Poverty in the U.S.: Do the Math

For the first time in many years, poverty is news again. Newspaper headlines, television report and the blogosphere have reacted to the latest Census Bureau report showing that U.S. poverty increased last year, and that women and children are among the poorest of the poor.

In fact, poverty among women is at the highest level in 17 years. Last year, 14.5 percent of American women were living in poverty, according to an analysis of the report by the National Women’s Law Center. The Center found that more than 17 million women now live in poverty and of those more than 7.5 million are surviving on less than half of the federal poverty level, which is defined as extreme poverty.

Female-headed families with children are doing the worst. In 2010, 40 percent lived in poverty. The rate increased among Hispanic female-headed families to over 50 percent and among black female-headed families it’s now almost that high. More than 20 percent of American children lived in poverty in 2010, and more than half of them were in female-headed families.

This increase in poverty is due to the collapse of the economy. Suggestions about how to revitalize the economy by raising revenue were met with a whining chorus of Republican leaders who demonized any measures to mitigate the damage as “entitlements” that need to be cut, and any resistance to their slash-and-burn economic policies as “class warfare.”

Their think tanks and pundit apologists entered the fray by releasing and trumpeting reports that describe the luxury that exists in poor households–refrigerators, ovens, stoves, microwaves, even computers! They breathlessly report that poor people have cars and air conditioning, cordless phones and coffeemakers. There is outrage that poor families “are struggling to pay for air conditioning and the cable TV bill as well as to put food on the table.”

The right-wing Heritage Foundation lambasted “activists and the mainstream media” for painting a false picture of the living conditions of the poor.

The nerve of those poor people to have cable television and air conditioning. The fact that so many of them had those things before they slid into poverty doesn’t seem to matter. This mean-spirited attitude implies that poor people who dare to have any modern conveniences are masking how well-off they really are. This is an attempt to deflect any discussion of the causes of the economic collapse and why there’s a growing chasm between the haves and the have-nots.

The right often trivializes the plight of poor families by hyping the abundance of programs available to them. They point out that the Census Bureau ignores the resources available through the “welfare state” that conservatives are so hell-bent on dismantling.

Since the attack squads of the right are now accusing us progressives, liberals and feminists of engaging in class warfare, maybe it’s time to think about that option. But if we’re to wage war for the hearts and minds of the public, we need to be armed with facts.

I dug into several reports and analyses in order to understand what all the talk about poverty rates, levels and extreme poverty means. Unfortunately, the terminology reflects a complicated world that doesn’t lend itself to bumper stickers and glib posturing. I’m not an expert but I needed to break through the “bureaucratese” to find out what it means in terms I can understand: dollars.

I’ve come up with some facts all of us can use against the GOP’s budgetary chainsaw massacres:

Today, 46.4 million Americans–15.1 percent of us–live in poverty. That’s 15 million more since the 2000 Census. More than 2.5 million were added to the poverty roll in 2009 alone. Many of them may have possessed refrigerators, microwaves, cars and cordless phones before they found themselves slipping into poverty.

The Poverty Threshold for a family of four in 2010–the measurement the Census Bureau uses to determine poverty–was $22,113 annually. That’s $1,842.75 a month, or $60.58 a day, for the whole family. Imagine what kind of place you can rent, what sort of food you can buy, how you can clothe yourself and your children, and how you’ll pay for medication, toiletries, transportation, child care, school supplies and daily incidentals most of us take for granted. A family in extreme poverty is living on just $11,057 per year or $922.91 per month. This works out to $30.34 per day for 7.5 million families in the United States.

I decided to see what it would take to support a typical family of four living, as I do, in Los Angeles County. My mythical family consists of me, a loving partner and two well-behaved school-age kids. My mythical partner and I work full time at rewarding but low-paid jobs. To do the math, I used a calculator developed by the National Center for Children in Poverty. To eke out a bare-bones living in Los Angeles, based on what rent and such costs here, it turns out we’d need to earn $49,937 a year or $4,161 a month. That’s $27,824 over the national poverty threshold, and the two working adults would need to earn $12 an hour at their full-time jobs to hit this magic number.

