Nearly Half of Americans Are Low-income

[Girl from Celebes 588]

WASHINGTON (AP) -- Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.

"Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too 'rich' to qualify," said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.

"The reality is that prospects for the poor and the near poor are dismal," he said. "If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years."

Congressional Republicans and Democrats are sparring over legislation that would renew a Social Security payroll tax cut, part of a year-end political showdown over economic priorities that could also trim unemployment benefits, freeze federal pay and reduce entitlement spending.

Robert Rector, a senior research fellow at the conservative Heritage Foundation, questioned whether some people classified as poor or low-income actually suffer material hardship. He said that while safety-net programs have helped many Americans, they have gone too far, citing poor people who live in decent-size homes, drive cars and own wide-screen TVs.

"There's no doubt the recession has thrown a lot of people out of work and incomes have fallen," Rector said. "As we come out of recession, it will be important that these programs promote self-sufficiency rather than dependence and encourage people to look for work."

Mayors in 29 cities say more than 1 in 4 people needing emergency food assistance did not receive it. Many middle-class Americans are dropping below the low-income threshold — roughly $45,000 for a family of four — because of pay cuts, a forced reduction of work hours or a spouse losing a job. Housing and child-care costs are consuming up to half of a family's income.

States in the South and West had the highest shares of low-income families, including Arizona, New Mexico and South Carolina, which have scaled back or eliminated aid programs for the needy. By raw numbers, such families were most numerous in California and Texas, each with more than 1 million.

The struggling Americans include Zenobia Bechtol, 18, in Austin, Texas, who earns minimum wage as a part-time pizza delivery driver. Bechtol and her 7-month-old baby were recently evicted from their bedbug-infested apartment after her boyfriend, an electrician, lost his job in the sluggish economy.

After an 18-month job search, Bechtol's boyfriend now works as a waiter and the family of three is temporarily living with her mother.

"We're paying my mom $200 a month for rent, and after diapers and formula and gas for work, we barely have enough money to spend," said Bechtol, a high school graduate who wants to go to college. "If it weren't for food stamps and other government money for families who need help, we wouldn't have been able to survive."

About 97.3 million Americans fall into a low-income category, commonly defined as those earning between 100 and 199 percent of the poverty level, based on a new supplemental measure by the Census Bureau that is designed to provide a fuller picture of poverty. Together with the 49.1 million who fall below the poverty line and are counted as poor, they number 146.4 million, or 48 percent of the U.S. population. That's up by 4 million from 2009, the earliest numbers for the newly developed poverty measure.

The new measure of poverty takes into account medical, commuting and other living costs. Doing that helped push the number of people below 200 percent of the poverty level up from 104 million, or 1 in 3 Americans, that was officially reported in September.

Broken down by age, children were most likely to be poor or low-income — about 57 percent — followed by seniors over 65. By race and ethnicity, Hispanics topped the list at 73 percent, followed by blacks, Asians and non-Hispanic whites.

Even by traditional measures, many working families are hurting.

Following the recession that began in late 2007, the share of working families who are low income has risen for three straight years to 31.2 percent, or 10.2 million. That proportion is the highest in at least a decade, up from 27 percent in 2002, according to a new analysis by the Working Poor Families Project and the Population Reference Bureau, a nonprofit research group based in Washington.

Among low-income families, about one-third were considered poor while the remainder — 6.9 million — earned income just above the poverty line. Many states phase out eligibility for food stamps, Medicaid, tax credit and other government aid programs for low-income Americans as they approach 200 percent of the poverty level.

The majority of low-income families — 62 percent — spent more than one-third of their earnings on housing, surpassing a common guideline for what is considered affordable. By some census surveys, child-care costs consume close to another one-fifth.

Paychecks for low-income families are shrinking. The inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to just under $15,000, and earnings for the next 20 percent have remained flat at $37,000. In contrast, higher-income brackets had significant wage growth since 1979, with earnings for the top 5 percent of families climbing 64 percent to more than $313,000.

A survey of 29 cities conducted by the U.S. Conference of Mayors being released Thursday points to a gloomy outlook for those on the lower end of the income scale.

Many mayors cited the challenges of meeting increased demands for food assistance, expressing particular concern about possible cuts to federal programs such as food stamps and WIC, which assists low-income pregnant women and mothers. Unemployment led the list of causes of hunger in cities, followed by poverty, low wages and high housing costs.

Across the 29 cities, about 27 percent of people needing emergency food aid did not receive it. Kansas City, Mo., Nashville, Tenn., Sacramento, Calif., and Trenton, N.J., were among the cities that pointed to increases in the cost of food and declining food donations, while Mayor Michael McGinn in Seattle cited an unexpected spike in food requests from immigrants and refugees, particularly from Somalia, Burma and Bhutan.

Among those requesting emergency food assistance, 51 percent were in families, 26 percent were employed, 19 percent were elderly and 11 percent were homeless.

"People who never thought they would need food are in need of help," said Mayor Sly James of Kansas City, Mo., who co-chairs a mayors' task force on hunger and homelessness.

http://finance.yahoo...-103940568.html

It can't be true. How come? I thought US still the world largest economy in the world.. I don't understand how cash flow works in economy math so I hope someone can shed a light of this.

[slim 1,525]

I don't understand how cash flow works in economy math so I hope someone can shed a light of this

It's very simple. If you go to work each day and don't make stupid decisions over and over and over and over then you won't be poor.

