Both official data and numerous news stories confirm how badly average citizens have fared in the wake of the global financial crisis. Food stamp use has fallen only a tad from record high levels. WalMart has reinstituted layaway. The average home with a mortgage has no equity in it.
Further confirmation comes via the Census Bureau release that showed the US poverty rate has risen a full percent in the last year to 15.1%, a level not seen since 1993, the end of a short but nasty downturn. And 1/4 of American children are living in poverty. Fewer young adults are able to start households. 14.2% of Americans between the ages of 22 and 34 are living with their parents, up from 11.8% before the downturn. As the Financial Times noted:
“To have hit 15.1 per cent is truly extraordinary,” said Alice O’Connor, a professor who studies poverty at the University of California, Santa Barbara.
“We are entering territory which looks like the period before we even started fighting a ‘War on Poverty’ in the 1960s. It’s quite stunning. This is a terrible statement about the depths of the Great Recession but, even more, about the recovery, which has clearly left the poorest out completely.”
Median income plunged 2.3% in 2010, and is down a full 7% from its high in 1999. Inflation adjusted median income is at the 1996 level. That makes it the first decade since the Great Depression in which inflation-adjusted median income has failed to increase. IN addition, Americans without health insurance reached 49.9 million, an increase of 1 million in the last year.
But focusing on the median as the American middle class is being hollowed out may be the wrong focus. Tech Ticker discusses how marketing giant Procter & Gamble has decided there is no future in the middle class (hat tip reader Valissa):
By contrast, the top 1% now pulls down a full 25% of all income in the US, and their lives are predictably unaffected by the downturn. Again from the Financial Times:
Ipsos Mendelsohn, the media research group, released figures that show things are apparently looking up for the top tier of US earners.
The group’s annual survey of affluent Americans found that the number of households making more than $100,000 a year was 44.2m in 2011, compared with 44.1m the previous year. Their spending held steady at $1,400bn after previously falling…
The survey, which polled 14,405 wealthy adults, found “almost all affluents are planning a wide range of activities in the next year, with travelling, remodelling, and investing topping this list”.
What is distressing is the lack of any sense of noblesse oblige. Those at the top of the food chain for the most part seem to have no concern about the damage income inequality does to broader society, and to them (we’ve discussed how unequal societies produce worse outcomes in health and happiness even for those at their apex). Unfortunately, the lesson of history is that little pigs get fed and big pigs get slaughtered,. These big pigs may have to learn their lesson the hard way.
This post originally appeared at naked capitalism and is reproduced here with permission.