Poverty, Inequality and Mobility in a Free Society: Can We Do Better?

There has been a lot of public attention given to these topics recently.  Our stagnant economy since the end of the recession almost five years ago has meant high levels of unemployment and underemployment which naturally causes widespread discontent.  The 50th anniversary of President Johnson declaring War on Poverty provides an opportunity to look back and evaluate its success.
A very good summary of where we stand on poverty was given two years ago by Robert Rector and Rachel Sheffield of the Heritage Foundation: “Understanding Poverty in the United States: Surprising Facts about America’s Poor”.  The authors used 2010 census data for their study.  Poverty was defined to be a cash income of $22,314 or less for a family of four in 2010 (which increased to $23,550 in 2013).  They pointed out, for example, that “96% of poor parents stated that their children were never hungry at any time during the year because they could not afford food.”  The chart below shows that poor households, in general, have many of the common amenities.
CaptureIn other words, the close to $1 trillion spent per year ($871 billion in 2010) by federal and state governments on means tested assistance for the poor has largely eliminated destitute poverty in the U.S.  Further progress will require successfully addressing both the collapse of marriage and the lack of parental work in low-income communities.  These very difficult problems can only be addressed with a long term educational effort to turn poor children into productive citizens.
Conclusion:  the War on Poverty has had reasonable success at huge cost and further gains will be more expensive and more drawn out over time.  We’ve already started on this second phase by emphasizing early childhood education and so the focus now should be to implement this new direction.
Next step: it’s now time to direct our serious attention to the issues of inequality and mobility.  That will be the subject of my next post!

2 thoughts on “Poverty, Inequality and Mobility in a Free Society: Can We Do Better?

  1. Robert rector likes to cherry pick his data and many conservatives as correlation doesn’t equal causation.The US has a weaker social safety net than many european countries and robert rector only lists electronics and not things like cost of utilites,health care,transportation,etc. Robert rector also cherry picks his data by omitting high marriage/low out of wedlock birth states such as west virginia,arkansas,idaho,kansas,etc that also have lower social spending. Rector doesn’t list monthly expenses.
    I find it amusing that the heritage foundation advocates for higher spending on defense on the taxpayer dole without considering advances in electronics. In the 1980s folks would spend $5,000 on a cell phone, in the 1990s with PCs it would be considered okay to spend $1500 on a computer, nowadays a $200 cell phone is sort of high end, and pc/laptops can be had for $500 or less that are are not “low-end”. Yet heritage and conservatives groups will decry how we don’t spend as much as defense.

    In Europe the muslim population is poorer but has higher marriage rates,lower out of wedlock births than the non-muslims. The heritage foundation likes to dismiss the poor which is why romney lost in 2012 and trump didn’t. I do agree that means test welfare can have a bad effect, take section 8, if an employer asks an employee to work higher pay on nights&weekends and he/she will lose/pay more in rent and healthcare obamacare,then it doesn’t serve society at large and creates a disincentive to work, in fact even if the employer offered less hours/higher pay the person will suffer loss of means-tested welfare. However heritage will cherry pick the data and claim that most poor americans get housing assistance (while only 4% do) and that the working poor using government healthcare and food assistance should be cut. Hence heritage will lump the working poor families or folks with roomates vs. the lucky few million on section 8 or whoever has public housing with its long often closed wait-lists and funding cuts.

    If folks want to have a fairer debate, I’m for it, but not cherry picking data by conservatives and liberals (liberals will claim your family doctor with student debt/overhead is a bad 1% while billionaires like buffet/gates don’t have a problem with 70% tax rates).

    • Thanks for your input about how Robert Rector cherry picks data to strengthen his case. However I think that my argument still stands that destitute poverty in the U.S. has largely been eliminated. Further progress on improving the lives of the poor will require better educational and work opportunities. This is where our focus should be in the future.

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