America's pain is wide and deep
Jose Guillen, 68, sorts his recyclable items in Los Angeles (Sept. 14, 2011). The ranks of the nation's poor have swelled to a record 46.2 million -- nearly 1 in 6 Americans -- as the prolonged pain of the recession leaves millions still struggling and out of work. Credit: AP
The American dream of ever-rising living standards is in serious jeopardy.
That's the implication of a new study of poverty released this week by the Census Bureau, a study demonstrating that the U.S. economy is failing far too many of its citizens -- and has been for far too long.
Let's start with the facts. One in six Americans was in poverty last year, the highest level since 1993. For children, the figure was one in 4.5. The absolute number of the poor -- 46.2 million -- was the highest since the Census Bureau started counting 52 years ago. The number of Americans without health insurance edged up to 50 million, a group larger than the population of Spain.
All the trends in 2010 were bad, but just as worrisome was the data on those who aren't poor -- and the extent to which our problems predate the current doldrums. Consider that the typical household earned less last year, adjusted for inflation, than in 1997, which implies an astonishingly long period without gains. Since 1973, full-time male workers haven't had any income growth, though women gained 25 percent.
Inequality, by some measures, has been growing in the worst possible way: Almost everyone is getting poorer, but especially low-income workers. Since 1999, for example, when household income peaked, the top 10th in earnings have lost 1.5 percent. But the bottom 10th lost 12 percent. Even during the growth years from 2001 to 2007, the income of a typical household barely increased.
Our economic problems, in other words, are even worse than they look. There is a jobs crisis right now, and that's serious. But for poor, blue-collar and middle-class Americans -- in other words, just about everybody -- our economy hasn't been working well for years.
The reasons are complex. The fast-rising cost of health insurance, which isn't counted as income even if employer-provided, has been eating up middle-class wage growth. Factory work has been declining for years, in part because of competition from overseas. Technology has changed the mix of skills demanded by employers, shifting jobs and pay toward the most highly educated workers. Union membership has plummeted.
The resulting picture isn't pretty. Little or no growth, high inequality, sustained joblessness, mounting debts, soaring health costs, and increasing poverty -- if these awful trends continue, we'll soon discover that our problems are a lot bigger than the economy. And even the wealthiest Americans won't be insulated from them.
People's health will suffer. The social fabric will fray. We'll be unable to care for the coming wave of retiring baby boomers. And American power in the world will recede. Our nation's challenge, then, is not just finding a way to reignite growth -- but making sure that most Americans share in it. There's no alternative. And no time to waste.
