POVERTY INCREASES AS MIDDLE INCOME AMERICANS STRUGGLE TO MAINTAIN POSITION

To put it simply, the latest economic numbers from the Census Bureau demonstrate that the first five years of the Bush administration have been a complete failure and a disaster for poor and working Americans. In the last year, another 1.1 million Americans have fallen below the poverty line. There has not been an actual reduction in poverty since 2000—the last year of Clinton’s presidency. Over 39 million Americans—one-third of them children—now live in poverty.

The number of Americans without health insurance also increased—by 800,000, bringing the total number to 45.8 million. Since 2000, the number without health insurance has increased by six million. During this same period, employer-furnished health care has declined by nearly four percent. It is only the expansion of state Medicaid and child health programs that has slowed the increase in the number of Americans without health insurance. Still, the number of uninsured Americans increased in 26 states.

The Census Bureau also reported that household income was flat, and we know that for most Americans real wages (wages adjusted to account for inflation) have actually declined during this period, leaving even middle-class Americans squeezed by increases in living expenses. The Economic Policy Institute reports that the median family income is today $1700 (3.8%) lower than in 1999. When you look at the numbers for the working-aged population (18-64), the drop is more significant—$2572 (4.8%). The EPI analysis also demonstrates that declining wage rates have offset increases in the number of hours worked. People are working more hours (and often more than one job) simply to economically tread water.

What is most remarkable is that this takes place during an economic expansion. Last year, 2.2 million new jobs were created, and yet the number of working-aged Americans without health insurance increased by 750,000. In 2004, corporate profits increased by sixteen percent, and yet employer-provided health care declined. The average salary for a CEO in 2004 was $9.84 million, with the total for the top ten reaching nearly $600 million. In 2004, the average CEO made 430 times what the average worker made, up from a ratio of 301-to-1 in 2003.

Poverty is disproportionately higher among communities of color. National poverty rates were unchanged for blacks (24.7 percent) and Hispanics (21.9 percent), but they rose for non-Hispanic whites (8.2 percent in 2003 to 8.6 percent in 2004) and decreased for Asians (11.8 percent in 2003 to 9.8 percent in 2004). Lack of health insurance also disproportionately affects communities of color. African-Americans (19.7 percent) and Hispanics (32.7 percent) were much more likely to be uninsured than non-Hispanic whites (11.3 percent).

Conservatives, right wingers, pro-business economists, and other apologists for the Bush administration argue that while unfortunate, these numbers are simply lagging indicators that will see improvement next year. However, these numbers are not typical of previous economic recoveries. In no other downturn over the past 45 years did poverty increase between the second and third full years of the recovery. In all other recoveries except that of the first Bush administration, the poverty rate was at or below that of the recession year within two years. We are still more than a full point above the 2001 rate.

So what is going on? Again, to put it simply, corporate-driven globalization, international trade, and productivity increases are creating downward pressure on the wages of Americans, or, to quote Philip Swagel, a Resident Scholar at the conservative American Enterprise Institute (New York Times, August 31, 2005), “The gains [of the recovery] have gone to owners of capital and not to workers.” A socialist could not have said it better.

That poverty of this magnitude still exists forty-four years after DSA’s founding chair, Michael Harrington, focused public attention on poverty with the publication of The Other America is both a national disgrace and a testament to the ability of American political leaders to put their heads in the sand. If the promise of the War on Poverty had been kept, we would not see the economic draft that has people of color disproportionately and poor whites dying in Iraq or as disproportionate victims of the destruction of Hurricane Katrina.

The solution to poverty is as obvious as it is easy: put more money in the hands of the poor by increasing wage levels and job creation, including government programs where the government acts as the employer of last resort. A real national health insurance program would do more to alleviate poverty and stimulate job creation than almost any other reform. Unfortunately, the unregulated free market true believers in both of our political parties block even moderate reforms such as national living wage measures, or indexing the minimum wage to inflation.

Even if we lack the political capacity to enact meaningful reforms on a national level, we still can achieve results if we put our minds to it. First, we must continue to resist the gutting of Social Security, Medicare and Medicaid that the Republicans are intent on forcing through. Additionally, we must work to enact state minimum and living wage proposals whenever we can. Minimum wage referendums were won in states that Bush carried in the 2004 election. A minimum wage ballot initiative is pending in New Mexico, and a “Big Box Store” living wage measure is being debated by the Chicago City Council.

Socialists understand that poverty is not a natural economic state resulting from the invisible workings of the free market. Poverty is a condition that is tolerated politically because the costs of alleviating it would be inconvenient for the rich and powerful. The solution is to mobilize and organize politically for real change while working to strengthen the labor movement and community based organizations. We all know that, but sometimes the continuing bedlam caused by more than twenty years of rightwing rule interrupted only by a centrist Democrat makes us forget that there is an alternative.