Economic Snapshot | Wages, Incomes, and Wealth

The poor get poorer

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for April 07, 1999

The poor get poorer

The growth of income and wage inequality and the decline in the real wages of low wage workers have been the key determinants of poverty in the 1980s and 1990s. As of 1997 (the last year for which figures are available), the overall poverty rate of 13.3% — affecting 35.6 million Americans — was 0.5% higher than the 1989 poverty rate of 12.8%.

The figure shows another measure of the depth of poverty: the percentage of the poor below 50% of the poverty line, which in 1997 meant a pre-tax income of about $8,100 for a family of four. In 1979, close to one-third (32.8%) of the poor were in “deep poverty.” By 1983, following the deep recession of the early 1980s, this proportion had approached two-fifths (38.5%), where it essentially held throughout the decade. As expected, the share of deeply poor persons expanded in the recession, which began in 1990, but it continued to expand in the ensuing recovery and rose to 41% in 1997. (For more information on workers earning poverty-level wages, see  Working full time fails families.)

Source: The State of Working America 1998-99 and U.S. Bureau of the Census website.

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