Economy's hot, but many left in the cold

While unemployment has fallen to 4 percent, figures show the US poverty rate is higher than in the 1970s.

By , Staff writer of The Christian Science Monitor

The nation's pistol-hot economy is universally accepted and lauded. Growth and productivity, wages and income, unemployment and welfare - all the trends are good from coast to coast.

Still, there are troubling signs that many Americans are being left behind.

Millions of adults and children live with hunger every day. Those trying to get by on the minimum wage earn less today in real dollars than they did 30 years ago. The poverty rate is higher than it was in the 1970s - higher than in most other industrialized countries. And the income gap between rich and poor is as wide as it's ever been.

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"Is inequality the fly in the New Economy ointment?" ask DeWayne Davis and Jeff Lemieux in a recent Progressive Policy Institute study.

The Census Bureau and Department of Agriculture reported recently that 31 million people - 12 million of whom are children - regularly go hungry or can't afford balanced meals. The number is down by 3.5 million people since 1995, a considerable improvement.

And yet, "the pace of improvement in hunger is just too slow compared to the roaring economy," says Lynn Parker of the Food Research and Action Center.

"The persistently high levels are of particular concern because of the serious adverse health, educational, and developmental consequences of hunger and food insecurity, as well as the daily emotional stress it adds to the lives of low-income families," says Ms. Parker, director of child nutrition at FRAC, a nonprofit research organization in Washington.

Welfare rolls have seen a steep decline since recent reforms - favored by Republicans and Democrats alike - mandated back-to-work programs.

Not on welfare, but still poor

"The 50 percent caseload decline since 1994 is without precedent," Ron Haskins, staff director of the House Ways and Means Subcommittee on Human Resources, said at a conference sponsored by the Joint Center for Poverty Research. "Many poor families on welfare have shown that they are capable of supporting themselves, and there is no compelling evidence of dramatic increases in hunger, homelessness, or foster care."

As with all issues involving economic and social well-being, the rosiness of the situation is in the eye of the beholder.

"Although caseloads have dropped and more people have gone to work, many families are still unable to rise out of poverty," says Wendell Primus, who held the post currently occupied by Mr. Haskins when the House was controlled by Democrats.

Federal government figures show the overall poverty rate in the United States to be 12.7 percent. Thanks to record-high employment levels, that's an improvement over earlier years in this decade.

Yet the poverty rate remains higher than it was during most of the 1970s, especially for children. According to the US Census Bureau, more than half of all children in households headed by single women fit the official definition of poverty. For African-American and Hispanic children, the rates are even higher.

"For an economy this strong, the poverty rate is still too high," says Robert Greenstein, executive director of the Center on Budget and Policy Priorities, an influential research organization in Washington.

Rich get richer, poor get poorer

At the same time, according to Congressional Budget Office figures analyzed by Mr. Greenstein's organization, the 1990s have seen a widening gap between rich and poor. While the poorest one-fifth of US households saw their after-tax income drop 9 percent between 1977 and 1999 (adjusted for inflation), the top one-fifth enjoyed income increases of 43 percent. Put another way, the wealthiest 2.7 million Americans have as much income as the 100 million people at the bottom of the economic ladder.

Not all experts agree with this assessment. "Since the mid-1990s ... the trend toward greater inequality clearly has ceased, as the US economy's rising tide has once again begun to lift all boats," say DeWayne Davis and Jeff Lemieux of the Progressive Policy Institute.

"The US unemployment rate has fallen to 4 percent, drawing into the workforce millions of new workers previously regarded as unemployable," say these economists, whose organization is associated with the centrist Democratic Leadership Council and the so-called "third way" approach to governance.

Divvying up cash on campaign trail

For politicians, "sharing" economic growth involves making choices in who to tax and how to spend. It also invokes powerful symbols of one's political philosophy.

Vice President Al Gore promises to fight the good fight against "powerful forces and powerful interests" on behalf of "hard-working, middle-class families."

Texas Gov. George W. Bush's appeal is less overt. He declares that "compassionate conservatism" will improve the lives of all Americans, that it will "increase access to the middle class," while lessening the hand of government in public affairs.

Mr. Bush charges Mr. Gore with instigating "class warfare," by pitting those in different economic strata against one another.

Still, both candidates are aiming mostly to attract that vast middle class. And if there's any "warfare" - at least for those still struggling back at the tail end of today's booming economy - it's the day-to-day battle of making ends meet.

(c) Copyright 2000. The Christian Science Publishing Society

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