In US, fewer are poor, more are working

The poverty rate dipped in 2006, the first significant decline in the Bush presidency. Median household income bumped up slightly.

from the August 29, 2007 edition

Page 2 of 2

Page 1 | 2

Mr. Rector has done surveys of people defined as "poor" by the government and found that of the 36 million Americans in poverty, almost three-quarters of them own their own car, 97 percent own a color TV, and 89 percent own a microwave oven.

That's led him to conclude that most "poor" people are materially better off than 20 years ago. The Census report released yesterday did find that while median income is still lower than it was in 1999, it's about 30 percent higher than in the late 1960s.

"Most people, when they hear the word poverty, think of malnutrition and food shortages. Certainly they're not thinking about households that have cable television, microwaves, and air conditioning, which most poor households have," he says.

He contends that only a very small minority of people defined as poor by the Census Bureau suffer real deprivation, such malnutrition or eviction.

Liberal analysts agree that living standards have increased for all Americans compared with 30 years ago. But many, including Jared Bernstein of the Economic Policy Institute in Washington, say the poverty rate 30 years ago is "a crazy low benchmark" to use in judging whether someone is poor in America today.

"The question [the conservatives] don't want to get near is, have the gains that low-income people have made been proportionate to overall growth?" says Mr. Bernstein. "Because income growth has been so unevenly distributed, the answer to that is unequivocally no."

Still, because of welfare reform, expansion of the earned-income tax credit, and other policies enacted during the 1990s, there are fewer poor people, most poverty experts note – partly because more people, particularly single mothers, are working. Experts also credit the growing economy.

"They may not be superduper jobs, but a lot are created every year," says Douglas Besharov of the American Enterprise Institute in Washington.

But experts also say that many of those working people are working poor. While they aren't in poverty, they still have a hard time making ends meet. Thus the strides made so far could easily be reversed if the economy goes into a recession and the unemployment rate goes up.

"Poverty is more tied to the economy than in the past because so many of these single-mother families now work," says Ron Haskins of the Brookings Institution in Washington.

1 | Page 2