No end to poverty without reducing wealth inequality
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“Millions in U.S. Climb out of Poverty,” read a recent New York Times headline in praise of President Obama for U.S. Census data showing the poverty rate in the United States fell by 1.2 percent in 2015, bringing roughly 3.5 million people above the poverty line. The poverty rate is now at 13.5%, according to the data, which is still higher than it was in 2008 at 13.2 percent in the midst of an economic recession when President Obama took office. While poverty decreased, what the New York Times conveniently omitted is that income inequality continued its trend of increasing in the United States. “The Gini index for the United States in the 2015 ACS (0.482) was significantly higher than in the 2014 ACS (0.480). This increase suggests that income inequality increased across the country,” noted the recent U.S. Census report on Household Income in 2015.

The likely reason for the omission is the elitist New York Times is purporting the agenda of the status quo, and the narrative that President Obama’s administration is providing benefits for lower-income and middle class Americans based on the decrease in poverty rate, therefore adding a highlight to Hillary Clinton’s candidacy. While a few bread crumbs may have reached lower income Americans, the change in the poverty rate, especially over time and compared to the income growth afforded by wealthier Americans, is insignificant.

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The New York Times cited job growth as the cause of the poverty rate decreasing from 2014 to 2015. Democrats have recently been touting the record low unemployment rate for the past several months as it initially dipped under five percent in February, with the most recent statistics placing it at 4.7 percent as of May 2016. Citing this statistic as evidence the economy is improving, especially for working and middle class Americans, is misleading for a variety of reasons.

The May 2016 jobs report noted only 38,000 jobs were added to the economy, the fewest since September 2010, and although the unemployment rate has decreased from 7.9 percent in 2012, when President Obama won re-election, the decrease is due more to workers leaving the labor force and the rapid emergence of the gig economy. The Economic Policy Institute founded by Bill Clinton’s former Secretary of Labor, Robert Reich, estimates true unemployment would be at 6.5 percent if “missing” workers were looking for work and included in statistics. Underemployment has also covered the gap for many unemployed workers as companies such as Uber, Lyft, and other gig operators offer individuals easily accessible employment, but at a cost. 

“The much-touted virtues of flexibility, independence, and creativity offered by gig work might be true for some workers under some conditions, but for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10%,” said Sen. Elizabeth Warren (D-Mass.) in a speech at the New America Annual Conference in May 2016. “The problems facing gig workers are much like the problems facing millions of other workers. An outdated employee benefits model makes it all but impossible for temporary workers, contract workers, part-time workers and workers in industries like retail or construction who switch jobs frequently to build any economic security.”

During the first Presidential debate of the general election, poverty was barely discussed as neither candidate offers any viable or hopeful solutions to fix poverty and wealth inequality in the United States.  

Hillary Clinton, rather than embrace Bernie Sanders’ popular calls to combat income and wealth inequality, has focused on courting the top 1% of Americans as she has managed to raise twice as much as Donald Trump in campaign contributions from Republican and Democrat millionaires and billionaires. A recent poll conducted by Bloomberg found income earners of $100,000 or more support Hillary Clinton over Donald Trump, 46 percent to 42 percent, a demographic that has traditionally supported the Republican Presidential Candidate by wide margins. In part, this is likely due to the anti-globalization aspect of Trump’s candidacy, while Clinton and her record embody corporate globalization.

Virtually all countries in Europe, Canada, New Zealand, Japan, and Australia have much lower child poverty rates than the United States. The U.S. ranks among the highest in the World among developed economies in wealth and income inequality. According to the authors of the Global Wealth Report, the world’s wealth has doubled in the past decade, reaching $250 trillion in 2015, yet the concentration of that wealth is increasingly in the hands of the wealthiest 1 percent. The 62 wealthiest people in the world have as much wealth as the bottom 50 percent, consisting of roughly 3.6 billion people. The wealthiest 1 percent of the global population have as much wealth as the other 99 percent. For decades, wages of the working and middle classes have remained virtually stagnant in the U.S. while the wealthiest Americans have seen their wages grow exponentially. Since the 2008 recession in the United States, nearly 99 percent of all new generated income has gone to the wealthiest 1 percent of Americans. While a recent marked decrease in poverty and unemployment rates is a positive sign in an otherwise bleak economy outlook for most Americans, there is still very little progress that warrants celebrating.

Sainato is a freelance writer whose work has appeared in the Baltimore Sun, the Guardian and the Huffington Post. Follow him on Twitter @msainat1 


The views expressed by authors are their own and not the views of The Hill.