Out of Control Policy Blog

What you didnít hear during the stump speeches

In this excellent essay, Steven Malanga makes the point that no politician would ever touch: sometimes it's not the dog-eat-dog world of capitalism that keeps poor people poor, sometimes it's (gulp) their own bad choices.

Case in point:

Christie, a day-care worker, describes herself as "lazy" for never finishing college (her brother, who did, is an accountant, and her sister is a loan officer). She has had several children out of wedlock with various men, and now lives with one of them–Kevin, an ex-con–in public housing. Christie can't make ends meet, but that's partly because, having never learned to cook, she blows her $138-a-month food-stamp allocation on "an abundance of high-priced, well-advertised snacks, junk food, and prepared meals."

The good news is that America is a dynamic society and those on the bottom rarely stay there for long:

Perhaps most astonishingly, mobility often occurs within months. The Urban Institute report points out that several mobility studies based on the University of Michigan's Panel Study of Income Dynamics, which has traced thousands of American families since 1968, show that about 20 percent of those in the lowest economic quintile rise at least one economic class within a year ...

And most workers don't just move on quickly–they also move on to better jobs. The Sphere Institute, a California public-policy think tank founded by Stanford University professors, charted the economic path of workers in the state from 1988 to 2000 and found extraordinary mobility across industries and up the economic ladder. Over 40 percent of the lowest income group worked in retail in 1988; by 2000, more than half of that group had switched to other industries. Their average inflation-adjusted income gain after moving on: 83 percent, to over $32,000 a year.

The workers who stayed in retail, moreover, were usually the higher earners, making about $10,000 more a year than the leavers ...

This mobility explains why poverty rates didn't soar in the 1990s, even though some 13 million people, most of them dirt-poor, immigrated here legally. In fact, the country's poverty rate actually fell slightly during the nineties–which could only happen because millions already here rose out of the lowest income category.

Ted Balaker is Producer


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