Terrance Heath

How to Move Foward in the War on Poverty

Filed By Terrance Heath | January 09, 2014 11:30 AM | comments

Filed in: Politics
Tags: liveable wage, minimum wage, President Johnson, unemployment, war on poverty

teach-girls-end-world-poverty.jpgFifty years ago, President Lyndon Johnson stood before Congress and declared war on poverty. His plans included broadening the food stamp program, extending minimum wage coverage, increasing education funding, and providing “hospital insurance” for older Americans. Johnson spoke of millions of Americans who lived on “the outskirts of hope,” and challenged the country to “replace their despair with opportunity.”

Contrary to conventional wisdom, American hasn’t lost the war on poverty. We stopped fighting it. It’s time to take up the challenge Johnson issued 50 years ago. We must not only renew the fight against poverty, but we must fight for jobs, livable wages, and economic growth that benefits all.

What Works

The war on poverty was successful. We have the numbers to prove it.

Critics of government anti-poverty efforts point to the current poverty rate as evidence of their failure. When Johnson stood before Congress, the national poverty rate was near 19 percent. After 50 years and trillions of dollars spent fighting the war on poverty, the national poverty rate is an unimpressive 15 percent.

Who can blame them? It’s simple. It’s also wrong. The poverty measure was established in 1963, and hasn’t changed since then. It only counts a family’s cash income before taxes, and doesn’t take into account anti-poverty programs that have lifted families out of poverty.

The Census Bureau solved this problem by introducing the Supplemental Poverty Measure, which factors in the effect of anti-poverty programs.  These Census statistics tell a different story: From 1959 to 1969, the poverty rate dropped from 22.1 percent to 13.7  percent. (According to Joseph Califano, who worked in the Johnson White House, “the portion of Americans living below the poverty line dropped from 22.2 percent to 12.6 percent, the most dramatic decline over such a brief period in this century,”— a staggering reduction, in just six years.)

Poverty dropped substantially from the start of Johnson’s anti-poverty offensive. What made the difference? The very same “centralized, bureaucratic, top-down anti-poverty programs” that Rep. Paul Ryan (R-Wis.) railed against this summer during a House Budget Committee hearing on the War on Poverty.

  • A recent University of Chicago/Notre Dame paper by Bruce D. Meyer and James X. Sullivan, which looks at low-income families’ consumption rather than income, and accounts for the impact of anti-poverty programs found that:
  • Poverty rates have declined steadily since the 1960s and 1970s, and dropped 12.5 percentage points since 1970.
  • During the 1960s and 1970s, the tax code became friendlier to low-income families. Tax cuts for low-income Americans, combined with tax cuts for parents (the child tax credit) and the working poor (the Earned Income Tax Credit), accounted for a lot of the drop in poverty. In fact, the EITC pushed after-tax poverty down in the 1990s, and in 2011 kept 6 million out of poverty — including 3 million children.

Columbia University study found that :

  • Programs like food stamps and unemployment insurance have made huge difference in reducing poverty rates since the launch of the war on poverty.
  • These safety-net programs have helped reduce the percentage of Americans living in poverty from 26 percent in 1967, to 16 percent in 2012.
  • Without these safety-net programs, more Americans would be living in poverty today – 29 percent, compared to 27 percent in 1967.
  • According to a study by the Agriculture Department, food stamps helped reduce the poverty rate by nearly 89 points during the recession.

Victories in the war on poverty show us what works. The decades that followed the war on poverty make it clear what doesn’t work.

What Doesn’t Work

“We fought a war on poverty,” Ronald Reagan famously said, “and poverty won.” America only fought a serious, well-funded war on poverty for a decade — even less, writes Michael Tomasky. In the 1970s, the war on poverty began losing steam, and money that might have funded the war on poverty was instead diverted to the war in Vietnam.

With presidency of Ronald Reagan, and rise of modern conservatism, the 1980s signaled a backlash against anti-poverty programs. The declining poverty rate plateaued, as the fates of anti-poverty programs ebbed and flowed. A new war, of sorts, began.

Ronald Reagan deployed the “welfare queen,” during his 1976 presidential campaign — an ’80s update of the Victorians’ “undeserving poor” in  blackface — as part of his mission to vilify welfare and welfare recipients, at the expense of black women living in poverty. It was the opening shot in what would become a full-fledged conservative “war on the poor.” Though mild when compared to present-day conservative rhetoric about the poor, it is echoed by every tea partier who mocks the poor and every conservative who blames the poor for their poverty.

In the 1990s, “welfare reform” presented conservatives with a model. Passed by a Republican Congress (with help from Democrats Who Should Have Known Better ™), and signed by a Democratic president, the 1996 Personal Responsibility and Work Opportunity Act marked a shift in the war on poverty. It ended welfare as an entitlement, placed a five-year limit on federal benefits, and block-granted programs to states.

Conservatives tout it as a success, but “welfare reform” was a “catastrophic success” at best. Welfare reform was only successful in getting people off the welfare rolls. Those who were kicked off the rolls either found jobs that paid too little, returned to welfare, or ended up with no income and few resources.

“Welfare reform” reduced the number of people receiving help, but did not reduce the number of people who needed government assistance. That’s the “success” on which Rep. Paul Ryan modeled his budget. It’s also the conservative model for “reforming” the programs of the war on poverty, from Medicaid to food stamps.

“Welfare reform,” in all its various forms, amounts to a surrender in the war on poverty.

Moving Forward

It’s too soon to declare victory in the war on poverty, but it’s also too soon to admit defeat. We are only halfway through this battle.

Without anti-poverty programs, nearly 24 million more Americans would be living in poverty. The poverty rate would rise to nearly 30 percent — almost double the current rate.

Antipoverty spending alone is not enough. These programs have been effective, but they have had to work even harder to address the challenges faced by the increasing number of people who are being denied the benefits of economic growth in today’s economy. Unless we address those economic realities, we’ll have to keep ratcheting up anti-poverty spending.

The war on poverty must be matched with a fight for a more equitable economy, that includes full employment, livable wages, and economic growth that benefits all.

  • Livable Wages. Low-wage jobs keep incomes low. Half of all jobs in the U.S. now pay less than $35,000 per year. Many pay much less, leaving workers unable to afford food, shelter, transportation and medical care. Raising the minimum wage could lift 5 million out of poverty, and reduce the poverty rate for adults aged 18 to 64.
  • Full Employment. Right now, there are three unemployed people competing for every job opening. Fighting for full employment must go hand-in-hand with fighting poverty. It will require major investment. But first, Democrats will to abandon complicity in prioritizing deficit reduction over job creation, and get over their fear of being labeled with “L Word.”
  • Economic Growth. Full employment will require reviving economic growth, so that everyone who wants or needs a job can find one. Ending tax policies and trade agreements that make it easier for businesses and corporations to send jobs and money overseas might be a good place to start.

That poverty is still with us doesn’t mean we’ve lost. It means we have more work to do. The conservative response to poverty is to cut assistance and let the chips fall where they may. Progressives must to fight to preserve anti-poverty programs, and to create an economy that produces good jobs, full employment and livable wages – an economy in which everyone has opportunities to participate and to prosper.


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