President Obama cares deeply about the poor, right? And President Reagan was a mean Republican who joked about welfare queens, so obviously the poor are much better off now than they were during Reagan’s reign.
Actually, that’s not true. AEI president Arthur Brooks lays out an array of facts to prove it in a recent article. The most disturbing evidence of declining opportunity for the poor is a Federal Reserve Bank of Boston study which looked at economic mobility, or how Americans move up and down the ladder of income. The Bank’s economists used the standard tool of dividing Americans by income into fifths, or “quintiles,” and found that
in 1980, 21% of Americans in the bottom income quintile rose to the middle quintile or higher by 1990. Those who started off in the bottom quintile in 1995 had only a 15% chance of becoming middle class in 2005.
Brooks notes that jobs – which Obama rightly calls “a source of pride and dignity” – are literally disappearing. The Labor Department counted total nonfarm jobs at 138 million in 2008. Today, the number of jobs has shrunk to under 136 million, even though America has 13 million more citizens.
Brooks adds that the President’s policy proposals aren’t helping the private sector to create jobs. Calls for a higher minimum wage, for instance, would hurt those among the poor who struggle the hardest to find jobs.
Or take a related example from Andrew Stiles of National Review. He did the math on the President’s proposed minimum wage hike in the State of the Union address, combined with the powerful incentive Obamacare gives employers to cut minimum wage workers’ hours. Imagine you’re a poor person who earns the minimum wage and works a 40-hour week. Then the President’s proposed minimum wage increase is enacted, raising your hourly wage by $1.75. But your employer cuts back your work week to 29 hours, to avoid having to count you as a full-time worker under Obamacare. The net result: you earn 29 fewer dollars a week.
When thinking about the poor, the tax-exempt world emphasizes philanthropy and charity, and understandably so. But economic growth is no trifling matter for the poor and their economic mobility. The evidence continues to mount that President Reagan and his policies were a boon to the poor, while the current President and his policies are not.