Drastic Growth in "Extreme Poverty" in the U.S.

Posted from WSWS.org
written by: Debra Watson

Blog note:  This is a great article with vital research on poverty in America.  Please pass this around to extend our knowledge base and stand up for our rights.  For example, instead of writing a check for their employees, McDonald's now issues pay cards with $1.50 charge for each withdrawal and penalties for non use.  When employees ask for a check, they are refused.  In the good ole' days, it used to be that those who worked at McDonald's were high school students saving up to buy a car.  However, these days nearly 70 percent of their workers are over 20 and a quarter of them are workers with children.  It is not surprising that the report referenced in the article below reflects a substantial increase in poverty levels in America.  

If a worker at McDonald's was paid a living wage of $15.00 per hour, the cost of the burger would go up by .05 cents.  Wouldn't you pay the extra $.05 for a burger knowing that the people behind the counter can survive and not need welfare benefits? The excuses the corporations give for NOT increasing wages does not prove factual.  McDonald's is not the only corporation that pays their workers way under living wages, folks like WalMart, Target and other box stores do the same.  WalMart Superstores costs the American taxpayers 1.7 billion a year in subsidized food stamps, medicare/medicaid, and other welfare programs totaling $5,185 per year per worker.  

I think that it is time to organize a nationwide boycott campaign with all the workers going on strike for a few days.  Don't you?

A report this summer from the National Poverty Center (NPC) reveals that the number of people in the US living on less than $2 a day per person, termed “extreme poverty,” increased by 160 percent from 1996 to mid-2011, rising from 636,000 households to some 1.65 million households. The findings throw light on the terrible plight of children in America. Concentrating on non-elderly households with children, the report found that 4.3 percent of these households were in extreme poverty, with 3.55 million children living in them.

The number of households in extreme poverty in the US began to climb irreversibly after the Clinton administration ended cash welfare for vulnerable families in 1996. Over a dozen years, between 1996 and late 2008, the number and extent of extreme poverty roughly doubled, rising by more than 600,000 households. The increase continued after the recession of 2008, but the pace was now accelerated. Over roughly three years following the financial meltdown, 450,000 more families joined the ranks of the utterly destitute, with a sharp increase in numbers in the first six months of 2011.

The report, published in Social Service Review, was authored by H. Luke Shaefer, University of Michigan, School of Social Work, and Kathryn Edin, Harvard University, Kennedy School of Government. Measuring extreme poverty uncovers a further income stratification among those below the official poverty level. The sharply rising income inequality in the US has created in its wake a new phenomenon: massive numbers of US families that live in daily conditions once relegated the poorest of the poor in the economically underdeveloped world.

It throws light on particular aspects of the growth in inequality in the US that have not been examined in reports from the Census Bureau and other sources that compare income for different quintiles of the population. Some recent research has developed a category called “deep poverty” or a yearly income below half the official poverty line. Both these methods of research have revealed drastically rising inequality and the growth of deep poverty in recent years.

The researchers used the figure of $2 a day per person, the United Nations measure of poverty in developing countries. The official poverty line for a family of three would equate to roughly $17 per person per day averaged over a year. Deep poverty, below half the poverty line, would equate to an average of approximately $8.50 per person per day.

At $2 per person per day, the extreme poverty category examined in this report finds a family with virtually nothing to live on, or roughly 13 percent of what is considered official poverty. Social science researchers have estimated that it requires an income twice the Census Bureau’s official poverty level to actually support a family.

Counting food stamp benefits, now called SNAP, as cash only reduces the number of extremely poor households with children by half. The current food assistance benefit for a family of three tops out at $526. Since it only is available to families with income below 130 percent of the official poverty level, receiving the benefit does not bring any family to a livable income. If counted as the equivalent of cash income, the assistance actually would barely move a family in extreme poverty to deep poverty.

In addition, the SNAP benefit itself is facing serious cuts and even outright elimination for many poor families. In November, a family of three will lose $29 a month when the SNAP per person benefit allotment is cut as the federal government eliminates stimulus measures instituted in the immediate aftermath of recession. Five million people will be entirely cut off from SNAP benefits if limits in eligibility are imposed under plans to cut the program that emerged during discussion of the new Farm Bill this summer.

The number of SNAP households has nearly doubled since 1996, according to the report, indicating the huge rise in need. In 1996, there were an average of 25.5 million recipients per month, and by the end of 2012, this had gone up to 47.5 million. Earlier this year, a new Census Bureau Survey of Income and Program Participation (SIPP) counted a record 49 million people considered poor in America. Still, 1.7 million children are left behind in extreme poverty because they do not get these benefits.

