Report on poverty in USA: “Still Working Hard, Still Falling Short”

“Working Poor” report: Nearly 30 percent of US families subsist on poverty wages
By Tom Eley
16 October 2008

A report released Tuesday by the Working Poor Families Project reveals that more than 28 percent of American families with one or both parents employed are living in poverty.

The report, “Still Working Hard, Still Falling Short,” is based on data for the period from 2004 through 2006 gathered from the US Bureau of Labor Statistics, the US Census Bureau’s American Community Survey and the Census Bureau’s Current Population Survey.

The report finds that 9.6 million households can be described as low-income or “working poor”—defined as families that earn less than 200 percent of the official poverty level. There were 350,000 more such families in 2006 than in 2002. More than 21 million children now live in low-income working families—an increase of 800,000 in four years.

SNIP

The impoverishment of ever-larger sections of the working class population is the outcome of a number of processes: the dismantling of large sections of basic industry, the wave of union-busting and strike-breaking in the 1980s, the gutting of social welfare programs, the betrayal of the working class by the trade union organizations.

The other side of this process is the vast enrichment of the top 10 percent of the US population and the ever-greater concentration of wealth in the hands of the financial elite.

A survey carried out in March by Equilar and reported by the New York Times revealed that the CEOs of the 200 largest publicly traded companies earned an average of $11.7 million in 2007.

http://www.wsws.org/articles/2008/oct2008/work-o16.shtml

The 1980's saw the first economic recovery in history that didn't reduce poverty. The "average" was heavily skewed by gains at the top. Poverty was vilified along with the politicians who spoke out on the issue. The middle class was told the poor and the government were the problem. As a result, they voted in policies that left the poor behind as the top earners ran off with unprecedented wealth.

And they're doing it 100 fold today.

Money and the Crisis of Civilization
Charles Eisenstein

Suppose you give me a million dollars with the instructions, "Invest this profitably, and I'll pay you well." I'm a sharp dresser -- why not? So I go out onto the street and hand out stacks of bills to random passers-by. Ten thousand dollars each. In return, each scribbles out an IOU for $20,000, payable in five years. I come back to you and say, "Look at these IOUs! I have generated a 20% annual return on your investment." You are very pleased, and pay me an enormous commission.

Now I've got a big stack of IOUs, so I use these "assets" as collateral to borrow even more money, which I lend out to even more people, or sell them to others like myself who do the same. I also buy insurance to cover me in case the borrowers default -- and I pay for it with those self-same IOUs! Round and round it goes, each new loan becoming somebody's asset on which to borrow yet more money. We all rake in huge commissions and bonuses, as the total face value of all the assets we've created from that initial million dollars is now fifty times that.

Then one day, the first batch of IOUs comes due. But guess what? The person who scribbled his name on the IOU can't pay me back right now. In fact, lots of the borrowers can't. I try to hush this embarrassing fact up as long as possible, but pretty soon you get suspicious. You want your million dollars back -- in cash. I try to sell the IOUs and their derivatives that I hold, but everyone else is suspicious too, and no one buys them. The insurance company tries to cover my losses, but it can only do so by selling the IOUs I gave it!

So finally, the government steps in and buys the IOUs, bails out the insurance company and everyone else holding the IOUs and the derivatives stacked on them. Their total value is way more than a million dollars now. I and my fellow entrepreneurs retire with our lucre. Everyone else pays for it.

http://www.realitysandwich.com/money_and_crisis_civilization