US Sees Highest Ever Increase in Poverty

Natalia Marques responds to a property developer’s recent call for more “pain” in the U.S. economy by highlighting what happened after pandemic-era aid ended.

U.S. President Joe Biden delivering remarks on the Child Tax Credit on July 15, 2021. (White House, Adam Schultz)

By Natalia Marques
Peoples Dispatch

Millionaire real estate company head Tim Gurner went viral  (not for the first time) for his barefaced remarks earlier this month to fellow capitalists at the Financial Review Property Summit.

In a talk, he claimed that workers have become “arrogant” and as a result need to experience rates of unemployment as high as 40 percent and feel “pain in the economy.”

“We need to remind people that they work for the employer, not the other way around,” Gurner said.

“People decided they didn’t really want to work so much anymore through Covid, and that has had a massive issue on productivity,” he claimed.

In reality, productivity growth has vastly outpaced wage growth since the early 1970s

Although the mask-off nature of Gurner’s comments may be shocking, they are not too different from the misleading idea of a “labor shortage” that has been circulating the mass media since the pandemic — arguing that pandemic benefits have created a category of workers too proud to work for a living.

As leftist media critic Adam Johnson writes, the “labor shortage” trope employs the notion of worker “laziness” to “normalize and make bipartisan the primary argument for throwing millions off one of the most effective forms of social welfare we’ve seen in decades” — pandemic-era aid.

“A much more elegant way of attracting workers is to simply increase wages by a meaningful amount,” Johnson writes.

Gurner makes it clear that CEOs don’t want an end to a supposed “shortage” so much as to put all control back in the hands of capital, especially during a resurgence in the labor movement. With UPS Teamsters winning record raises and UAW workers demanding wage increases tied to inflation, workers are demanding a more equal share of the wealth that they create. 

Despair as Pandemic Benefits End

But to the U.S. working class, the economic “pain” that Gurner describes is already here.

Recently released U.S. Census data shows that in 2022, the child poverty rate more than doubled — from 5.2 percent (a record low which was a result of pandemic aid) to 12.4 percent.

This enormous increase coincided with the ending of the child tax credit, a federal tax benefit, expanded in 2021, that provided up to $2,000 per year for those with children. When this expanded tax credit expired in December of 2021, 60 percent of parents who received the monthly tax credit reported increased difficulties in paying expenses, financial stress, and affording basic goods.

This month, the Census reported that between 2021 and 2022 the people of the U.S. experienced the highest one-year increase in poverty on record. This increase comes after two years of large declines in poverty due to pandemic-era aid programs, which largely expired beginning in 2022. 

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Nearly 4 million people lost access to healthcare following the expiration of the pandemic-era expansion of Medicaid, government-subsidized healthcare.

Right now, the tens of millions of children and adults that receive Medicaid or Children’s Health Insurance Program (CHIP) coverage are having their eligibility reviewed and face possible termination of benefits. Sources estimate that by the end of the eligibility review period, between 8 million and 24 million people will lose Medicaid coverage, 2 million to 7 million being children.

According to a report by Moody’s Analytics, the average person in the U.S. is rent burdened, meaning that 30 percent of the median income is required to pay the average rent.

In New York City, one of the most expensive cities to live in but also one of the most populous, the percentage of median income required to pay the rent was 67.8 percent in 2022.

For decades, in fact, median income increases have been unable to keep up with skyrocketing rent increases, with a report by Real Estate Witch (using Housing and Urban Development and Census Bureau data) claiming that rent increases have exceeded income increases by 325 percent  since 1985.

How can U.S. workers fight the trend towards impoverishment? Unionized labor is waging bold contract campaigns to reverse decades of wage stagnation, while organizations like the Debt Collective are organizing working people who owe debts for things that should be free, such as medical care and higher education.

Newer labor organizations are building a movement among the lowest paid workers, such as service industry workers. As workers fight back, the rich and powerful couldn’t make it clearer: it’s “us” against “them.”

Natalia Marques is a writer at Peoples Dispatch, an organizer, and a graphic designer based in New York City.

This article is from Peoples Dispatch.

The views expressed in this article may or may not reflect those of Consortium News.

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12 comments for “US Sees Highest Ever Increase in Poverty

  1. CaseyG
    September 24, 2023 at 14:59

    When WW II ended, the government was wise enough to create jobs and access to a better society with better pay. And why not, as those Americans suffered through war, and the government was wise enough to understand that all those Americans knew how to shoot. Europe was in a mess, and it became quote clear that with all those returning soldiers, the government had to show respect to all those soldiers.

