The latest Census Report on poverty is not good, though reports do show it is still possible to increase your financial standing in life, as I know is true on a first hand basis. It is estimated by the Census that about 12 to 12.5% of Americans still live in poverty, which equates to as many as 45 million Americans. This is per the latest data available, which is from the 2017 Census report. This means the number of Americans living in poverty has only decreased a couple percentage points over the last several years, even though we are in the midst of (maybe the tail end of?) an economic boom.
That figure from the census is even more optimistic (lower %) than others. Another 2017 report, which is apparently more highly regarded by professionals and economists, shows that about 13.7% of Americans live in poverty, and that is known as the Supplemental report. This Supplemental report is often preferred as it factors in some other data points, such as cost of transportation, child care, the benefits of food stamps, rental assistance programs, and more.
What do these poverty numbers mean?
This is not good news for the country. The economy is booming and has been expanding for 10 years. It is in fact one of the (if not longest) economic expansions in our countries history. It can’t go on forever…another recession will occur sometime. If poverty is at these levels now, what happens to it when the next downturn, which is inevitable, occurs? What happens when people once again start to lose their jobs, their homes, and companies slow down or stop hiring?
Even though we are experiencing major, long term growth, tens of millions of Americans are still in poverty. The unemployment rate is at historic lows, there are more available jobs than people to work them per the latest JOLTS report, and the job market is on fire; not only for people with skills but also those with limited ability and education. Anyone who wants a job and quite frankly has a pulse can get a job!
No one knows the solution(s) to addressing poverty. If they did, or if the solution was easy, it would barely exist. The fact is the poverty rate will never be zero, as there are people who are sick, those who are lazy and who refuse to work, drug addicts or substance abusers, the elderly who never saved for retirement, those who take advantage of the system or others, mental and physically disabled, etc. So it will never go away.
Poverty is difficult to address. But no ones knows the solution(s) to how to get it to quickly trend down to a much lower level. That is a more realistic goal…have poverty go down quickly to much less than 12% like it was in 2017. As poverty will never be zero.
A bit of good news is that multiple studies, including from a journal known as Science and the Global Database of Intergenerational Mobility (GDIM) show that the majority of children still earn more than their parents, when accounting for inflation, cost of living, etc. The studies show anywhere from 55 to 70% earn more than their parents did. I myself see this all the time, am a direct example of that fact as gone from a low (very low income upbringing) to a top 1% er. As a matter of fact, all 5 of my siblings are earning more than my parents (including old man)….even though they may blow through their money!
While it is good news, and it critical to battling poverty, those percentages of how many people are earning more than their parents are still down from the 1940s – 1950 timeframe…though that was coming at the end of the great depression. So it is still possible, and most kids have better futures than their parents, but i think it is fair to say the percent is no where near it needs to be.