15% of Americans Are Officially Poor

I’ve been talking quite a bit about poverty this week, and this is why. The latest Census Bureau figures show that 15% of Americans are poor, a term used for families earning up to $21,765 for a family of four. That’s up from 14% in 2009. That figure is even more pronounced in population centers across the country, like New York, Los Angeles, Dallas and Chicago. One in five New Yorkers (20.1%) now live in poverty in one of what is arguably one of the most expensive cities in the country.  The major cause?  The consequences of the Great Recession, of course.

I Can Has Job?

While the Census Bureau has landed on a preset income level to determine who qualifies as poor, the driving cause is really the job market – or lack thereof.  As of August 2011, the Bureau of Labor Statistics (“BLS”) has the official rate of unemployment pegged at 9.1% of the total eligible workforce, or 14 million individuals. But that number is misleading.  The BLS only counts individuals that it determines to be actively seeking employment.  If you’ve been unemployed for some time and have given up the search for a job, you are not counted.  If you’ve accepted a part-time job, even though you might have been or still are looking for a full-time position, you are also not counted.  Recognizing this flaw, the BLS also tracks what it calls the U-6 or the real unemployment rate.  In August, the BLS calculated that number to be 16.2%.  That would push the total number of unemployed individuals in need of a ful-time job up to 24.9 million individuals.  Big change, huh?

Would You Like Fries With That?

The consequence of so many individuals being out of work is being felt everywhere.  Soup kitchens and pantries report that they are getting more visitors – including individuals that had never used their services before.  Donations to non-profit organizations are down.  Taxes collected by municipalities are also down.  Kids are being pulled out of private schools, so Catholic school are closing left and right. Okay, those sex scandals also had something to do with that one too.  Entire neighborhoods of homes are going into foreclosure.  Summer jobs, the ones that give teenagers a sense of responsibility and an introduction into the world of employment, were offered at record low rates.  I went into McDonald’s two weeks ago to order some fries (extra ketchup, one packet of mayo) and noticed that almost every single person working there was middle aged.  It is now entirely possible for a parent to go from a six-figure job to slinging burgers and fries at McDonald’s, especially if they have mouths to feed.

There was a time when working in a fast food or quick serve restaurant was a teenager’s first job.  Now their parents are snapping up those jobs just to make ends meet. Just 55.3 % of people between 16 and 29 were employed in 2010 on average, according to new figures released by the Census Bureau.  That’s the lowest number since World War II.

Uncle Sam, Save Us!

We’ve heard quite a lot about the government trying to stimulate spending and encourage companies to hire more individuals by making it pretty much free for them to borrow money.  What we’ve seen happen is quite the opposite.  Bank of America, my favorite bank in the world, not only took bailout money and got a huge infusion of cash from the Oracle of Omaha (Warren “I’m Rich Bitch!” Buffett) but they’ve also recently announced plans to lay off between 30,000 and 40,000 individuals.  Let me repeat that one in a different way.  They are firing thirty THOUSAND people and adding all of those people into the ranks of the unemployed and possibly down into the rabbit hole into poverty.  Way to go!  But they’re not the only ones.  Schools, police districts, fire commands and lots of government municipalities are also laying people off.  If you think that a jobs act, any jobs act or bill from the government, can save those jobs you are wrong.  The government needs private sector jobs to help drive the economy.  They can not do it with taxes and short-term jobs alone…although it would be nice to get some people out there working again.

It Could Happen to You

Before this recession, many of us were lulled into a sense of complacency with our jobs.  If you lost one, you would readily find another one within a couple of months.  Now you are competing against just about everyone for every job opening that you see.  And who knows how long those jobs will last.  My advice?  Don’t get comfortable at work doing just your job.  Go above and beyond and be indispensable.  If your company offers training or will pay for schooling, take advantage of it.  If you can network and hobnob with individuals in other departments, do so.

The only thing that you need to remind you of what could happen is to walk by a job fair.  There are people on those lines that look just like you.  It could be you.  Always have a Plan B, bankable hobby or side hustle.  You don’t want to end up in the 15%.

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8 thoughts on “15% of Americans Are Officially Poor

  • I came close this Spring! I was RIFed, rescinded, displaced and finally reassigned. I am a tenured teacher with 10 years experience.Normally my profession is one of the most stable, but this recession has affected all of us. I relied on my old skills of networking,persistence and determination to resolve my situation. It is not great out there for a almost 65 year old teacher!

    • Do you think that No Child Left Behind is also affecting the number of teachers being retained? I feel like it unfairly punishes teachers instead of trying to bridge the learning gap between the U.S. and other countries.

  • It is sad to hear that 1/5 NY’ers are in poverty. Crazy! While it is bad, I don’t know how much worse it is getting. There are less jobs, but there are still places hiring. But, with that said, I am not an economist and it is hard for me to see the grand scale. Great post – very eye opening.

  • I heard NYC has a pretty healthy well-fare system, is that true? A lot of nice apartments in great areas for 70% below market rent to allocate to the poor.

    I’m amazed 200+ people at BoAML got $1mil plus bonuses in 2008 and 2009 a year when both would be gonzo without the govt.

    Impressive!

    • Yes NYC does have a pretty robust welfare system, but it’s because so many people are below the poverty line. The truth is that affordable, subsidized and rent controlled housing is dwindling. It’s really being propped up by illegally partitioned apartments where people are renting out rooms to others. Affordable apartments are a problem for people not on welfare.

  • Did you notice, BofA’s layoffs will save the bank about $5 billion, the exact amount needed to repay Buffett’s loan! (BofA didn’t need the money, it needed Buffett’s endorsement).

    Oh Buffett, what hast thou wrought?

  • The state of this country really is sad. I recently visited the small town that I grew up in and attended school in. Almost every business in the entire town was closed. It was very depressing to see my childhood town in such a bad situation.

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