While SNAP-assisted households were doubling, cash welfare was plummeting. The researchers note: “Subsequently, cash assistance caseloads have fallen from 12.3 million recipients per month in 1996 to 4.5 million in December 2011, and only 1.1 million of these beneficiaries are adults. Even during the current period of continued high unemployment, the cash assistance rolls have increased only slightly. ‘Welfare,’ in the form of cash assistance, is a shell of its former self.”

In Clinton’s infamous acceptance speech for the Democratic Party’s nomination for president in 1992, he laid out the plan to end the New Deal-era Aid to Families with Dependent Children (AFDC), which for the previous five-plus decades provided monetary assistance to families with little or no income.
Under the continuing economic crisis, states are accelerating the pace at which families in need are being driven off the welfare rolls. For example, in March 2013, there were 47,460 households in Michigan that received welfare payments, according to the latest Economic Security Bulletin from the Michigan League for Public Policy. They note: “This is the first time since the Family Independence Program was implemented in 1996 that the caseload dropped below 50,000.”

By June 2013, the caseload in Michigan dropped to 43,400 welfare cases, nearly half the number counted in late 2011 when new state measures eliminated exceptions to strict federal and state time limits for welfare. A 60 months’ lifetime limit for welfare was imposed under the Clinton administration in 1996 and was cut to 48 months in Michigan by Democratic governor Jennifer Granholm in 2007.
In fall 2011, the Republican Michigan state legislature eliminated exceptions, such as those that kept people living in high unemployment areas in the state from losing their benefits. There are still more than 400,000 unemployed in Michigan today.

The report also explores long-term unemployment and the increase in extreme poverty. There were 4.8 million workers in the US in 2012 unemployed for more than six months. That year, half the unemployed in Michigan were in this category.

The report’s authors note: “While the Great Recession era has ushered in a prolonged period of high unemployment, its real legacy may prove to be the unprecedented duration of unemployment spells: the average spell was 38.1 weeks as of December 2012.” This has increased the number of people in the US in extreme poverty, struggling to survive on practically nothing.

The researchers also point to the trend to shift already drastically inadequate government-funded income support from the unemployed to those working low-wage, part-time and temporary jobs—most of the new jobs being created in the US. The minimum wage is a poverty wage, still $7.40 an hour, about half what has been computed as a living wage.

WalMart - Keeping Families in Poverty

3 June 2013

WalMart hires more people in the United States than any other company.  They recruit three times the number of people than the U.S. military does each year.  Yet, the majority of their employees are families with children who live below the poverty line.  WalMart promotes to buy American but most of their goods are manufactured outside of the United States in sweatshops.

Walmart has 1.4 million employees in the U.S. and a total of 2.1 million worldwide. Females make up 70% of Walmart's work force, many of whom are head of households.  The average full time sales associate take home pay is under $15,576 per year. However, most of Walmart's employees are part time with an average take home pay of $250.00 per week or 8.81 per hour.  Walmart's associates earn 28 percent less, on average, than employees at other large retail stores.   In contrast, the average pay for store managers is $50,000 to $170,000 per year.  CEO Mike Duke received $18.7 million in total compensation or he makes more money in one hour than most of his employees make in one year. The Walton family controls over 48% of the stock and together they are worth an excess of $102 billion.

Distribution of Working Poor by Industry
Retail is Green (30%) and Services is purple (39%)
In retail trade, 12% of all workers were poor and 22% lived below 150% of poverty.Walmart's 1.4 million employees help create these numbers.
Department of Labor and Statistics (*more numbers)

 This pay scale places employees with families under the poverty line that qualifies the children for free lunches.  One-third of the employees work under 28 hours and do not qualify for benefits.  The lower paid working families are called the "working poor" and the federal government subsides many of these families and children.

