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Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined?

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Neil Irwin has been on our Wall of Shame a few times, with Global Growth is Slowing Down at the Worst Possible Time, and Why the Housing Market is Still Stalling the Economy, so it’s with great pleasure I feature this recent New York Times column on the Wall of Fame today. In Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined? Irwin does remind us of the conventional thinking about the goodness of economic growth:

“The surest way to fight poverty is to achieve stronger economic growth. That, anyway, is a view embedded in the thinking of a lot of politicians and economists.”

We even get some growth goodness quotes:

U.S. Rep. Paul Ryan: “…the best anti-poverty program is economic growth.”

U.S. President John F. Kennedy: “A rising tide lifts all boats.”

The percentage of U.S. residents in poverty dropped from 22% in 1959 to 11% in 1973, so Irwin is rightly puzzled by evidence that in 1974 growth stopped delivering the goods:

“From 1959 to 1973, growth in per capita gross domestic product translated directly into fewer Americans living in poverty. If that relationship had continued, there would have been no poverty in the United States since the mid-1980s; instead, the poverty rate has held steady in recent decades despite overall economic growth.”

What has been happening since the mid-70’s to keep the benefits of economic growth from enhancing the lives of the working class? This is a conversation we’re seeing a lot these days. The failure of trickle-down economics is the issue of the year. While those aren’t Irwin’s words, he does ponder this subject, but stops short of offering a complete prescription:

“If you want to address poverty in the United States, it’s not enough to say that you need to create better incentives for lower-income people to work. You also have to devise strategies that make the benefits of a stronger economy show up in the wages of the people on the edge of poverty, who need it most desperately.”

It’s a good conversation to have, but it’s unfortunate that so far the conversation is framed in pro-growth thinking. Perhaps, on a full planet, a growing economy is not a “strong” one, and not "good for decades." Irwin, like most who’ve been programmed from birth to believe in the universal goodness and feasibility of perpetual economic growth, isn’t pondering this:

The end of the flow of growth’s benefits to the working class coincided with the beginning of overshoot, when humanity began using the Earth’s ecosystem services faster than the planet can replenish them.

Think about it. The minute the pie stopped getting genuinely bigger, the slices for the poor began to shrink while the slices for the rich continued to grow.

Let’s have your vote to reward Irwin for asking some of the right questions. Let’s see your comments on this subject below. And let’s also see some serious donations trickle down to support this non-profit project. Thank you!

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Comments

  • Mike Hanauer
    Mike Hanauer Wednesday, 11 June 2014

    Since 1969, virtually all the economic benefits of GDP growth have gone to the top 1 percent. -Richard Wolff ~2012, economist, to Bill Moyers.

    Check http://thinkprogress.org/climate/2009/06/13/204231/robert-f-kennedy-gdp-obama-ponzi-scheme/ to see what Robert Kennedy thought about growth.

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  • Guest
    Brian Sanderson Friday, 13 June 2014

    Paul Colinvaux figured it out in 1979. Them that makes the rules will make sure that they do fine when population has outstripped the real economy... Serious thinkers, since long before, could also figure out such obvious things. (I vaguely recall having read something along those lines from Roman times. That's right, it was Jesus, didn't he say something like the poor will be with us always!)

    You are on the right track Dave, GDP is a totally false metric for a resource-limited world.

  • Dave Gardner
    Dave Gardner Friday, 13 June 2014

    Mike and Brian,

    Thanks for your comments. I think we'll see more and more class conflict now that we can't just increase the rate at which we extract wealth from the Earth. This is the beginning of a protracted fight over resources that cannot meet the need, or at least the greed, of 7+ billion people.

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