America's rise in poverty: The curse of the nonworking class

There was much economic news last week, almost all of it bad, making it a rough September to be president of the United States — or on the unemployment line. At this rate, Barack Obama may get an opportunity to see both sides of that particular circumstance in about 16 months.

Most troubling of all were the latest statistics from the U.S. Census Bureau showing that the number of people living in poverty in this country grew to 46.2 million in 2010, the most in the 52 years such numbers have been tracked. Collectively, that represents a 15.1 percent poverty rate, which was up from 14.3 percent in 2009.

The federal poverty rate is far from a precise measurement of who is poor in this country. It is an accounting of income only (adjusted periodically for inflation) and does not consider cost-of-living variances from region to region or the impact of government assistance. And the way the level is calculated has remained unchanged for decades, despite the rapidly evolving circumstances of American households, leading it to significantly understate the real problem of poverty. The notion that a family of four living on $22,351 a year isn't poor is laughable.

But it is a useful way of tracking trends, and this is why the news should be regarded as especially alarming. Not only are record numbers of Americans poor, but almost 1 million more are living without health insurance coverage than one year earlier.

Minorities have been particularly hard hit by this recession, as the poverty rates for African-Americans and Hispanics are hovering between 26 percent and 27 percent, double that of whites, while 40 percent of African-American children are living below the poverty line.

Moreover, those already poor and getting even poorer. Households in the bottom 20 percent saw a 4.5 percent fall in income last year. That was six times as much as families in the top 20 percent.

Given this grim reality, small wonder that President Obama's approval rating has fallen to new lows, according to the most recent polls, and Republican candidates won special congressional elections Tuesday in New York and Nevada. His only comfort? Nationwide, voter feelings about Congress are even worse.

One would think Washington would therefore be focused — laser-like, as politicians like to say — on creating jobs and repairing holes in the social safety net. Yet much of the public conversation of late is on the federal regulatory environment (questions like whether the Environmental Protection Agency should back off on polluters or whether bankers should have to fill out so much paperwork) and long-term deficit reduction (what gets cut from the budget 10 years hence) — two subjects of concern, certainly, but ones that don't address the immediate crisis.

What low- and middle-income Americans see from this nation's leaders (aside from the usual speech-making and hand-wringing) is a lack of interest in their plight. Income inequality, a growing problem since the 1970s, has never been worse. The top 20 percent of workers now earn about half of the income, and the top 1 percent account for about half of that — a far worse disparity than in the days of the Rockefellers and Carnegies.

President Obama's jobs bill might prove helpful with its short-term relief — if Republicans in Congress were interested in a legitimate economic stimulus. But just as importantly, Washington might help address the problem simply by reducing what economists acknowledge are the "uncertainties" that are keeping some businesses from hiring and expanding.

One can hope that the deficit reduction "super committee" members who began their deliberations this month will find some common ground, but there's little evidence to suggest that will be the case — only a history of partisan stalemate. What the country needs right now — a combination of a short-term spending increase with a plan for long-range deficit reduction — appears politically unpalatable to Republicans and their influential tea party constituents.

Spending cuts alone will not fix the problem and, if pursued in the short term or too aggressively, will only increase the disparity gap and worsen the economy. How will the nation's unemployed react to Republican strategies such as a permanent extension of the Bush tax cuts on those who earn $250,000 or more? Not especially well, one suspects.

Low-income households have already borne the brunt of this recession. It's time others were asked to make some relatively modest sacrifices, too, such as reducing tax breaks for oil companies and eliminating certain deductions for high-income earners, as Mr. Obama has proposed. Either would seem a reasonable way to pay for the jobs bill.

The GOP often accuses the Democrats of instigating class warfare. What the poverty report makes clear is that the economic classes are already at war, and anyone in the middle class or below is on the losing side. That's not good for democracy, the economy or the future of this country. People need to get back to work, and it's time Washington got serious about it.

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