Half a Century of Poverty In America

July 9th, 2012 at 4:02 pm

It’s popular in conservative circles to quip, “We fought a war on poverty and poverty won.”

Except it didn’t.  Yes, poverty rates are still way too high, especially for kids and minorities, but when we fought, we made significant progress against the enemy: economic deprivation amidst plenty.  And when we ceded the field, the enemy advanced.

These important issues will be the subject of a conference hosted by the Center on Budget and Policy Priorities along with Demos, the Georgetown Center on Poverty, Inequality and Public Policy and the American Prospect.  The goal is to examine poverty, the economic and demographic conditions that raise or lower it, and the policies designed to fight it in the United States since Michael Harrington’s 1962 path breaking book, The Other America.

It has been fifty years since Harrington’s exposé shed light on a side of America that many people didn’t know existed. A world where babies died from malnourishment, seniors faced destitution when they were no longer able to work, and millions of families lived in substandard housing– often without indoor plumbing and running water.

In 1964 President Lyndon Johnson announced an “unconditional war on poverty in America.” The reforms that followed in the coming years including the creation of Medicare and Medicaid, stronger food stamp and Aid to Families with Dependent Children (AFDC), or welfare programs, and enormous improvements in education including the creation of the Head Start program, helped to expand opportunity and reduce poverty — under the official poverty measure, which only counts cash income — by half between 1959 and 1973.

Here’s one piece of simple evidence clearly revealing that the “we lost” quip is flat out wrong.  It’s the time series of poverty rates of the elderly population (65+) from 1959 through 2010 (the Census Bureau has a data point for 1959—35.2%–and is then missing data until 1966, when the rate was 28.5%; I plugged in a linear interpolation between those years).  When we undertook to use social policy, largely through increased Social Security benefits, to bring down elderly poverty, we kicked poverty’s butt, from more than 35% in 1935 down to 15% in 1974, and settling into a 10% rate by the mid-1990s.

We can certainly have good arguments about whether even a 10% elderly poverty rate in the US should be acceptable.  But it’s a whole lot better than 35%.

Source: Census Bureau
* Data for 1960-1965 interpolated as explained in text.

Tomorrow, my colleagues at CBPP, Robert Greenstein and LaDonna Pavetti, will join panelists from across the political spectrum to discuss the efforts we have taken over the past fifty years to reduce poverty, what we need to do to further hammer away at it, and what the face of poverty looks like in the 21st Century.

And you can watch the webcast, beginning at 9AM tomorrow here!

These days, too much of what passes for poverty policy are discussions of which safety net programs to cut.  Well, fifty years after The Other America, it makes sense to step back and reflect on how far we’ve come, how effective our efforts have been, and how much further we have to go.

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4 comments in reply to "Half a Century of Poverty In America"

  1. Nhon Tran says:

    Thank you. I shall watch the proceedings.
    As I mentioned before, LBJ is my favourite US President for civil rights and war on poverty. He strengthened my views that helping the poor, the sick and the disadvantaged to do better must be the principal Democrat priority- not public sector workers’ privileges. To sustain support from the electorate for that, Democrats must ensure that these programs are well run and, equally importantly, public spending on everything else is well justified. President Obama’s health care policy (recently upheld by the Court) is a landmark contribution to health care reform and to reducing poverty.

  2. Auros Harman says:

    Worth noting: A big part of the reason we haven’t gotten even further in dealing with poverty is that we are doing a terrible job of addressing the component of persistent poverty that comes from mental illness. Yes, the institutionalization system had serious problems, but dumping all those people (and all the vets with PTSD and weak family ties who we now have from Bush’s wars) onto the streets was not a good solution. It looks cheaper in the short term, but in the long term it means more violence and property crimes, and just a generally worse environment to live in for all of us. Plus, rather than paying to house folks for a few years while working with them to improve their health, and then paying a low cost to track and support them as they become productive citizens, we often end up housing them on a permanent, very expensive basis, in our overcrowded prisons. It’s like somebody set out to pessimize both the costs and outcomes.

    • Shawn Fremstad says:

      Actually, the “poverty won” part of the conservative quip is not an unreasonble assessment. The poverty rate today is higher than it was in 1966, even though the official poverty threshold today is significantly lower in value compared to median income than in way then.

      What is wrong about the conservative quip is the idea we actually fought a “war” on poverty. LBJ made a huge strategic error when he told America that we were going to fight an “an unconditional war” on poverty, and then went on to propose what amounted to a minor skirmish in what became the Economic Opportunity Act of 1964.

      The programs you mention are all good programs that reduced economic hardship, but they likely contributed only modestly to the reduction in poverty between 1964 and 1973. Remember here that poverty fell as much between 1947 and 1964 as did in the decade following the declaration of “war.” The New Deal and other progressive economic policies that brought about the post-WWII “Great Compression” did much more than the EOA and subsequent Nixon-era policies.

      On elderly poverty, Social Security and Medicare (as well as SSI and Medicaid) have been tremendously successful, but it is worth noting here that the new Supplemental Poverty Measure suggests that elderly poverty is actually about twice as high as the FPL measure says it is, and nearly as high as the child poverty rate.

      As Hillary Hoynes and her colleagues have shown, poverty rates for the non-elderly since the mid-1960s can be explained by three economic indicators: unemployment, median wages, and growing wage dispersion between middle and low-wage workers. If we want to reduce poverty going forward, we need to get serious about the fundamental role that collective bargaining, the minimum wage and other labor market and economic institutions play in determining the poverty rate. Strenghtening these institutions needs to be at the center of any serious effort to reduce poverty rather than at the margins.

      One final thought: it would be good for progressive anti-poverty advocates to rediscover the working class and class generally, especially since the vast majority of people living below the poverty line today self-identify in class terms as either working or middle class.

  3. Josiah says:

    Did LBJ have a time machine? If not, what sense does it make to use 1959 as your baseline in evaluating the success of the War on Poverty (which didn’t start until 1965)?