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Growing inequality has helped sever the link between the economy’s overall growth and how that growth helped reduce poverty.  If the relationship between overall GDP growth and poverty that prevailed between 1959 and 1973 had continued, the poverty rate would have been driven to zero by the late 1980s.  But as this chart shows, economic growth was not shared broadly after 1973, and gains in the fight against poverty changed course and became losses.

Even in the best of times, the poverty rate for African Americans and Hispanics is always at least twice as high as that of non-Hispanic whites. However, the full-employment period between 1996 and 2000 reduced poverty to the greatest degree among groups that historically needed this relief the most.  This chart testifies to the ability of a strong economy to reach people across the entire economic distribution, underscoring the fact that poverty in the United States reacts to and can be improved by a strong job market.

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