The U.S. Census Bureau tracks statistics on poverty. They show that the 12.5% poverty rate in 2003 was lower than during any of the years from 1980-1998. The poverty rate did go up from 1999 to 2003, but by less than one percent. So why do we hear so much gloom and doom in the media?
Kevin at WizBang shows how a misleading analysis can make good economic news sound bad. As part of an article with the ominous title As Income Gap Widens, Uncertainty Spreads, the Washington Post compares 1967 data with 2003 data and worries over the fact that there are "more high earners but . . . fewer in the middle."
Why phrase it in terms of an income "gap" and "fewer in the middle?" If things are so bad, why not simply say "the poor make up a larger percentage of Americans now than in 1967"? They can't say that because that is false. The data shows that the percentage of poor people went down over this period, from 14.2% to 12.5%. So they have to invent a different way to scare us.
"Fewer in the middle" sounds scary, but the data in the Post story shows that the middle is disappearing upwards. If people in the middle got richer and moved up into one of the higher groups, while at the same time the percentage of poor people went down, that sounds like on the whole, people are better off than before.
Another trick the media sometimes uses to scare us is to talk about absolute numbers instead of percentages. The number of poor people went up from 27.7 million to 35.8 million from 1967 to 2003, because the population increased. Remember, the percent of poor people went down. With a growing population, there will tend to be more of everything: more poor people, but also more rich people.