Wednesday, September 12, 2012
Great Recession still slamming the middle class
The poor stayed poor and the rich got richer, but the middle slipped a few more rungs down the economic ladder.
More than five years after the Great Recession began, the lingering impact of the worst downturn in a half-century continues to deplete the standard of living of middle-class American households.
Median household income, after adjusting for inflation, fell 1.5 percent last year to $50,054, according to the Census Bureau's annual report on income and poverty issued released Wednesday. The poverty rate, at 15 percent, remained stuck at the highest level since 1993.
“You have to learn to roll with the punches and laugh a little; it’s very depressing,” he said. “It takes a toll, especially this long. You want to reach out and shake your fist in the air and blame someone, but you can’t. The way it is, is the way it is. There’s nothing you can do about it but stay in the fight."For Ray Bober, 45, of Pittsburgh, whose unemployment benefits ran out this year after a family printing business failed several years ago, the dismal economy takes a toll every time he sends out another resume that goes nowhere.
For millions of middle-class American households, the fight began well before the Great Recession destroyed more than 8 million jobs, or even before the financial collapse in 2008 that gave birth to the downturn. Median household income, adjusted for inflation, has been dropping for 13 years.
The drop in income has been magnified by the persistent high unemployment, currently above 8 percent, which peaked at a monthly pace of more than 800,000 jobs shed in November 2008. On top of job growth that's been weaker than any recovery in a half-century, wages haven't budged since the recession ended.
Last year, median family household income fell 1.7 percent, to $62,273, according to the Census Bureau. The decline has left income for those in the median 8.1 percent lower than in 2007, the year before the recession began, and 8.9 percent lower than the median peak in 1999.
“The lasting impact (of the Great Recession) has been at levels above the poverty level,” said Tim Smeedling, director of the Institute for Research on Poverty University of Wisconsin–Madison. “It’s been in the middle."
To cope with falling wages, many households have “doubled up” to share expenses. There were about 22.3 million such "shared" households as of last spring, up from 19.7 million when the recession began, according to the Census data.
For many, moving back home is the only way to avoid falling into poverty.
Bober is one of those for whom family offers the last threads of a social safety net. He lives with his mother and sister in the inner city house he grew up in.“Family is the oldest welfare program in the world,” said Smeedling. “But if they move back in with their parents, given that most parents' income is somewhat higher than poverty, they won’t be counted as being poor. This doubling up conceals some of the impact of poverty.”
“Between the bunch of us we pull together well,” he said. “But we’re backsliding.”
Not everyone is falling behind. While the median income slipped last year, those at the top of the income ladder continued to move ahead. The top 5 percent of incomes rose by 5.3 percent last year, according to government data.
Those at the very bottom of the ladder continue to struggle, but their numbers stopped growing last year. The government said 46.2 million Americans were living in poverty last year, statistically the same as in 2010. The determination of poverty is based on a number of factors but typically a family of four was considered to be in poverty last year if its total household income was less than $23,021.
The government’s official poverty threshold is calculated using a half-century-old formula based on the average household’s food budget. To determine whether a household falls below that threshold, the Census adds up cash income including earnings, Social Security benefits, unemployment insurance and other government assistance paid in cash, plus interest and dividends on savings and investments. The Census doesn’t count non-cash assistance like food stamps or the earned income tax credit, which pays workers who make poverty-level wages.
Those assistance programs have helped blunt the impact on the very poor in ways that the government’s official numbers don’t fully capture. If the value of food stamps were included in the income calculation, for example, some 3.9 million fewer people would have fallen below the threshold last year, according to the latest data. If the earned income tax credit were included, another 3 million fewer children would be included.
The comparisons also illustrate the impact of the broadest safety net programs. If unemployment insurance were excluded from the income calculations, for example, another 16 million people aged 18 to 64 would have fallen below the poverty line last year. If Social Security benefits weren’t counted, another 14.5 million people would have fallen below the line.
“People used to fall out of work all the time and onto a safety net,” said Arloc Sherman, a senior researcher at the Center on Budget and Policy Priorities. "Now the kind of safety net we have is very work-based. So if you lose work, you fall to nothing. “But many long-term unemployed end up without those financial lifelines.
The number of families at the very bottom of the ladder has remained relatively stable. But they’re not necessarily the same families, said Sherman.
“A lot of people who are at the bottom in one year weren’t there one or two or three years ago,” he said. ”It’s not so much that there’s a growth of a new underclass that stays constantly at the bottom quite.
