Sunday, December 18, 2011

Sunday Morning Papers: Census and Poverty

While it is tempting to write about the Presidential campaign right now, everything will probably revolve around the economic news that was announced on Thursday: 1 in 2 Americans is living in poverty or near poverty.

Now look at the Republican field that wants to cut or eliminate the safety-net, automatic-stabilizer programs that provide high-velocity money to those who have a marginal propensity to save of 0.  When unemployment benefits are given to someone living under the poverty line, the entirety of that check goes to rent, utilities, and food, and whatever it takes to keep from starving or becoming homeless.  Meanwhile, the landlords and grocery store owners can hire clerks and pay their own expenses, and the utility companies can pay for line maintenance and still return ginormous profits to their stockholders (Deregulation, HO!).  Newt Gingrich deciding that 99 weeks of unemployment is unnecessary means to me that he has no concept of the velocity of money, which is surprising as someone who should have a command of the social sciences.

The new poverty measures which classify a family of 4 as living in poverty if they make under $22,500 (above the average unemployment benefit), and low-income as below $45,000, illustrates a fundamental problem in the United States: what good is job creation if the jobs that are created are not worth having?  To make $45,000 per year, a wage earner would have to make $21.63 per hour.  That's three times minimum wage.  If this is a two-income household, then to rise to the middle class, parents would have to work 3 full-time jobs, or work 2 jobs that pay 1.5 times the minimum wage.  Minimum wage is so far away from a living wage in this country that it is hard to think that there is any corelation between the two. 

Which is why the attempts to institute the unfounded supply-side trickle-down economic theory in the Midwest should concern everyone.

Right now, Right To Work campaigns are underway in Wisconsin, Ohio, and Indiana, where the speaker of the General Assembly has declared that undercutting the ability of unions to organize is the most pressing priority in the state.  Indiana already has a median household income below the national average by state, one of the poorest states in the Midwest, and just barely over the standards of the new Low Income Household by the Census at $45,679.  If the most pressing issue in the state is to drive the percentage of workers living in poverty and low income households above 50%, then by golly, this sounds like a swell idea.  However, if you want to create jobs that allow people to live and thrive without reliance of government assistance, then maybe you should look at incomes and the decrease in demand of a consumer economy that can only afford to buy housing and electricity as a problem to try to tackle.

No comments:

Post a Comment