The Census Bureau recently released the poverty numbers, and even if these numbers actually did reflect reality, the results are shameful. Unfortunately, the official statistics considerably understate the poverty rate in the United States.
According to the Census Bureau's survey, 43.6 million people, or approximately 1 in 7 Americans, live at or below their poverty line in 2009. I refer you to their report Income, Poverty and Healh Insurance Coverage in the United States: 2009 if you want to dig into the details. However, the National Academy of Sciences, using an updated model for identifying the poor, found that there were 47.4 million Americans living in poverty the year before in 2008—
WASHINGTON, Oct. 20, 2009 (AP)
The level of poverty in America is even worse than first believed.
A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government's official figure.
The disparity occurs because of differing formulas the Census Bureau and the National Academy of Sciences use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That's higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.
That measure, created in 1955, does not factor in rising medical care, transportation, child care or geographical variations in living costs. Nor does it consider non-cash government aid when calculating income. As a result, official figures released last month by Census may have overlooked millions of poor people, many of them 65 and older.
Thus nearly 1 in 6 Americans live in poverty, not 1 in 7. But wait, it gets worse because unemployment insurance kept 3.3 million Americans out of poverty in 2009—
Looking to the Census data, the Center for Budget and Policy Priorities’s (CBPP) Arloc Sherman discovers one of these policies. Sherman finds that unemployment insurance kept 3.3 million Americans out of poverty in 2009:
An exclusive Center on Budget and Policy Priorities analysis of the new survey data shows that unemployment insurance benefits — which expanded substantially last year in response to the increased need — kept 3.3 million people out of poverty in 2009.
In other words, there were 43.6 million Americans whose families were below the poverty line in 2009, according to the official poverty statistics, which count jobless benefits as part of families’ income. But if you don’t count jobless benefits, 46.9 million Americans were poor.
CBPP illustrates this number through a chart it created:
Although it is unclear how the numbers would turn out if we use a revised methodology that wasn't invented in 1955, and we include those held off the poverty rolls because they receive unemployment insurance, it appears that at least 50 million Americans live in poverty, which is about 1 in 6.
When we refer to the destruction of the Middle Class in America, those formerly classified as such do not just disappear, although I'm sure most of our political leaders wish they would. If we discount the approximately 17 people who moved from Middle to Upper Class status in 2009 , we are forced to conclude that the formerly Middle Class are now poor, although it is not clear if they are poor enough to be counted as impoverished by the Census bureau.
When Americans do find new jobs, they often find put that their old jobs paid much more than they're currently able to earn. And what will happen if the unemployment benefits run out?
Arianna Huffington wants to prevent America from becoming a Third World Country. She is hopeful that it's not too late. These numbers demonstrate beyond any doubt that we've moved a long way down the road toward Banana Republichood. It is our National Shame.
What policies or economic developments will halt or reverse this lamentable trend in the coming years? I believe the correct answer is: none will. As I've said before, this sociey has turned to shit.