Tuesday, February 21, 2006

Poverty in the US is the worst in the Developed World

37 million poor hidden in the land of plenty

America often touts itself as the richest country in the world. I suppose it is true in terms of pure numbers. On the other hand, we also have the highest percentage of our population living in poverty and the statistics have only worsened under the Bush administration and Republican Congress. It is only going to get worse as Bush proposed 141 cuts in social spending programs in his current budget. There has been no large public outcry over this shift of funds away from people and largely into the hands of military contractors and into tax breaks for the wealthy.

A shocking 37 million Americans live in poverty. That is 12.7 per cent of the population - the highest percentage in the developed world. They are found from the hills of Kentucky to Detroit's streets, from the Deep South of Louisiana to the heartland of Oklahoma. Each year since 2001 their number has grown.

Under President George W Bush an extra 5.4 million have slipped below the poverty line. Yet they are not a story of the unemployed or the destitute. Most have jobs. Many have two. Amos Lumpkins has work and his children go to school. But the economy, stripped of worker benefits like healthcare, is having trouble providing good wages.

Even families with two working parents are often one slice of bad luck - a medical bill or factory closure - away from disaster. The minimum wage of $5.15 (£2.95) an hour has not risen since 1997 and, adjusted for inflation, is at its lowest since 1956...


The Guardian

17 Comments:

Blogger Jim said...

It's disgusting that things are like this. It drives me crazy to hear people argue that the poor are just lazy.

February 21, 2006  
Blogger torporific said...

It is disgusting and one would think that if a particular national party would have the courage to make this an issue, it might change some election results come November.

February 21, 2006  
Blogger Nölff said...

Reaganomical solution: Give money to the rich

February 21, 2006  
Blogger TheHamburger said...

It's sad that our government, the ones who are supposed to do all that is possible to protect us, are pushing these many people to the gutter...

February 21, 2006  
Anonymous lawgeekgurl said...

what, you don't think it's trickling down fast enough? are there no workhouses?

Bush makes Reaganomics look like a Nobel Prize winning economics program.

February 21, 2006  
Blogger Moulton said...

One of the ironies of poverty is that the economically impoverished are often the spiritually richest.

And vice versa.

February 22, 2006  
Anonymous Anonymous said...

With a huge budget deficit, a massive and growing trade deficit, and if it is clear that socialism and increased unionization are not the answer, what ideas/solutions do the left have to reduce poverty?

February 22, 2006  
Blogger torporific said...

Who said increased unionization and socialism are not the answer?

February 22, 2006  
Blogger lemming said...

Ha! I've got it - this is all a clever ploy to encourage the working poor to enlist in the army to further augment the troops in Iraq.

Whew - so glad I figured that out.

February 22, 2006  
Anonymous Anonymous said...

I phrased my comment in such a way to steer comments away from socialism and unionization, both because I believe that they would not be solutions and more importantly because they are very unlikely to happen politically. I was genuinely hoping not to get into a debate over citations and sources, but rather to hear some practical or pragmatic ideas. I am not a big fan of the far right nor the far left.

Where I am coming from: The poor are not necessarily lazy and freeing capital for entrepreneurs by reduced taxation not necessarily bad either.

Example: Hawaii. Lots of hard working poor with state mandated health insurance and high taxes. Bureaurocrats there have done their best to make it a terrible place to start a small business unless it is directly tourism related.

February 22, 2006  
Blogger torporific said...

Anonymous, I do not understand your reluctance to argue over citations and sources. Are you afraid of the facts? The facts are we trail the developed world in almost every major social and health index despite spending a higher of our national income on healthcare than any other nation.

There are twenty-two states in this country who are right to work states or are in favor of decreasing union numbers. The workers in these right to work states suffer higher workplace fatalities, are paid less, and have shorter life expectancies.

