Poverty is not a trap

June 26, 2002

Free Market Foundation

A study recently released by the U.S. Employment Policies Institute dispels the myth that poverty and low-income families never improve their status. According to the study,

Some 30 percent of low income American families in 1997 families making no more than twice the federal poverty level were no longer in the low income group the next year.

More striking were the figures for families below the poverty line, nearly half of those in poverty in 1997 were no longer in poverty by 1998.

The study also found that earnings from minimum-wage jobs played a significant role in reducing the number of working families in poverty. In most cases, minimum-wage work is supplemental, as most poor families are supported by another, higher source of income.

This study conclusively demonstrates that poverty is not a trap. With hard work, many families do escape poverty.

Source: John Formby, John Bishop and Hoseong Kim, The Economic Well-Being of Low-Income Working Families, March 2002, Employment Policies Institute.

For text http://www.epionline.org/study_bishop_03-2002.html
For more on Income Mobility http://www.ncpa.org/iss/eco/

FMF Policy Bulletin\18 June 2002