Bushonomics: 39 million locked in poverty

1 in 4 families are ‘working poor’

Report calls for minimum wage hike

One in four working families in the U.S. “earn wages so low they have difficulty surviving financially,” charged a report released Oct. 12 by three nonpartisan foundations.

The report, titled “Working Hard, Falling Short,” found that 9.2 million U.S. families with 39 million members, including 20 million children, are locked in the ranks of the “working poor,” toiling at minimum wage jobs without benefits and with little hope of rising from poverty.

Larry Matheney, secretary-treasurer of the West Virginia AFL-CIO, said the report describes the plight of thousands in his state where the Labor Department reported in August that 44,000 West Virginians are unemployed and 10,000 have exhausted their jobless pay without finding a new job.

Thousands of the newly created jobs in the state, he said, pay less than the $8.84 hourly wage needed to cover the bare necessities for a family of four. The federal minimum wage is only $5.15 an hour. “The jobs in the expanding industries pay 34 percent less than the jobs that have been eliminated,” Matheney said. “That works out to be $12,000 less in yearly income. It’s absolutely terrible.”

George W. Bush, he said, “talks about the ‘new economy.’ He promised job training but then he tried to cut $1 billion from federal job training programs,” including $23 million in federal job training programs in West Virginia. “Not only has he taken away jobs, he’s taken away the hope of finding new jobs.”

Matheney branded as a “new low” leaflets linked to the Bush-Cheney campaign falsely claiming that Kerry will “ban the Bible.” He praised Kerry’s vow to close tax loopholes that reward corporate export of jobs and his support for “clean coal technology.” He added, “Beginning today, we are urging voters to vote early. We’re working hard to make sure that no voter is left behind and every vote is counted. We believe John Kerry will win in West Virginia.”

The 36-page report was prepared by the Working Poor Families Project and sponsored by the Annie E. Casey, Ford, and Rockefeller foundations. It calls for increases in the federal and state minimum wage, adding, “Working families are insufficiently served by federal and state policies in such areas as education, training, health care, and tax and wage policies.”

The report debunks stereotypes, pointing out that 71 percent of the poor are employed but simply do not earn enough to get by. More than one-fourth of all families are “low-income,” defined as a family of four that earned $36,488 in 2002, far below the median income of $62,732 for a family of four. They are disproportionately African American and Latino.

Brandon Roberts, one of the authors, called attention to the plight of poor children. “Just the basic necessities, clothing, shelter, food, consumes all these families’ disposable income. They are not sitting around the dining table discussing the funds they are setting aside for their children’s college education.”

He added, “We believe this report is objective and not driven by any partisan political agenda. Right now is the perfect time to consider and debate these issues.”

The Bureau of Labor Statistics employment report released Oct. 8 contained the final scorecard for the 2004 election season. In the presidential debate that evening, Bush boasted that 96,000 jobs were gained in September. Kerry countered that Bush is the first president since Herbert Hoover to end his first term with a net loss of jobs.

The Economic Policy Institute (EPI) points out that “96,000 is below the 135,000 to 150,000 jobs needed per month to absorb the growing population and keep unemployment steady.”

The official September unemployment rate, 5.4 percent, is down slightly only because more working-age people have given up looking for nonexistent jobs. This “missing labor force” has increased by more than a half million people in the last year. Lee Price, the EPI’s research director, told an Oct. 12 press conference that, factoring in the missing labor force, the real unemployment rate is 7.2 percent.

And the job picture for teenagers and African American men is especially bad — studies have shown that only about one out of every two adult Black men in New York City has a job.

This is the first time in over 70 years that employment failed to regain its pre-recession level after 42 months. Since January, over 2.5 million people have exhausted their six-month unemployment benefits without finding a new job. But the Bush administration allowed extended benefits to expire last December, leaving long-term jobless out of luck.

The administration claimed its trillions in tax cuts for the rich would generate 5.5 million jobs. So far, only 1.7 million have been created, 2.9 million short. EPI’s Lawrence Mishel notes that the fastest-growing industries pay 40 percent less than the jobs in industries that are shrinking as a share of the total job market.

These new low-wage, no-benefit jobs explain the surge in the working poor spotlighted in the “Working Hard, Falling Short” report. The bad news in these two reports could mean bad news for Bush Nov. 2.

The authors can be reached at pww@pww.org.

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CONTRIBUTOR

Art Perlo

Art Perlo lived in New Haven, Conn., where he was active in labor and community struggles. He did research and writing on economic issues in Connecticut, including work with the Coalition to End Child Poverty in Connecticut which helped pave the way for the movement for progressive tax reform in the state. He wrote on national economic issues for the People's World and was a member of the CPUSA Economic Commission.