But the minimum wage in California is only $8 an hour, or $320 per week. A combined minimum wage income brings in $33,280 annually before taxes. Without factoring in taxes, my mythical famliy would be at least $16,657 shy of earning what we’d need to support ourselves if we only earned the minimum wage.

It’s even worse for a different family of four–say, a single mother with three children. She would need to earn $55,869 a year and have a full-time job paying her $27 an hour in order to earn enough money to meet her family’s basic needs in Los Angeles. If she worked full-time at a minimum wage job, she’d earn, before taxes, $16,640 a year. She’d be short $39,229. She’d be eligible for some government support, but not enough to bridge that gap. This is the nightmare facing the working poor and the unemployed poor in this country today.

It’s unlikely that many people will be able to find jobs that will pay enough to meet their family’s needs. While wages are falling or stagnant, the gap between what people can earn and the cost of living continues to grow, even with minimal inflation.

Cutting benefits and cutting taxes is not the way to lift an ever-increasing number of people out of poverty. That’s not a plan; it’s the path to social upheaval. The debate is going to continue to rage in Washington, D.C. and across the country. It is class warfare, and it’s time to speak truth to power. Whether we’re poor or not, we’re each poorer if we remain quiet.

Photo from Flickr user Images_of_Money under Creative Commons 2.0.


  1. Fabulous article. We do have a serious problem, one which began to grow back in the 1950’s when our country stopped taxing the rich and taxing the poor. A country’s wealth and development is quiet easily measured by the size of its middle-class, a soon-to-be endangered species in the U.S.A. Even if you are not currently living at the poverty level, the way things are going policy-wise, you may soon find yourself there.

  2. AmesTiedeman says:

    From the Ecopnomic Collapse Blog:

    The following are 50 economic numbers from 2011 that are almost too crazy to believe….

    #1 A staggering 48 percent of all Americans are either considered to be “low income” or are living in poverty.

    #2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be “low income” or impoverished.

    #3 If the number of Americans that “wanted jobs” was the same today as it was back in 2007, the “official” unemployment rate put out by the U.S. government would be up to 11 percent.

    #4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.

    #5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.

    #6 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

    #7 Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.

    #8 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006. Today, that number has shrunk to 14.5 million.

    #9 A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.

    #10 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

    #11 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

    #12 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.

    #13 One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

    #14 The Federal Reserve recently announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.

    #15 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

    #16 As the economy has slowed down, so has the number of marriages. According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married. Back in 1960, 72 percent of all U.S. adults were married.

    #17 The U.S. Postal Service has lost more than 5 billion dollars over the past year.

    #18 In Stockton, California home prices have declined 64 percent from where they were at when the housing market peaked.

    #19 Nevada has had the highest foreclosure rate in the nation for 59 months in a row.

    #20 If you can believe it, the median price of a home in Detroit is now just $6000.

    #21 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant. That figure is 63 percent larger than it was just ten years ago.

    #22 New home construction in the United States is on pace to set a brand new all-time record low in 2011.

    #23 As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.

    #24 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

    #25 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%.

    #26 One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.

    #27 If you can believe it, one out of every seven Americans has at least 10 credit cards.

    #28 The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

    #29 It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.

    #30 The retirement crisis in the United States just continues to get worse. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

    #31 Today, one out of every six elderly Americans lives below the federal poverty line.

    #32 According to a study that was just released, CEO pay at America’s biggest companies rose by 36.5% in just one recent 12 month period.

    #33 Today, the “too big to fail” banks are larger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

    #34 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.

    #35 According to an analysis of Census Bureau data done by the Pew Research Center, the median net worth for households led by someone 65 years of age or older is 47 times greater than the median net worth for households led by someone under the age of 35.

    #36 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.

    #37 A higher percentage of Americans is living in extreme poverty (6.7%) than has ever been measured before.

    #38 Child homelessness in the United States is now 33 percent higher than it was back in 2007.

