The Wall Street Journal

June 25, 2002


Lies, Damned Lies
And the Census

Some folks can't stand good news -- especially when it interferes with their failed ideas. So when new Census Bureau figures show that the prosperity of the 1990s was widespread, they've started spinning lemonade back into lemons.

Between 1989 and 1999, the Census shows, inflation-adjusted median incomes rose by nearly $3,000, to $41,994. Over the same period, the poverty rate fell to 12.4% from 13.1%. This is good news. Unfortunately, some are twisting this poverty number to argue that the economic boom of the 1990s was a cruel game in which the rich grew richer while a stagnant underclass remained mired in destitution.

It's true that on the surface, a 0.7% reduction in poverty over a decade may not seem like much. But put this number within the context of immigration and welfare reform, and it suggests that the U.S. economy did far better by America's poor than many admit.

Let's start with immigration. During the 1990s, a record 11 million foreigners immigrated to the U.S. More than half came from Latin America, and like the European immigrants that landed on our shores generations back, many arrived poor. That's important to note because, all else being equal, this influx of newcomers should have increased the poverty rate.

It didn't happen. As Alan Berube of the Brookings Institution put it, "Previous research shows that new arrivals to the U.S. tend to have higher poverty rates than the population that's already here. But these people aren't poor forever." To the contrary, as a 1999 study by the Fannie Mae Foundation found, upward income mobility is the norm for immigrants.

As for the argument that they did this at the expense of Americans who were already here, it's interesting to note that throughout the 1990s, those places with the largest immigrant populations (e.g., New York and Los Angeles) had faster economic growth and lower unemployment than immigrant-deficient locales. The real news is that, notwithstanding this infusion of immigrants, overall poverty still fell.

More significant still is the positive role played by welfare reform. Here again the bare numbers don't begin to tell you anything about what really matters, which in the case of welfare is motherhood and marital status. Simply put, single mothers and their children comprise the bulk of America's poor.

When Congress pushed Bill Clinton into welfare reform, the opposition cried that these people would end up sleeping on grates. And today Marian Wright Edelman of the Children's Defense Fund -- one of the lemon makers -- goes around claiming that welfare reform has kicked people off rolls but not reduced poverty.

In fact, welfare caseloads are down by 60% and there's also been an unprecedented drop in the poverty rate among single mothers and children. Back in 1994 the percentage of poor single mothers and children was 44% -- virtually the same as in 1970. But by 2000 that number fell to 32.5%, an all-time low.

The liberal record on black children was similarly dismal, with their poverty rate never improving from 1969 to 1994. Yet between 1995 and 2000, it magically dropped by almost a third, and today there are fewer poor blacks than at anytime in U.S. history.

The Heritage Foundation's Robert Rector attributes the reductions in poverty to unprecedented surges in employment among even the most disadvantaged single mothers. "From the mid-'90s to the present," said Mr. Rector, "employment of never-married mothers jumped 50%, and employment of single mothers who were high school dropouts rose by two-thirds."

In other words, after a generation of Great Society failure, what happened over the 1990s was that millions of poor immigrants moved into that bottom category -- but many more moved up out of it, some because of welfare reform. That's worth keeping in mind the next time you read a headline about the rich getting richer and the poor poorer.

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Updated June 25, 2002

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