In "Growth Has Been Good for Decades. So Why Hasn't Poverty Declined?" Neil Irwin posits in the New York Times that "growth alone" won't solve poverty. And he notes that poor families today are working harder and relying less on public benefits per capita than they were decades ago. "Growth has been pretty good," he writes, "up 147 percent per capita. But rather than decline further, the poverty rate has bounced around in the 12 to 15 percent range -- higher than it was even in the early 1970s. The mystery of why -- and how to change that -- is one of the most fundamental challenges in the nation's fight against poverty."
In "The Last Time Fatcats Tanked the Economy, the Backlash Was Huge. Why Didn't That Happen This Time?" John B. Judis argues in the New Republic that populist movements against inequality have been most successful when the middle class aligns its economic interests with the poor. If the economy booms, the middle class will be less likely to care about inequality than if our current low growth continues long enough "to stir the self-protective instincts" of the middle and upper-middle classes. "What's clear," he writes, "is that for the time being, there will be no effective counter to rising inequality."
The country is growing economically, but slowly. The wealthy grow more so. The middle class is hanging in there. And the poor are growing in numbers. Why is this happening and where is the outrage? Irwin and Judis don't attempt to fully answer these questions but they trace a similar history.
Irwin writes:
"From 1959 to 1973, the nation's economy per person grew 82 percent, and that was enough to drive the proportion of the poor population from 22 percent to 11 percent....From 1959 to 1973, a more robust United States economy and fewer people living below the poverty line went hand-in-hand. That relationship broke apart in the mid-1970s."
Judis writes:
"From the end of World War II through the late 1970s, incomes at bottom, middle, and top grew at roughly the same pace....After the '70s, what Timothy Noah calls "the great divergence" began. Incomes for the very rich soared; incomes for the bottom and middle slowed. But middle class income did not collapse or even stagnate -- and, even during the Great Recession and its aftermath, did not fall sharply."
What happened in the mid-to-late 1970s? Though not mentioned, immigration policy plays a significant roll in Irwin's and Judis' stories.
The period after World War II coincided with low levels of immigration and a surge in the middle class, particularly for minority groups (the percentage of Blacks in the middle class grew from 22 percent in 1940 to 71 percent in 1970). In the 1950s, Congress expanded chain migration beyond spouses and minor children to include adult children, siblings and parents. At first, the numerical impact wasn't readily apparent. But in 1965, Congress passed the Immigration and Nationality Act, which emphasized family reunification over skills. Although the authors of the bill all suggested that the total numerical levels would remain essentially unchanged, the combination of family reunification and chain migration sent the numbers skyrocketing.
The level of immigration has quadrupled since the 1950s. Immigration by decade increased from 2.5 million (1950s) to 3.3 million (1960s) to 4.5 million (1970s) to 7.3 million (1980s) to more than 10 million (1990s-to-current), combining for the largest wave of immigration in world history.
Due to low levels of education, many post-1960s immigrants have joined the ranks of the U.S. poor. Immigrant families are just as likely to consist of workers as U.S.-born families, but their lower education levels result in lower earnings.
The problem mass immigration creates is one of scale. Immigrants and their U.S.-born children now account for one-out-of-every-four people living in poverty. Mass immigration delivers the double-whammy of importing more poverty and creating a labor environment that is more hostile to the poor who can't earn enough to work their way out of poverty.
Economically, the wealthy, middle, and upper-middle classes have far less to fear from mass immigration than the poor. George Borjas of Harvard writes:
"For American workers, immigration is primarily a redistributive policy. Economic theory predicts that immigration will redistribute income by lowering the wages of competing American workers and increasing the wages of complementary American workers as well as profits for business owners and other "users" of immigrant labor. Although the overall net impact on the native-born is small, the loss or gain for particular groups of the population can be substantial."
Guess which particular groups experience the greatest negative impact from mass immigration?:
"The large supply increase experienced by high school dropouts reduced the wage of this group by 6.2 percent in the short run and 3.1 percent in the long run. Similarly, the wage declines for the most highly skilled workers (those with more than a college degree) were 4.1 percent in the short run and 0.9 percent in the long run."
The less-educated, including recent immigrants, bear the brunt of negative economic impact of mass immigration. But middle-class workers feel the pinch as well. Of course, some of those in the middle class also benefit from the large-scale increase in less-skilled labor. A middle-aged technology worker may be squeezed at work but benefit from more affordable child care and lawn care. But is there a tipping point where the negatives outweigh the positives for the middle third?
When dozens of corporations lobbied for increases in guest workers last year even as they were laying off Americans, the outrage was muted. But I'm with Judis, if things continue as they have been for the last 30-40 years, the middle class may find their economic interests more aligned with the poor.
JEREMY BECK is the Director of the Media Standards Project for NumbersUSA