    #39 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.

    #40 Sadly, child poverty is absolutely exploding all over America. According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.

    #41 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.

    #42 In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for more than 18 percent of all income.

    #43 A staggering 48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.

    #44 Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.

    #45 For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars. That was the third year in a row that our budget deficit has topped one trillion dollars.

    #46 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.

    #47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars. When Barack Obama first took office the national debt was just 10.6 trillion dollars.

    #48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

    #49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.

    #50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

    The De-Evolution Of America: Lower taxes? Higher taxes? Does anyone actually think being plus or minus 5% on taxes will make a lick of difference for the U.S. economy at this stage in the game? The economy will never again work the way we all want it to work with the current account deficit at 6 or 7 percent of GDP. You cannot get unemployment even under 6% without a credit bubble, with a current account deficit as large as ours. We have not had a trade surplus since 1974. We have been in decline for 40 years and this decline has only accelerated in recent years. We closed 55,000 plants in the United States since 1980. Your politicians won’t tell you this because some of them fed you the false promise of free trade. Others don’t want to admit NAFTA has been a complete failure for America. Great for Mexico as that giant “sucking sound” Ross Perot predicted has materialized. Clinton and Gore promised the American people ever bigger trade surpluses with Mexico and ten’s of thousands of new high paying jobs. Just pass NAFTA they exclaimed! Quite laughable, really. We have gone from a trade surplus of a few billion a year to a trade deficit nearing 100 billion per annum with Mexico. Our trade situation with China, South Korea, Japan, and Germany is equally depressing. We are responsible for employing their people as our people suffer. They will not pay our bills so why are we employing them via our consumption? This must all end. America has done a terrific job of creating a low employment and low wage society, for millions. Quite sad indeed. No civilization has succeeded by consuming more than it produces. We must massively restructure. Until America decides to produce what it consumes you can forget about any long term economic recovery. The financial games all failed. The credit bubble is gone and now the U.S. economy is exposed as the biggest joke of all time. Credit bubbles have a way of masking the real issues. How do we fix the American economy? Start by making every American who has received a Nobel Prize in economics return the award. Why? because they were either 100% wrong or their work proved to be of no benefit to the American economy. Next, leave the WTO, end NAFTA, and go about setting up country-by-country trade deals that are realistic based on where America stands today. It is not 1955 anymore. The world has either matched us or surpassed us in industry after industry. We have literally become an emerging economy is some industries as we have faltered so badly. We must, for major industries such as steel and automobiles, move to a must-be-made-in-America policy. No longer allow imports of products in specific industries. They must all be made in America. We must employ our people. We can no longer employ the world via our consumption as so many Americans remain unemployed. We must use our 50 state union to our advantage. We must promote massive trade between the states. We must socialize CAPITALISM to avoid becoming a socialist state! We must reinvigorate the American people. We must manufacture. I am calling on the American Government to do a complete re-think of this myth called FREE TRADE. It has destroyed much of the middle class and has put all Americans on the road to a much lower standard of living.

    What happens to a civilization when it abandons self sufficiency?
    Here is a great example:
    WASHINGTON (AP) — Electronic industry officials say counterfeit parts flooding the Pentagon supply chain are a “ticking time bomb.” The officials along with government investigators and company executives testified Tuesday before the Senate Armed Services Committee. The panel is conducting an ongoing investigation into suspect electronics from China that end up in weapons systems, helicopters and aircraft. Sen. Carl Levin, the committee chairman, said China declined to send a witness to answer the committee’s questions. The committee’s investigation found about 1,800 cases of suspect counterfeit electronics being sold to the Pentagon. The total number of parts in these cases topped 1 million. By the semiconductor industry’s estimates, counterfeiting costs $7.5 billion a year in lost revenue and about 11,000 U.S. jobs.

  3. This is a very thorough article. The growth in the number of people in the U.S. living in poverty is downright frightening. But some very serious questions beg…what can we do about it as an everyday citizen? What things would need to change, how would they need to change, and who has the power to make these changes?

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