The Real Numbers: Half of America in Poverty — and It’s Creeping Upward

The Census Bureau has reported that one out of six Americans lives in poverty. A shocking figure. But it’s actually much, much worse.

May 26, 2013  |

The  HYPERLINK “” \t “_blank” Census Bureau has reported that 15% of Americans live in poverty. A shocking figure. But it’s actually much worse. Inequality is spreading like a shadowy disease through our country, infecting more and more households, and leaving a shrinking number of financially secure families to maintain the charade of prosperity.

1. Almost half of Americans had NO assets in 2009 

Analysis of   HYPERLINK “” \t “_blank” Economic Policy Institute data shows that Mitt Romney’s famous   HYPERLINK “” \t “_blank” 47 percent, the alleged ‘takers,’ have taken nothing. Their debt exceeded their assets in 2009.

2. It’s Even Worse 3 Years Later 

Since the recession, the disparities have continued to grow. An   HYPERLINK “” \t “_blank” OECD report states that “inequality has increased by more over the past three years to the end of 2010 than in the previous twelve,” with the U.S. experiencing one of the widest gaps among OECD countries. The 30-year   HYPERLINK “” \l “/?start=1979&end=2008” \t “_blank” decline in wages has worsened since the recession, as low-wage jobs have  HYPERLINK “” \t “_blank” replaced formerly secure middle-income positions.

3. Based on wage figures, half of Americans are in or near poverty. 

The  HYPERLINK “” \t “_blank” IRS reports that the highest wage in the bottom half of earners is about $34,000. To be eligible for food assistance, a family can earn up to   HYPERLINK “” \t “_blank” 130% of the federal   HYPERLINK “” \t “_blank” poverty line, or about $30,000 for a family of four.

Even the Census Bureau recognizes that its own   HYPERLINK “” \t “_blank” figures under-represent the number of people in poverty. Its   HYPERLINK “” \t “_blank” Supplemental Poverty Measure increases, by 50%, the number of Americans who earn between one-half and two times the poverty threshold.

4. Based on household expense totals, poverty is creeping into the top half of America. 

A family in the top half, making $60,000 per year, will have their income reduced by a total tax bill of about $15,000 ($3,000 for   HYPERLINK “” \t “_blank” federal income tax and $12,000 for   HYPERLINK “” \l “_ftn8” \t “_blank” payroll, state, and local taxes. The   HYPERLINK “” \t “_blank” Bureau of Labor Statistics and the   HYPERLINK “” \t “_blank” Census Bureau agree that food, housing, and transportation expenses will deduct another $30,000, and that total household expenditures will be about $50,000. That leaves nothing.

Nothing, that is, except debt. The median   HYPERLINK “” \t “_blank” debt level rose to $75,600 in 2009, while the median family   HYPERLINK “” \t “_blank” net worth, according to the Federal Reserve, dropped from $126,400 in 2007 to $77,300 in 2010.

5. Putting it in Perspective 

Inequality is at its ugliest for the hungriest people. While food support was being targeted for   HYPERLINK “” \t “_blank” cuts, just   HYPERLINK “” \t “_blank” 20 rich Americans made as much from their 2012 investments as the entire   HYPERLINK “” \t “_blank” 2012 SNAP (food assistance) budget, which serves 47 million people.

And as Congress continues to cut life-sustaining programs, its members should note that their 400 friends on the   HYPERLINK “” \t “_blank” Forbes list made more from their stock market gains last year than the total amount of the   HYPERLINK “” \t “_blank” food,  HYPERLINK “” \t “_blank” housing, and   HYPERLINK “” \t “_blank” education budgets combined.

Arguments about poverty won’t end. Neither should our efforts to uncover the awful truth.

Note: This is an updated, corrected version of the original article, approved by the author. 

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites  HYPERLINK “” \t “_blank”,  HYPERLINK “” \t “_blank” and  HYPERLINK “” \t “_blank”, and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at  HYPERLINK “” \t “_blank”


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