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1 in 5 American kids rely on food stamps
1 in 5 American kids rely on food stamps
America is a global leader on a number of fronts, including having the largest economy in the world. But here is one area where the U.S., given its general affluence, would rather not distinguish itself: It has one of the highest rates of child poverty in the industrialized world.
Even as the economy continues to recover from the Great Recession, 1 in 5 children are on food stamps, the U.S. Census said on Wednesday. Before the housing crash, 1 in 8 received federal food assistance.
This dismal statistic reflects how the recovery is failing to reach families at the lower end of the economic spectrum. While the stock market has reached record highs and the richest 1 percent are on a path to own most of the world's wealth by 2016, many American families continue to struggle to put food on the table. The U.S. now has the second-highest rate of child poverty among 35 industrialized nations, according to the Children's Defense Fund, a child advocacy group.
That is a "shameful distinction," the group said in a new report. "Many countries with fewer resources have lower poverty rates, including the U.K., New Zealand, the Czech Republic and Hungary, a clear indication the U.S. could do much more to reduce child poverty."
U.S. CENSUS BUREAU
The only industrialized country with a higher poverty rate? Romania, a country that is still struggling to emerge from brutal decades under Communism and is only now starting to create a middle class.
About 15 million U.S. children live below the official poverty level of about $24,000 for a family of four, the Children's Defense Fund found. Children in the U.S. have a 20 percent chance of being poor, while children of color are twice as likely to be poor as white kids.
"It's shocking, and it doesn't have to be this way," Caroline Fichtenberg, director of research at the Children's Defense Fund, told CBS MoneyWatch. "It's in our economic interest to address child poverty."
There's a cost to America's high rate of child poverty, the Children's Defense Fund said. Because financially strapped parents have fewer resources and less time -- many work multiple jobs to make ends meet -- they are less likely to spend time talking and reading to their children. Hunger and food insecurity also lead to health problems, as well as a higher chance of obesity, and poor students are less likely to graduate from high school, which depresses their earnings potential.
"The lost productivity and extra health and crime costs stemming from child poverty add up to roughly half a trillion dollars a year, or 3.8 percent of GDP," the report noted.
Food stamps are just one of the costs. Last year, the food-assistance program provided benefits for 16 million children, compared with 9 million before the recession started in December of 2007. The rate of children who live with married parents and who are receiving food stamps, meanwhile, has doubled in that same time period, the Census said.
The findings come amid increased concern from economists and policy makers about the growing gap in the U.S. between the rich and everyone else. The top 1 percent of income earners capturedall the income gains since the recession officially ended in June 2009 in 16 states, while capturing at least half of all gains in another 22 states, according to the Economic Policy Institute, a left-leaning think tank.
While the "War on Poverty," started by President Lyndon Johnson in the 1960s to lower America's poverty rate, has been successful, the recession hit many lower- and middle-income families hard.
"Why we have the feeling we're treading water is the economy has changed," Fichtenberg said. "We have fewer jobs that pay enough to get by, we have wage stagnation and all the benefits have gone to the top 1 percent. Coming out of the recession, children have been the first to suffer and the last to benefit."
Boosting the fortunes of the middle class was the main theme of President Obama's State of the Union address last week. His proposals include raising the capital gains tax and eliminating a loophole that benefits wealthy families, with the additional tax monies used to fund educational benefits and tax cuts for middle-income earners.
Reducing poverty among America's children could be achieved through policy measures such as increasing the Earned Income Tax Credit for lower-income families and boosting the minimum wage, the Children's Defense Fund said. Those and other policy measures could reduce the country's child poverty rate by 60 percent, the group said.
"By investing more in protecting children from poverty the U.S. could rejoin the ranks of peer nations," the report noted. "Shrinking the U.S. relative child poverty rate by 60 percent would cut child poverty in the U.S. from 23.1 to 9.2 percent, placing the U.S. in line with countries like Germany and Switzerland."
Many of the government's social safety net benefits help families as they cope with periods of income loss or financial stress, and don't necessarily lead to dependence on government handouts, Fichtenberg added.
