From Volume 37, Issue 37 of EIR Online, Published Sept 24, 2010

U.S. Economic/Financial News

Census: One in Seven Americans Is Below the Poverty Level

Sept. 16 (EIRNS)—According to the US Census Bureau annual report issued on Sept. 16, in the year 2009—Obama's first year in office—the overall poverty rate in the U.S. climbed to 14.3%, or 43.6 million people. In 2008, the rate had been 13.2%, or 39.8 million people.

The share of Americans without health coverage rose from 15.4% to 16.7%, or 50.7 million people. The number would have been even higher in 2009 were it not for three factors: increases in Social Security payments, expansions of unemployment insurance, and a record number of working mothers.

Other census findings include:

Among the working-age population, ages 18 to 65, poverty rose from 11.7% to 12.9%. That is the highest since the 1960s.

Poverty rose among all race and ethnic groups, but was highest among blacks and Hispanics. The number of Hispanics in poverty increased from 23.2% to 25.3%. For blacks, it increased from 24.7% to 25.8%.

Child poverty rose from 19% to 20.7%.

The situation is even worse in some states. Take Texas. There, nearly 4.3 million people lived in poverty last year, up 11% from a year earlier. The poverty rate in Texas—17.3%—remained the nation's 6th highest in 2009. The rate among Texas children also has increased since 2008. Poverty now affects almost 1.8 million Texas children under 18. Texas child poverty rate was 25.6% last year, up from 23.1% a year earlier.

U.S. Municipalities Continue To Disintegrate

Sept. 18 (EIRNS)—The ever-deepening financial crisis faced by governments at every level shows just how entropic "money" really is. When budget writers and government officials are faced with needs that can't be funded by shrinking tax revenues, they slash spending and reduce or eliminate essential government activities such as public safety, health, and infrastructure, all of which guarantees that they will be cutting even more when the next round of budget-writing begins.

The following developments illustrate the point:

* Hollywood, Fla.—The FY11 budget proposed by the city manager cuts funding to 150 cultural events and proposes laying off 105 city employees, including 26 firefighters, 31 police officers, 40 general employees, and 8 managers, in order to close a $5.2 million budget deficit. The city commission declared a "financial emergency" earlier this month, allowing it to unilaterally reopen union contracts in order to force concessions from public sector unions.

* Chula Vista, Calif.—The city is contemplating laying off 33 police officers by Jan. 1, 2011, as part of an effort to deal with a $12.5 million budget deficit. The police layoffs would "save" the city $4 million, out of a $44 million police budget, but one officer says that Chula Vista's police department is already the "leanest staffed law enforcement agency in the county."

* Erie County, N.Y.—The county executive is warning that the county can't get through the Winter without "real cuts." He won't say one way or the other how many layoffs there will be, but the word is about 500, or more than 10% of the county workforce.

* Oregon—The state police is proposing to close its drug enforcement and counterterrorism programs to meet its required budget cuts. These closures would mean the layoffs of 31 employees, including 30 sworn officers. The department is also proposing 33 layoffs in forensics, administration, and data-keeping, for a total of 64 layoffs.

* Saginaw County, Mich.—Sheriff's deputies held an informational picket outside the county courthouse on Sept. 17 to "get the word out" on looming layoffs. The board of commissioners denied the sheriff's request to take money out of the payroll reserve fund, and now 16 deputies are threatened with being laid off. The sheriff has said the layoffs "will be dangerous" for public safety.

* Genesee County, Mich.—64 layoff notices went out this week, mostly to Health Department and county clerk's office employees. Another 55 employees are retiring and won't be replaced, for the elimination of 119 positions altogether. The county faces an $18 million budget deficit.

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