It's still not an economic recovery for everyone in US
Retailers' cash registers are ringing like sleigh bells as shoppers celebrate better economic times with a surge of heavy holiday buying. But the economic upturn is leaving an unexpectedly large number of Americans behind.
Requests to the Salvation Army for food, clothing, and rent money were up 50 percent last year. ''And there has not been any real decline'' this Christmas season, says Maj. Fred Ruth, the Army's Washington-area divisional commander.
The story is the same at other charities. Calls for aid are ''staying the same, if not going up,'' says Mary Beth Seader, an executive at the National Conference of Catholic Charities.
The United States poverty rate climbed during the recession and hit 15 percent in 1982, the highest level since 1966. The ongoing economic recovery will probably result in some modest reductions in the number of Americans living in poverty, forecasters say. But economists of all political stripes warn that for a variety of reasons, there is little likelihood the poverty rate will dip significantly in the next two years, despite a rebounding economy.
''Economic growth has lost much of its power to reduce poverty,'' says Charles Murray, a senior fellow at the conservative Manhattan Institute. As a result, ''there will be only a small reduction, maybe 1 percent,'' in the poverty rate.
''It would be hard for me to imagine getting back down to the 1978-79 level in the next three years,'' Rudolph G. Penner, director of the Congressional Budget Office (CBO), recently told Congress. In 1978 the poverty rate was 11.4 percent, and it has moved steadily upward since then.
''I don't see the poverty rate declining back to (pre-recession) levels as the recovery proceeds,'' says Sheldon H. Danziger of the University of Wisconsin's Institute for Research on Poverty and coauthor of a recent study on poverty trends. He expects the 1983 poverty rate to come in at 14.6 percent and stay around that level during 1984.
In their study, Mr. Danziger and his coauthor, Bowdoin College Prof. Peter Gottschalk, found that the recession only added to a problem that existed before the recession and before the Reagan administration trimmed some social spending. The problem: ''an underlying trend toward a greater inequality in incomes,'' Mr. Gottschalk says. The inequality accounted for 2.9 of the 3.3 percentage-point poverty-rate increase from 1979 to '82.
The growing inequality means that while average earnings throughout the economy are rising, incomes for the poorest are not keeping pace. ''People are being left behind under some fixed (poverty) threshold,'' Gottschalk notes.
Where to set that threshold is a matter of heated debate, since higher-than-normal poverty rates have political as well as human consequences.
The controversy erupted again late last week. Presidential counselor Edwin Meese told wire-service reporters that some allegations of hunger are not based on fact and are ''purely political.''
Some individuals going to food kitchens this holiday season are doing so not out of need, but because ''the food is free,'' Mr. Meese said. He added that the poverty situation ''is less serious than it was three years ago, because the President has reduced the inflation rate.''
When asked if Meese's statement reflected the President's view, White House spokesman Larry Speakes said, ''Obviously there is hunger.''
Currently some 34.4 million Americans are living below the official poverty line of $9,862 for a family of four. About 10 million more individuals are living in poverty now than in 1978.
The Reagan administration argues that economic growth will make a major dent in poverty and that official poverty rates exaggerate the problem. Budget Director David A. Stockman recently told Congress he is ''absolutely confident that the poverty rate is going to decline dramatically for 1983.''
And Mr. Stockman contends that the current official poverty figure ''substantially overstates the rate of poverty because it ignores $107 billion in in-kind medical, housing, food, and other aid that tangibly raises the living standards of many low-income families.''
If this aid were considered, the poverty rate for 1982 would be 9.6 percent vs. the 15 percent official level, and the number of poor would tumble from the official 34.4 million count to 22 million, he says.
Others contend that the poverty level is higher than official statistics show , because, among other things, the poverty calculation is based on outdated assumptions about the portion of the total family budget set aside for food.
Alternative measurement methods, CBO director Penner notes, ''could lead to higher or lower measured rates of poverty, but the (upward) trend in poverty rates for the past five years would generally remain the same.''
The trend will not reverse quickly just because the economy is growing again, Mr. Murray says. An improving economy helps those who work steadily. But it does not make much difference to ''those who are an irregular part of the labor market or not part at all.'' This segment, which includes, for example, people who seek only occasional work to supplement welfare income, grew as a portion of population during the 1970s, he says.
Requests from the poor for help vary in intensity depending somewhat on the state of the local economy, charity officials say. In Boston, for example, requests for emergency food, shelter, and fuel ''have stabilized, but at a higher level than before,'' says Alan Rubin, vice-president of the United Way of America. But in Detroit ''there appears to be a continuing increase in the demand for emergency food and shelter.''