American Poverty Level: The Figures & Story at Total Bankruptcy
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15 Million Working Americans Working Below Poverty Level

Most consumers have felt the impact of rising interest rates, rising energy costs, the rising cost of retail goods brought about by the increased fuel prices during 2005, and are now bracing themselves for the impact of increased minimum payments on their credit cards - which is creating credit card bills they can't afford. The true impact of those rising costs, however, is even greater than the increases themselves. That's because wages in the United States haven't kept pace with rising costs.

According to the Economic Policy Institute (EPI), the wages of most U.S. workers (when adjusted for inflation) declined in both 2004 and 2005. No one is more affected, though, than the 7.3 million workers who earn the federal minimum wage, which has held firm at $5.15 per hour since September, 1997. When that rate went into effect, gasoline cost $1.42/gallon, and the average family heating with oil paid $714/year to heat its home.

By the beginning of 2005 average gasoline prices had climbed to $2.04/gallon and the average family heating with oil was spending $1,200/year to do so-but the millions of workers being paid at minimum wage hadn't seen a penny in corresponding increase. An employee working a 40 hour week 52 weeks a year at minimum wage grosses $10,712/year-about $2000 below the poverty level.

72% of those workers earning minimum wage are adults, and many are supporting families. More than seven hundred thousand of them are single mothers with children under the age of 18.

During the 1950s and 1960s, the minimum wage hovered at approximately 50% of the average wage of workers in non-supervisory positions. Today, the minimum wage has dropped to 32% of that average. EPI data indicates that another 8 million Americans are earning within a dollar of the minimum wage.

That's more than 15 million working people earning $6.15/hour or less. Those people, who are earning below the poverty level for a two-person household, make up more than 10% of the nation's workforce. And, of course, that doesn't take into account the approximately 7.5 million people involuntarily unemployed in 2005.

In light of these numbers, it's no surprise that the financial industry's ten-year, $100 million dollar effort to put additional pressure on debtors to pay delinquent credit accounts has failed to increase their revenues. In fact, the increased pressure has done exactly what creditors should have predicted all along-driven consumers to make the difficult decision to file bankruptcy.

The initial rush and then decline in bankruptcy filings surrounding the law change in October, 2005 seemed to indicate that the effort had been successful, but only three months later bankruptcy filings are once again on the rise.

With more than 22 million people either unemployed or working below the poverty level that shouldn't come as a surprise to anyone-least of all those who make their livings in the financial industry.

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