

      Hope that makes sense.

      • Minkoff Minx says:

        So in earlier times poverty levels did not jump like they are now…because we did not have the high import levels we have now and the low GDP, coupled with the cuts in social programs? (That does make sense, thanks Dak.)

        This leads me to my next question. What can possibly be done to raise the level of employment, build the GDP and get people assistance? If there is hardly any jobs because we don’t really “make” the stuff we buy, which means our GDP remains as it is, and the idiots over in DC are cutting social programs left and right? (And it may be ridiculous, but I feel like a lightbulb just went off in my head.)

      • dakinikat says:

        It’s pretty simple. We need a jobs program. We need to stop giving tax breaks that are nonproductive.

      • Minkoff Minx says:

        Jobs program, that is not going to happen. Non-productive tax breaks? Those will continue to be given to the ones who don’t need them.

        Is there any other solution? (That light bulb I mentioned…I know we have been saying all along, we are so f’d. The truth is we aren’t heading for a larger nightmare, we are already there. )

        • dakinikat says:

          it’s not solving itself. Waiting it out is about the other option and that’s going to take maybe five or so more years if we are lucky. The problem is austerity programs will make it even worse. They need to remove tax cuts from businesses and people that dont need them and put the money to a jobs program. It’s the only solution.

      • B Kilpatrick says:

        Good luck getting people to sign up for a jobs program.

      • bostonboomer says:

        B. Kilpatrick,

        I understand you’re young, but you can look up historical information. Try researching the Job Corps, an LBJ program, and then go read a book about FDR’s job programs. Starving people will do anything to get a job. You may learn what that’s like eventually if the U.S. keeps on its disastrous course.

  3. Sima says:

    The morning thread talked about the prison guard who was killed in Monroe Wa while working in the prison chapel. She had requested help in the chapel, another guard, several times, saying she felt unsafe. But it wasn’t granted.

    It wasn’t granted in part because the WA state budget has been slashed so badly that counties and the state are cutting prison guards. They are cutting police and fire too. Social programs are gutted and non-existent. They are closing centers for the disabled and mentally ill.

    So on my local news site, in the thread about that poor guard’s murder were comments about how we have to cut the fluff in the budget, and direct the money to the guards. Comments about killing every prisoner, so we don’t have to pay to guard them or keep them. Comments about how we need more prison guards, but not by raising taxes!

    People just aren’t getting the picture. THERE IS NOTHING LEFT TO CUT BUT ESSENTIAL SERVICES. Taxes can not be lowered any more. A functional government is not possible with less. People are not poor because they are lazy!

    Gah, my fellow Americans are so wilfully stupid it hurts, it just hurts. And people, like the prison guard, are dying from it.

    • B Kilpatrick says:

      There’s a lot left to cut. Take your local PD, change the “retirement” age from 50 or so to age 65, cut the pension from 90-100% down to 55-60% of final average pay. It makes no sense to wonder why municipalities are going bust when a cop can “retire” at 40, get 60k and continue to collect it while working at another department.

      Imagine that you’re with the Louisiana State Police. If you make it to sergeant and work for 22 years, you wind up making 5,000 a month. You then “retire” at 42 or so, collect just under 100% of your pension, and go to work for a local or parish department making just a little bit less, and then we all wind up paying for a “public servant” who makes 9,000 a month to issue traffic tickets.

      • Sima says:

        No, cutting people’s pensions is not the way to go. Lowering everyone to poverty level in their old age is not the way to go.

        There may be stuff left to cut in Louisiana, but I doubt it. There’s nothing left to cut in Washington and people are DYING because too much has been cut.

        Edited to Add: I went and looked up pension and retirement for Louisiana state police. According to their website, it’s 66.6% at age 50 after 20 years of service, and 99.9% at age 50 after 30 years of service. Pay is currently about 3.5k a month.

      • B Kilpatrick says:

        It’s hard to lower someone who makes 100k+ in retirement down to poverty level.

      • bostonboomer says:

        What percentage of Americans make $100k+ in retirement?

        Hint: the average income in the U.S. is about $50,000 for a family of four.