US Census Bureau Confirms Rising Poverty, Falling Incomes, and Growing Numbers of Uninsured

In early September, the US Census Bureau released its new report titled, “Income, Poverty, and Health Insurance Coverage in the United States: 2008” showing disturbing data that portends much worse ahead under a president and Congress doing nothing to address it.

In 2008, poverty reached 13.2% of the population, its highest level in 11 years, the result of millions losing jobs during the first year of the gravest economic crisis since the 1930s. For blacks, the figure was nearly double at 24.7%, and 31% of all Americans were impoverished for at least two months between 2004 and 2007, years of economic expansion.

At year-end 2008, even by the Bureau’s conservative measures, 39.8 million people were impoverished, the highest level since 1960, and 17.1 million lived in extreme poverty at below one-half the official threshold. In addition, for the first time since the 1930s, median household income failed to increase over a 10-year period from 1999 – 2008.

The Census Bureau states that it “presents annual estimates of median household income and poverty by state and other smaller geographic units based on data collected in the American Community Survey (ACS)” covering population areas of 20,000 or more. The Bureau’s Small Area Income and Poverty Estimates (SAIPE) program also produces yearly figures “for states and all counties, as well as population and poverty estimates for school districts.” It uses data from a variety of sources, including surveys, administrative records, inter-censal population estimates, and personal income data published by the Bureau of Economic Analysis.

Critics maintain that official government figures way understate the gravity of today’s crisis, and the Bureau says:

“The official poverty thresholds were developed more than 40 years ago and have been criticized for not taking into account rising (or since the 1970s inflation-adjusted falling) standards of living, expenses such as child care that are necessary to hold a job, variations in medical costs across population groups (that have skyrocketed nationally and are now unaffordable for millions), and geographic differences in the cost of living.”

In addition, income and poverty estimates are pre-tax and exclude non-cash benefits, usually employer-provided. Disposable personal income, after income, payroll, sales, property and other taxes, reveals a far higher poverty level than the Census Bureau reports and a much graver crisis for growing millions as the economic decline deepens.

The Bureau reported that 2008 median (inflation adjusted) household income fell 3.6%, the largest single-year decline on record to the lowest level since 1997 and falling as conditions continue to worsen.

The plight of the poor and impoverished shows up in numerous other reports that paint a darker picture than the Census Bureau and suggest much worse ahead:

* an unprecedented, growing disparity between the very rich and other income groups;

* economists Thomas Piketty and Emmanuel Saez’s research showing the top 1% of households got two-thirds of the national income growth during the last recovery, a larger share than at any time since the 1920s;

* wages losing ground to inflation;

* millions of children dependent on school lunches for a hot meal;

* the Economic Policy Institute estimates one-quarter of all children living in poverty by year-end 2009;

* the continued erosion of employer and government-provided benefits, including at the state and local levels; the growing uninsured crisis is discussed below;

* greater numbers of households unable to meet expenses, even with two working members;

* added duress from state budget cutbacks;

* record numbers of food stamp recipients;

* persistent and growing hunger and homelessness; and

* job losses and higher unemployment continuing for many more months, with some analysts projecting record high numbers before peaking.

A September 11 story in Time magazine by Kissinger Associates’ Joshua Ramo highlights the problem. Titled, “Jobless in America: Is Double-Digit Unemployment Here to Stay,” it quotes Larry Summers’ remarks last July before the Peterson Institute for International Economics about the disturbing rate of job losses. He suggested something strange was happening, unpredicted by experts:

“I don’t think that anyone fully understands this phenomenon,” he said. Will job losses mount longer than expected? At the “recession’s” end, will low numbers of new ones follow, and will double-digit unemployment persist and remain common?

Without saying it, Summers wondered if America’s economic model was broken and, if so, how to fix it. Or can it be fixed? According to the Peterson Institute’s Jacob Kirkegaard, “It is entirely possible that what started as a cyclical rise in unemployment could end up as an entrenched problem.”

Summers earned his reputation as an employment theorist. He now believes that earlier unemployment views are “importantly wrong. I thought if you could have areas where there was long-term substantial unemployment, then that raised some questions about the functioning of markets.”

