It looks like the US is going to face not one, but “two lost decades”

Few bright spots on the horizon.
Few bright spots on the horizon.
Image: Reuters/Mike Blake
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The Annual Census Bureau report released today shows no meaningful changes in poverty, earnings, or median household income. This is because between 2011 and 2012 the unemployment rate fell only slightly and there was no significant growth in weekly earnings (as reported by the Bureau of Labor Statistics).

Poverty is higher today than it was in 2000 and household incomes are lower. The “lost decade” is likely to turn into “two lost decades,” because poverty will fall substantially in the next five years only if two factors are at work. First, the economy must continue to expand and the unemployment rate must fall to 5%. Second, government policies must do more to help those among the poor and near-poor who have been left behind by economic growth in recent decades.

If safety net programs are targeted to balance the budget, as House Republicans have proposed, poverty will increase. Even if the safety net is not cut back, the prospects for reducing poverty are dim. The only bright spot is that private sector employment has been increasing, but it is not that bright since many of the new jobs pay low wages.

In addition, government has contributed to increased poverty. The federal sequestration, the end of extended unemployment insurance benefits and the failure to expand spending on early education programs or infrastructure projects has reduced demand. And, state and local governments have increased poverty by laying off teachers, police and other workers.

Even if poverty should start falling in the coming year as the economy grows, it is likely to take more than five years just to reach the rate achieved in the late 1990s. Given the status quo in the economy and in public policy, we will continue to get disappointing news about the poverty rate from the Census Bureau each September.

This post originally appeared on the Russell Sage Foundation blog