Poverty and Inequality the Political Economy of Redistribution Chapter 1 -introduction

In the early 1970s, the War on Poverty appeared to be near a successful conclusion. In 1960, 18.1 percent of American families were living in poverty. But by 1973, the poverty rate of American families had fallen to 8.8 percent. Over this thirteen-year period there was an equally impressive reduction in the percentage of families living near poverty. The percentage of families below 125 percent of the poverty level dropped from 25 to 12.8 percent. During the 1960s, inequality also declined significantly, at least by some measures. In 1960, the top quintile of families earned 41.3 percent of aggregate income while the bottom quintile earned 4.8 percent, for a ratio of income shares of 8.6. By 1970, this ratio had fallen to 7.57.