I know you do not want to hear this proposal, but I do think we can increase the union workforce and improve a lot of lives. The SEIU have identified over 40 million service jobs that cannot be outsourced and they are trying to organize these professions. They include janitors, security guards, nurses and many other service professions. If these professions were organized, then a lot of companies would be forced to pay a living wage.

Okay, now that’s out of the way, I can talk about other ideas. I believe in a more progressive tax system, national daycare, universal healthcare, raise the capital gain tax, cut military spending, increased social spending, increased educational spending, increase regulation of corporations, and reduce CEO pay and that is just off of the top of my head. Unfortunately, you are going to consider many of these ideas to be “far left”, but a lot of these policies have been implemented in Europe and Japan and their health and social indicators surpass ours. I am not proposing that the US become Sweden, but I think we can reevaluate our priorities somewhat and still have a strong business climate.

Anyway, thanks for stopping by, Anonymous, and I am willing to elaborate and explain anything on my list if you have questions.

Also, I am not familiar with Hawaii. I have never been, but I do know they are not a typical US state because of distance and the high cost of living due to the cost of importing goods.

February 22, 2006  
Anonymous Anonymous said...

Facts:

Unionization decreasing as a percentage of American Workforce and trend probably will continue.

If you artificially inflate wages and it is cost effective to move, a company will move and that results in higher unemployment in the jurisdiction artificially raising wages. All else being equal an entrepreneur is less likely to start a company in a locale with higher wage requirements. Let's just say there are not a lot of companies lining up to start companies in Southeastern Michigan right now.

Low wages=bad for workers
Unemployment=worse

Whether socialism works or worked is extremely complicated, and given the same statistics economists (of which I am not) will argue the meaning of those statistics. Not withstanding whether it will work, as I said before, it is not likely to succeed politically here anytime soon.

I would argue healthcare costs are so high because there is a large disconnect between the consumer and the provider as to the actual cost being paid for services received. Solution? More HSA's or the like which would lead to greater scrutiny of prices paid and decrease fraud.

more progressive tax system=I'd buy simpler but not necessarily higher

national daycare=I would agree cheaper is not necessarily better, but would you want child care to run like the local BMV? I understand that some folks cannot afford to raise there own children, but I would argue nationalizing childcare would result in a similar situation to our educational system, namely high spending with subpar results.

universal healthcare= I believe much of Europe is in crisis over increasing costs, poor quality of service and trying to lower benefits

raise the capital gain tax= reduced investment in American Securities and Debts by foreign nationals (not good)

cut military spending=maybe, but not practical or probable at this juncture

increased social spending= have all the American social programs really impressed you with their efficiency and lack of waste? Not me.

increased educational spending= We already spend more than most with lackluster results.

increase regulation of corporations= to increase costs or just for fun?

reduce CEO pay= sounds good or so stalin, lennin and mao thought so anyway. Wage control requires a loss of social and economic freedom that most would not accept.

As for Sweden and most of western europe here is an interesting link:
http://truckandbarter.com/mt/archives/000590.html

As for Hawaii, it is my understanding that the high cost of living is due to artificially low wages due to state mandates, high taxes, and very expensive real estate. Fresh produce is more expensive but dry goods are not too bad. They have costco and other stores which keep the price of non tourist goods more reasonably priced.

We all have reasons for our anonymity.

February 22, 2006  
Blogger torporific said...

Thanks, anonymous, I'll try to answer you this evening.

February 23, 2006  
Blogger torporific said...

