The Income Gap: Who is Winning and Who is Losing

Since the year 2000, Asians have seen their median incomes increase by $3693 per year.  That is almost twice what Whites and Hispanics have seen as income increases of $1431 per year.  In that same time, Blacks have seen their median incomes drop by -$1,873 per year.  During that time, all median incomes have increased, reaching a high of $59,039 in 2016, but even with that increase, Black households trail the pack with an income of $39,490. 

            Insufficient income does not exist in a vacuum.  There are reasons.

Asians showed the biggest increase in income and they have the highest percentage of adults with a college degree (53%, up from 39% a generation ago).  While all groups have shown an increase in college degrees in that same amount of time (36% for Whites, 23% for Blacks and 15% for Hispanics) only Blacks show a decrease in median income.  It is striking, for example, that while Hispanic college degrees trail Blacks by 8%, their increase in income is the same as for Whites.  So, let’s look at another key factor, marriage.

Being married cuts the poverty rate by 3.5%.  When you look at families with children who are living above the poverty line, 81% are headed by married couples.  But of poor families with children, only 40% are married.  There is only a 30% marriage rate among Blacks.  In fact, 71% of all Black children are born in one-parent households.  Compare that to Hispanic rate of only 53% and you see one reason why Hispanics, while having a smaller percentage of college educated adults are still making progress. 

What about just finishing high school?  That will cut the poverty rate by 2%.  But, Hispanics, like Blacks, have poor high school graduation rates, so what other element is at work?  The answer is full time work. The poverty rate for families with children in 2001 was 13%.   Full time work cuts that rate almost in half, to 7.3%.  The Brookings Institute ran models that showed how work—any work—commensurate with a person’s education and skill set, brought that person out of poverty no matter how meager the wages.  The key was working full time.  If you don’t care what the job is, how hard it is, how menial it is, if getting a pay check is the goal, then full time work will pull you up and out. 

            Liberals often say that increasing welfare benefits will help raise people out of poverty, but this same Brookings study increased all forms of welfare benefits to see what happened with the models.  Even doubling the benefits did not produce as big a decline in poverty as any of the four pro-active actions of full-time work (a 7.3% cut), marriage (a 3.5% cute), high school graduation (a 2.0% cute) or limiting family size (a 1.7% cut). 

Here is the hard truth.  There are Blacks, Hispanics and Asians who are wealthy, still more in the middle class and many, many more who are simply not poor.  Looking at these numbers it increasingly becomes evident that poverty is not a result of race, it is the result of bad choices.  Those choices can be harder for some than others, but they are still choices. 

            Work full time.  Get married.  Stay in school.  Limit your family.     

            You will notice that none of these factors are politically linked.  During the 16 years that Blacks lost ground you had 8 years of Republican and 8 years of Democratic Presidents.  The Democrats and Republicans have roughly shared control of the House and Senate during this same time.  This is data.  This is economics.  This is what we must deal with. 

            Say the truth and keep the faith.