Second Great Depression numbers start to roll in
Between six and eight million Americans fell into poverty just since Covid, and that's the good news.
A study from Columbia University published on Thursday found that the number of Americans in poverty grew by 8 million since May.
Looking at the monthly poverty rates for American families from October 2019 to September 2020, the study found that the number of families in poverty has been gradually rising since March 2020, but the Cares Act, the original coronavirus economic relief package, prevented 18 million families from going into poverty in March and April.
Without that stimulus package, the poverty rate would have jumped from 12% in March to 19.4% in April. Instead, it was 13.9%, the study found.
Since the Cares Act benefits have expired (the $600 checks are gone, and even the $300 checks are running out), with no second stimulus coming, that means we can expect millions more Americans to fall into poverty between now and the end of the year.
Since then, monthly poverty rates have grown closer to what researchers estimate rates would have been without the Cares Act. The poverty rates in August and September were 17.3% and 16.7%, respectively. Without the stimulus package, researchers would have expected rates of 18.7% and 18% in those months, respectively.
Now for the bad news.
900,000 people applied for unemployment just last week. To put that into perspective, the one-week record for the United States anytime before 2020 was 695,000.
Bans on evictions in states like New York and Nevada are expiring, while in Massachusetts they are preparing in a spectacular way.
Massachusetts Gov. Charlie Baker is rehiring 15 retired judges to fire up what critics call the "eviction machine," according to reports.
The retired judges are being brought back to court as the state faces a backlog of cases regarding its sweeping eviction ban that passed in April as part of the governor's coronavirus emergency declaration. The ban, set to end on Saturday, halted all eviction and foreclosure court proceedings amid the pandemic.
"The wheels of the eviction machine are spinning and the programs and processes that were supposed to make it fairer for tenants are not in place," Lewis Finfer, co-director of the Massachusetts Communities Action Network, told the Boston Herald.
If you are one of those poor people lucky enough to find a job in this depression, it's likely that it won't pay for sh*t.
If you measure the unemployed as anybody over 16 years old who isn't earning a living wage, the rate rises even further, to 54.6%. For Black Americans, it's 59.2%.
The recession made everything worse. Only 46.1% of white Americans over the age of 16 — and a mere 40.8% of Black Americans — now have a full-time job paying more than $20,000 per year.
That seems hard to believe, while at the same time I believe it.
Finally, our tax code is horribly regressive, and designed to keep poor people poor. While Donald Trump pays $750 a year in taxes on millions of dollars in income, poor people pay through the nose.
Millions of low-income Americans are locked into poverty thanks to U.S. tax policy, Federal Reserve Bank of Atlanta researchers say.
About a quarter of lower-income workers effectively face marginal tax rates of more than 70% when adjusted for the loss of government benefits, a study led by Atlanta Fed Research Director David Altig found. That means for every $1,000 gained in income, $700 goes to the government in taxes or reduced spending. In some cases, there are no gains at all...
“This is a perverse incentive that says you shouldn’t try to make yourself better,” said Atlanta Fed President Raphael Bostic, who is leading a virtual conference Thursday intending to focus attention on the problem.