Bad-News Poverty Figures
THE POLITICIANS pay too little attention; the 1988 income and poverty figures just issued by the Census Bureau are bad news.</br></br>The longest sustained economic expansion in peacetime history has failed to drive the poverty rate back to the lows of the 1970s; the economy famous for lifting all boats no longer does so. Real per capita income was up, but this broadest measure of economic well-being is an average. As in other recent years, for the richest two-fifths of families median income and income share rose; for the poorest two-fifths they declined. The gap between rich and poor was the highest in the 40-odd years it has been measured.</br></br>The poverty rate was 13.1 percent, more than one American in eight, down only 0.3 percent from the year before. The bureau called that steady. For children, who made up 40 percent of the poor, the rate was 19.7 percent, the highest of any age group; for blacks, 31.6 percent; black children, 44.6 percent; Hispanics and Hispanic children, 26.8 percent and 37.9 percent. For the elderly it was 12 percent, lower than for the population as a whole.</br></br>Weak wages are one of the reasons the economy no longer functions as it used to. In real terms the earnings of men working full-time year-round declined last year, while those of women were flat. Median family income was also flat for the first time since the recovery began in 1982. When married couples gain ground, it is often because both wife and husband work, but not even steady work is enough to save all families. A sixth of poor families last year were headed by people, mostly men, who worked full-time year-round.</br></br>The policy implications of these figures are as obvious as they are resisted. The need is not to cut the capital gains tax, but to raise the minimum wage, to liberalize the earned-income tax credit for the working poor with children, and perhaps also to make the existing child care credit refundable and available to those too poor to owe any taxes. All four of these proposals are before Congress. Rejecting the first while enacting the others would move money from people who most emphatically do not need it to others who do.