Today marks the 50th anniversary of the War on Poverty, a
set of federal policies that President Johnson announced in his 1964
State of the Union Address. This anniversary provides us with the
opportunity to consider the impact and implications of safety net and social
insurance programs at a time when poverty persists and inequality is increasing.
Nonetheless, anti-poverty programs have significantly improved the lives of
millions of Americans and have had important long-term benefits.
Building on the Great
Society’s Legacy
President Johnson’s original War on Poverty was part of his
‘Great Society’ initiative and included major programs such as Medicare,
Medicaid, Head Start, federal funding for public education and college loans,
and expanded and permanent food stamp program, and expanded social security
benefits. Today, these programs are complemented by more recent policies that
share the goal of reducing poverty and providing economic opportunity for the
working poor. These programs include the Earned Income Tax Credit,
the Child Tax Credit,
and WIC, which helps improve nutrition for young children and their mothers.
In addition, many original great society programs have been
expanded. Maryland is one
of 26 states to expand Medicaid under
the Affordable Care Act, saving
money in the process, while the original food stamp program has become the Supplemental
Nutrition Assistance Program, or SNAP.
Evaluating the War on
Poverty
While anti-poverty and social insurance programs do much to
improve people’s lives, that 50
million Americans, including 13 million children lived in poverty in 2012
is evidence that there remains much work to do to foster broad prosperity.
However, we cannot simply view the persistence of poverty as evidence that government
programs to alleviate it are ineffective. Instead, we must consider how these
programs not only improve people’s lives but keep more people from falling into
poverty.
One method of doing so is the Census Bureau’s Supplemental
Poverty Measure. In contrast with the official national measure
of poverty that is used to calculate the Federal
Poverty Level and is based on narrow measures of income and expenses to
determine whether individuals and families make enough money to satisfy their
basic needs, the Supplemental Poverty Measure seeks to account for both the
full range of expenses that Americans face as well as the benefits they receive
from the government. The Supplemental Poverty Measure takes into account both
cash income as well as non-cash and tax-based benefits, such as SNAP, the
Earned Income Tax Credit, and rental assistance. The Supplemental Poverty
Measure also
seeks to more fully account for the range of expenses that individuals and
families face such as income and payroll taxes, out-of-pocket medical expenses,
and child care, as well as geographic differences in living costs.
(click to enlarge)
When measuring poverty using the Federal Poverty Level,
poverty has increased slightly from 14 percent in 1967 to 15 percent in 2012.
But a
new study by researchers at Columbia University applies the Supplemental
Poverty Measure to this time period, and finds that safety net and social
insurance programs have contributed to reducing the percentage of Americans in
poverty from 26 to 16 percent between 1967 and 2012. Further, the
authors argue that the safety net has been particularly important in keeping
children and senior citizens out of poverty, as the Supplemental Poverty Rate
fell from 29 percent to 19 percent among children, and it fell among the
elderly from 47 percent to 15 percent.
(click to enlarge)
But more than keeping individuals and families out of
poverty, these programs have important long-term effects as well. For example, a recent study by the National
Bureau of Economic Research of the nationwide expansion of nutrition assistance
in the 1960s and 70s found that poor children who had access to food stamps (and
whose mothers had access during their pregnancy) were less likely to have
stunted growth, heart disease, or be obese later in life than those without
access to nutrition assistance. Children whose families received
nutritional assistance were also more likely to graduate from high school. More
broadly, access to health insurance through public programs, especially
Medicaid, have reduced infant mortality considerably.
The Columbia Supplemental Poverty Measure study also
addresses the expansion of the safety net that occurred in the wake of the
great recession, including additional tax credits, extended unemployment
benefits and a more generous SNAP program, in keeping poverty stable during
this time. Had the safety net not been expanded to address the recession, the
study’s authors argue that poverty would
have increased by 5 or 6 percentage points. This is particularly noteworthy
as some policy makers at the national level are refusing
to extend emergency unemployment insurance and seek to further
cut SNAP assistance even after the post-recession expansions have expired.
More Work to Do
But the persistence of poverty, by any metric, is important
as well, and is indicative that despite the importance of safety net and social
insurance programs, economic
conditions have worsened for those with low incomes. The percentage of men who
are employed has
decreased from 87 percent to 74 percent since President Johnson’s began the War
on Poverty and long-term unemployment persists in
the wake of the Great Recession. The struggling labor market plays a key role
in the persistence of poverty. The poverty rate is 3 percent for those with
full time jobs, and 33 percent for those that are not working, according
to statistics provided by UC Davis. Thus, poverty persists because of the
failure of government programs intended to end it, but jobs that might help
workers escape poverty on their own are not there.
But this story is not the same for all Americans since the
start of the War on Poverty. During this time, the
share of income gained by the top 1 percent of households has doubled, from
11 percent to 22 percent. Meanwhile, the
share of income going to the bottom 20 percent has decreased. Clearly,
wealth has accumulated unevenly since President Johnson sought to end poverty,
hampering these efforts.
As Maryland's 2014 legislative session begins today, we will
be keeping track of how proposed laws can reduce inequality and
foster broad prosperity for all Marylanders. Check back
here for more on the War on Poverty and the work that remains.
