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America's Dirty Little Secret: Who's Really Poor in America?

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Every Tuesday the Huffington Post lets me post a featured piece. Mostly I write about jobs, especially the issue of 'real unemployment', and trade, where I worry over the extremely adverse effects which unfair globalization is having on American workers.

Two old friends, civil rights activist David Mixner and former U.S. Senator (and my oft co-author) Don Riegle (D-MI), believe that in the economic recovery, not enough attention is being given to 'who's really poor' now. David and Don have for years advised me -- and others -- on the issue of poverty in America, and they are worried that too many people, and especially too many people in the administration and Congress, are missing this imperative.

To help make their point, they referred me to poverty activist Marsha Timpson, who describes today's poor as "America's dirty little secret, hidden in the backyards of America's shining homes, the hollows, the reservations, the border towns and the dark ghettos of the city where they are the lie of the American dream."

I agree with my friends, and with Ms. Timpson's view, and everyone else should as well, for right now in America:

  • At least 50 million people are ill-fed -- up from 37 million just a year ago -- including 17 million children. Hunger in America is now at an all-time high, and there are currently entire national geographic regions -- the very large 15-state 'South' being one of them -- where more than half of all public school students are poor and ill-fed.

Although I myself grew up in a fairly hardscrabble environment, as the father of a daughter who was in fact able to create a successful life from the opportunities her mother and I could give her, it is hard for me to imagine what it must be like to have your child needy and hungry. Yet all of us need to 'imagine' this, because each night in America millions of children do in fact go to bed hungry and under-nourished, while also lacking proper housing, needed clothing, and the basic education required to develop and ultimately find gainful employment. And while I wholeheartedly support the First Lady's new "Let's Move" effort to improve the nutrition of America's children, we must first react to basic hunger rather than to food quality.

  • 30% of the nation's 50 million homeowners own a home whose value is below its mortgage balance, and this number could rise to an almost unbelievable 50% by year-end 2011. It would cost about $745 billion, more than the size of the original 2008 bank bailout, to restore these borrowers to the point where they were breaking even, which there is no obvious political will to find right now.
  • Despite the truly dismal 'real unemployment' figures with which most everyone now agrees -- a staggering 30 million workers and 19% of the labor force -- very little attention is being paid to the particularly adverse effects the recession is having on people of color, recent immigrants, and out-of school youth. And almost no one is acknowledging the sad reality that even the nation's 130 million full-time workers have had an average economic loss of 15% just since December 2007 -- an average effective work week of 34 hours rather than 40 -- which means that the number of unemployed workers, measured economically, is actually as high as 50 million.

The overwhelming problem today for most workers isn't this recession, as horrible as it is -- it's the fact that for every earned income level except the top 10%, average household income hasn't changed a bit for 10 years, and that for the bottom 60% of wage earners it hasn't changed for more than 20 years. Through economic expansions and recessions -- and bull and bear markets -- alike, 90% of workers in America have been standing still earnings-wise.

  • And 100 million people, fully one-third of the entire U.S. population, are at or below "200% of the federal poverty line of $21,834 for a family of four", which is a needs-measure made lame by the fact that no family of four can actually comfortably live on such a low annual income.

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The best response to this scourge would be for our government to embrace in today's troubled time the same "economic bill of rights" that FDR, in his last State of the Union Speech in January 1944, demanded for his.

Roosevelt's "bill" sought to guarantee, in addition to health care and education, rights to:

  • "a job with a living wage...that would earn enough to provide adequate food and clothing and recreation;
  • "protection from the economic fears of old age, sickness, accident and unemployment; and
  • "a decent home".

And with his typical sensitivity, FDR concluded his last SOTUS, when he knew that he was dying, by saying that, "We cannot be content, no matter how high the general standard of living may be, if some fraction of our people -- whether it be one-third or one-fifth or one-tenth -- is ill-fed, ill-clothed, ill-housed and insecure."

Until we in this time include the eradication of poverty as part of our economic recovery efforts, as FDR tried to do in his time, no matter how much we attempt to rebuild the nation's economy through better trade practices, enhanced workers' rights, and investments in infrastructure and the 'green economy', tens of millions of Americans, literally, will still be left impoverished.

In making this effort, and thus in trying to determine "who's really poor in America" so that we can assist them, it helps to think of America as a doughnut, with the 'hole' in the doughnut being, at any point in time, the middle class (and the elites) and with the dough-part being those Americans who aspire to get there.

When our ancestors got off their boats at Ellis Island or on the West Coast, the American doughnut was a fat one with a relatively tiny hole, because almost all of them were impoverished 'outsiders' looking to find their individual American Dream. The doughnut's hole grew relatively larger over the next 50 to 100 years as the economy grew, and then with the widespread prosperity that came with the end of the Second World War, it ballooned in size as the middle class ballooned.

In the two decades after the War, with a burgeoning middle class clearly in hand, our government, in order to help those Americans still living on the outer ring, established very powerful employment & training, education, home mortgage, and small business assistance programs, while freely allowing labor unions to advance and protect workers' rights.

The problem with how we have reacted so far to the Great Recession of 2007 is that most of the recovery programs are, as in the '50s and '60s, only for those Americans living in the outer ring: programs such as "cash for clunkers", first-time homebuyer credits, expanded Pell Grants, etc. In 2010, however, after decades of wide-spread wage stagnation, the entire middle class needs help as well, and the simple proof of this is that overall income inequality in America is now the greatest since 1928, when we first began to measure it.

Without an immediate all-of-government commitment to creating upwards of 30 million new jobs (not the 9 million that the administration has identified), without stimulus efforts that specifically target the entire struggling middle class, and without very specific initiatives aimed at breaking the back of general wage stagnation, there is not even a medium-term prospect of anything approaching real full employment and healthy economic growth that benefits all Americans.

So, the answer to the question of 'who's really poor' now is that we all are in one way or another, because, as FDR would have said if he was here, "some [way too large] fraction of our people is."

Addressing this reality -- this now virtual pandemic of poverty -- must be at the core of our current economic recovery efforts, because a vibrant middle class that grows from the bottom up will always be central to the continued health of America's democratic society.

Leo Hindery, Jr. chairs the US Economy/Smart Globalization Initiative at the New America Foundation and is a member of the Council on Foreign Relations. He is the former chief executive of AT&T Broadband and other major media and telecom companies.