Social Climate

Stubborn poverty in the US, too


September is the month when the US Census Bureau reports the official poverty statistics for the previous year.  Last Tuesday, it gave out the disappointing news that there was no improvement in household incomes and the proportion in poverty in 2012 compared to 2011. Reuters reported that “U.S. poverty rises despite economic recovery,” to contrast the stubbornness of American poverty with the gain of 16 percent in Standard & Poor’s 500 index from last year.

The Census Bureau covered incomes of the year 2012 in its Current Population Survey, Annual Social and Economic Supplement, last March.  The survey took a very large sample, of some 100,000 addresses from the 50 states and the District of Columbia.  It did not include homeless households, i.e., those without an address, for technical reasons.  It observed money income before paying taxes, and without the value of noncash benefits from government or employers.

It found median household income at $51,017 in 2012, or statistically the same as the $51,100 in 2011. This followed two consecutive annual declines.  Indeed, 2012 was no better than 1995; the gains in between, particularly in 1999 and 2007, had frittered away.

Poor Americans were 15.0 percent of the population in both 2012 and 2011.  So, due to population growth, the absolute number of poor people went from 46.2 million in 2011 to 46.5 million in 2012.

Poverty is officially defined as being below a poverty line of $23,492 for an average family of four as of 2012.  This line is adjusted for inflation each year.  Dollar amounts in the report are all in 2012 values.

The official poverty line is much less than what Americans say they need, in opinion polls.  Since the 1930s, the Gallup Organization has asked the question “What is the smallest amount of money a family of four needs to make each year to get by in your community?”  Its latest median response is $50,000, as of April 2013, or more than double the federal government’s poverty threshold.

When the US official annual poverty series started in 1959, 22.4 percent were poor.  Poverty steadily declined, going to a record low 11.1 percent in 1973, and stayed at just over 11 percent until 1979.  The 1960s and 1970s were favorable times.  The poverty rate had peaks of 15.2 in 1983 and 15.1 in 1993; it improved to 11-12 in 1998-2007, another relatively good period.  Then it rose again, and has been flat at 15 since 2009.

Poverty is a dynamic phenomenon in the United States, as much as in the Philippines.  The Census Bureau’s separate Survey of Income and Program Participation observed a panel of households in the three-year period 2009-2011, and found that 31.6 percent of the population had at least one spell of poverty lasting two or more months. Thus, transitory poverty is common.

Last Sept. 12, the Gallup Organization reported: “More Americans struggle to afford food.”   Of those it polled in August 2013, 20.0 percent affirmed that there had been times in the past 12 months when they did not have enough money to buy food their family needed.  This was up from 17.7 percent in June 2013, and was the highest since October 2011.  This monthly survey that started in January 2008 has seen those struggling for food moving between 16.2 and 20.4 percent. This suggests to Gallup that the economic recovery is disproportionately benefiting upper-income Americans.

The US Census Bureau also found drastic widening of income inequality.  In 2012 the annual household income of the top 10 percent was at least $146,000, while that of the bottom 10 percent was at most $12,236.  Back in 1993, top decile income was at least $127,903, while bottom decile income was at most $12,027—so the top added $18,097 or more, whereas the bottom added $109 or less.

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Hunger might increase some more. As published by the Bureau of Agricultural Statistics, the peso prices of Regular Milled Rice per kg in the four weeks of July 2013 were, successively, 32.86, 33.32, 33.67, and 33.92. Then, in the five weeks of August, they became, successively, 34.12, 34.43, 34.75, 35.07, and 35.72. For the first week of September, the preliminary average price was 36.21, i.e., the price rose by 10.2 percent from early July to early September.

Compared to the average of 32.50 in the first week of September 2012, this year’s price is up by 11.4 percent, with most of the hike happening only in the last nine weeks!  Meanwhile, the rice price per metric ton in Thailand fell from $538 last July to $504 this August (indexmundi), or only P22 per kg at a 44:1 exchange rate.

The threat to our food security would cease if rice importation were not legally monopolized by the National Food Authority, and if private imports, when authorized, were not subjected to an atrocious 50-percent tariff (from which NFA is exempt).  NFA’s mandate should be limited to carrying buffer stocks and distributing them in emergencies.

“The root cause of the rice sector’s problems is the NFA’s monopoly of international trade of rice,” says Dr. Bruce Tolentino, deputy director general of the International Rice Research Institute (in his “Stymied reform in rice marketing in the Philippines, 1980-2009,” with Beulah de la Peña, in the book  “Built on dreams, grounded on reality: economic policy reforms in the Philippines,” The Asia Foundation, 2011).

The monopoly is anticonsumer, and only benefits NFA’s business clients.  It has been the source of gargantuan corruption.  It should be abolished.

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  • tadasolo

    Poverty in the USA is not apparent if you walk around but the fact is in order to live the American standard way of life there is more than food to be factored and is the reason the threshold is high.

    On another note and I have always believe the government policies meant on paper to help the Filipinos are actually anti business and favor a few. It is moronic for the government to be competing with private enterprise and at the same time collect taxes and diminish their competitiveness to compete with the government.

  • Jao Romero

    poverty in the US is middle class here.

    • bertrand

      I am sure you’re thinking in terms of the dollar – peso exchange

  • agxo3

    The fact that poverty exists in the US and other countries is NOT an excuse for failing to address it in the Philippines.

