America’s Poor Are Getting Poorer, and the Stock Market Won’t Help
You might call it a tale of two Americas. Seemingly every week, Americans turn on the news to hear about a record on the stock market. Since the wildly uncertain days of The Great Recession, investors and people’s 401(k) plans made their money back (and then some) on the markets.
Meanwhile, the poorest citizens of the U.S. have seen their fortunes fall. This chart from Pew Research Center does not have the same upward trajectory as the Dow Jones and Nasdaq in 2017, but the story it tells is far more powerful.
Overall, the percentage of those at the worst level of poverty hit a 20-year high in 2016, according to Pew Research data. Here is proof the poorest Americans are actually getting poorer, and why this situation continues in one of the world’s richest countries.
1. America’s poor=population of Central America
In 2014, the number of people in poverty in America peaked at 46.7 million, according to the U.S. Census. Just two years later, the number shrank to 40.6 million, which matched pre-recession levels. This improvement is something to celebrate, but the lack of opportunity at the bottom of the income ladder has only become starker. Meanwhile, the number of people in poverty is close to the equivalent of the entire population of Central America (41.7 million).
2. Defining extreme poverty
According to U.S. census takers, an individual or family earning less than half their poverty threshold is considered to be in extreme poverty. The exact dollar amount depends on age and family size. Here are a few common thresholds:
- Single person: $12,228
- Household of two: $15,569
- Family of four: $24,339
Therefore, to be considered among the poorest of the poor, a single person would earn about $6,000 per year. A family of four would have access to about $12,000 per year. The number of families living in these conditions continues to rise.
3. Close to 50% among the very poorest
With the steady growth of extremely poor people across the country, the percentage of Americans in that group is 45.6%. Overall, the poverty rate is down over the last nine years, but the number of poor people in America has risen sharply since 1980. According to Brookings Institution data, there were 29.3 million Americans living in poverty in the last year of the Carter Administration. More than 11 million people joined the ranks since then.
4. Wage stagnation
With a higher percentage of poor people yet low unemployment, you have to consider slow wage growth. According to Brookings, the lowest earners saw wages grow 4% between 1980 and 2014. Over that same time period, wage growth among the top 1% amounted to 194%. It’s a recipe for the income inequality that has plagued the nation in recent years.
5. The fully employed poor
According to Brookings, one in 10 working-age adults in poverty works full-time, year-round. In other words, over 2 million Americans clock 40 hours a week, 12 months a year at their jobs yet have the most meager income to show for it. Stats like these make the best case for a higher minimum wage.
6. 20% unable to work due to disability
Brookings data showed over half of working-age adults in poverty were not participating in the workforce whatsoever. The reasons for this non-participation varied, but 20% reported disabilities that kept them out of work. Another 15% of working-age poor were caring for family members, while 13% could not work because they were students.
7. Part-time workers in poverty
During the worst years of the recession (2008-10), the number of people working part-time involuntarily spiked from 950,000 to 2 million, according to Brookings. As of 2017, there were still 630,000 Americans in poverty who could not work due to their responsibilities as caregivers. This point rarely gets airplay during debates on the economy and the workforce.
8. Rising number of poor seniors
While the percentage of poor senior citizens (9%) is down over the last 30 years, the number (4.6 million) is actually higher. America’s aging population is the reason for the shift, and we can expect that number to grow in the coming decades as people live longer. If that’s not enough motivation to fix Medicare, Congress will never find any.
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