Homeless And Paying Taxes

Posted: July 25, 2009 in Bureauacracy, Employment, Government, Homelessness, Housing, Politics, Poverty

A few days ago I read a report by the Economic Policy Institute (EPI) which examined the current unemployment situation in the U.S.

The report suggested that the current recession is the "… longest and deepest economic downturn since the Great Depression."

Not exactly a comforting thought, is it?  

The report stated that June’s 9.5 percent unemployment rate was not a historical high. However, it also pointed out that the unemployment rate rose faster within the first 18 months of this recession than during any other "post-war recessions."

There were two specific things mentioned in the report which caught my attention.

First was the number of jobs which our nation needed to – but didn’t – create just to keep pace with overall growth in population.

The report stated:

"… while the labor market has shed 6.5 million jobs since the start of the recession, it is important to keep in mind that in those 18 months, the population has continued to grow. Just to keep up with population growth, the economy must add approximately 127,000 jobs every month, which means over 2 million jobs, should have been added over this period. In other words, the economy is now 8.8 million jobs below what is needed to maintain pre-recession employment levels."

The second thing is something called "underemployment."

What seems a bit odd to me is that the underemployment rate is seldom (if ever) mentioned by the mainstream media. Yet, the data is listed right along with the unemployment data posted each month on the Bureau of Labor Statistics‘ website.

Even more odd is that politicians and bureaucrats seem to go out of their way to avoid mentioning the underemployment rate when they speak about the state of the economy.

The EPI report had this to say about the underemployment rate in the U.S.:

"Underemployment is a more comprehensive measure of labor market slack that includes not just the unemployed, but also ‘involuntarily’ part-time workers (workers who want full-time work but can’t get the hours) and marginally-attached workers (jobless workers who want a job but are not actively seeking work and are therefore not counted as officially unemployed). Underemployment data as currently measured are only available since the mid-1990s, so it is not possible to compare the current recession to the recession of 1981 on this measure.

In particular, the number of involuntarily part-time workers has nearly doubled since the start of the recession, from 4.6 million to 9 million. Over this time, the underemployment rate has increased from 8.7% to 16.5%, so that now nearly 26 million people – one out of every six U.S. workers – are either unemployed or underemployed."

It would be easy to point out that folks who are underemployed have jobs – albeit part-time jobs – and so, in some ways, they are better off than folks who aren’t employed at all.

However, it is important to realize that while being underemployed might be considered better than being unemployed; the reality is that a person who has part-time employment, in all probability, cannot afford housing any more readily than someone who is working full-time earning only a minimum wage.

If the report is correct and there are indeed as many folks unemployed or underemployed as suggested by the data, then it is an almost certainly that there will be a continued increase of homelessness.

Furthermore, the lack of adequate resources to assist those folks in reacquiring housing means that quite a number of them will be "sleeping rough" – meaning that they will be literally living on the streets.

Some of them will be fortunate enough to retain their jobs.

The National Coalition for the Homeless fact sheet, Employment and Homelessness, states that:

"… 17.4% of homeless adults who had children were employed while 13% of single adults or unaccompanied youth were employed."

It seems strange to me that each pay cycle, personal income taxes will automatically be deducted from their paychecks. Those taxes will go into the government’s "general fund" and supposedly be spent by our elected leaders to make life better for Americans. But, very little of it will actually be spent on providing services and resources to help get them off the streets.

Moreover, also deducted from their paychecks will be their FICA (also known as Social Security) contributions – although, there is little or no security in being homeless.

Strange, isn’t it?

Taxpayers who are homeless.

And in exchange for their taxes, what they will get the most from those who are spending their tax dollars are laws and ordinances which penalize them for being homeless.

  1. AnAmerican says:

    Yes it is strange to have Americans who need the most help still paying into our tax system. By all accounts our current Social Security funds are going to be paying out less than collected in 2017 and a noted reduction in benefits will be collected by Americans who have faithfully payed into this system as mandated by law throughout our years being employed. The logic of having those without shelter, without a stable environment contributing to such funds without receiving assistance is downright criminal.

    I wonder if our government would tolerate us taking their money and investing it with such abandon? I think not.

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