In September, I linked to a story discussing the fact that the poverty statistics released by the Census were, to be blunt, incorrect. The story pointed out that people horrified by the poverty rate disclosed in the Census numbers would be even more horrified if they knew the true picture of poverty in the United States and, indeed, we might better understand class disparities in the United States if we fully comprehended the extent of poverty in our population.
24% of the income in this country is accounted for by just 1% of the population. That’s what I would like to call a profound disparity. Expand our reach a bit, and you will see that the top 10% earns almost 50% of the nation’s income, which leaves 90% of us to duke it out amongst each other for a little over 50% of the income available in this country. When we talk about class disparities, this is the kind of thing we are talking about. It’s not just that wealth is concentrated, it’s that the concentration is almost obscene; are you telling me that 10% of the population does almost 50% of the work?
The top 20% controls over 80% of the income. What’s interesting to note is that many people are not aware of the depth of the class disparities when it comes to income, and are, thus, not aware of the fact that these disparities have been increasing rapidly and radically. People have a distorted view of how income is distributed and as a result, it’s hard to have conversations about poverty in the United States; while people know things are unequal, they don’t know how unequal they are, and the reality is really quite stark.
The Census, as a major source of statistical information about the population of the United States, has a duty to collect data as accurate and meaningful as possible. Which is why it’s a tremendous problem that the Census is using metrics from 1955 to estimate poverty rates.
They ignore many key factors, such as the increased costs of medical care, child care, education, transportation, and many other basic costs of living. They also don’t factor geographically-based costs of living. For example, try finding a place to live in New York that costs the same as a place in Florida.
Correcting for problems with the Census numbers yields a much larger and much more frightening number, especially when we start thinking about people who are living on the margins, in the paycheck to paycheck sense. They may not be considered poor in terms of their income, but they have limited to nonexistent assets, putting them in a position of extreme vulnerability.
People spending the bulk of every paycheck to survive don’t have money to put into savings or investments. They usually don’t own their own homes (where would they get the down payment?). Their cars are beaters, or they’re sinking a lot of money into car payments every month, and by the time the loan is paid off, the car has depreciated significantly. They don’t have things like art and jewelry and all of those other things wealthy people talk about as ‘investments.’ They have nothing, which means when the job dries up, when the hours get cut, they are helpless.
It’s not just that people have to contend with disincentives to save, it’s that they can’t save even if they wanted to, because they are too busy trying to survive and they are caught in a poverty trap where any additional money they make is immediately swept away in taxes or lost in benefits, keeping them functionally in the same position. When you look at people in the United States who are ekeing out a survival, whether by working or with government benefits, without any assets as a safety net, you start to realise it’s a pretty big percentage of the population. A scary big percentage. 60% of this country’s population makes the bottom 5% of the income. 186,221,597 people have to fight for a tiny fraction of the money earned in this country. You can bet your bottom dollar, so to speak, that most of them need some form of government assistance to survive, and are probably not getting it.
This is wrong. I don’t know any other way to describe it. It’s wrong, and the way the government presents statistics makes it harder for people to see that it is wrong. Providing true and accurate pictures of poverty in the United States would be jarring for many people, but the reality on the ground here is that the situation is bad, and it’s getting worse. One of the reasons it’s getting worse is that people don’t realise how bad it is.
Thinking about just the people I know, and taking into account the fact that the plural of anecdotes is not data, I know very few people with assets to support them in the event of job loss or major life events. Most of the people I know live from paycheck to paycheck, freelancing job to freelancing job. It’s not just that, it’s that people with assets are remarkable to me. The thought of having a lot of money in savings or a house is alien and unfamiliar and it seems weird when I meet people who have these kinds of assets.
I live in a fairly wealthy community. Only 16% of the population of Mendocino County is living below the poverty line and the median income is around $36,000. The cost of living is definitely very high, but the point is that demographically, we are doing much better than some communities in the United States. And I see poverty everywhere. I see evidence of poverty in so many ways, I can’t even begin to count it. If this ‘idyllic’ community has such stark reminders of poverty and living a marginalised existence on not enough, I can’t even begin to imagine what conditions are like in the rest of the country.