Poor Getting Richer

Poliliticans often say how the rich have been getting richer but the poor have remained poor. Although, this makes for great rhetoric if politicians cared to look at some data they might change their minds. According to the U.S. Census more than 40 million people are in “poverty”. However, the term poverty is somewhat misleading. Most of us when we think of the word poverty think of people who are homeless, struggling to get by, and maybe even malnourished. Robert Rector in a paper from the Heritage Foundation using data from 2005 shows that the poor nearly all have refrigerators, televisions, stoves and ovens, air conditioners, and DVD players. With summer time here there are always stories about how poor people don’t have air conditioning. In 1980, only 41.2% of poor households had air conditioning. By 2005, 78.3% of households had air conditioning. Also 46% of poor households live in their own homes. 75% of poor people own one car and 30% own two cars. Clearly, the poor are not living on the streets starving to death but have things that even middle class people in other countries wished they could have.

The poor people in America have it better than in most countries around the world. People at the bottom of the United States socioeconomic ladder are still higher than some of people in the top 10% of other countries.

Another myth is that the people at the bottom of the socioeconomic ladder never move up. This type of nonsense should be forbidden. Panel data (meaning tracking people over years and decades) from University of Michigan Panel Study of Income Dynamics shows that only 5% of families that were in the lowest 20% of income earners in 1979 were still there in 1991. However, 52.7% of the income earners in the top 1% in 1979 were gone by 1988. Real incomes have not also stagnated as some people claim. Real incomes for households have increased 29% despite household size getting smaller. Also if we look at wealth in generations more than 66% of Americans born a generation ago have greater income than their parents. So if we look at income groups and people over time and we see the poor have gotten richer not poorer as some like to say. Also the standard of living of everyone has increased through those greedy entrepreneurs. Twenty years ago hardly anyone had a cell phone or internet connection. Today these things are abundant with quality improving while prices keep dropping. People in every income class are benefitting from this. Truly the poor aren’t as poor as some people would make you believe.