  • Samboy_rod

    Truly the Bible is infallible, which states that the poor will always be present everywhere.

  • josh_alexei

    Of Course poverty exists even in the US and all other industrialized and richer countries, but at least they have measures to address these issues, like social assistance, unemployment insurance and other assistance for those who have been the victims of economic realities or have been trapped in the cycle of poverty. And that can not be said in the Phl where the money for those programs found their way to the Politicians pockets and foreign bank accounts which was exposed in a recent Pork Scandals..shame, shame and just shame.

  • Angelicus1

    Hey thanks, M. Mangahas for the detailed analysis of the US number on poverty. It is curious to note that your numbers happened under Obama’s administration(he can’t possibly blame this on GWBush but he will). Remember the anti-1% protests by hooligans on Wall Street (they’re anarchists, really). Obama supported them because they demonized the top 1% in the economic scale. Obama when speechifying demonizes the wealthy (call them top 1%, top 10%, call them the taxpayers…) and redistributes wealth to the bottom half who already pay no income taxes. He has done this by:1. raising taxes on every one who makes $250,000. and up and adding surcharges on the same group of people to fund Obamacare .2. by standing pat on “green energy” projects and killing coal-based industries thus throwing a lot of people in coal states.3. by promoting food stamps including fraud, yes fraud through waivers and inclusion of illegals from Mexico 4. by encouraging people to stop looking for work and making it easy to apply for disability through social security payments. (this explains the relatively low unemployment rate of 7.8 some %. It should be 15%. these machinations were done by the ruling democratic party in government to ensure Obama’s reelection in 2012.) Behind the numbers are the paradoxical effect of socialism’s redistribution: punish the rich and reward the poor in poverty. The result, blacks are in the worst status compared to when the President was not black but Caucasian (50% of young blacks are unemployed under Obama) . Black family incomes have plummeted to the level in the 1990’2 thus erasing all the gains during the economic boom under the GOP presidents. They used to deride Reagan for “trickle down wealth”. Now, Obama’s policies of “trickle up poverty” is hurting the blacks and the poor more than the rich. The lesson? It is harder to punish the rich because they have money and power; the poor have to learn to help themselves. Even in wealthy USA where the average family on welfare has TVs , free Obama cell phones, cars (usually Cadillac), etc. They go to soup kitchens or fancy “Lord’s Diners” for free. They get free medications and doctor visits and emergency care . You would rather be poor in the USA. (if you’re black, shoo the father away so Uncle Sam will take care of you). There are so many freebies amounting to $38,000.00 for a poor family of 4. Its the middle class that’s being screwed.

    • crazy_horse_101010

      funny im a american and knew a lot of poor never seen one driving a cadillac unless it was 20 years old. and i blame clinton when he let the banks run wild with the loaning system and apr loans.

      • Angelicus1

        then your objection to my comments is selective. it would be fair and balanced if you said: i agree with most of what you said but… I never saw a family on welfare riding a cadillac. Would it make it more believable to you if I said the cadillac is old and used and probably not a hot shot cadillac (it was more in reference to certain group’s ethnic preference). I saw a lot… and believe me I have been in US serving poor people on medicaid nobody else would take. Fair enough? You take your experience and I will take mine.

      • crazy_horse_101010

        i was born there and lived in 6 states and worked all over the northwest and northern california, but i was never everywhere to see all there was to see. but my parents were considered poor most of the time. when i was young i lived the experiences of the poor. and my dad never had a caddy. there has always been poor even in the boom years. and this includes the whites also. anyway im sure you have had bad experiences. serving the poor. fair enough .oh has for coal i worked at the open pit mines in montana and the last i knew they were going strong and still shipping coal all over the northwest

      • Angelicus1

        okay lets agree to disagree.

  • bertrand

    Does anybody know how much food is wasted in America
    everyday ? TONS AND TONS !!

    In fact , there are regular folks who call themselves ” Dumpster
    Divers ” who wait until after restaurants , eateries and supermarkets
    close so they could salvage untouched food and take them home.

    Google or youtube it and find out.

    • crazy_horse_101010

      yeah hey call them crack heads, meth addicts, junkies etc. has for food being wasted ask them to ship it here. .

    • Angelicus1

      I’ve always wanted to share Dunkin’ Donuts’ day old baked goods myself. The stores got rid/changed their bakery at 4 PM. I used to see old ladies coming to collect them (some at the pretense of taking to shelter homes, yeah right). I realized this by asking the salesgirl as I ate fresh doughnut and sipped coffee seated at the bar stool. Then one day oh about 10 years ago, when I asked the salesgirl why there are no more ladies coming to pick up old doughnuts, she said the management pit a stop to it, prohibited them from giving old doughnuts away because of lawsuits. That’s the reason for tons of still good food wasted in America, not to mention overproduction, the relatively cheap price of produce and the fickleness of the eating public (or perhaps America is really cooking everyday for the whole global world ). Lawyers and their lawsuits: that’s the restaurant’s reason for so much good food in the garbage. Perhaps the restaurants will make you sign wavers not to sue them if you catch Botulism, Salmonella, Listeria etc or if that’s too much paper work without protection from suits , they end up throwing still edible food away. But don’t you worry some inventor has probably thought of ways to turn these food garbage into energy. After that they should figure out how to cook efficiently, with the least waste. I’m not sure if out left-over foods can be shipped to Haiti, the Philippines etc do you?

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