The latest Census data bear that out, as the number of people working full-time, year-round rose by more than two million, many of them shifting from part-time jobs to full time jobs, but at the lower end of the income spectrum.
“We think that shift from part-time to full-time could have kept the poverty rate from rising,” said David Johnson, head of the Census Bureau's Social, Economic and Housing Statistics Division.
Pulling income lower
The growth of full-time employment on the low end of the wage scale also helped pull the median income lower, however, he said.
The growth of full-time employment on the low end of the wage scale also helped pull the median income lower, however, he said.
Confronted with a dismal job market, many of those out of work have tried going back to school, contributing to the recent drop in the official count of the U.S. labor force to the lowest in three years.
Government statistics offer hope that the investment in time and money will pay off. The unemployment rate for workers with a college degree stood at 4.9 percent last year compared with 9.4 percent for those with a high school diploma and 14.1 percent for those without one. The median weekly earnings for college graduates was $1,263 compared to $638 for Americans with just a high school diploma.
“Certainly, there’s been a lasting impact on people who don’t have college educations,” said Smeeding. “They’re having a real hard time.”
So are many jobless workers who lack the savings to pay for college. Bober tried that tack, enrolling in a local community college, but fell short of money for tuition and books when his unemployment benefits ran out.
“I have management experience. When I was younger I used to call on supermarkets,” he said. “So I figured, ‘Hey I can move boxes just like the next guy. They emailed me back after a couple of days and said, ‘Sorry you didn’t meet our qualifications.'"Competition for low-skilled, low-wage jobs remains fierce, as he recently found out when he applied for a job as a night stock manager at a local retail outlet.
The experience, he said, was a sobering reminder of the dismal employment outlook.
“It scared me because I always felt you can get a lesser job in life. Just suck it up; you can always find work,” he said. “That isn’t true. And that’s a scary, scary thing."
Bober says he gets by these days doing odd jobs. He helps out a friend who owns a local funeral home. He’s landed work as an extra on film and television shows shot in Pittsburgh.
He doesn’t blame anyone in particular for his seemingly relentless search. But, as a former small businessman, he thinks something’s badly wrong with the American way of earning a living.
“When I was a kid, if a guy wanted to go an print up some Steelers T-shirts in his garage and show up at the football game and make up a couple of bucks, that was an enterprising guy.” He said. “It was a hard-working upstanding citizen. Now, the government and the lawyers come and you’re a bootlegger.”
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The latest Census report found 15 percent of Americans living below poverty line, a leveling off in the poverty rate from 2010 to 2011. But the number of people on food stamps is going up, many of them considered middle class. NBC's Chris Jansing reports.
The attack on the Libyan consulate, as it happened
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The deaths of four Americans, including the U.S. ambassador, are a grim reminder of the dangers that lurk in Libya. NBC's Steve Handelsman reports.
NBC News compiled this reconstruction of the assault on the U.S. Consulate in Benghazi, Libya, after a briefing from senior U.S. officials, who asked not to be identified and cautioned that it was imprecise because it was based on preliminary field reports:
Timeline: Political fallout from the attack on diplomats in Libya
The political fallout associated with the attacks Tuesday on a U.S. diplomatic mission in Benghazi that left four dead, including an American ambassador, was the product of a fluid and quickly evolving situation on the ground in Egypt and Libya.
Jason Reed / Reuters
President Barack Obama delivers a statement alongside Secretary of State Hillary Clinton, following the death of the U.S. Ambassador to Libya, Chris Stevens, and others, in the Rose Garden of the White House in Washington, September 12, 2012.
At the heart of Mitt Romney's criticism of President Barack Obama (for "apologizing for the right of free speech") was a statement issued by the U.S. Embassy in Egypt on Tuesday as protests there and in Libya crept up in reaction to a controversial film about the Islamic prophet Muhammad, a clip of which was set for screening by the Florida pastor Terry Jones.
The Embassy of the United States in Cairo condemns the continuing efforts by misguided individuals to hurt the religious feelings of Muslims – as we condemn efforts to offend believers of all religions. Today, the 11th anniversary of the September 11, 2001 terrorist attacks on the United States, Americans are honoring our patriots and those who serve our nation as the fitting response to the enemies of democracy. Respect for religious beliefs is a cornerstone of American democracy. We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others.At 6:17 a.m. ET on Tuesday, the U.S. Embassy in Egyptreleased this statement:
At a 1 p.m. ET briefing, State Department Spokeswoman Victoria Nuland confirmed that the U.S. Embassy in Cairo had suffered a breach – around noon ET:
We did have reports just before I came down here that we had a protest outside our embassy in Cairo. We had some people breach the wall, take the flag down, replace it -- what I heard was that it was replaced with a ... With a black flag -- a plain black flag, but I may not be correct in that. We are obviously working with Egyptian security to try to restore order at the embassy and to work with them to try to get the situation under control.
