An oft-repeated catch phrase among Democrats and one touted especially by Senator Bernie Sanders is that “The rich keep getting richer and the poor keep getting poorer.” While this makes a marvelous talking point for Democrats, this claim is simply not true. The actual trend historically leading up to the housing crash of 2008 shows a very different picture.
Walter E. Williams, an economist at George Mason University, demonstrates the increasing wealth of the “poor” in America. “In 1971,” he explains, “only about 32 percent of all Americans enjoyed air conditioning in their homes. By 2001, 76 percent of poor people had air conditioning. In 1971, only 43 percent of Americans owned a color television; in 2001, 97 percent of poor people owned at least one. In 1971, 1 percent of American homes had a microwave oven; in 2001, 73 percent of poor people had one. Forty-six percent of poor households own their homes. Only about 6 percent of poor households are overcrowded. The average poor American has more living space than the average non-poor individual living in Paris, London, Vienna, Athens and other European cities. Nearly three-quarters of poor households own a car; 30 percent own two or more cars. Seventy-eight percent of the poor have a VCR or DVD player; 62 percent have cable or satellite TV reception; and one-third have an automatic dishwasher,” he concludes.
In addition, a University of Michigan study shows that only 5% of the lower fifth of income earners, those we label as poor, in 1975, remained poor by 1991. The other 95% had moved up in income brackets, some as high as the top fifth of income earners. In fact, those who were poor in 1975 had an inflation-adjusted average income gain of $27,745 by 1991. Workers in the top fifth of income earners in 1975 only gained an average of $4,354 by 1991. So, yes, the rich got richer during those years, but so did the poor. In fact, the poor got richer by a considerably higher percentage than did the rich.
The housing crash of 2008, however, changed the scenario somewhat. Families lost homes, jobs, and wages. The unemployment rate rose to a staggering 9% of the population by 2011 and that did not include the “real” unemployed. . . those who had become discouraged and stopped looking for work altogether. That number had climbed to 2,600,000 by 2011 and to 3, 900,000 by the start of 2016. The number of those on the SNAP program (food stamps) increased by over 11 million. Those numbers were alarming to economists, because the recession was considered by many to be over by 2010. Unfortunately, President Obama’s administration instituted a number of regulations which stifled business growth, drove some coal mines out of business, and delayed the approval of gas pipelines, all of which had a negative effect on job growth. Thus, the GDP continued to stagger along, averaging 1.48% during the eight years of President Obama’s presidency and making him the only president not to have at least one year of 3% GDP growth. So, for those eight years, it could indeed have been said that the poor, nay even the middle and much of the upper class, had become poorer.
Under the Trump administration, however, the economy has made a stunning comeback. The stock market climbed to over 25,000 and has generally remained there despite some drops from time to time. Over 3,000,000 new jobs have been created. And those who had to make do with part-time work during the Obama administration have been able to move into fulltime jobs. Millions of workers received cash bonuses of $1000 – $3000 as an immediate result of the Tax Reduction and Jobs Act passed by Congress under the president’s leadership. Hundreds of companies also increased wages and benefits for their workers. Because of the reduction in the corporate tax rate, which had been one of the highest of any country in the world, companies began bringing their businesses and millions upon millions of dollars back to the United States. Over 90% of middle class families saw their paychecks increase as the government reduced the amount of taxes that needed to be withheld from their salaries. Regulations instituted by the Obama administration that were stifling business growth were rolled back. The unemployment rate has dropped to 3.8% and unemployment among blacks and Hispanics has reached historic lows. Jobless claims are the lowest they have been in 48 years, and business after business has “now hiring” signs posted as more jobs are available than the number of people looking for work.
Are the rich getting richer and the poor getting poorer now? The answer would have to be that currently, as before the 2008 crash, everyone is getting richer, the poor included. However, a salient point about poverty that the Republicans understand and that the Democrats ignore, is that those 95% of the poor who have left poverty, did so by obtaining jobs, not by living off of government subsidies. Programs like the housing program promoted by Secretary Ben Carson of Housing and Urban Development, that will provide childcare and job training for the able-bodied poor in return for their reduced housing costs and then require them to eventually get a job. . . these will lift people out of poverty, giving them self-esteem as well as a far better way of life.
It is also useful to note that among both whites and blacks, the single greatest factor that pushes them into poverty is the absence of marriage and the tendency to have children before or without marriage. In fact, 85% of all poor black children live in single parent households. There is far less poverty among married couples than among those who are not married because at least one partner can work even if the other needs to stay home to care for the children, or, obviously, if both work, the household is supported by two incomes rather than one.
Black columnist Walter E. Williams in an article on Townhall.com argued the same point when he wrote, “Over the past 50 years, more than $16 trillion has been spent on poverty programs. The majority of those programs have simply made poverty more comfortable by giving poor people more food, health care, housing, etc. What’s needed most is to get poor people to change their behavior. Chief among the modifications is reducing female-headed households. Female-headed households produce most of our prison inmates, the highest crime rates and disproportionate numbers of high school dropouts and suicides.”
So, contrary to the favorite talking point of Democrats, not only are the poor not getting poorer, but their very poverty is caused by a combination of their own poor choices and poor governmental attempts at fixes.
Professor Williams concluded his article on poverty in America with these words: “Poverty in the United States, in an absolute sense, has virtually disappeared. Today, there’s nothing remotely resembling poverty of yesteryear. However, if poverty is defined in the relative sense, the lowest fifth of income-earners, “poverty” will always be with us. No matter how poverty is defined, if I were an unborn spirit, condemned to a life of poverty, but God allowed me to choose which nation I wanted to be poor in, I’d choose the United States. Our poor must be the envy of the world’s poor.”