If you’ve been paying attention to the economy for the past seven years or so, you’ve probably been wondering when the whole charade is going to come crashing down. When will all of those inflated markets and debts reach their apex, and start crumbling under the weight of economic reality, and leave us all destitute? There have been plenty of predictions, but none have truly come to fruition.
Well the truth of the matter is that there may not be a single day when everything grinds to a halt, and there’s plenty of evidence to suggest that our standard of living is crumbling in slow motion. For many Americans the end has already arrived, and their ranks are growing a little more every day. In fact, the number of Americans that are earning what amounts to a third world wage, has doubled over the past 20 years.
The number of U.S. residents who are struggling to survive on just $2 a day has more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation. That’s according to “$2.00 a Day: Living on Almost Nothing in America,” a book from publisher Houghton Mifflin Harcourt that will be released on Sept. 1.
The measure of poverty isn’t arbitrary — it’s the threshold the World Bank uses to measure global poverty in the developed world. While it may be the norm to see families in developing countries such as Bangladesh and Ethiopia struggle to survive on such meager income, the growing ranks of America’s ultrapoor may be shocking, given that the U.S. is considered one of the most developed capitalist countries in the world.
“Most of us would say we would have trouble understanding how families in the county as rich as ours could live on so little,” said author Kathryn Edin, who spoke on a conference call to discuss the book, which she wrote with Luke Shaefer. Edin is the Bloomberg Distinguished Professor of Sociology at Johns Hopkins University. “These families, contrary to what many would expect, are workers, and their slide into poverty is a failure of the labor market and our safety net, as well as their own personal circumstances.”
Of course, this article comes from CBS news, and being a mainstream source they couldn’t help but provide a statist solution to the problem. The author tries to connect the rise of the “ultrapoor” with the creation of TANF in 1996, a program designed to replace previous welfare systems, and provide temporary financial aid to poor families with children. There’s so many more poor people today because TANF isn’t doing enough to lift up the poor. What we need is more welfare apparently.
In reality, most of these Americans are already receiving some form of assistance. These numbers have been thrown around before, and they are very liberal estimates. They’re not taking non-cash programs into account like food stamps, housing vouchers, and tax credits. When you include all forms of welfare, those numbers fall dramatically. While the percentage of Americans that are earning less than $2 a day has grown significantly, very few are actually living on less than 2$ a day.
As I wrote about last week, government assistance is essentially masking the symptoms of our crumbling economy, and creating millions of dependents along the way. And that’s the really scary fact to be gleaned from this report. We have millions of families in this country that would literally die without the help of the government, and their growing ranks indicate that our economy is completely unsustainable.
And since the economy is on an unsustainable path, someday those bubbles will burst and our debts will become impossible to maintain. When they do, there will be a whole class of Americans that are both earning and living on less than $2 a day, because the safety nets that we have now will cease to exist. It’s hard to fathom how these people will survive in the new America.