NCPA - National Center for Policy Analysis

Poor Are Benefiting From Boomtimes

February 14, 2000

The President's Council of Economic Advisers says that the incomes of poorer families rose between 1993 and 1998 at a faster pace than those of the wealthiest. This represents a sharp reversal of the trend for the previous 20 years, they say.

  • In the 1993-98 period, real incomes for the lowest 20 percent of families rose an average of 2.7 percent a year.
  • The top 20 percent of families averaged gains of 2.4 percent annually in the latest period.
  • The increase in the incomes of the poorest 20 percent of families reversed a decline of 0.8 percent annually during the prior 20 years.

Yet in 1973, the average income for the top 20 percent of families was 7.5 times higher than the average for those in the bottom 20 percent -- which grew to a difference of 11.4 times higher by 1993.

The CEA maintains that the recent, more rapid increase in incomes among the bottom 20 percent was the result of a surge in productivity growth -- but it is unclear how long that trend will last.

Source: John M. Berry, "This Time, Boom Benefits the Poor," Washington Post, February 14, 2000.


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