As The Economy ‘Booms’ For The 1%, Most Americans Are Poorer Than Ever Before
For all of President Trump’s tweets championing “his” booming economy and analysts praising the economic growth of the past few years, the majority of Americans are living in an entirely different version of America — one in which most people struggle from month to month just to get by.
The Nation recently published a stunning overview of the working poor and underpaid. One of the most powerful data points in the piece described how empty the decline in unemployment actually is: having a job doesn’t exempt anyone from poverty anymore. About 12% of Americans (43 million) are considered poor, and yet they are employed. They earn an individual income below $12,140 per year, and slightly more than that for a family of two. If you include housing and medical expenses in the calculation, it raises the percentage of Americans living in poverty to 14%. That’s 45 million people.
In many of America’s larger cities, this is a recipe for disaster: without enough money to pay for food and shelter, even working Americans are experiencing homelessness.
Rajon Menon writes, for The Nation:
In America’s big cities, chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless, sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families.
As for the ability to save money, the vast majority of Americans struggle there, too: those who can save have little to put away each month.
A third of the U.S. population has no savings and another third has saved less than $1,000. Two-thirds of American households, by this measure, are desperately scrambling to make ends meet from check to check. Nearly half the American population earns too little to live on comfortably:
“One-third of all workers earn less than $12 an hour and 42% earn less than $15. That’s $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.”
Forbes notes that on average, it now takes a little more than $100,000 per year to live in the United States without fearing money problems.
This can present difficulties even for families with two income earners.
Add inflation to the mix, and the story only gets worse:
According to The Nation, the minimum wage rose to $7.25 by 2009, but since then inflation has eroded 10% of its buying power. So this year, someone will have to work 41 additional days to make the equivalent of the 2009 minimum wage.
And consider the following:
• Healthcare costs are projected to go up 20% in the coming year.
• Credit card debt has crested at a trillion dollars and is projected to increase at 4.7% by 2020.
• Wages have been increasing by only 2.9% per year.
• For the young, education debt has reached a record $1.52 trillion.
This economic setup cannot last, and the risks of continuing to turn a blind eye include economic collapse as well as social unrest.
Our current course is unsustainable. And for all the proposals for changes in public policy to ameliorate income inequality, only the private sector can get the nation on a better track by raising wages, increasing benefits and investing in new ventures and expanded markets.