A new analysis of the most recent U.S. Census report shows that for a large swath of the U.S., the economic downturn has resulted in two decades of losses.
Orange County Chapter 7 Bankruptcy Lawyer Vincent Howard of HOWARD LAW understands that overall median incomes fell by about 1.5 percent last year, even though the official poverty rate remained virtually unchanged at about 15 percent.
The reason we're not worse off has to do with certain social safety nets intended to provide temporary relief to those struggling. The key word here is: temporary. It's assistance that either isn't available long-term or isn't intended to be available long-term.
Of course, there's no shame in reaching for a leg up when times are tough. However, the recession has created recurring problems for those on the cusp of poverty. An alternative to social assistance is bankruptcy. Sometimes, people think bankruptcy and poverty go hand-in-hand. But actually, bankruptcy is one solution to poverty. It's a way for debtors to help themselves. If you can shed the credit card bills and the medical debts that you've racked up, you might not need to apply for food subsidies or other assistance because you'll be able to cover it on your own.
The report indicates that a family in the middle of the income spectrum right now makes about $50,000. It's actually about $600 lower than it was in 1989 - which is especially troubling when you account for inflation.
Economists haven't reached a solid consensus about what brought us here, though they do have some theories:
- Globalization, which is that the rest of the world is catching up to us in terms of technology and productive might. In order to stay on top, America has to put more effort into boosting its skilled workforce.
- Inequality. There has been a steep decline in labor unions and the minimum wage hasn't kept pace with inflation. These are some of the reasons why there is a widening gap between the working poor and the wealthy, and it's only continuing to worsen.
- Technology, which is altering our jobs landscape. No longer can you emerge with a simple high school diploma and count on earning a decent living. In some ways, we're harmed by our own efficiency, as advances in technology have even meant that certain jobs are being eliminated entirely because they have been automated.
- Government, specifically a government in which the policies appear to favor certain companies or industries to the detriment of the lower classes.
According to the report, nearly 21.5 million people are currently on the verge of poverty, but are prevented from technically falling below that line because of social safety nets like Social Security and Medicaid. Given a lot of talk by politicians of dramatically cutting these programs, we may yet see even more people in financial crisis.
Orange County Bankruptcy Attorney Vincent Howard at HOWARD LAW can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.
US incomes fall to 1989 levels. How did that happen? Sept. 12, 2012, By Mark Trumbull, Christian Science Monitor
More Blog Entries:
Bankruptcies Slightly Decline in Favor of Debt Settlement, Aug. 28, 2012, Orange County Bankruptcy Lawyer Blog