The complacent assumption behind the tax cut we’re now supposed to be enjoying was that there’s nothing left for government to do – no pressing social problems or unmet human needs.

Welfare reform has been declared a universal success, with more than 60 percent of former recipients making their own way in the job market. The official poverty rate has reached a comfortingly low 12 percent. So let the federal government, or what’s left of it, focus on Star Wars, was our president’s happy thought: No one needs the federal largess more than the wealthy taxpayers who are currently raking in their five-and six-figure rebates.

But a report issued on July 24 by the Washington, D.C.-based Economic Policy Institute should puncture these presidential delusions. Titled “Hardships in America,” it shows that 29 percent of families with young children do not earn enough to live at any acceptable level of comfort and security.

The EPI researchers got to this appallingly high number by calculating the basic – make that very basic – budget a family needs to live on. This budget includes health insurance, child care costs and telephone, but no meals out, vacations, movies, cigarettes, beer or other indulgences. So for nearly one-third of American families, things the more affluent take for granted – such as Internet access, video rentals and occasional cab rides – are almost impossible luxuries.

But they get by, don’t they? Not exactly. Of the families who earned less than the “basic” budget, which amounts to $33,511 for a family of four, more than 70 percent worried about food, sometimes missed rent payments and had to rely on an emergency room for their medical care. Nearly 30 percent reported facing far more dire hardships – having to miss meals, forgoing needed medical care, being evicted from their housing.

In a selfish way, I’m relieved by all this statistical bad news: At least it shows that the conditions I faced while researching my recent book were not due entirely to my own bad luck or incompetence. I spent a total of three months, in three different cities, attempting to support myself on the wages I could earn as an entry-level worker – as a waitress, a hotel housekeeper, a maid with a housecleaning service, a nursing-home aide and a Wal-Mart floor clerk. I could not make ends meet, not with on e job anyway. I averaged $7 an hour, an amount that fell tragically short of my bare-bones expenses – gas, food and, above all, rent.

My co-workers had various strategies for coping. Many of them, of course, shared expenses with another breadwinner – a husband, boyfriend or grown child. A surprisingly high number worked more than one job – typically an eight-hour shift followed by a six-hour one – an arrangement that is utterly destructive to family life as well as health and stamina.

Most skipped the company’s health insurance, simply because they couldn’t afford to pay the employee contribution, which was often more than $100 a month. Possibly some of them received government help in the form of Food Stamps or the Earned Income Tax Credit, although I never once heard these programs mentioned.

But some of my co-workers were clearly not coping. I worked alongside people who turned out to be homeless, although in the peculiar hierarchy of poverty, they didn’t consider themselves homeless as long as they had a van or a car to sleep in. Others were not getting enough to eat, and not, as I first imagined, because they were dieting. Lunch, in low-wage America, can mean a small-size bag of Doritos or a few hot-dog rolls.

What my experience shows anecdotally, and the EPI’s “Hardships in America” report shows far more systematically, is that we’ve been fooling ourselves with the official poverty level, now pegged at $17,463 for a family of four.

That number is still calculated by the archaic method of taking the bare-bones cost of food for a family of a given size and multiplying this number by three. Yet food is relatively inflation-proof, at least compared to housing costs: Rents, especially, have gone through the roof. I found a half-size trailer renting for $625 a month, a room in a genuinely creepy residential motel for $250 a week. But the government persists in believing that low rents are available for the poor.

Our leaders are unable to see the true extent of economic misery in America. They’re used to thinking of poverty as a consequence of unemployment. Hence, for example, the optimistic assumption that welfare recipients would be lifted out of poverty once they were hustled into the work force. But the relatively high-paying, unionized blue-collar jobs that brought an earlier generation into the middle class have been de-industrialized out of existence. What’s left are the service and retail jobs I found in my foray into the work force – and a new world of relentless toil, rewarded by poverty-level wages.

If the consequences of this economic shift are almost invisible from Pennsylvania Avenue, they are painfully evident to hard-pressed charities. According to the hunger-relief organization America’s Second Harvest, food banks all over the country are seeing “a torrent of need which (they) cannot meet,” and the U.S. Conference of Mayors reports that 67 percent of the adults requesting emergency food aid are now working people with jobs.

Almost everyone – 94 percent of Americans, according to a 2000 poll conducted by Jobs for the Future, a Boston-based employment research company agrees that, “People who work full-time should be able to earn enough to keep their families out of poverty.” When that proposition no longer holds true, then the social contract, at least as I always understood it, is no longer in force. And it is hard to imagine a more serious abrogation of “America’s core moral values” than that.

We have a choice: Either raise all wages to a “living wage” level or greatly expand the government programs that make life a little easier for low-wage families – food stamps, health insurance, child care subsidies, the Earned Income Tax Credit, and – yes – welfare for families whose breadwinners must stay home as care-givers for the very young, the elderly or the chronically ill. Ideally, we should do both. At 4.5 percent unemployment, most Americans who can work have jobs. Now, it’s the system that isn’t working.

Barbara Ehrenreich is the author of “Nickel and Dimed: On (Not) Getting By in America.” She lived in Maine while researching her book.