Thursday, September 16, 2010

Lifestyle Comment To TIME Post On Increasing Poverty

A comment I posted on the Curious Capitalist blog on Time.com, "Why Are a Record Number of Americans Living in Poverty?" by Stephen Gandel:
Income inequality has nothing to do with the point of your article about the increase in poverty. According to same GINI census data, http://www.census.gov/newsroom/releases/pdf/09-16-10_slides.pdf,
(see pdf page 15, or document page 13), the 1967 GINI was also .37. So over 43 years, inequality as measured by GINI increased by 22 percent, as poverty has generally declined in the US.

Until this recent recession, poverty in the US has been declining. As you correctly point out, the extended amount of unemployment and the lack of jobs are causing the increase in poverty.

The increase in the GINI index since the early 1980s is directly related to the changing nature of the household and the decrease in the average number of people per household.

The census GINI numbers are measured per household. With the increase in divorce, out of wedlock births by adults and the resulting increase in single parent households, naturally household GINI inequality measures will increase. A substantial part of the increase in household GINI is a cultural phenomenon having nothing to do with the increasing income of the upper ten percent.

The increase in single wage earner households, and single working mothers due to divorce and out of wedlock births has led to an increase in GINI and stagnation in household and per capita income.

It easy for the press to blame and insinuate that the increase in income inequality is due to the increasing income and income share of the wealthier US households. If there were fewer single parent households and fewer divorces, the income of the middle and lower tier of households would also have increased and GINI would have decreased.

Divorced women and single parent mothers are most likely poor as are their children. It has always been the case, and there increasing numbers, increases childhood poverty rates and the overall poverty rates. The poverty rate for a female householder without a husband present is close to 40 percent, according to the US Census Bureau.

Our lifestyle explains more about our overall poverty rates then does any GINI index that measures income inequality between the upper 10 percent and the lower 10 percent.

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