If parents with children still find themselves poor after taxes are forgiven, the government kicks in extra money to boost families out of poverty. There are lessons here for the broader economy. No matter how you cut the numbers, it s clear that the rewards of the current economic boom are not trickling down to low-wage workers as they did in the boom times of the 1960s. The patterns between 1973 and 1996, measured in inflation-adjusted dollars, are striking. According to a paper adjusted here by David Ellwood of Harvard University, the compensation for women at all levels of income have gone up substantially largely because women are working more.
Women have by no means achieved pay equality with men, but they re catching up.
The good news is tempered by bad news. While men in the top third of the economy have also seen their incomes rise, the income of men in the middle and bottom thirds have stagnated or dropped. The bottom is also losing out on benefits. While the EITC has helped men with families offset some of these losses, it leaves out many others. This should come as news to no one.