In 1986, he wrote an article titled, “Hysteresis and the European Unemployment Problem.” Hysteresis is the Greek word for late, referring to what happens when something snaps and can’t be fixed. It’s an idea economists deplore applying to economies, preferring instead to cite normal business cycle ups and downs. Yet in 1986, Summers argued that Europe’s unemployment might be chronic and persist in times of growth.

Today’s situation is another matter, coming at a time of changing economic landscape, perhaps suggesting that hysteresis is confronting America, and many lost jobs aren’t coming back, especially better paying ones. That’s Kirkegaard’s view in saying growth won’t put Americans back to work, and new jobs created will be of poorer quality than old ones.

So what can be done? Unlike in the 1930s, machines now do much of the work that people did on infrastructure projects. And it’s a lot harder converting white-collar workers to blue-collar ones. Moreover, Summers’ own research concludes that the traditional Western economic model won’t alleviate the jobs crisis. So what will?

Summers won’t say it, but short of a total remake of “free market” economics, likely nothing. And perhaps that’s America’s future: growing millions consigned to a permanent underclass, while an elite few at the top grow richer, until one day “hysteresis” snaps the system in a disruptive convulsion, the old model passes from the scene, and nothing is the same again.

More Evidence of Economic Duress in the Latest Federal Research Report on Consumer Credit

On September 8, the Federal Reserve reported that total consumer credit fell by a record $21.6 billion in July (the sixth consecutive monthly decline) and year-over-year by $2.47 trillion or 10.4%. According to Bernard Baumohl, The Economic Outlook Group’s chief global economist:

“It is one more important sign that consumers are not going to be contributing very much to the economy for the balance of this year and probably for (at least) a good part of next year.” Shrinking credit’s impact on consumption indicates an economy in decline. It shows up in growing poverty, falling incomes, and greater duress for growing millions, sure to be reflected in the Bureau’s 2009 report.

Continued Erosion of Health Care Coverage

In 2008, the Bureau also collected data on health insurance coverage, putting the number of uninsured at 46.3 million last year (15.4% of the population), an increase of 682,000 over 2007. It was the eighth consecutive year that fewer workers got employer-provided coverage, and those with insurance had to pay more of the cost.

Other estimates are far grimmer. Some, including the Congressional Budget Office, place the current uninsured total at about 50 million, and a May 2009 Todd Gilmer/Richard Kronick study estimated that 191,670 more lose coverage monthly, 2.3 million annually at the present rate, and an expected 6.9 million more Americans (over 2007) will lack it by year-end 2010 if the present trend continues.

Add to these the underinsured. According to the American Public Health Association, at least another 25 million are at great risk if they face a serious health problem not covered by their present plan. In addition, Families USA estimates about 90 million Americans had no health insurance during some portion of 2007 or 2008. The Henry J. Kaiser Family Foundation reported that over 80% of the uninsured come from working families, and the Agency for Healthcare Research and Quality estimated that 27% of under aged-65 year old Americans lack coverage.

Still other estimates project up to 60 million uninsured if the commonly reported U-3 unemployment rate hits 10%, and the Urban Institute sees around 66 million without coverage by 2019, given the present trend of rising costs forcing employers increasingly to cut back.

Bureau data show that coverage weakened across most sectors of the population, including full-time workers and the middle class, the result of economic decline and years of employers putting a greater burden on their workforce.

Since at least 2001, the percent of workers with employer-provided insurance has steadily eroded, and it’s the main reason behind growing numbers of uninsured and underinsured. In 2008, 61.9% of the below-age 65 population had job-provided coverage, down from 67% in 2001 and falling due to cost cutting, continued job losses, and the trend to lower-paying ones.

In addition, holding a job no longer guarantees coverage. Plans offered have been greatly eroded, and medical expenses today are the leading cause of personal bankruptcies. America is the world’s only industrialized country denying its citizens universal coverage, yet spends on average more than double what the other 30 OECD countries spend, and delivers less because of unaffordable private insurance and overpriced drugs.

Nothing being debated in Washington addresses this, so whatever legislation emerges will make a dysfunctional system worse with the American public betrayed by “a slick-talking street hustler” — what analyst Bob Chapman calls Obama, or according to James Petras, “the greatest con man in recent history.” Make that plural with Congress under Democrat or Republican leadership because both parties are beholden to the corporate interests that own them and are indifferent to growing public needs.