Let's put this in perspective:
Wal-Mart hires 550,000 people each year
They are the largest employeer outside of the Federal Government;  around 2 million employees
America has been declining in wealth and the disparity is getting wider (The wealthiest 20% own 72%; the Poorest 20% only 3%) Apr 2013
More and more people in America are on food stamps than ever before 47.8 million (mar 2013)
More and more American's are making non-sustainable/livable wages
WalMart makes $34, 880 dollars in profit every minute
Low wages cost the taxpayers $900,000 each year for Walmart's low wages at one WalMart Super Center in Wisconson. ( Huffington Post May 2013)
California paid $86 million a year on WalMart employees in benefit programs (health and public assistance to 44,000 employees)
One Store of 200 employees may result in a cost of $420,750 per year - $2,103 per employee for free and reduced lunch programs, Section 8 housing, federal tax credits, Title 1 expenses, federal health care costs, children's health insurance programs (S-CHIP), low income energy assistance. (Democratic Staff of the Committee on Education and Workforce)

Walmart has a high turnover rate; about 70% of the employees leave within the first year.  The reasons they leave is for lack of job recognition and inadequate pay.  Studies show that Walmart promoted fewer women than men and women dominate the lowest paying jobs at Walmart and that men earned $5,200 more for the same jobs as the women. Although, women make up 70% of the workforce, they only occupy less than one third of its store management.

Our government is broke and they try to squeeze as much taxes from the citizens as they can for just about everything.  Yet, the corporations can get away with hiding money offshore, using loopholes that saves them millions if not billions in taxes to the U.S. Closes down the factories with tax incentives to open new production overseas and widening the gap for job creation in the U.S.  The last thing we need is to drain our economy with social programs for people who work and are willing to work full time.

Most of the employees at Walmart are willing to work more hours, but to save money, Walmart's average weekly hours is 28.  But that is not all folks!

Walmart's new Health Plan January 2013
A memo was leaked to the NY Times stating that Walmart workers are "sicker than the national population" and tended to overuse emergency rooms.  The memo made recommendations to reduce health care spending by discouraging unhealthy people from working at Walmart requiring all jobs to involve some physical activity.  To hire more part time workers, to reduce 401K contributions and to put health clinics in Walmart stores.  With these recommendations Walmart could save over $1 billion in health care costs by 2011.  With 1.5 million employees working in the U.S. at Walmart part time not receiving health benefits, then who picks up the tab?

The Benies:
The average wait for full time workers to qualify for benefits is six months, compared to the retail average of 2.6 months.  Walmart recently cut their contributions to the medical savings plan by 50%.  The deductible for their plan is $1,750 before any assistance kicks in.  The monthly premium went up from $2 to $11 dollars per pay check at a $60.00 minimum per month.

A new policy took place in January 2013 as a way to cut costs and shift the cost onto the federal government taking advantage of Obamacare.
Walmart has the right to eliminate health care coverage for workers if their average workweek dips below 30 hours, which happens with regularity and at the direction of the company managers.   The response? "Walmart made a business decision" replied company spokesman David Tovar.  This new policy is a step back in time from the expansion in their health care coverage seven years ago.  The problem is that Walmart is known to not have anyone work over 30 hours a week and they have been doing that for years.

Walmart's network family plan is $322.60 bi-weekly with a $800 annual deductible, $500 health care credit and $4,000 out of pocket medical expenses could cast over $12,000 a year.  The average full time Walmart employee makes $20,000 a year and cannot afford the health benefit.

In the last quarter of 2012 it is reported they made $67,35 billion with a $17.2 billion profit.   This is enough profit to settle the Walmart's infamous employment practices and stop them from robbing America by using our social system and taxes to help keep their employees alive.

*Of those who do not work full-time, about half state that they are working part time because they cannot find full-time work. Thus the working poor face the problem of involuntarily working part time to a greater extent than other workers. Approximately 20% of the working poor are employed involuntarily part-time.  

Although some people believe that the problem of working poverty would be solved by providing full-time year-round work, this does not appear to be true. Most (52%) of the working poor would not b e able to work their way out of poverty even if they held full-time year-round employment because their wages are too low. In addition, of the working poor who would be able to lift themselves out of poverty by working such hours, many are unable to do so because of health problems.

Single female headed families are especially over-represented among the working poor. Among the working poor, 49% live in families headed by a single woman. Of those who live in families headed by a single female, 28% work but live below 150% of the poverty level.

The working poor are less likely to be covered by health insurance by their employers. Only 18% of the working poor are covered by health insurance available through their employer or their union, compared to 55% of all workers. Most likely, the jobs these workers hold are less likely to offer health insurance.

The working poor need higher wages and jobs that offer full-year employment, wage supplements such as the Earned Income Tax Credit and access to services such as health care and child care. 

Department of Labor

In light of the facts listed by the Department of Labor, it does not take a genisus to understand that a company that employees 70% women, pays poverty wages, does not offer viable health options, keeps their employees at a part time level while earning billions in profit each year clearly contributes to America's working poor numbers.  I firmly believe that if Walmart were to increase both wages and hours and offer affordable medical plans, these numbers from the Dept. of Labor would drastically change. 