"We have a culture that focuses on individual responsibility, and we completely agree with that, but we are all in the same boat and it's in everybody's interest" to lift children out of poverty, she said. "Children don't choose their parents or who they are born to."
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Fool’s Gold: California Has The Highest Poverty Rate In The United States
Since Jerry "Moonbeam" Brown took over as governor in January 2011, the state of California has engineered an extraordinary recovery from the brink of economic collapse. Consider some of Brown's stellar achievements: for the 2013-2014 fiscal year, state coffers are projected to show a budget surplus of $4.2 billion [from a $6-billion deficit in 2010-2011]; a stabilizing of the once-precarious housing market; and job-creation programs that have kept unemployment at about 8.5 percent (still high, but down from 12.5 percent in 2010). Some of these accomplishments resulted from the imposition of (temporary) tax hikes and spending cuts by the governor’s administration.
With an annual GDP of some $1.9 trillion, California ranks as the eighth largest economy in the world (roughly similar to the economic output of India or Italy), reflecting the Golden State’s crucial importance to the U.S. and even global economy. Indeed, Brown (who has run for president three times, all unsuccessfully) should be a shoo-in for re-election come November, if he chooses to return to Sacramento.
However, California, the state renowned for Beverly Hills mansions, glittery Hollywood stars, Malibu beaches, palm trees, and the stunning Golden Gate Bridge, hides a deep, dark secret – it has the nation's highest poverty rate. According to the Census Bureau, nearly one-fourth (23.8 percent, up from a 20-year low of 12 percent in 2006,) of California's 38-million people live below the poverty line – with Latinos, now the state's single largest ethnic group, bearing the brunt of such deprivation. According to the Public Policy Institute of California (PPIC), at least 6-million households in the state live with incomes below the federal poverty level (about $23,000 for a family of four). Poverty rates are extremely high not only for Latinos, but also African-Americans and those lacking in college diplomas. Reportedly, 5 million Latinos (one-third of their total number) are living in poverty in the state.
The Los Angeles Times explained that the 23.8 percent poverty figure arose from the Census Bureau's “supplemental poverty measure,” which differs from the official poverty rate yardstick by, among other factors, including tax credits and government benefits, while counting expenses for such items as child care, out-of-pocket medical costs as well as housing costs (which tend to be quite high in California).
Regardless of the measuring method, poverty rates in California now exceed even those of such endemically deprived states as Mississippi and Louisiana. On the basis of this “alternative” measure, some 16 percent of Americans, or about 50 million people, are now living in poverty. “Most poor families in California are working,” PPIC stated. “The majority of poor people in California live in working families. In 37.3 percent of poor families, at least one family member is working full time, and in another 25.6 percent someone is working part time.”
Ann Huff Stevens, director of the Center for Poverty Research at University of California-Davis said soaring housing costs, especially in California's cities, explains the vast majority of the higher poverty rate based on both the ‘alternative’ measure versus more traditional measures of determining the extent of poverty. “Housing costs in Nevada or Florida… are nowhere near this extreme,” she said in an interview. “It is important to note that California is a very expensive state, but it is also important to keep in mind that this is the main factor that makes our poverty rate jump from slightly higher than the national average in the official measure to number 1 in the supplemental measures.”
Given California's huge size (at 165,000 square miles, it takes up as much real estate as Iraq), poverty rates vary significantly within the state – from a low of 7.2 percent in San Mateo County (home of tech hub Silicon Valley) to a high of 30 percent in Merced County in the Central Valley which suffered mightily during the housing collapse. On the basis of absolute numbers, Los Angeles County is home to the largest population of people trapped in poverty – some 1.8 million, 30 percent of the state's total.
The Economist reported that at a recent meeting of the California Economic Summit, lecturers spoke of “two Californias” – basically, the affluent coastal areas and the depressed inland regions. Even with the drastic (but necessary) spending and welfare cuts enacted by Brown, California still accounts for an astounding one-third of all welfare recipients in the entire U.S. – though it has only about one-eighth of the country's population. The Economist estimated that income inequality is higher in California than almost any other state – with a gutted middle-class, an expanding underclass, and a thriving elite of 1 percenters.
