America's Underclass

 America's Underclass: The Growing Gap Between the Rich and Poor

Posted May 18, 2010 09:00am EDT by Peter Gorenstein in Recession

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Macro economic data suggest the great recession is over. But the gap between the haves and the have-nots is growing, thanks, in large part, to a jobless recovery. Wall Street Cheat Sheet’s Damien Hoffman says the growing underclass now accounts for about 10% of the U.S. population.

In this clip, he and his brother Derek, who jointly run the Wall Street Cheat Sheet website, point to several signs America is turning into a two-class society:  

• -The foreclosure problem. 2.8 million homes were foreclosed in 2009.  RealyTrac expects that number to increase to 3-3.5 million in 2010.  Damien Hoffman thinks it could be even higher if "strategic foreclosures" become a more accepted practice.
• - Unemployment.  The official rate is 9.9% but the wider measure of under employed and those who have given up on their job search is more like 17%.   That's more than 24 million Americans out of work.
• - Record numbers using food stamps. The Agriculture Department said a record 40 million Americans, or 1 in 8 Americans, may not be able to eat without government assistance.  “This is the ultimate sign of an under class,”  the Hoffman Brothers say.
• - Take a look at Dollar Tree Stores. The discounter's stock is near an all-time high while revenues are up 12.5% this year.  In other words, more Americans are chasing cheaper goods. 

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