The fight against poverty in the United states made very little gains in 2014. While the poverty rate dropped slightly last year, due mostly to more Americans transitioning back into full time jobs versus the part time jobs many were forced to take the year before in the height of the recession. Wages however have barely kept up with the rate of inflation so overall there was very little changes to overall incomes according to the Census Bureau.
Poverty rates remain quite high in the nation. Although the recession officially ended 5 years ago, many business are still struggling. Loans are still not flowing freely, and investment capital is still needed for new start ups which are among the nations leading employers. While there are indeed more jobs to be had in 2014, income inequality remains very high. Median income wages have been stuck at the same level dating back to 2009.
In 2012 the poverty rate was 15 percent, in 2013 the poverty rate took its first dip since 2006, the year before the recession began. While the overall poverty rate has taken a slight dip, American consumer debt is at an all time high as many Americans leverage there available credit just to make ends meet in a never ending cycle of debt traps. Payday loan usage is also at an all time high, as millions of Americans struggle to make ends meet. The number of Americans living at or below the Federal poverty rate remains about 45 million. The Federal poverty rate remains unchanged and experts predict 2015 it should remain at that level.
The only notable groups whose incomes jumped up are families and Hispanics. Hispanics median household income rose 3.5 percent last year, making Hispanics the only racial or ethnic group with sizable changes to both median income and the poverty rate, which fell slightly over 2 percentage points to 23.5 percent. The child poverty rate however did decline, down to 20 percent from 22 percent. Among Hispanics this rate was even more dramatic falling down to roughly 30 percent from almost 34 percent, which is the lowest level since 2007. This is an important first step to get back to pre-recession levels of poverty overall for all races. Poverty rates fell for all races of children except African American children, and their rate remained unchanged. This is largely due to the fact that many African American families live in “extreme poverty levels”, and it is harder to escape extreme poverty.
The reason for the significant drop in the rate of poverty among Hispanic families has been largely due in part to members of these families holding multiple jobs and working over 40 hours per week. To truly help with the fight against poverty we need to reduce the levels of children growing up in poverty and to increase the number of children growing up in poverty to full time college or trade schools, as a tool to escape poverty. Higher education and the access to higher education is seen as the primary tool to combat poverty levels. Another tool to help combat poverty is affordable housing, which needs to be made more readily available to those in extreme poverty levels. Lastly affordable loans need to made available for those in extreme poverty who need a loan and whose credit is at least fair. Those in extreme poverty are more likely than those not in poverty to fall victim to predatory lending. The often never ending cycles of predatory lending often keep those who are poor in high levels of debt, which can be difficult to escape from.
Over the last 40 years the levels of poverty have mostly remained unchanged, as the poverty rate moves up and down on average only 3 to 4 points in either direction. Lyndon Johnson launched the War on Poverty in 1966 and the poverty rate remains nearly as it was since the war on poverty began. Average median household income last year was just under $52,000.00, which is 8 percent lower than it was in 2007, right before the recession hit full force, even when accounting for inflation. Yet more people are working full time jobs today, which is a good indicator that the economy is improving overall, albeit slowly. However it should be noted that wages are just barely keeping up with inflation, and the average worker can not expect a meaningful wage raise in 2015.
Some groups that are doing well overall income wise include married couples, who lead the highest median income, averaging at $76,509, although this is a slight dip down 0.4% from 2013. Households led by someone ages 15 to 24 saw a huge increase in earnings, 10.5% with the average income being $34,311.00, and this is attributed to younger people being involved in higher tech entry level jobs. Households who are led by someone age 65 or older also did well this year with median incomes up 3.7% to an average income of $35,611. Income inequality and distribution of income however is still experiencing record level jumps in the gap between the top 5% and everyone else. Income inequality sparked off a series of nationwide protests, aimed at the so called top 1%. Overall as far as median incomes go and income distribution, very little has changed since 2012, with the major exception of more people holding down full time jobs.