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  • The median poverty rate was from to

    2018-11-09

    The median poverty rate was 13.4% from 1959 to 2012 (horizontal dashed line in Figure 1). It is clear that after the 1980\'s, the US G418 has been well above that point (see Figure 1). It can be noted that the best way to describe the growth rates of poverty in the United States is a line with a positive slope (see Figure 2). However, this approach has two problems: (1) the adjusted line explains too little due to time series fluctuations, and (2) the time series does not seem to exhibit any clear trend (see Appendix, Table 1A. Test for unit roots). For a time series that does not have any clear trend but may exhibit several, a useful tool to examine such trends is an exponential smoothing, which can be done using the Holt-Winters filter (see Kleiber and Ceileis 2008; Copertwait and Metcalfe, 2009). Thus, it appears that the growth rate of the index of poverty has three increasing trends (see Figure 3): (1) from negative rates to near zero from the 1970\'s to early 1980\'s, (2) through moderate increases to the end of the 1980\'s, and (3) through the 2000\'s with a steadily increasing growth rate. In addition to this behavior of the poverty rate, exploitation and inequalities have increased in the US. As shown in Figure 4, productivity grew along with hourly real wages from 1955 to 1969 (mostly the Keynesian years), but from 1970 onwards workers in the US produced more but were paid less. These conditions have been exacerbated during the 2000\'s. For Europe, there is not an extended time series of the index of poverty as is the case in the United States. Hobsbawm (1993), Glynn (2006) and have pointed out that after the crisis of 1973/74, poverty in Europe increased due to rising unemployment and declining real wages. Reviewing the recent period, it might be concluded that poverty reduction has increased in the largest countries of Europe from 2005 to 2013 (see Table 1). This situation is the case in Germany, France, Spain, and Italy. The only big economy where the poverty rate has remained constant is the United Kingdom. In small economies or countries with a small population, experiences have been diverse. Some countries such as Ireland and Greece have increased their levels of poverty, but in many of the countries of the so-called economies in transition, poverty rates have declined. This situation is the case in the Czech Republic, Estonia, Latvia, Lithuania, Poland and Slovakia. Considering inequality, Ciocca (2000) suggests that there was a decrease in this indicator during the first decades after WWII because of the Keynesian state compromise; however, from the 1970s onwards inequality worsened in Sweden, the UK, Germany, France, and Italy (see also Glyn, 2006). From 2001 to the present day, the Gini coefficient has increased in Germany from 25 G418 to 29.7%, in France from 27 to 30.1%, in Italy from 29 to 32.5% and in Sweden from 24 to 24.9%. The exception is the UK where inequality has declined from 35 to 33.2% (Eurostat, 2014). In 1963, the German philosopher J. Habermas (see Dussel, 2001) noted that in the rich countries such as those in Europe as well as the US and Japan, the quality of life –even in the poor sectors– had increased so extensively that the interest in the emancipation of society could not be expressed any more in just economic terms. Townsend, in the 1960s, reported that poverty in the UK was close to 1% because of the great prosperity, decreasing inequality and the implementation of the welfare state (Townsend, 1962; see also Sen, 1985; Duménil and Lévy, 2001; Glyn, 2006). Habermas and Townsend\'s opinions were undoubtedly influenced by the economic expansion after the war. However, McNally (2011, 38) asserts that the Golden Age was a unique event in history– “an exceptional set of social-historical circumstances that triggered an unprecedented way of expansion. But prolonged expansion with rising levels of output, wages and employment in the core economies is not the capitalist norm.” High and sustained growth rates along with strong workforce participation resulted in the reduction of poverty in the Golden Age of capitalism. However, that development of productive forces along with an institutional framework is not available any more, and from the 1970s onwards, but mostly during the 2000s, the conditions of life for the majority of the world\'s people have deteriorated.