The Rise Of the Bottom Fifth [the poor are getting richer - welfare was holding them back]

The Washington Post ^ | May 29, 2007 | Ron Haskins

[grundle]

Imagine a line composed of every household with children in the United States, arranged from lowest to highest income. Now, divide the line into five equal parts. Which of the groups do you think enjoyed big increases in income since 1991? If you read the papers, you probably would assume that the bottom fifth did the worst. After all, income inequality in America is increasing, right?

Wrong. According to a Congressional Budget Office (CBO) study released this month, the bottom fifth of families with children, whose average income in 2005 was $16,800, enjoyed a larger percentage increase in income from 1991 to 2005 than all other groups except the top fifth. Despite the recession of 2001, the bottom fifth had a 35 percent increase in income (adjusted for inflation), compared with around 20 percent for the second, third and fourth fifths. (The top fifth had about a 50 percent increase.)

Even more impressive, the CBO found that households in the bottom fifth increased their incomes so much because they worked longer and earned more money in 2005 than in 1991 -- not because they received higher welfare payments. In fact, their earnings increased more in percentage terms than incomes of any of the other groups: The bottom fifth increased its earnings by 80 percent, compared with around 50 percent for the highest-income group and around 20 percent for each of the other three groups.

Low-income families with children increased their work effort, many of them in response to the 1996 welfare reform law that was designed to produce exactly this effect. These families not only increased their earnings but also slashed their dependency on cash welfare. In 1991, more than 30 percent of their income was from cash welfare payments; by 2005, it was 4 percent. Earnings up, welfare down

[grundle]

The purpose of the "war on poverty" was to keep people dependent on the government. Welfare reform has greatly reduced this problem.

[dirtboy]

Two points:

How much of this increase was from EITC?

How did the middle 60 percent do?

[tcrlaf]

FACTS like this are the enemy of Democrats and the left. Without enslaved voting groups, who the hell would vote Democrat anymore?

[hinckley buzzard]

This same pattern held through the “Decade of Greed,” the Reagan ‘80s. The lowest quintile showed the greatest gains. Both periods of prosperity fuelled by a round of tax cuts.

[IamConservative]

Hillary was just blaming the growing gap between the rich and the poor just yesterday. Facts truly are inconvenient things for the shysters..

[tcrlaf]

And, just like in the Reagan era, you will NEVER see this mentioned in an MSM broadcast.

CBS.ABC.NBC wouldn’t DARE to say this aloud.

[dirtboy]

But now consider that the next-biggest increase in income for the bottom group was from the earned-income tax credit (EITC), a program that, in effect, supplements the wages of parents with low incomes. In addition, most of the children in these families had Medicaid coverage and received free school lunches and other traditional social benefits. In other words, this success story is one of greater efforts to work more and earn more backed by government benefits to improve living standards and, as President Bill Clinton used to say, "make work pay."

Better living through government.

Unless you're a working stiff in the middle class and get taxed everywhere you turn. Including a higher marginal tax rate if you make $65K a year than if you make $130K a year.

[Jagman]

Here's a question to mull during this spring of our conservative discontent:

Do you believe George Bush would have signed the bill to end welfare, given his current behavior?

[Mase]

Bookmarking this for the next debate regarding the ‘wealth gap’and the alleged lack of upward mobility in this country.

[Teflonic]

bookmarking, thanks for sharing

[grundle]

Those are good questions that you ask - I don’t know the answers.

[grundle]

Of course Bush would have signed welfare reform. Ne never vetoes anything.

[HamiltonJay]

It wasn’t its purpose, it was its result. The purpose was honest.. but good intentions and all. It certainly became that, as people tried to protect their cushy government jobs, but it wasn’t its original purpose.

Quinn’s Law: Liberalism always generates the exact opposite of its stated intent.

[HarmlessLovableFuzzball]

The purpose of the "war on poverty" ..

The Democrats declare war on everything but America's enemies.

[Jagman]

LOL!

[No.6]

Well TECHNICALLY if the poorest’s income (say 10,000) rises 35% (to 13,500) and the richest guy’s income (say 1,000,000) rises 50% (to 1,500,000) then the gap between their incomes is rising (both in absolute terms and %age-wise).

However in non-crazy land the important thing is that the poor’s income rose 35% and that fewer of them are on welfare. This is just good news!

The whole socialist ideology relies on envy. It’s not that the poor have two TVs and one car, it’s that some other person has 5 HDTVs and three sports cars. How dare they! Of course the elite socialists who would like everyone equally poor allocate to themselves 2 jet aircraft and 6,000 square foot homes, but they’re the anointed.

[grundle]

Oh wait - I do know. The article says it went up about 20% for the middle 60%.

[dirtboy]

So in other words, the middle 60 went up 20 percent, the bottom 20 went up 35, and the top went up 50 percent.

Which makes my point - the current structure hoses the middle class.

[grundle]

You're right. Here's another article, which focuses on the income gap. The article briefly mentions that all groups are richer. But most of the article, and the article's headline, focos on the income gap. This is proof that liberals think that rising income for all groups is bad:

http://www.msnbc.msn.com/id/11060191/

[Mr. Jeeves]

How did the middle 60 percent do?

I think that's the best yardstick - middle 60 or middle 80, since the top and bottom 5-10% will always be pulling away from the pack in oppoisite directions.