Poverty After the Financial Crisis in 2008

1. Introduction

In 2008, the United States experienced what could be deemed as one of the worst economic setbacks in history. The economic recession six years ago did not only impact the general economy of the country but also trickled down to the everyday lives of the Americans. The said recession exposed the frailties of the American economy. However, more than this, this economic setback gave an impression to the global community that the ever formidable American economy could be weakened. The American people, once deemed as the richest people in the world, even got the surprise of their lives seeing some of their countrymen sleeping in cars, queuing in lines for food and just about other charities from both the private and public sector. Indeed, it cannot be argued that poverty rates went so high after the recession. Hence, in this paper, the causes and effects of the recession to the poverty rates in the US will be examined using the three sociological perspective, Symbolic Interaction, Functionalism, and Conflict Theory.

1. Poverty Rates After the Economic Recession

        According to Erik Eckholm of The New York Times in the article, “Recession Raises Poverty Rate to a 15-Year High,” “The percentage of Americans struggling below the poverty line was the highest in 2009, it has been in 15 years, the Census Bureau reported Thursday, and interviews with poverty experts and aid groups said the increase appeared to be continuing this year.” Indeed, it cannot be argued that the 2008 has been the worst economic setback that the country has experienced since the Great Depression.        Just a few months after the recession, news on TV would feature families sleeping in their cars and on the streets. Children have to be taken out of the school because their parents cannot afford to pay for their education. Fathers were axed from their jobs, further complicating the problem of the families of where to get their daily expenses. Just a year after the recession, the number of people who claimed that they have found themselves under poverty climbed to a staggering 44 million.

        Indeed, it cannot be argued that various social problems abound during and the years following the economic recession. Sheldon Danziger, Koji Chavez and Erin Cumberworth in their paper, “Poverty and the Great Recession”, told that the poverty rate climbed from 12.5% in 2007 to a high of 15% in 2011. They further explained, “The recession officially lasted from December 2007 through June 2009, but monthly unemployment rates remained above 9 percent for more than two years after the official start of the current economic recovery.” (“Poverty and the Great Recession”, 11)

        Hence, the question that remains is that what has caused the increased poverty rate following the recession. Although it is inarguable that recession itself has been the main precursor for this spike in poverty, the aspect that should be looked at are the phenomena that disabled the American people of attaining comforts in their lives. One of the causes is unemployment. It has been noted that a lot of companies closed down in the US because of their poor revenues. Hence, hundreds of thousands of workers suddenly found themselves with no work, and most of these people are fathers and family breadwinners. (Danziger et al, “Poverty and the Great Recession”, 11)