As the recession climaxed in 2011, unemployment in the United States peaked at 9.8%. It seems that better days are now ahead of us with an unemployment rate below 6 percent and tens of thousands of jobs being added to the economy weekly. While many of us are catching the strong economic wave bringing us back to lives of prosperity, we forget that many of our fellow Americans are not so lucky.
Americans commonly respond to research on the topic of poverty in America by questioning: “there is poverty in America?”, “so you must be writing about New York City and Los Angeles…”, or “shouldn’t you research somewhere like Mexico where poverty exists?” Too often when we think of poverty we think of starving children in Africa or masses of people in Bangladesh, ignoring the notable footprint that poverty has left in our own backyard. In 2010, the US Census Bureau showed that 14.9 percent of the US population lives in poverty, totaling to more than 47 million Americans. How can so few of us notice the problem that poverty poses in our society?
Who and where are these stranded Americans? Surprisingly, the racial group which increased in proportion most over the recession was Caucasians, raising from 11.3 percent in 2000 to 20.3 percent of that racial group in 2010 in areas that were considered poverty zones. Thirty-five percent of poverty area inhabitants obtained higher education, showing that individuals from many backgrounds are being influenced by poverty.
The 47 million impoverished in our society commonly cluster in neighborhoods across the nation which are defined by having 20 percent or more of the inhabitants living in poverty. Poverty areas are not restricted to major cities as only 51 percent of those living in poverty areas live in metropolitan regions. In the past decade, the number of Americans living within impoverished areas increased by 54 percent, reaching a total of 25.7 percent of Americans or over 77 million of our population. For many of us, poverty may not be apparent. The poor are mostly tucked out of sight and out of mind. But, it would be hard to argue that for the quarter of our population found living in these neighborhoods, that poverty is not a major reality.
The majority of non-impoverished inhabitants (the other two-thirds) living in these neighborhoods are mostly low-income families and individuals, trying to make it financially. It is not surprising that multiple studies show that living in these poverty zones comes with higher crime rates, often poor housing conditions, and fewer job opportunities. The majority of these 77 million Americans are “just getting by” as financial success mostly passes over their neighborhoods.
In these communities the culture of pay day loans thrives. Pay day loan providers are open about the fact that there is no credit check required to take out a cash advance as long as you can show proof of employment. A typical pay day loan of $100 will call for $15 of interest in two weeks, not that bad until you realize that extrapolated these terms bring an annualized percentage rate of 390 percent. These pay day loans fortify the cycle of poverty in these neighborhoods as over 29 percent of pay day loan users were found to take out more than nine pay day loans in a year. Of course, borrowing from loan sharks can even be worse.
The citizens affected most by the recession are not those encountering small bumps in the road, but those who face few prospects of prosperity and are caught in the cycle of poverty. In a country based upon a tacit promise of equal opportunity, it is time that we recognize the eighth of our population that feels little ability to achieve prosperity and will not do so any time soon without concerted efforts by many.