US Failure to Address/Recognize its Underclass & Resulting Increasing Income Inequality

[tjscott0]

https://cepr.net/newsroom/us-poverty-measure-fails-to-meet-government-standards-of-reliability-accuracy-timeliness-and-objectivity/

US Poverty Measure Fails to Meet Government Standards of Reliability, Accuracy, Timeliness, and Objectivity

“The Census Bureau’s statement that only 10.5 percent of Americans were poor in 2020 is an utterly unreliable and inaccurate claim that does not provide a sound efficient basis for decisions and actions by governments, businesses, households, and other organizations.

“There are many reasons why the Census Bureau’s statement is utterly unreliable and inaccurate, but here are the two most important ones. The poverty line used by the Census Bureau to produce this figure is 1) much lower than the amount of income most Americans say is needed to not be poor in today’s America; and, 2) much lower than any reasonable expert estimate of the goods and services it takes to not be poor today.

Poverty, not the poor

for certain groups, (iv) unexpectedly high for those who “play by the rules,” and (v) pervasive across various groups and places.

The historian Michael Katz (1) writes, “The idea that poverty is a problem of persons—that it results from moral, cultural, or biological inadequacies—has dominated discussions of poverty for well over two hundred years and given us the enduring idea of the undeserving poor.”

They deserve it. They made poor choices.
Yet poverty remains high in the nation. Are we a nation of dummies?
Or is it more likely the system is unfairly tilted toward the advantaged and it is increasingly more difficult and expensive to crawl out of poverty.

There was a 30 year period [1980-2009] where US median wages remained stagnant. But the cost of living did not.

Employed full time: Median usual weekly real earnings: Wage and salary...

But tj look at the chart! Wages have gone up since 2015. Walmart has doubled its starting wage. Problem solved.

Maybe not.

Workers at top 20 US low-wage firms rely on public assistance, report says

Many workers at some of the largest US corporations have no choice but to rely on healthcare and food assistance because of low wages, even as CEO compensation continues to grow, according to a new report released Wednesday.

The report, published by the Institute of Policy Studies, focuses on 20 of the S&P 500 corporations that have primarily US-based workforces and report the lowest median wages of the group.

Many Walmart & Amazon workers rely on Medicaid & SNAP.

America’s 20 Largest Low-Wage Employers and the Affordability Crisis -...

• At least 16 U.S. billionaires owe their wealth to companies in the Low-Wage 20. These individuals, which include both current and former top executives and dynastic heirs, include eight associated with Walmart, two with Amazon and Tyson Foods, and one each with Home Depot, Best Buy, Starbucks, and Chipotle.

• The Low-Wage 20 companies combined spent $260 billion on stock buybacks between 2019 and 2024. This financial maneuver artificially inflates the value of CEO stock-based pay while siphoning resources from worker wages and other productive investments.
  Stock buy backs largely benefit the top 10% that own 90% of stocks.

Will there be a reckoning from the armed underclass?
Could a lifted up underclass consume enough to drive US GDP even higher?
Will US establishment political parties offer solutions to the structural problem?
Important questions for the economic future of the United States.

But not for me. I got mine and it will last until my expiration date.

[tjscott0]

The Measuring Stick is OUTDATED

This week, while trying to understand why the American middle class feels poorer each year despite healthy GDP growth and low unemployment, I came across a sentence buried in a research paper: “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.” The formula was developed by Mollie Orshansky, an economist at the Social Security Administration. In 1963, she observed that families spent roughly one-third of their income on grocerie…

“The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”

The formula was developed by Mollie Orshansky, an economist at the Social Security Administration.

But everything changed between 1963 and 2024.

Housing costs exploded. Healthcare became the largest household expense for many families. Employer coverage shrank while deductibles grew. Childcare became a market, and that market became ruinously expensive. College went from affordable to crippling. Transportation costs rose as cities sprawled and public transit withered under government neglect.

It would seem we have more folks living in poverty than the US government counts.

[intercst]

@tjscott0

Are we a nation of dummies?

The fact that so many people vote against their economic interests seems to indicate the affirmative.

intercst

[solarae100]

I’ve encountered many folks, some older some not that just can’t “navigate the system”. From online forms to chatbots, the digital gap is widening.

[ges]

For a few years my wife volunteered to help people with their taxes. The people who needed help were those living on the margins of society. Even though most had relatively simple returns, it was very confusing to them.

But, given our absurd tax system, even ‘relatively simple’ can be quite confusing.