“Unemployment is still huge. We’ve cut housing. We’ve cut Head Start [childhood education programs]. We’ve cut nutrition programs,” said Ron Haskins, co-director of the Brookings Center on Children and Families to the Los Angeles Times. “Now it's food stamps.... That'll show up in these [poverty] numbers next year."
The Women's Economic Agenda Project (WEAP) blamed California’s high poverty on the increasing costs of housing, electricity, and health care in tandem with job cuts. WEAP further noted that some 6.5 million – or one-fifth of Californians -- lack any kind of health insurance. In 2008, the National Low-Income Housing Coalition determined that to live in an average two-bedroom apartment in California, one must earn at least $24.01 per hour – about triple the minimum wage at the time.
A. Colin Cameron, professor of economics at UC-Davis, said a significant portion of California’s high poverty reflects the state’s large number of immigrants. “While many immigrants are well educated and high-paid, there are also many immigrants who are low skilled and have poor English [skills],” he noted. Indeed, according to PPIC, California, with more than 10 million immigrants, has more than any other state – or one-fourth of the nation’s entire population of foreign-born residents. In 2011, 27 percent of the state’s population was foreign-born (primarily Latin America but also Asia), about double the U.S. percentage. Nearly half (47 percent) of California’s immigrants are naturalized U.S. citizens, and another 26 percent have some other legal status. But according to the Department of Homeland Security, about 27 percent of immigrants in California are undocumented.
Meanwhile, the trends towards a bifurcated society in California have been percolating for decades. “Nearly 30 years ago, [I] wrote a book about California and its future, suggesting that despite its egalitarian and upwardly mobile pretensions, the state was evolving into a two-tier society of haves and have-nots,” Dan Walters wrote in the Sacramento Bee newspaper. “Unfortunately, that has become its reality and while the state’s media and political elites may sneer at Texas and other states that lack our mild weather and scenic attributes, they should note that Texas’ poverty rate is just two-thirds of California’s and Iowa’s is just one-third. You can’t eat an ocean view.”
Poverty will likely emerge as a dominant theme in this year's gubernatorial campaign in California. Neel Kashkari, a former U.S. Treasury official who played a major role in the federal government's bank bailouts and who has announced he will run for governor as a Republican, has criticized Brown (his presumptive challenger), for failing to alleviate poverty in the state. “The status quo is unacceptable,'' Kashkari said at a speech at California State University unveiling his candidacy for the state's highest office. “Governor Brown may claim a ‘California comeback,’ but the truth is that he has forgotten the millions of California families who are struggling.”
Assemblyman Tim Donnelly, a Tea Party favorite who will also run for governor, said Brown "has repeatedly failed to address how he intends to get the state back to work and return prosperity to California." Republicans also point to the state’s massive debt crisis – not only a $24.9 billion “wall of debt,” but also $330 billion “skyline” of other liabilities, including $80 billion needed to cover teachers' pensions and $64 billion to pay for state workers' health care in retirement.
California's GOP (a party now in serious decline in the state) also criticized Brown for failing to mention poverty in his recent 'State of the State' address. But last year, during an interview on National Public Radio, Brown addressed the poverty rate by describing it as "the flip side of California's incredible attractiveness and prosperity,” citing the large number of unskilled immigrants. But that hasn’t appeased Brown’s opponents, on the right or left.
Ellen Brown, an attorney, president of the Public Banking Institute, and who is running for state treasurer under the Green Party banner, complained that under Brown's austerity budget, welfare payments, health care for the poor, and benefits for the elderly and disabled have been slashed, state workers have been downsized, and school districts in need of cash have been reduced to borrowing through bonds bearing interest rates as exorbitant as 300 percent. “California cannot solve its budget problems by slashing services that have already been cut to the bone or raising sales taxes that hurt the poor far more than the rich,” she wrote. “We are fighting over a pie that remains too small.”
But Stevens of UC-Davis is cautiously optimistic about the state’s near future. “I do not expect poverty in California to worsen substantially in the coming years,” she said. “Like the rest of the country, the state seems to be recovering, slowly, from the great recession.”
font redaction .ibtimes.com/fools-gold-california-has-highest-poverty-rate-united-states-1548707
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