Since taking office in January, Obama kept reform off the table, made progressive change a nonstarter, and achieved the impossible by governing worse than George Bush on virtually all of his domestic and foreign policies. Along with looting the federal Treasury, wrecking the economy, selling out to Wall Street, and continuing imperial wars, Obamacare is the centerpiece of his failed agenda and a betrayal of the public’s trust.

On September 9, he presented his vision to a joint congressional session, reassuring providers that their interests are secure. Rejecting universal single-payer coverage, he said it “makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch.” And while favoring a “public option,” he assured private insurers that it’s not a deal-breaker, guaranteeing that no final plan will include one because enough votes can’t be gotten in the Senate.

Key also is the lowering of costs by:

* cutting hundreds of billions in Medicare and Medicaid benefits as a prelude to eliminating or greatly gutting these programs with perhaps Social Security and other social gains to follow;

* placing caps on what tests and treatments doctors can provide;

* putting “medical expert” gatekeepers in charge of deciding the most cost-effective care, thus preventing doctors from prescribing what’s best for their patients and denying people the right to make their own health care choices if their cost exceeds what Washington will allow;

* taxing so-called “Cadillac” plans (mostly covering state employees, municipal union members, and other working Americans, not just the super-rich) to encourage employers to provide fewer benefits, thus placing a greater burden on workers; forcing everyone to have insurance; and placing a surtax on non-compliers with incomes of between 100 – 300% of the poverty level under the Baucus Senate plan;

* creating a “deficit trigger” to reduce the growth of Medicare and Medicaid spending if anticipated savings aren’t met; and

* making everyone more responsible for their own care by forcing them to cover more of the cost in return for less coverage when they need it most.

Numerous details remain hidden from the public, but the goal of Obamacare is clear. It’s a scheme to ration care; charge people more for it; enrich private insurers, PhRMA, and large hospital chains; mandate insurance for everyone; and penalize non-compliers.

It’s up to public outrage to stop it.

Stephen Lendman wrote How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War. Contact him at: Also visit his blog site and listen to The Global Research News Hour on Mondays from 11AM-1PM US Central time for cutting-edge discussions with distinguished guests. All programs are archived for easy listening. Read other articles by Stephen.

10 comments on this article so far ...

Comments RSS feed

  1. mary said on September 16th, 2009 at 10:26am #

    Tonight’s BBC News reports food banks being set up, unemployment officially at 2.47m (unofficially reported to be 5m adding in school and college leavers, long term unemployed on various work schemes and those who do not qualify for unemployment benefit) and 1 in 7 households dependent on benefits of one kind or another.

    No solutions to these problems are being offered by Brown or his would be replacement Cameron. The enormous bank bail outs have left us in penury with a budget deficit of £175 billion if that figure can be believed.

  2. b99 said on September 16th, 2009 at 10:37am #

    So why do Americans not overwhelmingly opt for universal health care? The major reason for this is that America has Black People. Conservatives, especially Southern Conservatives, want NO social programs that aid blacks. (Or for that matter, Hispanics – but it’s historically blacks that rankle them). So even meager crumbs – or perceived crumbs – thrown that way by Obama gets him labeled a socialist, it gets him yelled at as a liar (for the wrong reasons), it gets the gun-toting posse comitatus types out to his speeches. It gets them questioning his birthplace (even as these same people campaigned to overthrow that requirement just so they could run Austrian-born Schwartzenegger for prez).

    Until and unless American workers – particularly its working class – abjures racial privilege and makes every effort to bond with black workers (instead of with owners and managers) – for higher pay, for employee benefits, and for universal health coverage – Wall Street, the medical industry, and the collective chambers of commerce will insure that the US remains #37 in global health,

  3. Deadbeat said on September 17th, 2009 at 1:53am #

    What B99 writes is very true and why it is incumbent upon the Left to principally reject ALL FORMS OF RACISM.

  4. United-Socialist-Front said on September 17th, 2009 at 8:48am #


    B99: You missed some races and ethnic groups that the white-nationalists libertarians far-right wingers of the conspiracy theory movement in America and the Tea Party hates: the latinos and any “illegal” immigrant.

