Figures on income levels released this week confirm what many in the United States struggling to make ends meet already knew: it is a country in the midst of a poverty crisis that will define a generation.
Soaring poverty rates and a decade of stagnation in prosperity levels even for wealthier Americans emerge as the gloomy headlines from a new Census Bureau survey showing that 46.2 million people in the country were subsisting below the poverty level last year, more than has been seen in any year since the surveys began 52 years ago.
Last year an additional 2.6 million Americans fell below the poverty threshold, set at US$22,113 ($27,100) for a family of four. Moreover, median household incomes dipped to a level not seen since 1997. The US has not seen such an extended period without growth in household income since the Great Depression. The statistics are a study in gloom and lost optimism. The percentage of Americans living below the poverty threshold was the highest it has been since 1993 – 15.1 per, up from 14.3 per cent the previous year and 11.7 per cent in 2001.
They are also a study in disparity.
While Americans in the top 10 per cent of earners saw median household income drop by only 1.5 per cent since 1999, for those in the bottom tenth of the income spectrum it plummeted by 12 per cent.
The picture was worse than most analysts had been expecting and is likely to reinforce the growing sense that the country is on a historic losing streak, that any recovery since the 2008 crash has done little or nothing to improve the lot of the majority.
It may thus also darken the gloom already enveloping President Barack Obama as he pitches the American Jobs Act he unveiled last week.
“This is one more piece of bad news on the economy,” said Ron Haskins, co-director of the Centre on Children and Families at the Brookings Institution. “This will be another cross to bear by the administration.”
Lawrence Katz, an economics professor at Harvard, said: “A full year into recovery, there were no signs of it affecting the wellbeing of a typical American family. By late 2010, the economy was sort of dead in the water, and that’s where it’s remained.”
He told the New York Times: “This is truly a lost decade. We think of America as a place where every generation is doing better, but we’re looking at a period when the median family is in worse shape than it was in the late 1990s.”
Last year, 6.7 per cent of Americans had fallen into deep poverty, living somewhere below half the poverty line. The figures could give Obama and the Democrats in Washington ammunition against Republicans who continue to resist any changes in tax rates that might force the richest Americans to pay a higher share and who support only parts of the Obama jobs plan.
It is joblessness that lies behind the poverty rates. About 48 million Americans aged 18 to 64 did not work at all last year. Among those who tried and especially those now among the growing ranks of the long-term unemployed, the difficulties only multiply as their homes are foreclosed on and health insurance premiums are beyond their reach.