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50 Years After the War on Poverty, Will the Middle Class Become the New Poor?

If destructive policies continue, more Americans will come to know poverty firsthand.
 
 
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Fifty years ago today, LBJ threw down the gauntlet on poverty in his famous State of the Union address of 1964. Fired with passion and buoyed by bipartisan support, his anti-poverty team kicked off new health insurance programs for the old and the poor, increased Social Security, established food stamps and nutritional supplements for low-income pregnant women and infants, and started programs to give more young people a chance to succeed, like Head Start and Job Corps.

Americans have greatly benefited from big-picture economic changes like the minimum wage; investments in worker training and education; civil rights policies; social insurance; and programs like food stamps and Medicaid. As Georgetown University’s Peter Edelman pointed out in the New York Times, without these programs, research shows that poverty would be nearly double what it is today. According to economist Jared Bernstein, Social Security alone has reduced the official elderly poverty rate from 44 percent, which it would be without benefits, to 9 percent with them.

Some of our most prominent citizens have enjoyed protection from life’s vagaries through one or another of these measures. President Obama’s family once survived on food stamps. Congressman Paul Ryan was able to pay for school with Social Security survivor benefits when his dad died. A mere generation before, the workhouse or the orphanage might have been their fates.

Yet middle-class Americans are increasingly in danger of learning about poverty firsthand.

Middle-Class Tightrope

The gaps between the rich and poor are the widest they have been in a century, and the middle class is disappearing into the chasm. According to research by economist Emmanuel Saez, the share of income that goes to the top 1 percent has more than doubled since 1964. In the aftermath of the Great Recession, the top 1 percent has sucked up nearly all of the income gains in the first three years of the “recovery" — a stupifying 95 percent. The fluidity of American society used to be taken for granted, but now the U.S. lags behind Europe in measurements of mobility.

Not only is the climb to middle-class stability increasingly steep, the fall into poverty is more likely. The Great Recession brought home an ugly reality: nowadays it only takes one pink slip, foreclosure notice or catastrophic medical bill to push economically secure people into the ranks of the poor — even people with college diplomas and impressive resumes.

Why is this happening? Not because of some cosmic forces beyond our control, but because of misguided policies put into place by our elected officials and paid for by an increasingly out-of-touch business elite.

Energized by Ronald Reagan’s famous declaration that government is the problem, not the solution, conservatives in recent decades have sought to reduce the government’s vital role in creating opportunity and keeping hard-pressed Americans afloat. Simultaneously, they have unleashed the wild horses of deregulated capitalism, which have trampled working people. Labor unions have been crushed, wages have declined, safety nets have frayed, medical expenses have risen, and millions of Americans are now teetering on the edge of poverty.

It gets harder and harder to work your way out of dire straits. A mom with two kids toiling full-time for minimum wage at a grocery store would make about $15,000 a year, well below the poverty line of $18,498 for a family of three. But just looking at poverty figures doesn’t tell the whole story. A far larger group of Americans — around 100 million — is considered low-income, which would mean about $45,000 in income for a family of four. When you include the low-income category, census data show that the number of economically distressed Americans jumps to 50 percent. Half of us!