Some of the figures in a recent Census Bureau report got a lot of attention in the media. The figures showed that the average family's income has declined in recent years, that more people are living in poverty, that more people don't have health insurance, and that more people are unemployed. These figures paint a fairly coherent picture of a society in decline, but they don't tell the whole story.
Since there is a national debate going on right now about Social Security, let's take a look at how much money senior citizens are making. According to the Census Bureau, a person aged 65 or older is living in poverty if that person has $10,452 or less in annual income. If two seniors, such as a husband and wife, live together and make less than $13,180 a year, the Census Bureau considers that they are living in poverty. Let's not quibble about whether these numbers really define poverty, or whether two people can live on just $2728 more than one person can. I think we can agree that in most parts of the country, you can't live very well on that kind of money. Once you pay rent, heat, electricity, water, phone, taxes, groceries, health-insurance premiums, deductibles and co-pays, medicine, basic transportation, and a few other necessities, you wouldn't have much left over – if you can make your income stretch that far at all.
Most retirement-age people in this country have almost nothing saved, so they live entirely off of their Social Security checks, plus a little bit of money they earn. People don't really retire at 65. So, how much money do those people have to live on? According to the Social Security Administration, the average Social Security recipient gets $14,179.20 a year in benefits. That is just $3727.20 more than the poverty level for one person. (Because some spouses collect a spousal Social Security check and some don't, it's more complicated to compare the figures for couples living on Social Security.) In other words, most people in this country who retire on just Social Security live just above the poverty line.
According to these figures, if Social Security is eliminated, most actual retirees will be thrown into poverty. If Social Security benefits are reduced even a little bit, the result is the same. Many other seniors, who still work, will have their standard of livings drastically reduced. The median income for a household with seniors who still work is $31,408, and that is the median for families of all sizes.
What the figures really show is that a huge number of Americans are living in a very narrow income range. The median income for a single worker is $29,730. The median for all households including families of all sizes is $49,445. Poverty for a family of four is $22,113. So, the difference between living in poverty and living on what most people live on, using any of the above income figures, is less than $30,000. Americans who are not living in poverty are living on not much more than poverty-level incomes – maybe twice the poverty level. Or, to put it another way, the loss of one income in a family with more than one wage earner can be all that it takes to plunge an entire family into poverty. The loss of income for a retiree puts one right on the edge.
The big picture is that half our country is either living in poverty or living not far from poverty, and poverty is dangerously close for those who have escaped it so far. The rest of the picture is that half of the country is living in a much broader range of incomes, reaching into the millions and billions. Most of those fortunate people in the upper half are a lot closer to the bottom than to the top of the income distribution. Only a tiny number of people in this country make anywhere near what the top earners do.
So, we still have a middle class. But the middle is a lot closer to the bottom than we like to think.