The above-linked story was the feature article on Reuters yesterday. It caught my eye because, though I now live in Michigan, Indiana was my home state. The article uses the state of Indiana as a case study in the growth of poverty in the U.S. It seems that Indiana has the second fastest-growing poverty rate in the country, second only to Nevada. I suppose that the writers chose Indiana over Nevada for their case study since it better represents middle-class America, as opposed to a state whose economy is built around gambling and entertainment.
It’s a very long, thorough treatise of the problem of poverty in America, but it’s this one sentence in particular that reall caught my eye:
The number of Americans below the federal poverty level – $22,350 a year for a family of four – hit 48 million in 2011, 17 million more than in 1989.
With this data, we can do a little math. In 1989, the U.S. population was 247 million people. At that time, the number of people living in poverty was 31 million (48 million minus 17 million). That’s a poverty rate of 12.5%. In 2011, the U.S. population was 310 million, and 48 million lived in poverty. That’s a rate of 15.5%.
But consider this: between 2011 and 1989, the U.S. population grew by by 63 million people, and 17 million have been added to the ranks of the poor. That means that 27% of the people added to our population since 1989 are below the poverty level!
The theory I presented in Five Short Blasts predicts that a growing population (once some critical level has been breached) will result in rising unemployment and poverty. This piece of data corroborates that theory, and even I was surprised at just how rapidly it’s fueling the poverty rate.
And, as the article points out, all of this is in spite of the fact that the federal government spent a record amount in 2011 to combat poverty. Given the impetus to cut federal spending, what is the likelihood that this effort to hold back the tide of poverty can be sustained? Only slightly better than the likelihood that it will address the real root cause of the problem.