Friday, August 9, 2013

Definition of Poverty: When Nearly a Third of America Lives In a Third World Country

Guest Post: Today's post is written my Maxime Rieman, Senior Analyst and Writer for NerdWallet, a financial website for the average American.



Only in a dream
Happy 237th Birthday America! The land of the free, home of the brave, wealth and abundance... Wait, what? Wealth and abundance? It looks really great in print, but does wealthy still describe contemporary America? With over 22% of American children (16.1 million) living in poverty and over 15% of the general American population (46.2 million) living in poverty, can the United States still be considered the land of plethoric abundance as others and even we, ourselves, tend to describe it? Does the American Dream of equality and material prosperity—an owned home with a white picket fence around it—still thrive in America today? Perhaps optimists may cling onto the last thread of this intricately woven dream, but we might just need a reality check.

Poverty in the US

How often do you even hear of poverty in the news? Not very often. Even during presidential debates? Nope. Anywhere at all? Not really. Americans, who have managed a decent living for themselves and their families, are cut off from the world of poverty in their own country and possibly unaware of it entirely. Oh, but poverty is very real and it is on every street corner.

About half of all Americans over 65 experience poverty. If you thought 46.2 million was too much, just think that if not for social security, 67.6 million more individuals would be added to that number. These numbers, however, only reflect the number of people who are recognized as living in poverty—below the poverty line—and not those barely getting by.

The poverty line itself is another concern; it is hardly representative of the standard of living in the US. $23,550 for a family of four is absurd. That’s barely $2000 per month for four individuals with countless expenses, including rent, meals, transportation, schooling, clothing, and other essentials. Let’s consider this same family of four with double the income; even this is still too little, yet over one third of Americans, 106 million, endeavor to fend for themselves in this situation.


Poverty on the rise in America

America’s Homeless


Currently, about 630,000 individuals call the streets of America their home. This official number is really just an estimate; it is inherently difficult to count the number of individuals who don’t have a permanent place to call home. Some families out of sheer desperation to keep a roof above their heads, double up with other families in homes that can barely hold one family.

Which first world country has the greatest number of homeless, you ask? You guessed it, the United States. At 630,000, we have more than double Canada’s 300,000; Australia has 105,000, while the United Kingdom has only 10,500. Just a side note, Sweden and Finland theoretically have no homelessness at all since citizens who don’t have a home are provided ones.

These comparisons may seem innocuous, until you realize how we fare in comparison to third-world countries. We have more than 302 times the GDP (nominal) of Tunisia, 29 times their population, yet as a post-revolution country they have 1/315 the number of homeless that we do. Eh, you say? Somalia has been amidst a civil war for more than two decades; Somalia has 1.5 times the number of our homeless population as internally displaced persons—a direr, yet comparable form of homelessness—but we have 83 times their GDP per capita. So while it’s easy and quick to argue that the US’s population is playing a large role in terms of the numbers, it does not explain why despite our more bountiful resources, we are not doing more to help our own citizens. Our desire for rugged individualism can’t support our equally shared desire for first world status. Our fear of government intervention, even on the level exemplified by Sweden and Finland, might just be the reason we lose our status in the future.

Unemployed in the Land of Opportunity

In June, the Bureau of Labor Statistics reported the number of unemployed workers in America, unskilled to highly skilled, to be 11.8 million people. Let’s put this into perspective. Consider Norway, a sovereign nation of 4.7 million. The number of unemployed workers in the US is 2.5 times the population of Norway, yet their unemployment rate at 3.7% is slightly less than half of ours (7.6%)! It is difficult to fathom that number of people without a job, which will eventually translate into the number of people without an income, can be that much higher than the entire population of another country.

The unemployment rate that gets touted in the news is only half the story. This unemployment rate only reflects the number of people who currently collect unemployment benefits and can actively be tracked. If you take into account the number of individuals who have given up looking for jobs or have given in to taking temporary, part-time jobs just to make ends meet, the real unemployment rate or “U-6” is a whopping 14.3% and counting.

Many argue that U-6 is more realistic and should be the official unemployment rate because the longer individuals go without jobs, the less likely they are to ever get back on a payroll, thus they eventually stop looking for jobs or take whatever they can get in the interim. We should be concerned about this population because, as even politicians have been forced to admit, we have no solutions to help this growing demographic.

Equality Only in Theory?

30 million Americans have been added to food stamp rolls since the beginning of the 21st century, leaving the current number at 50 million Americans. Despite the declining condition and growing needs of the country, members in Congress wish to cut $20.5 billion from the food stamp program.3

On the other hand, our 2013 military budget was $728 billion dollars, only after $55 billion was cut from its originally requested level. The United States spends more on its military than the next ten highest military-spending countries combined. Why are we so willing to allocate more money to the military than to food stamp programs, which help fill the hungry stomachs of Americans? Some food for thought, pun intended.

As generous as we are to funding our military, we are curiously reluctant to aid war veterans who suffer from physical disabilities, mental illness, and other war-inflicted disorders. In fact, veterans are 13% of the adult-homeless population. If you ask me, I would prefer more of my tax dollars to go towards those who already risked their lives and are now suffering for the sake of my freedom.




How long will we as a nation continue to find it acceptable to ignore the increasing number of poor, homeless and/or hungry citizens in our so-called “first world” country? The foundations of this country are shaking; we must work towards preventing our dream from crumbling under the weight of our ignorance and indifference for matters of that should be of priority.

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Maxime Rieman is a writer for NerdWallet, a financial literacy website that helps consumers make informed choices about the big things like mortgages and education to the little things like finding the best car insurance companies or getting a deal on that vacation you’ve always wanted.



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