Walmart and Sherwood, Oregon have teamed up!

1 June 2013

I just found out that Walmart is coming to my neighborhood and may one day be coming to a neighborhood near you!  Can't you wait?  Low wages, more traffic, your neighborhood mom and pop shop will close down within a year and less choices of products to chose from.  Forget about buying things make in the U.S.

But wait!  There is more!  Not only do you bring more poverty into your own neighborhood, but you get to bring more slavery into China, more environmental toxic wastes will get dumped into both China and your own neighborhood!

Who can beat such a bargin!  Stop by and shop at Walmart today.

A bit about Sherwood, Oregon...from my perspective as a non-lifelong citizen.  Sherwood is all about the small town feeling, we have plenty of trees, parks and walkways.  We have one Highschool and Middle School, one nice and clean small library and cute and nifty downtown with old traditional buildings.  This is a family town, clean cut, mainly Christian and low in crime.  Everyone seems to know just about everyone and most of the folks grew up together.  We have your involved citizens, with the girl scouts, schools and development and we have your new families with stay at home moms running after their children or driving them around.

This great picture of a peaceful community is about to change and it is all because of corruption and greed.  Yes, this is what I said.  Rumors are:  One of the commissioners actually owned the land and sold it to Walmart for development.  But just before that, the zoning changed to allow this development.  It is also said that it is required for the local city government to announce the planning and request to build a new development.  It is supposed to be advertised, posted with signs on the property, in newspapers and hold an open local meeting for community discussion.

Well, none of that happened.  The Sherwood citizens found out about the Walmart after the fact.  For me this is corruption.  (uhh ohh, am I now blacklisted from this wonderful community for calling the cards as they are?)

You can imagine, if you have been following my blog over the years, that I am an anti-Walmart fan, I am person for justice and human rights. Once I discovered that in my very own community a Walmart of all things was in the future,  I was speechless for about two hours. I had to keep my head together because I was working.  Actually, I was under the impression that Sherwood was promoting the growth of small businesses and encouraging them to remain.  I actually thought that the city commission was against big businesses such as Walmart so I never imagined that one would be in my own backyard.  I was wrong and therefore shocked.

Please stay tuned to the postings about the progress and actions of our community against this Walmart.  I cannot but help writing and taking action to try to make this stop.  Please read some of the previous articles on this blog about Walmart linked below.  Don't worry, there is more to come on this topic!

Related Links:

Walmart stirs concern over wages
Walmart receives subsidies from the U.S. Government
Walmart Blip List
Walmart Biggest Seller of Firearms in the U.S.  (Do you want easy access to guns in your neighborhood?)
Walmart Keeping the World in Poverty
Walmart costs taxpayers $900,000 per year (Huffington Post)

Walmart the Biggest Seller of Firearms in U.S.

Adam Lanza the terrorist who shook Sandy Hook Elementary School and one of the weapons was an AR-15 assault weapon.  Although it is not known where the weapons were purchased the AR-15 is a highly recognized weapon sold at 1,700 Walmart stores across the U.S.  This weapon was also the choice of assault used at the Beaverton Mall shooting.

"Five months earlier, it was used by James Holmes in an attack that wounded fifty-eight people and killed twelve in an Aurora, Colorado, movie theater.  And several years before that, a man and his teenage accomplice used a Bushmaster AR-15 to terrorize the Washington, DC, area with a series of random shootings."  The Nation

Because of the debate over selling guns and how easy it is to get assault weapons Walmart decided to remove the item from their website, yet they have not pulled them from their stores.  Nothing has changed.  Walmart stocks their shelves in the open with a variety of bullets that are easy to steal and the guns are out in the open on the shelves.  The hourly sales clerks have not been trained with guns and firearms and the shelves remained unlocked during store hours.

"Overall Walmart sales figures are back on track after the 2011 slump, and executive vice president Ducan Mac Naughton told shareholders at a meeting in October 2012 that gun sales in particular are a staple of the chain's strategy to continue boosting its numbers.  He said that over the past twenty-six months, gun sales at Walmart stores open for a year or more were up an astonishing 76 percent, while ammunition sales were up 30 percent.  Walmart is now the biggest seller of firearms and ammunition in America."  The Nation

The FBI reported that they received 16.4 million background requests by the end of 2011 it rose to 16.8 this year.

Although many stores have changed how they stock and sell guns after Sandy Hook, Walmart has not changed a thing.  For Five Assault Rifles you can pick up with your groceries view images here on The Nation.

This is something to think about.