Bad news for Lou Dobbs and John Edwards: The poor are getting richer
From The Wall Street Journal:
What happened? CBO says the main causes of this low-income earnings surge have been a combination of welfare reform, expansion of the earned income tax credit and wage gains from a tight labor market, especially in the late stages of the 1990s expansion. Though cash welfare fell as a share of overall income (which includes government benefits), earnings from work climbed sharply as the 1996 welfare reform pushed at least one family breadwinner into the job market.
Earnings growth tapered off as the economy slowed in the early part of this decade, but earnings for low-income families have still nearly doubled in the years since welfare reform became law. Some two million welfare mothers have left the dole for jobs since the mid-1990s. Far from being a disaster for the poor, as most on the left claimed when it was debated, welfare reform has proven to be a boon.
The report also rebuts the claim, fashionable in some precincts on CNN, that the middle class is losing ground. The median family with children saw an 18% rise in earnings from the early 1990s through 2005. That’s $8,500 more purchasing power after inflation. The wealthiest fifth made a 55% gain in earnings, but the key point is that every class saw significant gains in income.
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May 24th, 2007 at 4:57 pm
I blame global warming, of course.
That means that the gap between rich and poor is growing.
Perhaps more disturbing though was this line:
The fact that government redistribution of wealth is driving wage gains for the poor is not something to celebrate, I don’t think.
May 29th, 2007 at 11:07 am
The problem with wealth distribution is not that the wealthy have money and are getting more, it’s that the poor don’t have enough to meet their basic needs. The middle class’ income rose by a modest percentage, but the point was that the lowest income bracket rose by the largest percentage. I should have included this table:
As far as the poor’s income growth coming from the government, I agree that isn’t exactly something to celebrate. But if they can’t lift themselves out, who will? Or maybe they can…