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The poor: Reagan vs. Obama

| Sunday, Sept. 15, 2013, 9:00 p.m.

I think the poor need another Reagan in the White House.

The income of black heads-of-households dropped by 10.9 percent from June 2009 to June 2013. This decline in black income is more than double the overall 4.4 percent drop nationally in real, adjusted for inflation, median household income during the same four years of alleged “recovery.”

Similarly, real incomes of those under age 25 fell by 9.6 percent over the same period — again, more than double the average drop in household income.

Income in households headed by single women, with or without children, declined by approximately 7 percent over the same four years, a significantly higher drop than the national average.

The income of Hispanic heads-of-households fell by 4.5 percent, slightly more than the national decline, while the income of workers with a high school diploma or less dropped by 6.9 percent.

In dollar terms, the median income per year (including cash government benefits such as earned income tax credits, disability payments and unemployment insurance) in female-headed households and black households has dropped, respectively, by $2,300 and over $4,000 since Obama's stimulus-led “recovery” began in June 2009.

These income changes are based on the Census Bureau's Current Population Survey and summarized in an Aug. 21 report by Sentier Research, “Household Income on the Fourth Anniversary of the Economic Recovery: June 2009 to June 2013.”

In his Wall Street Journal column on Sept. 3, “Obama's Economy Hits His Voters Hardest,” Stephen Moore, a member of the Journal's editorial board, reported that those who were the most likely to vote for Obama in 2012 were members of the aforementioned five demographic groups that were hit with the largest income declines and highest jobless rates.

During July 2013, with the economy's official unemployment rate at 7.4 percent, Moore reported that “the highest jobless rates by far are for key components of the Obama voter bloc: blacks (12.6 percent), Hispanics (9.4 percent), those with less than a high-school diploma (11 percent) and teens (23.7 percent).”

In contrast to these overall income declines in the past four years, especially among groups with the lowest incomes, a Congressional Budget Office report, “Historical Effective Federal Tax Rates: 1979 to 2005,” showed across-the-board gains in income, with incomes growing at roughly the same pace for all groups, following the implementation of President Reagan's pro-growth, pro-business economic policies in the 1980s.

The CBO report shows that after-tax household income, adjusted for inflation, increased overall by 13.73 percent from 1983 to 1993 and by 12 percent in the lowest income quintile, reversing the overall decline in household income in the 1970s produced by high levels of inflation and unemployment (the misery index, the inflation rate plus the unemployment rate, stood at a post-World War II high of 20.6 percent when Reagan took office in 1981).

All told, the poorest 40 percent of households in America went backward in income in the pre-Reagan period of 1973 to 1981 while the income of the upper 60 percent increased.

The Reagan years, 1981 to 1989, in contrast, saw real income increases and job gains for every income group, from the poorest quintile to the richest.

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur (rrreiland@aol.com).

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