The Poor Stay Poor


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In November, the Treasury Department came out with an intriguing study which looked at income mobility from 1996 to 2005. The study found that income mobility rates (the ability of taxpayers to move between income quintiles) were similar over this ten-year period to those of the previous decade. Interestingly, only about half of those in the bottom income group in 1996 moved up the income ladder by 2005. Clearly there is no guarantee that low-income Americans would see their income grow substantially over this ten-year period.

The St. Louis Post Dispatch published an editorial based on the study which found what many anecdotally already knew. "In America, you can start poor, work hard and end up rich. But winding up rich is easier if you're born to wealthy parents." The Post Dispatch calls for policies that level the playing field for those Americans who aren't lucky enough to be born with a silver (or even copper) spoon in their mouths: "If America truly wants to truly improve the odds of achieving the American Dream, it would work to counter the effects of poverty on children. A larger earned-income tax credit for low-income parents would help. We also should improve school systems and make public colleges and universities more affordable by expanding scholarships and holding down tuition."

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