By mid-afternoon Tuesday, this statement provoked criticism from some conservative bloggers, who characterized it as an "apology" for American values (i.e., free speech) rather than a strong condemnation of the protests, which would later metastasize into attacks on those diplomatic missions. Conservatives furthermore suggested that it was no coincidence that these demonstrations were occurring on the 11-year anniversary of the Sept. 11 terror attacks on New York and Washington.
Through it all, the situation on the ground in Egypt and Libya was changing rapidly. NBC News and other news organizations were monitoring reports that the situation in both countries was potentially deteriorating.
At 4:29 p.m. ET, the U.S. Embassy in Cairo issued a series of tweets, some of which simultaneously defended its earlier statement and condemned the compound attackers. The Romney campaign seized on these tweets to argue that the original statement had remained the embassy’s policy even after the breach:
2) Of course we condemn breaches of our compound, we're the ones actually living through this.3) Sorry, but neither breaches of our compound or angry messages will dissuade us from defending freedom of speech AND criticizing bigotry
“We can confirm that our office in Benghazi, Libya has been attacked by a group of militants. We are working with the Libyans now to secure the compound. We condemn in strongest terms this attack on our diplomatic mission.”At 6:25 p.m. ET, Nuland confirmed, via email, that the U.S. diplomatic mission in Benghazi, Libya, was under attack:
At 6:32 p.m. ET, Nuland said that demonstrators had been removed from the Cairo compound. There was no indication at this point whether there was a connection between the Cairo and Benghazi incidents:
“In Cairo, we can confirm that Egyptian police have now removed the demonstrators who had entered our Embassy grounds earlier today.”
As the evening progressed, vague reports emerged suggesting that an "American" had been killed in the Libya assault, though there was no indication of that person's identity. It had been emphasized to news organizations that the situation in Libya was fluid.
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The U.S. ambassador to Libya and three other Americans were killed after protesters angry over a film that ridiculed Islam's Prophet Muhammad stormed the U.S. consulate in the eastern Libyan city of Benghazi.
At 10:10 p.m. ET, the Romney campaign emailed a statement from the Republican presidential nominee to media organizations about the violence in both countries, reporting of which was prohibited (or "embargoed") until 12 a.m. ET Wednesday:
“I'm outraged by the attacks on American diplomatic missions in Libya and Egypt and by the death of an American consulate worker in Benghazi. It's disgraceful that the Obama Administration's first response was not to condemn attacks on our diplomatic missions, but to sympathize with those who waged the attacks.”
At around the same time, POLITICO posted a story featuring a quote from a "senior administration official" appearing to disavow the statements from Cairo. This would emerge as fodder for Romney on Wednesday:
"The statement by Embassy Cairo was not cleared by Washington and does not reflect the views of the United States government," an administration official told POLITICO.
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Secretary of State Hillary Clinton comments on the death of U.S. ambassador to Libya, Chris Stevens.
At 10:13 p.m. ET, Secretary of State Hillary Rodham Clinton issued the following statement:
I condemn in the strongest terms the attack on our mission in Benghazi today. As we work to secure our personnel and facilities, we have confirmed that one of our State Department officers was killed. We are heartbroken by this terrible loss. Our thoughts and prayers are with his family and those who have suffered in this attack.This evening, I called Libyan President Magariaf to coordinate additional support to protect Americans in Libya. President Magariaf expressed his condemnation and condolences and pledged his government's full cooperation.Some have sought to justify this vicious behavior as a response to inflammatory material posted on the Internet. The United States deplores any intentional effort to denigrate the religious beliefs of others. Our commitment to religious tolerance goes back to the very beginning of our nation. But let me be clear: There is never any justification for violent acts of this kind.In light of the events of today, the United States government is working with partner countries around the world to protect our personnel, our missions, and American citizens worldwide.
At 10:26 p.m. ET, the Romney campaign lifted its embargo on the GOP candidate's statement.
At 11:11 p.m. ET, Republican National Committee Chairman Reince Priebus tweeted the following:
Obama sympathizes with attackers in Egypt. Sad and pathetic.