Anonymous, you have no argument from me that the percentage of the union workforce has decreased since its highpoint in 1955. There are many factors for this. First, there is Taft-Hartley which opened the door for states to create right to work laws. Second, the Landrum-Griffith again gave more power to the states. The anti-union southern and inner western states have all but restricted the growth of unions. Both North and South Carolina have only 2 percent of their workforce in a union because they have such strong anti-labor laws.
Another reason for the decline of unions is automation, this began in the late 1950s and 1960s. Within ten years the US was manufacturing more vehicles with 17% less workforce in the automotive industry. Finally, the latest blow to unions is globalization and the resulting outsourcing. I’ve already discussed this. I believe that the future is bleak for many American manufacturing workers. They have little bargaining power as companies can move their jobs overseas or even to right to work states. These types of industrial unions face an uphill battle. On the other hand, many of the skilled trades in the afl-cio or service unions represented by the seiu are not as affected by globalization and can effectively fight for worker rights. You mention entrepreneurs are going to be reluctant to build plants in southeastern Michigan. This may be true, but skilled trades like plumbers and electricians will always be needed there, plus as I mentioned earlier you cannot outsource many service industry jobs.


If you artificially inflate wages and it is cost effective to move, a company will move and that results in higher unemployment in the jurisdiction artificially raising wages. All else being equal an entrepreneur is less likely to start a company in a locale with higher wage requirements. Let's just say there are not a lot of companies lining up to start companies in Southeastern Michigan right now.

Low wages=bad for workers
Unemployment=worse
I disagree. It is no secret some western European countries have up to 10% percent unemployment. On the other hand, those who are unemployed are cared for by their government. While 10 percent seems rather high (and I am no economist), but economists treat 5% percent unemployment as “full employment”, so it is really not that bad. Low wages with little healthcare and decreased bankruptcy protection leaves American workers in a far more precarious position than their European counterparts. One thing I did not mention the other day was an increase in Earned Income Tax credits, if this program is expanded, it can help supplement the income of the working poor.

Healthcare costs are so high because there is little or no regulation of the American healthcare system. We pay a higher amount for prescription medicines than any other country in the world. In other countries, the government negotiates a fair price for pharmaceuticals. This is why so many Americans try to import their medicine from Canada. Medicare (until recently) is an efficient healthcare system. Why not expand that coverage to all citizens.

As for daycare, I just wish our government had more friendly laws for childcare. Compare our family leave laws with any other developed nation. Heck, compare them with Mexico. I just think this would ease the burden on a lot of working families.

universal healthcare- It is true that Europe’s social welfare system will face a crisis in the future, but it is not because of any failure in the system. It is largely because Europe’s birthrate is so low and their population is in decrease and is aging. In the future, there will not be enough workers paying into the system to provide for social spending programs at the current rates.

raise the capital gain tax= Cuts have often been followed by economic downturns and reductions in saving and investment. Increases have generally resulted in the opposite. The theoretical case against cutting capital gains is also strong; most serious economists (i.e. those not on the payroll of the Heritage Foundation) acknowledge that even eliminating this tax completely will not increase productivity, and may even do significant economic harm.

February 24, 2006  
Blogger torporific said...

cut military spending=maybe, but not practical or probable at this juncture
Well, this ridiculous and wasteful in Iraq will cost Americans (and Iraqis) for generations.

increased social spending= I do not think the social programs have been wasteful. Of course, in any bureaucracy or even corporation, there will be waste, but how come no one gets upset about all of the waste in military spending and to defense contractors.

increased educational spending= Show me where we spend more money per student than similar countries as you claim.

increase regulation of corporations= to increase costs or just for fun?
Well, to stop future Enrons, Tycos, Worldcoms.

reduce CEO pay= Take a look at this link and tell me if we have a problem. http://governedbyplutocrats.blogspot.com/

The link about Sweden is untrue. There was an article written last year that tried to argue that a poor person in Alabama had a better life than an average Swede. It was universally ridiculed. I recommend Jeremy Rifkin’s The European Dream.

February 24, 2006  
Anonymous Anonymous said...

Thank you for taking so much time to respond to my comments.


I don't believe we have truly adverse positions. Having said that, I may lurk around just to see if I can occasionally goose a member of your choir (the completely supportive refrain that follows most of your posts.)

February 24, 2006  
Blogger torporific said...

anonymous, please stick around. I welcome differing opinions

February 24, 2006  

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