The problem with cash flow in this country is we've developed a culture that believes they should be paid to NOT work. And the silly thing is... we're doing it! We're paying people to sit at home and do nothing. Some, we're paying more for each baby they have.

An elementary school kid could figure out this isn't a sustainable system yet we continue to do it.

[Sofiyya 1,687]

It's very simple. If you go to work each day and don't make stupid decisions over and over and over and over then you won't be poor.

The problem with cash flow in this country is we've developed a culture that believes they should be paid to NOT work. And the silly thing is... we're doing it! We're paying people to sit at home and do nothing. Some, we're paying more for each baby they have.

An elementary school kid could figure out this isn't a sustainable system yet we continue to do it.

Your simplistic analysis doesn't take into account the very real fact that whether you go to work everyday, your job doesn't belong to you and it can be taken away from you at any time and for no reason in all but a very few states.

A local company recently fired (not laid off coz they don't want to pay UI) 3000 employees in one month. Most of them are over 40 and had 10 or more years of service. How were they stupid other than to expect never to lose the jobs they went to every day?

[slim 1,525]

Your simplistic analysis doesn't take into account the very real fact that whether you go to work everyday, your job doesn't belong to you and it can be taken away from you at any time and for no reason in all but a very few states.

A local company recently fired (not laid off coz they don't want to pay UI) 3000 employees in one month. Most of them are over 40 and had 10 or more years of service. How were they stupid other than to expect never to lose the jobs they went to every day?

If they were 40 and had over 10 years of service they should be financially stable and not need that job.

That's where the stupid part comes in.

[Bad_Daddy 2,209]

If they were 40 and had over 10 years of service they should be financially stable and not need that job.

That's where the stupid part comes in.

Really? So if someone isn't financially set for the rest of their life by the time they hit age 40 they are stupid? ok....

[dalegg 143]

Really? So if someone isn't financially set for the rest of their life by the time they hit age 40 they are stupid? ok....

That one qualifies as the jaw dropper of the day for me too.

[Trompe le Monde 1,107]

I need to hear about this "retire at 40" program. In fact, I think a lot of people would be interested.

[elmcitymaven 9,712]

I hear Portland is where young people go to retire. We should see if they're all adherents to the program.

[mawilson 2,133]

I need to hear about this "retire at 40" program. In fact, I think a lot of people would be interested.

[Bad_Daddy 2,209]

I knew I should have been a Captain in the NYPD. Right after I made Detective, and then Sergeant, and Lieutenant and all within 22 years. That was right after I hit two straight flushes in a row in Atlantic City.

[Mr. Big Dog 10,747]

[/font]It can't be true. How come?

On the upside, a few folks are doing so much better now that productivity gains don't get spread around anymore.

[Sofiyya 1,687]

That one qualifies as the jaw dropper of the day for me too.

I read and thought, if you can't say anything nice. . .

[slim 1,525]

Really? So if someone isn't financially set for the rest of their life by the time they hit age 40 they are stupid? ok....

Where did I say anything about being set for the rest of their life?

I said they should be stable enough they don't need that job. That's a far cry from retiring right after getting fired.

Someone who loses their job of 10 years and isn't stable isn't stupid, per se, but they've definitely been making some stupid financial decisions. It goes without saying by the time you're 40 you should have a career of some type picked out and obviously, if you've worked a job for 10 years, you do. Therefore, you should be relatively stable in your life to the point where taking on a lower-paying job doesn't wipe you out financially.

The STUPID thing we do in this country is we assume our income is going to go up, up, up over the next 20-40 years and we're going to have that job forever. We run into trouble when those jobs disappear. Why? Because we've made STUPID decisions. Did we really need another kid? Did we really need that big house in the suburbs? Did we need to take on the second car payment? Did we need a timeshare?

What we should've done is said, "even if I lose my job, I can work at McDonald's and we'll make ends meet."

Since people make the STUPID decision of not doing so, the rest of us STUPID people decide to pay them 80% of their previous salary for 99 weeks while they look for a job that can support their extravagant lifestyle they can no longer afford. "But I can't pay my bills on that?"

I need to hear about this "retire at 40" program. In fact, I think a lot of people would be interested.

Like I said, it's not a retirement program. It's an "I can make ends meet without other people's money" program.

All of you need to take a real serious look at your life right now. What if you lost your job tomorrow?

[Sofiyya 1,687]

Slim, do you realize how many career paths have been eliminated or outsourced in the past 30 years alone? This is not just about people who just want to live on the dole, but the profit margins of companies who see people as either consumers or tools. If you hitch your wagon to that, you take your chances at any age.

[slim 1,525]

Slim, do you realize how many career paths have been eliminated or outsourced in the past 30 years alone? This is not just about people who just want to live on the dole, but the profit margins of companies who see people as either consumers or tools. If you hitch your wagon to that, you take your chances at any age.

How hard is it to analyze market trends and see which jobs will still be there in 10, 20, 30 years?

This is like all those idiots in high school who wanted to be artists. I'm glad people have dreams, but you have to make yourself marketable in a skill that's still going to be around in the future. If you don't, it's not my fault and I hate paying for your stupid @$$. (Not you, in particular, but you as in all the dummies that thought they could be porters or elevator operators forever.)