The theme at the Democratic Convention in Denver yesterday was “RenewingAmerica’s Promise”–the Democrats’ plan to grow the economy andrestore fairness so that it works for all of us. The 2007 Censusdata on poverty, income and health insurance was also released yesterdayand it showed just how tall an order Senator Obama and the Democratsface in reversing eight years of failed Bush economic policies -policies we will continue to pay a price for in 2008 and beyond.
While the 2007 numbers don’t even include the devastation wrought by thehousing and credit crisis, and high energy costs, they neverthelesspaint a bleak picture with poverty on the rise and working people’s paystagnating despite increased productivity.
Robert Greenstein, Executive Director of the Center for Budget andPolicy Priorities said, “Though 2007was the sixth (and likely the final) year of an economicexpansion, 4.4 million more Americans were poor, the median income ofnon-elderly households was $1,100 lower, and nearly six million moreAmericans were uninsured than in 2001 – even though the economy was inrecession that year…. Never before on record has poverty been higherand median income for working-age households lower at the end of amulti-year economic expansion than at the beginning. The new data add tothe mounting evidence that the gains from the 2001-2007 expansion wereconcentrated among high-income Americans.”
“We have the biggest gap between the rich and everybody else since theGreat Depression,” saidIndependent Senator Bernie Sanders on VermontPublic Radio.
Jared Bernstein, Director of the Living Standards program at theEconomic Policy Institute, agreed with Sanders. He suggested that we havethe greatest concentration of wealth in the richest 1 percent of the countrythan we’ve had since 1928. Bernstein noted that the economic expansionfailed to lift working people’s incomes despite that fact that “outputper hour, or productivity, rose 2.5 percent per year during the 2000 to 2007cycle, compared to 2 percent in the 1990s, when family incomes fared muchbetter…. The economy… expanded in the 2000s, but that growth clearlyfailed to reach most households, a dynamic that implicates growingincome inequality…. The fact that these disappointing income, poverty,and earnings trends occurred in thecontext of strong productivity growth is a reminder that in today’seconomy, productivity growth creates only the potential for higherliving standards. As long as most workers lack the bargainingpowerto claim their share of the growth they have helped to generate, thatpotential will not be realized.”
The Bush administration will tout 2007 as the first decline in number ofuninsured during its tenure. But Greenstein pointed out that privatecoverage continued to erode and “the improvement in health care coveragein 2007 was due to more Americans obtaining coverage through governmenthealth insurance programs, principally Medicare and Medicaid.” Surely,that’s not what the Bush Administration was gunning for. In fact,Greenstein said the Congressional Budget Office estimated that four millionmore children would be insured had President Bush not twice vetoedexpansion of the State Children’s Health Insurance Program (SCHIP). Inall, nearly 46million Americans did not have health insurance last year.
As for poverty, it’s first worth noting that the standard of measurementis woefully inadequate. The federalpoverty guideline for a family of four is $21,203 in 2007. Bernstein has suggested a more accurate measure of “material deprivation” usingrecommendations from the National Academy of Sciences. But even usingthe federal standard, 816,000 more people slipped into poverty in 2007,meaning 37.3 million Americans or 12.5 percent of our population lived belowthe federal poverty line. That figure includes 18 percent of all childrenunder the age of 18, and over 20 percent of related children under age six. The poverty rate was 24.5 percent for African-Americans and 21.5 percent forHispanics. 50.9million people , or 17 percent of all Americans, lived on less than125 percent of the federal poverty level in 2007 (approximately $26,000for a family offour).
The Food Research and Action Center (FRAC) – a national non-profitworking to address hunger and poverty –
wrote in a released statement,”The 12.5 percent rate in 2007 compares to 11.3 percent in 2000. It isunprecedented that poverty is higher at this point in an economic growthcycle, and the damage from the failure of the economy’s growth to liftmore people out of poverty is huge: if the 2007 poverty rate were justthe same as in 2000, approximately six million fewer Americans would havelived in poverty in 2007. All signs are thatthe poverty rate will be driven higher in 2008 by a slowing economy andskyrocketing costs for housing, energy and food.”
There seems to be little disagreement about that.
“The data for 2007 are of particular concern given that the economy isnow in a slowdown, and poverty is almost certainly higher now–andincomes lower–than in 2007,” Greenstein said. “The 2007 levels… arelikely to constitute a high-water mark for the next few years.”
“When the data become available for 2008, the picture will undoubtedlygrow more grim,” wroteMichael Ettlinger, Vice President of Economic Policy at the Center forAmerican Progress. “Average real weekly earnings are down 2.4 percentso far this year, according to the Bureau of Labor Statistics.”
So where should an Obama Administration and Democratic Congress settheir sights?
Greenstein said the next President and Congress should set a nationalgoal to reduce poverty and act on it. Other organizations have pushedhard on this too. The Association of Community Organizations for ReformNow (ACORN), the Center for American Progress Action Fund, the Coalitionon Human Needs, and the Leadership Conference on Civil Rights aretogether cooperating on the Half in Ten project,working to promote a national goal to reducepoverty by 50 percent in ten years. Greenstein also argued forsupporting state Medicaid programs by temporarily boosting federalsupport, and reconsidering the Bush-vetoed legislation expandingcoverage for children.
FRAC President Jim Weill focused on a second stimulus package and theneed to boost food stamps as a record number of people turn to them.”We will hear a lot this fall from Presidential and Congressionalcandidates about their vision for America’s economic future. Areinvigorated fight against hunger and poverty must be an essential partof this vision,” he said.
When it comes to vision on poverty there islittle comparison between the presidential candidates. Senator Obama istalking about a new energy economy, rebuilding our crumblinginfrastructure, union organizing, pay equity and a more progressive taxsystem. While his policies may not be bold enough during the campaign,the facts on the ground—mounting foreclosures, more people out ofwork–will demand more of a Democratic administration.Senator McCain, onthe other hand, is hopelessly out of touch–saying the economy is “fundamentally sound” and poverty isn’t even listed as anissue on his campaign website.
These recent figures show there is a powerful need for Obama andDemocrats to put poverty back on the national radar. The grim stats onthe ground and the lives intertwined with them demand a boldagenda. Beyond Obama and the Democrats, such an agenda needs independentorganizing to drive it, much the way the 1963 March on Washington eventually helped drivethe War on Poverty. Ending a trillion dollar war and redirecting someof those resources back home is key as well.
Unless (and until) we tackle the gap between the very rich and the restof America–including the growing number of people falling into poverty–it will be increasingly difficult to confront the major challenges ofour time.
The truth is, lifting the boats at the bottom has historically been goodfor all Americans.
