Are the poor getting poorer?

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We hear it all the time "the rich just keep getting richer while the poor get poorer." But according to the Census Bureau that isn't exactly true. The rich are getting richer, but the poor are not getting poorer.

The rich will always continue to get richer, because much of their income is traced to their investments. They have the money that they made 5 and 10 years ago working for them, producing more money, while they continue to receive pay raises relatively in line with the rest of America.

The only way to make the statement that the poor are getting poorer true, is to take the mean average income from 2000 and compare that to 2003. That comparison does show a 7.8% mean income reduction in the lowest 20% of income earners, compared to a 6.07% reduction for the top 5%, and a 3.3% reduction for themiddle fifth of the population.
In inflation adjusted $$ the bottom fifth made $854 less in 2003 than they did in 2000, while the top 5% makes $16,370 less for the same time periods. Interestingly, the most stable groups are the 3rd and 4th Fifths - the so called middle class.

Basically, the rich are getting richer - but so are the poor. The poor just see their income rise more slowly, which again can be partially attributed to their lack of income from invested moneys. If you look at the chart below you will see that the percentage of income that each fifth of the american population receives hasn't changed much in the last 10 years, and not drastically since 1967.

Charts You will have to click on the December 2004 article.