Taking On Poverty and Inequality

The theme at the Democratic Convention in Denver yesterday was "Renewing
America's Promise"--the Democrats' plan to grow the economy and
restore fairness so that it works for all of us. The 2007 Census
data on poverty, income and health insurance was also released yesterday
and it showed just how tall an order Senator Obama and the Democrats
face in reversing eight years of failed Bush economic policies -
policies we will continue to pay a price for in 2008 and beyond.

While the 2007 numbers don't even include the devastation wrought by
the
housing and credit crisis, and high energy costs, they nevertheless
paint a bleak picture with poverty on the rise and working people's pay
stagnating despite increased productivity.

Robert Greenstein, Executive Director of the Center for Budget and
Policy Priorities said, "Though 2007
was the sixth (and likely the final) year of an economic
expansion, 4.4 million more Americans were poor, the median income of
non-elderly households was $1,100 lower, and nearly six million more
Americans were uninsured than in 2001 - even though the economy was in
recession that year.... Never before on record has poverty been higher
and median income for working-age households lower at the end of a
multi-year economic expansion than at the beginning. The new data add to
the mounting evidence that the gains from the 2001-2007 expansion were
concentrated among high-income Americans."

"We have the biggest gap between the rich and everybody else since the
Great Depression," said
Independent Senator Bernie Sanders on Vermont
Public Radio.

Jared Bernstein, Director of the Living Standards program at the
Economic Policy Institute, agreed with Sanders. He suggested that we have
the greatest concentration of wealth in the richest 1 percent of the country
than we've had since 1928. Bernstein noted that the economic expansion
failed to lift working people's incomes despite that fact that "output
per hour, or productivity, rose 2.5 percent per year during the 2000 to 2007
cycle, compared to 2 percent in the 1990s, when family incomes fared much
better.... The economy... expanded in the 2000s, but that growth clearly
failed to reach most households, a dynamic that implicates growing
income inequality.... The fact that these disappointing income, poverty,
and earnings trends occurred in the
context of strong productivity growth is a reminder that in today's
economy, productivity growth creates only the potential for higher
living standards. As long as most workers lack the bargaining
power
to claim their share of the growth they have helped to generate, that
potential will not be realized."

The Bush administration will tout 2007 as the first decline in number of
uninsured during its tenure. But Greenstein pointed out that private
coverage continued to erode and "the improvement in health care coverage
in 2007 was due to more Americans obtaining coverage through government
health insurance programs, principally Medicare and Medicaid." Surely,
that's not what the Bush Administration was gunning for. In fact,
Greenstein said the Congressional Budget Office estimated that four million
more children would be insured had President Bush not twice vetoed
expansion of the State Children's Health Insurance Program (SCHIP). In
all, nearly 46
million Americans did not have health insurance last year.

As for poverty, it's first worth noting that the standard of measurement
is woefully inadequate. The federal
poverty guideline for a family of four is $21,203 in 2007.
Bernstein has suggested a more accurate measure of "material deprivation" using
recommendations from the National Academy of Sciences. But even using
the federal standard, 816,000 more people slipped into poverty in 2007,
meaning 37.3 million Americans or 12.5 percent of our population lived below
the federal poverty line. That figure includes 18 percent of all children
under the age of 18, and over 20 percent of related children under age six.
The poverty rate was 24.5 percent for African-Americans and 21.5 percent for
Hispanics. 50.9
million people , or 17 percent of all Americans, lived on less than
125 percent of the federal poverty level in 2007 (approximately $26,000
for a family of
four).

The Food Research and Action Center (FRAC) - a national non-profit
working to address hunger and poverty - wrote in a released statement,
"The 12.5 percent rate in 2007 compares to 11.3 percent in 2000. It is
unprecedented that poverty is higher at this point in an economic growth
cycle, and the damage from the failure of the economy's growth to lift
more people out of poverty is huge: if the 2007 poverty rate were just
the same as in 2000, approximately six million fewer Americans would have
lived in poverty in 2007. All signs are that
the poverty rate will be driven higher in 2008 by a slowing economy and
skyrocketing costs for housing, energy and food."

There seems to be little disagreement about that.

"The data for 2007 are of particular concern given that the economy is
now in a slowdown, and poverty is almost certainly higher now--and
incomes lower--than in 2007," Greenstein said. "The 2007 levels... are
likely to constitute a high-water mark for the next few years."

"When the data become available for 2008, the picture will undoubtedly
grow more grim,"
wrote
Michael Ettlinger, Vice President of Economic Policy at the Center for
American Progress. "Average real weekly earnings are down 2.4 percent
so far this year, according to the Bureau of Labor Statistics."

So where should an Obama Administration and Democratic Congress set
their sights?

Greenstein said the next President and Congress should set a national
goal to reduce poverty and act on it. Other organizations have pushed
hard on this too. The Association of Community Organizations for Reform
Now (ACORN), the Center for American Progress Action Fund, the Coalition
on Human Needs, and the Leadership Conference on Civil Rights are
together cooperating on the Half in Ten project,
working to promote a national goal to reduce
poverty by 50 percent in ten years. Greenstein also argued for
supporting state Medicaid programs by temporarily boosting federal
support, and reconsidering the Bush-vetoed legislation expanding
coverage for children.

FRAC President Jim Weill focused on a second stimulus package and the
need to boost food stamps as a record number of people turn to them.
"We will hear a lot this fall from Presidential and Congressional
candidates about their vision for America's economic future. A
reinvigorated fight against hunger and poverty must be an essential part
of this vision," he said.

When it comes to vision on poverty there is
little comparison between the presidential candidates. Senator Obama is
talking about a new energy economy, rebuilding our crumbling
infrastructure, union organizing, pay equity and a more progressive tax
system. While his policies may not be bold enough during the campaign,
the facts on the ground---mounting foreclosures, more people out of
work--will demand more of a Democratic administration.Senator McCain, on
the other hand, is hopelessly out of touch--saying the economy is "fundamentally sound" and poverty isn't even listed as an
issue on his campaign website.

These recent figures show there is a powerful need for Obama and
Democrats to put poverty back on the national radar. The grim stats on
the ground and the lives intertwined with them demand a bold
agenda. Beyond Obama and the Democrats, such an agenda needs independent
organizing to drive it, much the way the 1963 March on Washington eventually helped drive
the War on Poverty. Ending a trillion dollar war and redirecting some
of those resources back home is key as well.

Unless (and until) we tackle the gap between the very rich and the rest
of America--including the growing number of people falling into poverty
--it will be increasingly difficult to confront the major challenges of
our time.

The truth is, lifting the boats at the bottom has historically been good
for all Americans.