[Marxism] The absence of real forces [was: The low point]

Sayan Bhattacharyya ok.president+marxmail at gmail.com
Sat Aug 4 06:18:40 MDT 2007

On 8/3/07, Mark Lause <MLause at cinci.rr.com> wrote:

> What does "the poorest fifth of Americans" actually mean?  American
> households?  American wage earners?  American individuals generally?  Who's
> included and who's not included?  On the face of it, it includes kids...

Here's the Washington Post article that was referenced by the Brooks  article:

The Washington Post

May 29, 2007 Tuesday

The Rise Of the Bottom Fifth

BYLINE: Ron Haskins

Imagine a line composed of every household with children in the United
States, arranged from lowest to highest income. Now, divide the line
into five equal parts. Which of the groups do you think enjoyed big
increases in income since 1991? If you read the papers, you probably
would assume that the bottom fifth did the worst. After all, income
inequality in America is increasing, right?

Wrong. According to a Congressional Budget Office (CBO) study released
this month, the bottom fifth of families with children, whose average
income in 2005 was $16,800, enjoyed a larger percentage increase in
income from 1991 to 2005 than all other groups except the top fifth.
Despite the recession of 2001, the bottom fifth had a 35 percent
increase in income (adjusted for inflation), compared with around 20
percent for the second, third and fourth fifths. (The top fifth had
about a 50 percent increase.)

Even more impressive, the CBO found that households in the bottom
fifth increased their incomes so much because they worked longer and
earned more money in 2005 than in 1991 -- not because they received
higher welfare payments. In fact, their earnings increased more in
percentage terms than incomes of any of the other groups: The bottom
fifth increased its earnings by 80 percent, compared with around 50
percent for the highest-income group and around 20 percent for each of
the other three groups.

When considering this explosion of work among those in the bottom
fifth, remember that they all had children to take care of, that more
of these households were headed by single mothers than households in
the four better-off groups, and that they had the least money to, say,
fix their cars or tide them over if they got sick. Those who do not
admire this performance should live for a year on $16,800 and see if
they could increase their earnings by 80 percent.

My rendition of the CBO findings to this point should make Republicans
happy: Low-income families with children increased their work effort,
many of them in response to the 1996 welfare reform law that was
designed to produce exactly this effect. These families not only
increased their earnings but also slashed their dependency on cash
welfare. In 1991, more than 30 percent of their income was from cash
welfare payments; by 2005, it was 4 percent. Earnings up, welfare down
-- that's the definition of reducing welfare dependency in America.

But now consider that the next-biggest increase in income for the
bottom group was from the earned-income tax credit (EITC), a program
that, in effect, supplements the wages of parents with low incomes. In
addition, most of the children in these families had Medicaid coverage
and received free school lunches and other traditional social
benefits. In other words, this success story is one of greater efforts
to work more and earn more backed by government benefits to improve
living standards and, as President Bill Clinton used to say, "make
work pay. [...]

The writer is a senior fellow at the Brookings Institution.

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