While many of us have chosen to look forward toward to 2014 and beyond, I’ve chosen to briefly look backward to the recent 50th Anniversary of President Johnson’s War on Poverty. This is where we are 50 years later:

More than 46 million Americans lived in poverty last year, representing 15 percent of the population. For three years now there have been more Americans in poverty than at any other point since the Census Bureau began collecting data in 1959, and the poverty rate is hovering at its highest level since 1997.

While many economists had hoped to see a small decrease in the poverty rate, the only statistically significant change was the additional 300,000 elderly Americans who fell below the poverty line.


The recovery has simply missed most Americans, with the upturn’s benefits accruing largely at the upper echelons of society: the top 1 percent has captured 95 percent of the income gains made since the recession. While income grew by more than 30 percent for the 1 percent between 2009 and 2012, all other Americans together made gains amounting to less than half-of-one percent.


Meanwhile, median household income fell slightly to $51,017 a year in 2012, down from $51,100 in 2011 -- a change the Census Bureau does not consider statistically significant.


But taking a wider view reveals a larger problem: Income has tumbled since the recession hit, and is still 8.3% below where it was in 2007. Americans were the richest in 1999, when median household income was $56,080, adjusted for inflation.


This long-term decline in income is troubling to economists, especially as the middle and lower classes have fared considerably worse than the rich. Since 1967, Americans right in the middle of the income curve have seen their earnings rise 19%, while those in the top 5% have seen a 67% gain. Rising inequality is seldom a sign of good social stability. The entrenchment of poverty in American society is alarming on its own, but it is particularly striking in the shadow of a massive rebound in the stock market and in corporate profits. The Census’ measure of inequality in 2012 is on par with the all-time high found the previous year.


While the poverty rate rose for both women and men during the recession, the percentage of men in poverty last year was still lower than it has ever been for women. The numbers show that poverty grips women and children particularly fiercely. More than a fifth of all children live in poverty; one in three poor Americans are children. Inequality across race persists, too, with more than a quarter of black and Hispanic Americans living in poverty, compared to just 9.7 percent of whites.


Women made 77% of what men made, unchanged from the year before but up from 61% in 1960. Over one million men found full time work last year, as the economy recovered. Some have dubbed the most recent recession the "mancession," as large numbers of men have left the workforce.


Asians had the highest household income ($68,600), followed by whites ($57,000), Hispanics ($39,000) and blacks ($33,300).

The recession also pushed many more people into poverty. In 2010, the poverty rate peaked at 15.1%, and has barely fallen since then. This is the first time the poverty rate has remained at or above 15% three years running since 1965.


Those making $23,492 a year for a family of four, or $11,720 for an individual were considered to be living in poverty.


While the ranks of the poor are still elevated from the recession, overall poverty is remains far below the 22.4% it was at in 1959 when the Census first began tracking the data. Over the last 25 years, the poverty rate has averaged just over 13%.


Our politicians should be ashamed of themselves. What type of leadership are they exercising not only in this country but throughout the rest of the world? For the richest country on the globe to demonstrate so little interest and compassion for our neediest populations is a dishonor to our noble tradition of democracy and human rights.


America needs to create several million middle-class jobs, and a commitment not just to train and re-train people to be able to do them, but also a commitment to hire those who’ve gone through the training. Where would these jobs come from? Ronald Reagan’s conservative economic advisor Martin Feldstein recently recommended a 5 year, $1 trillion program to improve America’s infrastructure, and I think that’s a good idea. We need to fix up our streets, roads, highways, bridges, tunnels, airports, water/sewer lines, school buildings, parks. We could build a state-of-the-art mass transit/rail system and a smart electrical grid. We could work to retrofit our residential, commercial, governmental buildings to be green and energy efficient.


I’m afraid that if we don’t do something along these lines, America’s economy will continue to creep along, millions will remain in poverty, the middle class will continue while find it harder to keep up, and the very wealthiest will continue to gain.


What do *YOU think we should do to minimize poverty and increase/help the middle class?






Keith (Much additional information obtained from the The Nation and Huffington Post.)


Views: 153

Comment by Matt Charney on January 16, 2014 at 11:59am

Keith - this is a great post. Thanks so much for putting this together. I think that it's really easy to forget just how endemic this problem is, and how important it is to eradicate it through employment.  To answer your question, I think the best way to help the poor & increase the middle class starts with legislation.  The minimum wage in most states isn't a living one, so that's the first step - particularly when it comes to tipped labor, considering that their hourly minimum wage hasn't increased since 1970. I also think that the repealing of binding arbitration clauses in employment agreements as an unfair constraint of labor would help make employers more accountable for putting control back into the hands of workers, most of whom aren't covered by a CBA, are at will and therefore are basically unable to litigate to facilitate changes to improve salary, working or living conditions.


Comment by Keith D. Halperin on January 16, 2014 at 1:43pm

Thanks, Matt. I believe that minimum wage peaked sometime around 1968 in terms of Constant Dollars.

I agree: one of the factors li often listed  for the decline in the middle class is the decline of the labor movement.

I read something yesterday which was an opinion that at least part of) the reason CEO salaries have exploded in terms of ordinary employees over the past several decades was that during those dark, evil days of the1950s  when the marginal tax rate was much higher than today's, there wasn't much point in getting a lot of pay- presumably I comp was more in equity or something other than current salary.... (That also was when the economy was growing substantially faster than most periods since and we had a strong labor movement.)


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