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Thursday, December 14, 2006
Posted by: Michael Medved at 7:43 PM

According to a new poll sponsored by the LA Times, some 74% of respondents feel “concerned” or “very concerned” about the gap between rich and poor. As a result, Congressman Barney Frank, incoming Chair of the House Financial Services Committee, promises February hearings to explore “why some Americans are not reaping the benefits of a mostly healthy economy.”

In this context, it’s not popular to make the point that poverty (especially long-term poverty) predictably flows from an inability or unwillingness to work.

As a matter of fact, there’s a brilliant, top-secret, sure-fire strategy that can empower virtually anyone to avoid a life of poverty: get a job (yes, even a low paying job) and keep working and there’s very little chance that you’ll stay poor.

Economist Alan Reynolds (of Cato Institute) has written a new book (Income and Wealth, cited by National Review’s Rich Lowry) that includes the stunning revelation that the poverty rate among full-time, year-round workers above the age of 16 is a minimal 2.6%. In other words, if you’re over 16, and you get a full-time job, and hold it for a full year, there’s a better than 97% chance that you won’t be poor. Meanwhile, among those households that occupy the bottom rung of the economic ladder (the lowest one-fifth in terms of annual income), the majority (an astonishing 56.4%) contain no one in the home who’s working.

By contrast, the Census Bureau reports that the top one-fifth of households contain six-times as many full-time workers as the bottom fifth. In part, that’s because the low-income group contains a disproportionate number of single people, while the high-earners are disproportionately married. But it also reflects the fact that in prosperous families more people are likely to work – producing more income, and more wealth.

The dirty little secret in this economy: the more you work, the more you make. What a concept!

Of course, one of the reasons that high-earners work harder and devote more energy to their jobs is because they’re more likely to work at jobs that they enjoy. But in most cases, the only way to qualify for those enjoyable and satisfying jobs is to work with furious intensity at some point – at the beginning of your career, or in school, or by building up your business.

Conventional wisdom suggests that a gap between rich and poor indicates an unjust society, but that’s never true. Does the vastly different salary structure for a doctor on the one hand, and a bagger at a supermarket on the other, indicate some massive injustice? The medical field requires vastly greater training, skill, sacrifice and stress. If an 18 year bagger earned anywhere near the same hourly rate as an experienced, effective 50-year-old doctor, that would demonstrate injustice.

A just society doesn’t require that everyone earn similar rewards. It does require, however, that hard work should be reliably rewarded.

With this demand in mind, the statistics on poverty avoidance for full-time workers (96.4% of whom don’t count as poor) indicates the essential justice of our economic system: if you work hard, you get ahead. Maybe not as quickly as you desire, but you’ll almost certainly avoid destitution.

The startling fact that only 43.6% of our low-income households include anyone who’s gainfully employed suggests hard work may not, in every case, bring wealth but it will serve to keep you far from poverty.





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