Already High Level of Poverty Likely to Get Worse

Wednesday, January 11, 2012 by CommonDreams.org
Ranks of American Poor Forecast to Grow Until at Least 2017: Study
Common Dreams staff report

2010 Census Bureau figures recently revealed that the US poverty level had skyrocketed and noted that  the population of poor Americans had climbed to 46.2 million.  A new study released today by Indiana University compounds that bad news by predicting that things are likely to get worse before they get better.

The report said Michigan had one of the highest rates of poverty, with minorities among the hardest hit. As reported by The Guardian:

The report warns that the numbers will continue to rise, because although the recession is technically over, its continued impact on cuts to welfare budgets and the quality of new, often poorly paid, jobs can be expected to force many more people in to poverty. It is also difficult for those already under water to get back up again.

"Poverty in America is remarkably widespread," concludes the study, At Risk: America's Poor During and After the Great Recession. "The number of people living in poverty is increasing and is expected to increase further, despite the recovery."

And the reason? According to John Graham, one of the authors of the report, it was surprising. As he told the Guardian:

"The unique feature of the great recession is not just the high rate of unemployment, but the long duration of unemployment that millions of Americans have experienced. [For] a lot of these long-term unemployed, the job that they had won't exist when they go back in to the labour market."

The deeper and more troubling cause, however is a man-made disaster: the politically driven budget-cutting  austerity strategy that has followed the financial crash in 2007.

The Indiana University study says that the numbers of people falling into poverty is also likely to grow because of severe cuts to state and federal welfare budgets.

"The states by their constitutions all have to have a balanced budget each year. A lot of states are already in the process of cutting back their safety net programs at the same time that poverty is increasing," said Graham. "Their needs are going up but the programs are receiving less support. It's going to continue because the revenues of state governments are not increasing as rapidly as is needed and the federal government will be under a lot of pressure because of its large deficit to decrease funding given to the states."

And things are likely to get much worse if unemployment benefits are not extended. This represents another political battle that played out in Washington at the end of 2011 and will return as Congress picks up a future extension later this month.  According to Reuters:

If the long-term unemployed lose their unemployment insurance benefits before the economy produces enough well-paying jobs, the ranks of the "new poor" will continue to swell steadily through 2017, the study found.

"Many of the 'new poor' are the former middle class," broadcaster Tavis Smiley, who requested the study, said in a statement. "Poor people are not moochers and welfare queens, as some would like you to believe."