The U.S. economy has grown a lot since 1970, but the non-elderly poverty rate has barely moved. That seems like it should be a contradiction. If the economy is bigger and producing more, shouldn't fewer people be poor?
Hoynes, Page, and Stevens dug into this using CPS, Census, and PSID data, and their findings explain a lot. Weak wage growth and rising inequality at the bottom of the distribution are doing most of the work. More women entering the workforce helped reduce poverty, but that was offset by the rise in single-parent families. Immigration and government programs didn't really change the official rate. The unchanged poverty rate is really a labor market and family structure problem.
What surprised me is that even with so many women entering the workforce, the poverty rate didn't drop. That shows just how strong the effects of family dynamics and inequality are. I also found it interesting that government programs helped in some ways but didn't move the official rate, which made me think about how the way we measure poverty shapes how effective policies look.
The paper could have gone deeper into subgroups, breaking down women, immigrants, and minorities to see who actually benefits from economic growth and who gets left behind. That kind of detail would be more useful for policymakers trying to figure out where to target programs.
What I keep thinking about is families that leave poverty and actually stay out. Programs like TANF increase income for families in poverty, but they're mostly going to families well below the poverty line, so they don't move the rate much. And since the poverty rate is measured using pretax income, the impact of EITC doesn't show up in the numbers either. That makes me think post-tax programs alone aren't enough. Families right at the poverty line are the interesting case, whether income assistance or education programs can provide the push they need, and what kind of long-term support helps them stay out.