Michael Jensen
The "Poor" in America
By
Dec 12, 2007 - 2:04:00 PM

Christmas is always a bittersweet time for me.  I’m excited for the time off work and the family gatherings, and I love Christmas shopping.  But I always worry about the less fortunate—especially the children who will have a sparse Christmas.  No child should go without presents Christmas morning.

But there are two bits of good news that keep me jolly at Christmastime.

First, America is an amazingly generous place.  In 2004, for example, individual Americans gave $242 billion to charity.  In fact, America is the most generous country on earth.  Americans give three and one-half times more to charity per capita than the French, seven times more than the Germans, and fourteen times more than Italians.

Charitable opportunities such as Angel Tree and Sub for Santa allow Americans to donate money and gifts to needy children across the country at Christmastime.  Many retail stores also allow customers to purchase toys and leave them in collection bins for needs kids, and I never see these bins empty.  We—individual Americans—take care of our poor in this country, as we should.

But there is even better news.

As it turns out, being “poor” is not a static condition in the United States of America.  Two recent studies have shown that most of the “poor” don’t stay poor for long.  The first study, completed by the University of Michigan, found that only five percent of those who were in the lowest income bracket in 1975 were still there in 1991.

What happened to the other 95 percent?  They moved into higher income brackets—into the middle class or better.  In fact, 30 percent of those in the lowest income bracket in 1975 had moved into the highest bracket by 1991.

Not only that, but those in the lowest income brackets improved their incomes far better than even those in the highest income brackets.  The poor had an inflation-adjusted average income gain of $27,745 between 1975 and 1991, while the top income earners saw their incomes increase by only $4,354 during that time period.  Not only are poor individuals moving out of poverty, but as a group their income is rising faster than even the richest among us.

A second study by the U.S. Treasury Department confirms this finding.  This study found that 58 percent of Americans who were in the poorest income bracket as recently as 1996 had advanced to a higher group by 2005—that’s more than half in under a decade!  Almost 25 percent had moved into the middle or upper-middle class income bracket, and more than five percent had actually moved into the highest income bracket.

Also confirming the University of Michigan study, the Treasury report showed that income for those in the lowest income bracket grew by 90 percent between 1996 and 2005, while income for those in the highest income bracket grew by just 10 percent.

In other words, just because a family is poor this Christmas doesn’t mean that it will be poor next Christmas.  According to these studies, more than half will be out of poverty within a decade, and 95 percent will be in a higher income bracket within 16 years.

The obvious question here is how this happens—but the answer is just as obvious.  It happens because America is, has been, and hopefully always will be a land of opportunity.  No matter what your income is today, if you’re willing to work hard, there’s no limit on where you might be tomorrow.

That’s good news for all Americans, especially our children.

P.S. Please do your part to make sure no child wakes up this Christmas without a present.  Drop off an unopened toy at any participating retailer, or make a donation to your favorite charity.  Merry Christmas!


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