I came across this article shortly after it was published, and meant to publish this response back then, but have been exceedingly busy. So here it is now.
In his article Raising America’s Pay, Tim Worstall argues that the Economic Policy Institute has made untrue claims about poverty staying the same despite continuous economic growth because the way the USA measures poverty is flawed and doesn’t take into account the support provided by the government. In his own words:
The American system is much closer to a measurement of here’s the number of people who would be poor if we weren’t helping to alleviate their poverty.
So basically, Tim’s argument is that because the government provides support for many people who would otherwise be in poverty, the EPI’s claim that a growing economy has not proportionately pulled people up out of poverty is untrue.
This argument doesn’t make sense.
Companies are making more money than ever. The wealthiest are making more money. The poor though, they’re getting more government hand outs – therefore a rising tide floats all ships…? No. Clearly, the basic argument of the EPI report remains valid. Exceptional economic growth has NOT improved the lives of the poorest. Continual government oversight and support has done a bit to help them, and that is all.
So, the evidence here seems perfectly clear. Strong economies don’t alleviate poverty. Strong governments do. The rational advice would be to tax the wealthy more, and give that money to the poor.