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The True State of Our Union - 1998
A strong nation rests on a society rooted in responsibility. Because of the hard work and high purpose of the American people, these are good times for America.
--President Clinton, State of the Union Message, 27 January, 1998
In his State of the Union address delivered on January 27th, 1998, President Clinton highlighted the achievements of his administration and laid out his strategy to pursue the path toward a stronger America for the twenty-first century. This America, he stated, is exemplified by an "economy that offers opportunity, a society rooted in responsibility, and a nation that lives as a community." Claiming that "the state of our union is strong," he described the strength of contemporary America and its communities as by the following:
Lowest unemployment rate in 24 years
14 million-plus new jobs
Rising incomes
Highest home ownership in history
Lowest welfare rolls in 27 years
While on the surface these indicators seem to point to the prosperity of a nation, the harsher reality is one of increasing hunger, poverty and economic insecurity in the U.S. Our economy is indeed booming; the stock market is breaking records. But not everyone is sharing in the prosperity.
In this True State of Our Union we present a more accurate account of the state of the people, especially the poor. Our evidence challenges President Clinton's claim that his policies have produced a stronger America.
The Real Indicators
Hunger
Today, more than 30 million Americans are hungry - at least 12 million of them children under age 18. This figure represents a 50% increase since 1985.
The number of hungry in the U.S. is equal to the number of hungry in 14 Sub-Saharan African countries. (Botswana, Burundi, Cameroon, Chad, Ivory Coast, Gabon, Gambia, Liberia, Malawi, Mali, Niger and Senegal)
In August 1996 President Clinton signed Welfare Reform, including $60 billion cuts to federal assistance programs over six years. Two-thirds of the $27 billion cuts in food stamp programs are directed at low-income families with children. In Fiscal Year 1998, nearly 7 million families with children receiving food stamps will lose an average of $435 in food stamp benefits. Since the average income of a poor family with children in 1995 was $600 a month, this is a huge loss.
A study by Second Harvest Food Bank showed that more than two out of every five clients- 42.9 percent - were children age 17 or younger, although this age group makes up only 25.9 percent of the US population. An additional 22 percent of the soup kitchen clients were elderly, while they are only 12.5 percent of the overall population.
Some 63 percent of the elderly are at moderate or high nutritional risk - 5 million experience what social workers call 'food insecurity."
Citizen initiated food banks are intended to make up for some of the gaps in the safety net. Yet with welfare reform, they are increasingly relied on to function as the safety net. With general cuts in food stamps (affecting many welfare recipients, including unemployed and working poor), and ineligibility criteria for legal immigrants, food banks across the country are being inundated with more hungry people looking for food.
A report by Catholic Charities U.S.A., found that "the cuts in entitlements and other low-income programs under the new welfare law will average $15.1 billion per year over the next seven years. Charitable giving to churches and human-services groups around the nation was only $11.7 billion in 1995."
The U.S. Conference of Mayors surveyed 29 cities and found emergency food requests up 16 percent. One in five requests could not be filled. Nine out of 10 cities expect demand to rise again this year.
Poverty
What the President failed to mention in his message is that almost seven years of economic recovery have done remarkably little for people in the bottom half of the income ladder. The real news is that 38 million Americans live in poverty, 40% of the nation's 38 million poor are children and 10% are over age 65. In California, nearly one out of five Californians lives below the poverty line. Families with children make up the majority of the working poor, (63 percent). Since 1980, California's poverty rate has increased 63 percent.
The U.S. today has the widest gap between the rich and poor of any industrialized country. By the mid-1990s, the richest 20 percent of families with children had average incomes over 13 times as large as the poorest 20 percent of families. The gap between the top fifth of families and the bottom fifth of families has grown by 65 percent since the 1970s. In terms of income inequality, U.S. is on par with Honduras, Jamaica, Kenya and about twice as bad as Japan, Indonesia, Pakistan, India, Bangladesh, Rwanda, Uganda and Ethiopia.
In 1976, 19% of total networth was held by the richest 1% of American families. In 1996, it had increased to 40%.
The U.S. continues to have the highest rate of young child poverty of any Western industrialized nation. The percentage of children living below poverty line rose 49% from 1970s to 1990s. 43% of all young children in the U.S. live in low-income families, i.e. with incomes below the poverty line. Of the 5.5 million young children living in poverty, 47 % are extremely poor, i.e. living in families with incomes below 50% of the Federal poverty line.
Despite decades of efforts to improve the lot of American farm workers, wages for the nation's more than two million farm laborers have fallen 20 percent or more over the past two decades, making it hard for many of them to afford adequate housing and other basic necessities.
Despite peak economic performance, the government has lagged in steps to widen health coverage. The number of uninsured has increased each year since 1987 and now exceeds 41 million, roughly one sixth of the population.
Though home ownership may be up, some 5 to 7 million Americans are homeless. According to the San Francisco Public Health Department, 102 homeless people died in the city between Dec. 1, 1996 and Nov. 30, 1997. Its report claimed that these deaths were preventable- the direct result of "poverty and the conditions in which homeless people live."
Welfare Reform will push more people into poverty. An estimated 1.1 million families with 2.6 million children will lose their eligibility for welfare by 2006. Disabled children are especially vulnerable to cuts in SSI. 95,180 disabled children have already been cut off from SSI under welfare reform. Another 250,000 to 315,000 currently receiving benefits are expected to be affected.
