Trickle Down Poverty

trickle down povertyRepublicans in the House just voted to cut food stamps for poor Americans. They say the program is too large, because so many Americans need food stamps to help them buy groceries. Too large means too many tax dollars are being spent to feed poor Americans. The Republicans want to cut taxes, and they mean to do that by cutting programs that spend money on the poor.

Why does rich America have so many poor people? The answer cannot be found in the recent economic disaster from which we are slowly recovering. The problem of the American economy is much older.

The typical American household, right in the middle of the economic spectrum, is making the same real income as in 1988, 25 years ago. The per capita size of our economy has grown 40% in that time, but none of the gains have gone to middle Americans. Even worse, the real net worth of the middle American family has fallen 6% since 1989.

Over the past 15 years the number of full-time year-round workers has barely changed, as more and more corporations offer only part-time work in order to reduce the need to pay benefits. Even for those with full-time work, like factory workers, real wages have fallen since the 1970s. Adjusting for inflation, the minimum wage has fallen steadily since the 1960s; it is now only two-thirds of the value it was 45 years ago.

In fact, the vast majority of Americans, the real 99%, have seen little improvement. Since 1993, real income for the 99% has grown only 6.6%, about one third of 1% a year, barely noticeable.

For the top 1%, on the other hand, the past 35 years have been a bonanza. In 1978, the top 1% made 9% of the total income in the country; last year their share was 23%. In the last 20 years, their incomes nearly doubled. The top one-hundredth of 1%, the richest 16,000 families, have increased their share of total income from 1% in 1978 to over 5% now, the highest it has ever been. These 16,000 families make about the same each year as the bottom 16 million families.

While the very rich have been increasing their share of the American economy, the number of poor Americans has been rising. Although the social programs and economic expansion of the 1960s reduced the number in poverty from 40 million to under 25 million, the number began to climb again after 1978 to over 46 million in 2012. But the so-called poverty rate of 15% of Americans for 2012 is misleading about the nature of American poverty. Over the three years 2009 through 2011, nearly one-third of Americans experienced a spell of poverty lasting 2 or more months. Only 3.5% of the population were poor for that entire span. So the spending on anti-poverty programs like food stamps works to help the millions of Americans who fall into poverty to stand back up again.

You wouldn’t know any of this from listening to Republican politicians. They blame poverty on the poor. Of course, they don’t actually make that argument openly, because nobody could really believe that the poorest Americans have caused the rich to get richer and the rest to stagnate. They make the argument behind closed doors, like Mitt Romney did when he was caught on videotape during the 2012 campaign.

In public, they talk a lot about the national debt, and then try to reduce it by cutting every program that helps the poor. Here’s how they connect the dots. The biggest problem in our economy is the national debt. That is caused by too much taxation and too much government spending, but not every big government program needs to be cut. The programs that need to be cut are the food stamp program, unemployment compensation, and Head Start. Programs that need to remain or even grow are tax breaks for the rich, tax breaks for corporations, and subsidies for agribusiness.

None of those programs can possibly help the poor, or the sinking middle class. And that’s the whole idea. The Republicans are not trying to use government to make life better for most Americans. They don’t believe that government should help most Americans.

The Republicans don’t even have to pretend that they care about the economic plight of the majority. In Owsley County, Kentucky, over half the population gets food stamps, but this nearly all-white county voted 81% for Romney. Of the 254 counties whose number of food stamp users doubled since 2007, Romney won 213.

steve hochstadtSo tough luck for the poor. Republicans are trying to slash the programs which have allowed most people who fell into poverty during the recession to get out of it. And for the rest of the middle class, whose incomes are going nowhere, they can watch the very rich eat up more and more of our national wealth.

Maybe the trickle down will start tomorrow.

Steve Hochstadt
Taking Back Our Live

Photo: Linh Dinh

Monday, 23 September 2013

Published by the LA Progressive on September 23, 2013
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About Steve Hochstadt

Steve Hochstadt is professor of history at Illinois College in Jacksonville, Illinois, and author of Sources of the Holocaust (2004) and Exodus to Shanghai: Stories of Escape from the Third Reich (2012), both from Palgrave Macmillan. He writes a weekly column for the Jacksonville (IL) Journal-Courier and blogs for the History News Network. "His latest work is presented at www.stevehochstadt.com."