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Author: Koon Yew Yin   |   Latest post: Sat, 19 Jun 2021, 10:12 AM

 

U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years - Koon Yew Yin

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Donald Trump will be recorded as one of the worse, if not the worst US President in the American history. During his presidency, he concentrated in bashing China, imposed higher import tariff on Chinese made goods but allowed free import of Kongflu so that US has the most Covid 19 cases in the world. Currently US has a total of 33.6 million Covid 19 cases and 598,523 deaths.  

China has a total of 90,868 Covid 19 cases and 4,636 deaths. The daily new cases can be countered by your figures. It looks like China is the safest place to live in the world.

In the last 40, China has lifted more than 600 million people out of poverty and created more than 600 million middle class people. Every year China has more college graduates and entrepreneurs than any nation in the world. There are no homeless people in China. But in Los Angeles, you can see many people living on the roadsides and back lanes.  

The end of 2020 brought the sharpest rise in the U.S. poverty rate since the 1960s, according to a study released recently.

Economists Bruce Meyer, from the University of Chicago, and James Sullivan of the University of Notre Dame found that the poverty rate increased by 2.4 percentage points during the latter half of 2020 as the U.S. continued to suffer the economic impacts from Covid-19.

That percentage-point rise is nearly double the largest annual increase in poverty since the 1960s. This means an additional 8 million people nationwide are now considered poor. Moreover, the poverty rate for Black Americans is estimated to have jumped by 5.4 percentage points, or by 2.4 million individuals.

The scholars’ findings put the rate at 11.8% in December. While poverty is down from readings of more than 15% a decade earlier, the new estimates suggest that the annual Census Bureau tally due in September will be higher than the last official, pre-pandemic level of 10.5% in 2019.

Black Americans were more than twice as likely to be poor as their White counterparts in December -- an improvement from the summer months when they were nearly three times more apt to live in poverty -- but an increase from before the pandemic, when the differential was under 2.

Poverty Rate Jumps.

Millions more Americans to be classified as poor in 2020

 

Despite improvements in the overall poverty rate since the middle of the 20th century, Black Americans had been about three times as likely to be poor as White Americans for most of the past 60 years. The gap started to narrow after the financial crisis, during the longest economic expansion in history.

These December poverty estimates are based on survey data collected late in the month after some government relief measures expired. The researchers found that the stimulus checks the federal government issued in the spring helped forestall the poverty rate from rising even faster. In late December, $900 billion in addition federal relief aid was passed, and President Joe Biden is asking Congress for an additional $1.9 trillion in stimulus.

How Does the U.S. Compare to Other Countries?

In Table 1 we can compare poverty rates across 26 OECD countries. In this table, poverty is being measured as the percent of the population falling below one half of a particular country’s median household income. This is what is known as a relative measure of poverty, and is used extensively in making cross-national comparisons. The first column shows the overall poverty rate for each country; the second column displays the poverty rate for children; and the third column indicates the percentage distance from the poverty line to the average income of those in poverty.

Country

Overall

Children

Poverty Gap

Iceland

5.4

5.8

27.2

Denmark

5.5

2.9

31.0

Finland

6.3

3.6

21.0

France

8.3

11.5

23.9

Netherlands

8.3

10.9

31.6

Norway

8.4

8.0

34.3

Switzerland

9.1

9.5

26.2

Sweden

9.3

9.3

22.5

Belgium

9.7

12.3

21.6

Austria

9.8

11.5

35.4

Ireland

9.8

10.8

3.3

Hungary

10.1

11.8

29.2

Poland

10.3

9.3

28.4

Germany

10.4

12.3

26.5

New Zealand

10.9

14.1

26.2

Luxembourg

11.1

13.0

28.9

United Kingdom

11.1

11.8

35.5

Australia

12.1

12.5

28.7

Canada

12.4

14.2

30.4

Portugal

12.5

15.5

29.4

Italy

13.7

17.3

40.8

Greece

14.4

17.6

35.3

Japan

15.7

13.9

33.7

Mexico

16.6

19.8

33.5

Korea

17.4

14.5

35.5

25 country average

10.7

11.7

29.6

United States

17.8

20.9

39.8

Table 1. Extent of Poverty across 26 OECD Countries

 

 

 

Source: OECD Data, 2019.

 

What we find is that the U.S. rates of poverty are substantially higher and more extreme than those found in the other 25 nations. The overall U.S. rate using this measure stands at 17.8 percent, compared to the 25-country average of 10.7 percent. The Scandinavian and Benelux countries tend to have the lowest rates of poverty. For example, the overall rate of poverty in Denmark is only 5.5 percent.

Looking at the poverty rates for children we see similar patterns. The United States again leads all nations in having the highest rates of child poverty at 20.9 percent, while the overall average stands at 11.7 percent.  Again, we see the Scandinavian countries having the lowest rates of child poverty, with Denmark seeing only 2.9 percent of its children falling into poverty.

Finally, the third column indicates the poverty gap, which is defined as the percentage by which the average income of the poor falls below the poverty line. This gives us an overall gauge of the depth and severity of poverty in each country. Once again, we find that the United States is at the very high end in terms of this measure. The distance between the poor’s average income and the poverty line is nearly 40 percent.  Only Italy has a greater poverty gap than the U.S.

To summarize, when analysing poverty as the number of persons who fall below 50 percent of a country’s median income, we find that the United States has far and away the highest overall poverty rate in this group of 26 developed nations. Furthermore, the distance of the poor from the overall median income is extreme in the U.S.  At the same time the United States is arguably the wealthiest nation in the world.

This paradox is revealed in additional analyses that have examined how well children and adults from the lower, middle, and upper ends of the income scale do. Not surprisingly, the United States has the highest standards of living at the middle and upper ends of the income distribution scale, yet for children at the lower end, their standards of living fall behind most other industrialized nations.

The reasons for such a discrepancy are twofold. First, as discussed in Discussion Module 8, the social safety net in the United States is much weaker than in virtually every other country in Table 1. Second, the United States has been plagued by relatively low wages at the bottom of the income distribution scale when compared to other developed countries. These factors combine to contribute to both the relative and absolute depths of U.S. poverty in comparison to other industrialized nations.

 

 

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stockraider How can the world richest nation in the world has such high poverty rate leh ??

What have gone wrong for this superpower leh ?

How can Usa reverse its decline leh ?
14/05/2021 1:03 PM
MuttsInvestor US = Rich / Elites = Fund = Election = Presidents = Policies to Help Rich / Elites = Rich Gets Richer !!!! ( Power of democracy )
14/05/2021 2:59 PM
apolloang uncle type wrong ar? is it US or msia? hahaha
14/05/2021 10:02 PM
enning22 kyy minds your own margin call lah,not to spend too much time spreading FAKE NEWS, serving the RED.
15/05/2021 10:22 AM
stockraider Open your eye N mind lah!

Kyy telling the truth mah!

Posted by enning22 > May 15, 2021 10:22 AM | Report Abuse

kyy minds your own margin call lah,not to spend too much time spreading FAKE NEWS, serving the RED.
15/05/2021 11:07 AM
COVID18NOT19 63% of Americans have been living paycheck to paycheck since Covid hit

https://www.cnbc.com/2020/12/11/majority-of-americans-are-living-paycheck-to-paycheck-since-covid-hit.html
18/05/2021 11:24 PM


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