Are the Poor and Middle Class Actually Getting Poorer? Reassessing Prosperity Trends Since 1980
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Our current “Great Recession” has hit the poor and middle class hard, but does this short-term downturn in prosperity characterize the last three decades? Bruce Meyer from the University of Chicago and James Sullivan from the University of Notre Dame take the long view and argue that things are not as bad as we think. In their new paper “The Well-Being of the Poor and the Middle Class Since 1980,” they present research showing a significant rise in prosperity for the poor and middle class over the last 30 years. Contrary to popular conceptions, they found that median income of those groups rose by more than 50 percent and that poverty as measured by consumption has rapidly declined. At this event, Meyer and Sullivan will argue that proper assessment of long-term prosperity trends will have significant value to policymakers trying to get the country back on its feet. Gary Burtless of the Brookings Institution and Alan Reynolds of the Cato Institute will respond. Lunch will be served.
12:00 PM
Luncheon and Registration

12:30 PM

BRUCE MEYER, University of Chicago
JAMES SULLIVAN, University of Notre Dame


GARY BURTLESS, Brookings Institution
ALAN REYNOLDS, Cato Institute

2:00 PM
Event Summary

Leading experts on poverty and income distribution gathered at the American Enterprise Institute on Tuesday to discuss a controversial claim that the well-being of the poor and middle class in America in the last three decades has increased. In their new paper “The Well-Being of the Poor and the Middle Class Since 1980,” Bruce Meyer from the University of Chicago and James Sullivan from the University of Notre Dame have gone against the conventional wisdom that the poor are no better off than they were 30 years ago by arguing that better measures of material well-being reveal evidence of substantial improvement for the poor and the middle class in the past three decades. Sullivan pointed out that even though the recession has hurt both the poor and middle class, it is important to distinguish between short- and long-term trends. The official measures have weaknesses that include the absence of key programs (food stamps, housing assistance, Medicaid, Medicare), the measure of well-being by income rather than consumption, and the biased reliance on the consumer price index. He concluded that better adjusted measures of well-being indicate considerable improvement for both the poor and middle class over the last three decades. Alan Reynolds of the Cato Institute contributed to the discussion by stressing the impossibility of measuring well-being without taking into account all resources, and Gary Burtless of the Brookings Institution emphasized that no matter how the statistics are measured, the recent slow economic growth is an enormous problem.


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Speaker Biographies

Gary Burtless
holds the Whitehead Chair in Economic Studies at the Brookings Institution in Washington, DC. He researches issues connected with poverty and the income distribution, public finance, aging, labor markets, social insurance and the behavioral effects of government tax and transfer policy. Mr. Burtless is co-author of numerous books, including “Five Years After: The Long Term Effects of Welfare-to-Work Programs” (Russell Sage Foundation, 1995) and “Growth with Equity: Economic Policymaking for the Next Century” (Brookings Institution Press, 1993). He was also editor or co-editor and contributor to “Does Money Matter? The Effect of School Resources on Student Achievement and Adult Success” (Brookings Institution Press, 1996) and “A Future of Lousy Jobs? The Changing Structure of U.S. Wages” (Brookings Institution Press, 1990). He was co-editor of the Brookings-Wharton Papers on Urban Affairs for five years and earlier served as associate editor of the Journal of Human Resources. Mr. Burtless has written numerous scholarly and popular articles on labor markets, income distribution, pensions, and the economic effects of Social Security, unemployment insurance and taxes. In recent work he has assessed the impact of the 2008–2010 stimulus programs on US social protection and the economy, evaluated the implications of financial market fluctuations for the design of optimal pension systems, and estimated the impact of public and private health insurance on the distribution of American household incomes. Before joining Brookings in 1981, he served as an economist in the policy and evaluation offices of the Secretary of Labor and the Secretary of Health, Education, and Welfare. In 1993, he was visiting professor of public affairs at the University of Maryland, College Park.

Nicholas Eberstadt
is the Henry Wendt Scholar in Political Economy at AEI and a senior advisor to the National Bureau of Asian Research. He serves as a member of the World Economic Forum's Global Agenda Council and of the visiting committee for the Harvard School of Public Health. He was appointed commissioner to the Key National Indicators Commission in 2010. Mr. Eberstadt writes extensively about demography, development and international security. He has published hundreds of studies and articles in scholarly and popular journals, including Foreign Affairs, Atlantic Monthly, The New Republic, The New York Review of Books, Commentary, The Wall Street Journal and The New York Times. He is the author or editor of about 20 books and monographs, including “Poverty in China” (International Development Institute, 1979), “Foreign Aid and American Purpose” (AEI Press, 1989), “The Tyranny of Numbers” (AEI Press, 1995), “The End of North Korea” (AEI Press, 1999), “Europe's Coming Demographic Challenge” (AEI Press, 2007, with Hans Groth) and “Russia's Peacetime Demographic Crisis” (National Bureau of Asian Research, 2010). Mr. Eberstadt consults frequently for various branches of the US government and has served on several congressionally appointed committees and commissions. He has also testified as an invited expert before the Senate and the House of Representatives on issues ranging from aid for Africa to population control in China and the North Korean nuclear drama.

Bruce D. Meyer is the McCormick Foundation Professor at the Harris School of Public Policy Studies at the University of Chicago. He was a faculty member in the Economics Department at Northwestern University from 1987 through 2004. He has also been a visiting professor at Harvard University, University College London and Princeton University; a faculty research fellow and research associate for the National Bureau of Economic Research; and a faculty fellow at the Institute for Policy Research; and editor of the Journal of Public Economics, the Journal of Business & Economic Statistics, the Berkeley Journal of Economic Analysis and Policy and the Journal of Labor Economics. Mr. Meyer studies tax policy, welfare policy, unemployment insurance, workers’ compensation, the health care safety net and labor supply. His most recent work includes research on measuring poverty in the United States, the consequences of disabilities, the effects of welfare and tax reform on the well-being of single mothers, models and methods to analyze labor supply, and the effects of changes in the health care safety net. His work has appeared in the American Economic Review, Quarterly Journal of Economics, Econometrica, Journal of Labor Economics, Journal of Public Economics and other refereed journals. 

Alan Reynolds
is a senior fellow with the Cato Institute and was formerly director of economic research at the Hudson Institute. He was a member of President Reagan’s transition team in 1981, research director for Jack Kemp’s tax reform commission in 1995–96 and an advisor on tax policy for Canada in 1987 and Australia in 1999. Since 1972, Mr. Reynolds has written on economic issues in numerous publications such as The Wall Street Journal, Fortune, Forbes and The Georgetown Journal on Poverty Law and Policy. He is the author of the textbook “Income and Wealth” (Greenwood Press, 2006).

James X. Sullivan is an associate professor of economics at the University of Notre Dame and a research affiliate of the National Poverty Center at the University of Michigan. He has been a visiting scholar at the National Poverty Center and a visiting professor at the University of Chicago, Harris School. His research examines the consumption, saving and borrowing behavior of poor households and how welfare and tax policy affects the well-being of the poor, and his recent work analyzes consumption and income-based measures of poverty and inequality in the United States over the past 50 years. His research has been supported by grants from the Smith Richardson Foundation, Earhart Foundation, Annie E. Casey Foundation, National Bureau of Economic Research and United States Department of Agriculture. Mr. Sullivan has published articles in several journals, including American Economic Review, Journal of Human Resources, Journal of Public Economics and Journal of Policy Analysis and Management.

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