We made enormous progress during those years. The poverty rate under the official measure of poverty, which counts only cash income, fell by half between 1959 and 1973, from 22 percent to 11 percent.
Research by economist Sheldon Danziger of the University of Michigan’s National Poverty Center indicates that if the relationship between economic growth and median earnings growth from 1959 to 1973 had continued in the years after 1973, official income poverty would have fallen to very low levels. It’s clear that the surge in income inequality was an important factor in impeding progress.
Economic growth has had a limited impact on poverty because rising earnings inequality has left many workers with lower real earnings.