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NewsFlash: June 6, 2007

Low-Income Families Losing Ground in 2000s

Some analysts have hailed a recent Congressional Budget Office study which finds, among other things, that income grew 28% for low-income single mothers from 1991-2005. But an EPI Snapshot  shows those analysts ignore the outcomes of two distinct time periods with different tales to tell. Over the last several years, these families have seen a loss of real income, a loss which has not been offset by the social safety net.

EPI senior economist Jared Bernstein  examines these two periods: In the 1990s, the combination of welfare reform rules, tight labor markets and supports like expansion of the Earned Income Tax Credit (EITC) generated gains for low-income families, while in the 2000s, such families have been hit hard by a faltering job market and a decline in EITC and welfare benefits. As a result, over 2000-2005, low-income families headed by single mothers experienced a real income decline of 2.6% per year, amounting to a $1,900 loss. 

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