Here are some statistics from the 2010 U.S. Census to chew on:
- Real median household income in 2010 declined 2.3% compared to 2009.
- America’s poverty rate in 2010 increased for the third consecutive year to 15.1%, up from 14.3% in 2009. This accounts to 46.2 million American citizens. Of note, the poverty line for a family of four in 2010 was $22,314.
- The number of people without health insurance in 2010 rose to 49.9 million, up from 49 million in 2009 (as a percentage of total population, this change is negligible).
Just like in our families, where each generation is expected to exceed the quality of life of the prior, it is disappointing to find ourselves on the decline. In a country where we have access to the world’s most pristine national parks, the most prestigious university, and even some of the cheapest Big Macs, it’s maddening to see median incomes go down, poverty levels increase, and quality of health care to decrease. Given these sobering statistics, the United States can no longer hide behind our Fake Empire consisting of flashy electronics, trendy coffee stores, and hip social networks.
Don’t get me wrong; I am in no way advocating for individuals to give up their iPads and smartphones so the poor can get free handouts. Instead, I’m hoping that illuminating the status quo will help informed individuals to worry about the long-term implications of current trends.
It’s no surprise that the economic recovery since 2008 has been sluggish. Recently, Federal Reserve Chairman Ben Bernanke recently admitted to being surprised at how cautious consumers have been in the recent years as an explanation for America’s anemic economy. As a microfinance practitioner, it’s hard to ignore the similarities between “cautious” American consumers and “risk-averse” microfinance clients that I’ve worked with in the past. In both cases, a lack of adequate income forces people to spend the majority of their disposable income on sustenance. Without enough income to sustain insurance or invest, the poor become tangled in a poverty trap, transforming short-term liquidity issues into long-term structural problems.
These long-term problems bear huge societal costs which everyone will have to pay for. We are already seeing these effects, with skyrocketing health care costs, a push for tax dollars to be spent on short-term job creation instead of sustainable institution building, and strikes of disgruntled workers paralyzing the U.S.’s ability to fund a sustainable future.
Regardless of political opinion, I’m sure we can all agree that having an entire portion of America’s population hindering the country’s ability to recover from the financial crisis and prosper down the road is in no one’s interests. It’s time we conceded that our prosperity comes at a real cost to others in the short run, and to ourselves in the long run.
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