America’s Working Poor: How 12 Million Americans went from Working Poor to Food Stamps in Two Years. 38 Million Americans in Poverty by Government Statistics. The Importance of Education in Pulling People out of Poverty.

The middle class in America has been under assault for years but this recession only magnified the issue.  Most Americans, 6 out of 10 own their home and this is where most of their wealth is stored.  Yet the housing bubble bursting has wiped out much of what they once thought was part of their net worth.  Housing has yet to recover the value that was once lost.  But one group that we rarely hear about is the poor.  More disturbing of all, we now have a large legion of working poor which boomed in the last decade.  This trend actually started way before the official recession start date in December of 2007.  Since the recession started, 12 million Americans have fallen from middle class or working poor to now relying on food assistance from the government.

The poverty rate since 2000 has shot up:

Source:  Census

What this tells you is that even during the heyday of the housing bubble that there were millions of Americans being added to the working-poor category or being funneled into poverty.  Poverty is hard to measure in the U.S. if we only go by visuals.  During the Great Depression, it was easy to see who was in poverty because their clothing and other visual aids allowed people to recognize who was poor.  Lack of food also was evident.  But today, it is hard to distinguish.  Cheap clothes, accessible food, and other items have fixed some ills but now we have a fleet of non-working and working poor that remain silent in plain view and many blend in with the struggling middle class.

Let us try to define poverty by what the government has:

According to the Census, a family of 3 making $17,163 a year or less falls under this category.  According to government data:

“In 2008, 39.8 million people were in poverty, up from 37.3 million in 2007 — the second consecutive annual increase in the number of people in poverty.”

When the 2009 Census figures come out in September, we can rest assured that rate increased again.  In one year, from 2007 to 2008 we added 2.5 million Americans into the poverty category.  We’re not talking about people losing some money in the stock market or seeing their home value go down.  We are talking about a family of four trying to make it on $20,000 or less.  The recession only added fuel to a trend that has been going on for over a decade.

Now why have more Americans fallen into poverty?  One major reason has to do with the structure of the global corporatocracy we have set up.  A large number of these Americans would have done the manufacturing that we once did as a country.  So now, as a largely service based economy, a new skill set is necessary.

If we go back to our first chart, many will be stunned that in 1959 over 20 percent of Americans were in poverty.  Even back then we had 40 million Americans in poverty.  A similar ratio for today would put us at 68 million Americans.  So things over this time have improved.  Yet things are reversing and this is happening quickly.  But what brought it down?  One main factor was education:

Nearly 90 percent of Americans 25 years or older have completed high school.  Back in 1950 this rate was slightly above 30 percent.  That has drastically changed.  But our economy seemed to be doing well during that time.  Well part of it was because of our well paying manufacturing base.  That is now largely gone.  So even though we may be more educated, there are less and less jobs for those with no college background.

College wasn’t always as accessible as we see it today.  College in the early days of our country was seen as a place for the sons of the wealthy to be trained for the church or what was more common, public life.  That was it.  The large recent push came from the GI Bill and you can see that in the chart above.  In 1950 only about 5 percent of those 25 years and older had a college degree (bachelor’s) or more.  Today that rate is closer to 25 percent.  But even so, we have industries and for-profit colleges that are giving students degrees that don’t really make them more competitive and add a deep layer of debt.  In fact many of the for-profit colleges directly advertise to the poor in our country knowing that they will have access to government loans to pay for their study.  Just watch the local stations during the day or really late at night and you’ll see this if you live in an urban area.

The latest data on food assistance shows that 39 million Americans are receiving this kind of support:

Source:  SNAP

This number as you would expect correlates with the number that are in poverty.  Government data tells us that 15 million Americans are unemployed.  But we also have 9 million Americans that are working part-time jobs looking for full-time work.  This is where the working poor figure is growing.  These are people that have one or even two jobs yet still fall under the poverty statistic.  With tax day just passed, the working poor are gouged by seedy lenders as if they needed any more problems:

“(Inthesetimes) The problem isn’t in Washington, however. The problem is with the tax preparers, payday loan businesses, check-cashing operations, banks and others that offer to give money-hungry low-income workers their tax refunds ahead of time.

These businesses have learned how to take advantage of a 25-year-old program, called the Earned Income Tax Credit. The idea of the program was to give a quick financial boost to low-income workers who need it.

The businesses’ pitch to taxpayers is that all they need to do is take out a short-term loan, lasting often only two weeks, pay some fees to get the loans, and they can have their refund. Why wait for the government to give you your money?, they say.

But the rates for these loans, adjusted annually, can range from 83 to 161 percent, according to a 2009 report by the Ninth Federal Reserve District.”

We already know how the financial corporatocracy has robbed the middle class.  We at least hear about this on the news because for the time being, this group still has a bit of political power.  The poor are at the mercy of loan sharks and others who exploit their financial circumstance and lack of voice.  Just like we would expect our government to push for financial regulation that protects us all, we should expect that there will be rules protecting those who already have so little.

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