America’s Middle-class Meltdown

1/5 of US adults live in or near poverty

moneyMy Comments: Followers of my posts can recall numerous times over the past five years when I’ve talked about the growing divide between the haves and the have-nots. If not corrected, there’s going to be rioting in the streets before my five year old grandson reaches my age today. This is a long article that appeared a few months ago in the Financial Times. It’s just as relevant today. Some will say it’s all Obama’s fault, but the trend started long before any of us knew his name.

Shawn Donnan and Sam Fleming – December 11, 2015

One in five US adults now lives in households either in poverty or on the cusp of poverty, with almost 5.7m having joined the country’s lowest income ranks since the global financial crisis.

Many of the new poor, or near-poor, have become so even amid an economic recovery that is widely expected to lead the US Federal Reserve to raise interest rates next week for the first time in almost a decade. More than 45 per cent of them — almost 2.5m adults — have joined the lowest income ranks since 2011, long after the post-crisis recession was ostensibly over.

The findings, contained in data prepared for a new study of the US middle class by the Pew Research Center and shared with the Financial Times, put a stark human face on the economic legacy left by the crisis and reveal how uneven the recovery has been.

They illustrate how many Americans are being left behind even amid the strong jobs growth that, should the Fed move as expected, will be at the core of the argument its policymakers present for raising rates.

They also help explain why any notion of a recovery still seems a long way off to many in the US and why the message of populist politicians such as Donald Trump that America is not working resonate on the eve of an election year.

“There’s a new American dream,” says Torrey Easler, a Baptist preacher who helps feed a growing population of poor in the town of Eden, North Carolina. “The old American dream was to own a home and two cars. The new American dream is to have a job.”