“We are shocked that, at a time when the United States of America is confronting the tragic death of one of our diplomatic officers in Libya, Governor Romney would choose to launch a political attack.”At 12:11 a.m. ET, Obama campaign spokesman Ben LaBolt issued the following statement:
At 6:17 a.m. ET, NBC News confirmed and reported that U.S. Ambassador to Libya Christopher Stevens was among those killed at the mission in Benghazi.
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President Obama, alongside Secretary of State Hillary Clinton, condemns "in the strongest terms" the "outrageous and shocking attack" that claimed the lives of Ambassador Chris Stevens and three other Americans at the U.S. consulate in Benghazi, Libya.
At 7:22 a.m. ET, President Obama issued the following statement:
I strongly condemn the outrageous attack on our diplomatic facility in Benghazi, which took the lives of four Americans, including Ambassador Chris Stevens. Right now, the American people have the families of those we lost in our thoughts and prayers. They exemplified America's commitment to freedom, justice, and partnership with nations and people around the globe, and stand in stark contrast to those who callously took their lives.I have directed my Administration to provide all necessary resources to support the security of our personnel in Libya, and to increase security at our diplomatic posts around the globe. While the United States rejects efforts to denigrate the religious beliefs of others, we must all unequivocally oppose the kind of senseless violence that took the lives of these public servants.On a personal note, Chris was a courageous and exemplary representative of the United States. Throughout the Libyan revolution, he selflessly served our country and the Libyan people at our mission in Benghazi. As Ambassador in Tripoli, he has supported Libya's transition to democracy. His legacy will endure wherever human beings reach for liberty and justice. I am profoundly grateful for his service to my Administration, and deeply saddened by this loss.The brave Americans we lost represent the extraordinary service and sacrifices that our civilians make every day around the globe. As we stand united with their families, let us now redouble our own efforts to carry their work forward.
At 7:43 a.m. ET, Secretary Clinton issued the following statement:
It is with profound sadness that I share the news of the death of four American personnel in Benghazi, Libya yesterday. Among them were United States Ambassador to Libya Chris Stevens and Foreign Service Information Management Officer, Sean Smith. We are still making next of kin notifications for the other two individuals. Our hearts go out to all their families and colleagues.A 21 year veteran of the Foreign Service, Ambassador Stevens died last night from injuries he sustained in the attack on our office in Benghazi.I had the privilege of swearing in Chris for his post in Libya only a few months ago. He spoke eloquently about his passion for service, for diplomacy and for the Libyan people. This assignment was only the latest in his more than two decades of dedication to advancing closer ties with the people of the Middle East and North Africa which began as a Peace Corps Volunteer in Morocco. As the conflict in Libya unfolded, Chris was one of the first Americans on the ground in Benghazi. He risked his own life to lend the Libyan people a helping hand to build the foundation for a new, free nation. He spent every day since helping to finish the work that he started. Chris was committed to advancing America's values and interests, even when that meant putting himself in danger.Sean Smith was a husband and a father of two, who joined the Department ten years ago. Like Chris, Sean was one of our best. Prior to arriving in Benghazi, he served in Baghdad, Pretoria, Montreal, and most recently The Hague.All the Americans we lost in yesterday's attacks made the ultimate sacrifice. We condemn this vicious and violent attack that took their lives, which they had committed to helping the Libyan people reach for a better future.America's diplomats and development experts stand on the front lines every day for our country. We are honored by the service of each and every one of them.
The president was informed of the Libya situation by NSA Donilon yesterday afternoon as he started his weekly meeting with the Secretary of Defense and the Chairman of the Joint Chiefs. The President was updated on both incidents several times throughout the evening and again this morning.Around 9 a.m. ET, a senior administration official described to NBC News the process by which the president was notified and briefed:
The president was notified last night that Ambassador Stevens was unaccounted for and then notified again this morning about his tragic death.
In the same hour, Clinton appeared on camera at the State Department to make remarks about Stevens's death. She said (excerpt):
This is an attack that should shock the conscience of people of all faiths around the world. We condemn in the strongest terms, this senseless act of violence and we send our prayers to the families, friends and colleagues of those we've lost.All over the world every day, America's diplomats and development experts risk their lives in the service of our country and our values because they believe that the United States must be a force for peace and progress in the world, that these aspirations are worth striving and sacrificing for. Alongside our men and women in uniform, they represent the best traditions of a bold and generous nation.In the lobby of this building, the State Department, the names of those who have fallen in the line of duty are inscribed in marble. Our hearts break over each one. And now because of this tragedy, we have new heroes to honor and more friends to mourn.
