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Poor and Getting Poorer: Why Poverty Keeps Rising

A new study from Indiana University predicts that, while unemployment might be at its lowest rate since February 2009, the ranks of the poor will continue to grow in this decade. At the heart of the problem are the 97 million Americans who, while not poor, make less than 200 percent of the poverty line, approximately $45,000 for a family of four.

Falling unemployment has not meant much to the poor and near poor, according to these Indiana researchers led by professor Kristin Seefeldt: "No other post-World War II recession comes close to matching the adverse job impacts of the Great Recession." Four million of the 13 million unemployed have reported being without work for more than 12 months; another 2.3 million Americans report being out of work for at least 6 months.

As I explained here some months ago, if you're unemployed, you're basically locked out of this economy, especially now that employers increasingly discriminate against the long-term unemployed. The report cites the Congressional Budget Office report that forecasts that the economy will not reach full employment (95 percent) until 2017. With employment prospects like these, many Americans have just stopped looking for work.

Ironically, these discouraged workers have provided a better assessment of our economic prospects. Track the jobs-to-population ratio, or the number of employed persons to the number of working age adults ratio, from 2008 to 2010 and you’ll see a steady decline from 62.7 in April 2008 until it reached 58.5 in January 2010. Everyone acknowledges that those were really bad months for the real economy and the median American family, which earns around $49,000 annually. A healthy economy posts a jobs-to-population ratio somewhere between 60 and 70 so how could it be that the economy is doing all that much better when today, one year later, the jobs to population ratio is still 58.5? The truth is that it’s not.

Both the workers who have stopped looking and those stlil on the hunt are looking out at an economy where poverty wages jobs are often the norm. The Center for American Progress' "Half in Ten" initiative puts a living wage at 50 percent of the median wage, which had been the historic marker for the minimum wage. Today, more than 30 million people (1/5 of all workers) earn less than a living wage -- and some are the only wage earners in their home. No wonder the median family income is only 212 percent of the poverty line. 

And in these low skilled positions, where many of the working poor reside, not only are workers earning barely enough to get by, they aren't preparing for upward mobility. Low wage jobs are low skilled jobs with perpetually low wages. Working families caught in this labor market have few exits from chronic economic insecurity.

And the attack on the safety net only compounds the problem. Since welfare funds were block granted to the states following 1996, the most reliable anti-poverty funds have come from federal programs: Medicaid, Medicare, Supplemental Nutritional Assistance (Food stamps), and unemployment insurance. Still, Republican governors and those in Washington have proven merciless in their attacks on these essential supports -- and at exactly the wrong time.

The growing demand for food supports is well documented, but it is still understated. A recent U.S. Conference of Mayors survey said more than 1 in 4 people needing emergency food assistance did not receive it. This Indiana University study notes that, in 2012, two million more Americans are expected to be in need of unemployment insurance. That figure could grow substantially if Congress does not vote to extend federal UI benefits in February.

I love a bit of good news like the next guy, but the truth is that poverty is likely to get a lot worse in the immediate future. And it has absolutely no chance of getting better if Republicans in state legislatures and governors mansions and the halls of Congress have their way.