    You also have to be aware and realize, that after 9-11 terrorist events in USA, there was a rise of the ultra-right wing, libertarian conspiracy-theory websites and movement, like Jeff Rense, Michael Rivero, and Alex Jones.

    I used to be a loyal reader of the websites of Alex Jones, Jeff Rense and Mike Rivero, but after i’ve noticed their ideology which is ultra-right wing, white-nationalism, libertarianism, free-market conservatism. I have lost interest in even reading their websites.


  5. United-Socialist-Front said on September 17th, 2009 at 8:55am #

    b99: oh and i forgot one thing. The real reason of why the US left is so weak today, it is because of the rise of libertarian, conspiracy-theory alternative news.

    Many americans come from the filthy white-nationalist, consumerist middle-class, who are also beating the bullets economically. But instead of using their anger created by lack of money in becoming socialists. What many young americans are doing is following blindly the conspiratorial world view of David Icke, Alex Jones, Mike Rivero, Jeff Rense, Henry Makow and all the theorists who talk about The Illuminati Order, the so called “New World Order” which is really the capitalist-system.

    Instead of attacking the capitalist-system worldwide, what these followers of Jeff Rense, Mike Rivero, David Icke, and other theorists of the white-nationalist, conservative free-market, ultra-right wing conspiracy theory movement do is that they label the “New World Order” or the “Global Elites” or even they think that only a few families are culpable of all world problems. These families are The Rotschilds, The Rockfellers, The Walton Family, The Morgans and others.

    And indeed, those families are evil, but instead of pointing our finger against a specific family, or even against the jews, what we should do is to attack the head of the snake which is the capitalist system. And welcome the socialist system as a rational alternative. Instead of choosing weird recipes like paleoconservative, libertarianism Ron Paul’s romantic free markets.


  6. b99 said on September 17th, 2009 at 10:47am #

    Adtually, USF, I mentioned Hispanics (Latinos). I could have mentioned Asians as well.

    But the question is how to we get from here to there. What must be done at the work-a-day level – in the here and now – to promote the idea of getting working people to identify as a class rather than by some other identification that pits the working class against itself? If you are suggesting an elite vanguard of the proletariat – what must they do besides rail against the empire?

  7. United-Socialist-Front said on September 17th, 2009 at 12:17pm #

    B99: Be aware of the ignorance and dumbness of the followers of the neoliberalism economic model are like Ron Paul, Libertarian Conspiracy Theorists, The Tea Party Supporters, And the Republican Party supporters are, and how evil this ideology of free market is for americans.

    My sister had a little fire in her house in Knoxville, Tennessee, and the Fire Department charged her a capitalist bill of $400.00 for shutting off that small fire which was not even a fire, it was a small fire in her stove top and some thing like that which was irrelevant really. (I told her that the cause of why life is so expensive in America and why there are almost no subsidized and free services in this country is The Tea Party Libertarians, The Republican Party, The libertarian ideology of the US government, the libertarian Founding Fathers, and the libertarian think tanks and lobbies within the US government)

    But the thing is that thanks to the Neoliberal Libertarian Free Market privatized ultra-right wing economic model that all US cities have, the utility and basic services in this neoliberal-free market libertarian country are privatized (I.E: not free)

    I can’t understand how USA still has Free Public schools and food stamp program (Almost a miracle) in a country with ultra-right wing, conservative, neoliberal, libertarian, Pro-Ayn Rand economic system in all US cities and states.


  8. United-Socialist-Front said on September 17th, 2009 at 1:38pm #


  9. mary said on September 18th, 2009 at 12:56am #

    Stephen Lendman’s colleague, Michel Chossudovsky, speaks to the Corbett Report on the insolvency of the US.

    Simply put, the cost of the bail-outs and financing of the derivatives plus the cost of military spending EQUAL the total Federal revenue. How’s that for a neat equation? He calls it a diabolic process and predicts a fiscal collapse.

  10. Carla said on October 2nd, 2009 at 8:15am #

    Interesting. Mary, your link did not work. I wonder if that was conveniently removed. Liberty rules, not tyranny. People are finally waking up to the dangers of both parties and bailing in vast numbers. We need an end to the two-party tyranny that exists in this country. Period.