GOP presidential hopeful Mitt Romney criticizes the Obama administration concerning their response to the "disgusting" attack on the US consulate in Libya in which Ambassador Chris Stevens and three other Americans were killed.
Around the same time, Romney re-arranged a planned rally in Jacksonville, Fla., to hold a 10:16 a.m. ET press conference, used in part to reiterate his criticism of Obama.
Some of Romney's statements include:
America will not tolerate attacks against our citizens and against our embassies. We'll defend also our constitutional rights of speech and assembly and religion.We have confidence in our cause in America. We respect our Constitution. We stand for the principles our Constitution protects. We encourage other nations to understand and respect the principles of our Constitution, because we recognize that these principles are the ultimate source of freedom for individuals around the world.I also believe the administration was wrong to stand by a statement sympathizing with those who had breached our embassy in Egypt, instead of condemning their actions. It's never too early for the United States government to condemn attacks on Americans and to defend our values.The White House distanced itself last night from the statement, saying it wasn't cleared by Washington. That reflects the mixed signals they're sending to the world.[...]I think it's a terrible course for America to stand in apology for our values. That instead, when our grounds are being attacked and being breached, that the first response of the United States must be outrage at the breach of the sovereignty of our nation.An apology for America's values is never the right course.[...]The White House also issued a statement saying it tried to distance itself from those comments and said they were not reflective of their views. I had the exact same reaction. These views were inappropriate. They were the wrong course to take when our embassy has been breached by protesters. The first response should not be to say, "Yes, we stand by our comments that -- that suggest that there's something wrong with the right of free speech."[...]The president takes responsibility not just for the words that come from his mouth, but also from the words that come from his ambassadors from his administration, from his embassies, from his State Department.They clearly sent mixed messages to the world and the statement that came from the administration and the embassy is the administration. The statement that came from the administration was a statement which is akin to apology and I think was a severe miscalculation.
Every day all across the world, American diplomats and civilians work tirelessly to advance the interests and values of our nation. Often, they are away from their families. Sometimes, they brave great danger.At 10:42 a.m. ET, Obama appeared in the Rose Garden to address the incident in Benghazi, but made no reference to Romney's attack. An excerpt:
Yesterday, four of these extraordinary Americans were killed in an attack on our diplomatic post in Benghazi. Among those killed was our ambassador, Chris Stevens, as well as Foreign Service Officer Sean Smith. We are still notifying the families of the others who were killed.And today, the American people stand united in holding the families of the four Americans in our thoughts and in our prayers.The United States condemns in the strongest terms this outrageous and shocking attack. We're working with the government of Libya to secure our diplomats. I've also directed my administration to increase our security at diplomatic posts around the world. And make no mistake, we will work with the Libyan government to bring to justice the killers who attacked our people.Since our founding, the United States has been a nation that respects all faiths. We reject all efforts to denigrate the religious beliefs of others. But there is absolutely no justification for this type of senseless violence. None. The world must stand together to unequivocally reject these brutal acts.
Throughout the morning, statements from a variety of lawmakers flowed in, though most Republicans avoided the kind of harsh criticism of Obama voiced most prominently by Romney.
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Republican vice presidential candidate Paul Ryan, says, "This is a time for healing. It's a time for resolve. In the face of such a tragedy, we are reminded that the world needs American leadership."
At 12:14 p.m. ET, Republican vice presidential nominee Paul Ryan appeared in Wisconsin to address the Libya situation, though he also avoided direct criticism of Obama.
I want to begin unfortunately on a somber note. We woke up to some pretty disturbing news this morning. I know all Americans today are shocked and saddened by the news from the Middle East. The attacks on our diplomatic missions in Egypt and Libya and the loss of four American lives including our Ambassador J. Christopher Stevens. This is outrageous. Our hearts are heavy and our thoughts and prayers are with the victims and their families and I would just like to ask at this moment that we join together in a moment of silence in memory of them. [MOMENT OF SILENCE] Thank you. This is a time for healing. It is a time for resolve. And in the face of such a tragedy, we are reminded that the world needs American leadership. And the best guarantee of peace is American strength.
At around 1:04 p.m. ET, Vice President Joe Biden told supporters gathered in Ohio:
"The cause to which they dedicated their lives and gave their lives, democracy, partnership, tolerance, stands in sharp contrast to the values of those who callously took their lives," he said. "And let me be clear, we are resolved to bring to justice their killers."
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