Unemployment
In 1996, the number of jobless persons in the U.S. was 14.2 million, a jobless rate of 11.0 percent. This figure was twice the official Unemployment Rate of 5.4 percent, and the number of officially unemployed, 7.2 million. The 14.2 million figure includes the 5.5 million who wanted jobs but had given up looking, and was adjusted for the 31 million who worked part-time.
Thousands of workers lost jobs at major companies across the U.S. last year while executives at companies with layoffs enjoyed a 67.3 percent increase in total direct compensation, well above the average increase of 54 percent for executives at the top 365 U.S. firms.
The goal of Welfare Reform was to replace welfare checks with paychecks. The odds against a typical welfare recipient landing a job that pays a living wage are about 97 to 1 for the Midwestern states of Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin. These states compare favorably to the rest of the country, so it is reasonable to conclude that these odds are not significantly better, on average, in the national economy as a whole. This raises questions about the bedrock premise of the welfare laws i.e. that tougher eligibility guidelines move people from dependency to jobs.
The influx of welfare recipients into the low-wage labor market is predicted to reduce wages by almost 12 percent, which will result in low-wage workers losing about $36 billion a year in income.
The trend to privatize public sector services, such as welfare administration, has resulted in a loss of public sector jobs. A survey by Andersen Consulting found that private companies have contracts to perform welfare functions in 49 states. In Texas alone this has resulted in the loss of as many as 5,000 state public sector jobs.
Conclusion
President Clinton concluded his message with these words:
America has continued to rise through every age, against every challenge; a people of great works and greater possibilities, who have always found the wisdom and strength to come together as one nation, to widen the circle of opportunity, to deepen the meaning of freedom, to form that perfect union.
While we disagree with President Clinton's rosy depiction of today's U.S. economy, we do believe that America can rise to the challenge of offering every person a life with dignity.
Indeed, now that the economy is doing well, the time has come to deliver on the promise - to deepen the meaning of freedom - freedom from fear and freedom from want. The time has come to widen the circle of opportunity and provide jobs and justice. The time has come to deliver on our commitment under the Universal Declaration of Human Rights (UDHR), which guarantees a full range of economic human rights including: the right to an adequate standard of living, food, health, housing, education, social services and work that provides livable wages. Only then will we form that perfect union.
Compiled by Anuradha Mittal and Kathy Yoo
Notes:
"The Prepared Text of President Clinton's State of the Union Message," The New York Times, January 28, 1998.
Based on a study by the Center on Hunger, Poverty and Nutrition Policy at Tufts University prepared for the U.S. Congress.
Source of Africa Data: Hunger in a Global Economy, 1998, Bread For the World, Washinton, DC.
The State of America's Children, Year Book 1997, Children's Defense Fund, 1997.
J. Poppendieck, "The USA: Hunger in the Land of Plenty," in First World Hunger: Food Security and Welfare Politics, ed. G. Riches, 1997.
T. Lieberman, " Hunger in America," The Nation, March 1998.
D. Sarasohn, "Hunger on Main St.: Food Banks Are Straining, But The Worst Is Yet To Come," The Nation, December 8, 1997.
R. Conniff, "Girding for Disaster: Local Officials and Private Charities Brace Themselves for Welfare Reform," The Progressive, March 1997.
S. Roberts & Cokie Roberts, "Hunger: A Startling Crisis," USA Weekend, March 27-29, 1998.
Dispelling the Myths About Welfare, Population Reference Bureau, 1996.
Working, But Poor, In California Budget Project, 1996.
Ibid.
Pulling Apart: A State by State Analysis of Income Trends, Center on Budget and Policy Priorities, Washington DC, 1997.
Human Development Report, UNDP, 1994, New York.
Edward Wolff, Top Heavy: The Increasing Inequality of Wealth in America, New Press, 1996.
Young Children in Poverty: A Statistical Update, National Center for Children in Poverty, March 1998.
S. Greenhouse, "U.S. Surveys Find Farm Worker Pay Down for 20 Years," The New York Times, March 31, 1996.
Robert Pear, "Government Lags in Steps to Widen Health Coverage," The New York Times, August 9, 1998.
How Many People Experience Homelessness?, National Coalition for the Homeless, 1997.
S. Blackwell, "S.F. Homeless Death Toll: 102 in Past Year," The San Francisco Bay Guardian, December 24, 1997.
R. Pear, "U.S. Plans to Cut Disability Checks of 95,180 Children," The New York Times, August 15, 1997.
D. Dembo & W. Morehouse, The Underbelly of the U.S. Economy. Joblessness and the Pauperization of Work in America, New York, 1997. The official Unemployment Rate had excluded the people who had given up looking for jobs entirely from the labor force and treated the part-timers statistically the same as if they were fully employed.
CEO's Win: Workers Lose, 4th Annual Report, Institute for Policy Studies, Washington DC, 1997.
M. Weisbrot, Welfare Reform: The Jobs Aren't There, The Preamble Center for Public Policy, Washington DC, 1997.
Ibid.
Ibid.
A. Fifield, "Corporate Caseworkers," In These Times, Vol. 21, No. 15, June 16, 1997.
"The Prepared Text of President Clinton's State of the Union Message," The New York Times, January 28, 1998.
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