    But sadly, the American born Japanese had their homes and businesses stolen away, and Black Americans didn’t do so well, nor did Hispanic people. But still, America was left standing in a better way than most of Europe.But something happened in the 1970s , where the People of all races did not seem to matter and the
    military had decided to take on Vietnam—and lose. And sadly the People have been losing ever since that time.

    I n sad order the power of the People has now switched to Power to the Corporations. Americans can not
    afford to live in their own nation anymore. What kind of a future is this?

  2. Chris Cosmos
    September 23, 2023 at 16:37

    Sadly, the Democrat Party abandoned the working class and unions at least thirty, and some would argue, forty years ago. Today both “left” and “right” are pretty much anti-labor, anti-poor, anti-universal health-care, pro-war, pro-empire. Only the right contains elements that are at least sympathetic to the Constitutional Republic and freedom of expression while the “liberals” and wokesters are solidly against free-speech, reason, and history itself.

    Thus there is little impetus within US political structure to alleviate poverty in a serious way. So poverty will continue to increase even if “the economy” surges for the oligarchs and the professional class.

    • Dienne
      September 25, 2023 at 10:38

      The right is literally burning books. They are not remotely sympathetic to freedom of expression. They are also trying to prevent people from crossing state lines to seek medical care which they are denying in states they control. So freedom in general is not high on their priority list, except their own freedom to control.

  3. New Dealer
    September 23, 2023 at 15:40

    Tim Gurner, and all of the corporate & political elites, are missing one important point.

    From where do their Customers get the money to buy goods & services? For most, that money comes from selling their LABOR. Workers are Customers, and Customers are Workers.

    These people don’t realize that underpaid, overworked Workers aren’t very good Customers. When Workers are underpaid & insecure about their economic future, they pinch pennies, they stop buying things, and they do without.

    When employers underpay their Workers, they’re taking money out of the pockets of their Customers. They’re cutting off their own air supply.

    After 40+ years of Neoliberalism, we’ve reached the point where the vast majority of the world’s Workers can’t afford the goods & services that they produce. AND, most are paycheck-to-paycheck, or under massive debt loads, or both.

    This will not end well.

  4. Henry Smith
    September 23, 2023 at 10:27

    Proof, if needed, that you don’t have to be very smart to succeed as a capitalist, you just need to be an extremely unpleasant person with no respect or empathy for your fellow human beings.

    • New Dealer
      September 23, 2023 at 15:20

      That is, a sociopath.

  5. Vera Gottlieb
    September 23, 2023 at 10:08

    Oh, sure…idiots like this one are always ‘ sorry’ after they insulted people. Their brains/mouths seem disconnected.

  6. Pedro Ghirotti
    September 23, 2023 at 06:54

    In recent years I came to the conclusion that the USA as a modern nation fooled the world. It came out of WW2 shining and sparkling, floods of money everywhere, it had created the wealthiest civilization in history. But it was all a lie that has finally run its course. The truth is that the USA is a rotten society, run by sociopaths, and it is obviously self destructing. I feel for the working people there. But as a nation, it’s going the inevitable way.
    Welcome to the so called Third World fellow Americans!

    • New Dealer
      September 23, 2023 at 15:27

      Agreed! But the prosperity wasn’t “a lie.” It was absolutely real — until *both* U.S. political parties, led by Reagan (GOP) and Carter (Dems) set their sights on destroying FDR’s New Deal policies. The New Deal was also the model for Europe’s Democratic Socialism and widely-held prosperity.

      These were the policies that Made America, and Europe, Great.

  7. gcw919
    September 22, 2023 at 18:15

    It may seem overly simplistic, but the rise of poverty in the US, along with the neglect of infrastructure, millions without medical insurance, exorbitantly expensive education, a deteriorating environment, etc., etc., can be attributed to an out-of-control military budget, which protects us from no one (Who’s going to attack us?). When we wake up to this massive con-game, it may be too late. Until our focus is on the well-being of people, and the planet, we are on a collision course with the end of “civilization” as we know it.

  8. Drew Hunkins
    September 22, 2023 at 14:14

    “We need to remind people that they work for the employer, not the other way around,” Gurner said.

    Holy smokes! Where to begin?

    Apparently he doesn’t understand industrial production 101 — without labor everything sits idle. Labor is that magical special ingredient that produces all wealth. This sniveling capitalist would have nothing if it were not for the toiling workers.

  9. Jeff Harrison
    September 22, 2023 at 11:25

    This jerk would be the kind of guy that would say that increasing will force me to raise prices. The thought of reducing the wages he pays himself to something less than stratospheric would never occur to him.

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