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Jared Bernstein

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Half a Century of Poverty In America

Posted: 07/09/2012 4:35 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%.

2012-07-09-pov_eld.png
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.

This post originally appeared at Jared Bernstein's On The Economy blog.

 

Follow Jared Bernstein on Twitter: www.twitter.com/@econjared

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HUFFPOST SUPER USER
MassWG
02:32 PM on 07/12/2012
"In 1964 President Lyndon Johnson announced an 'unconditional war on poverty in America.' The reforms that followed in the coming years... helped to expand opportunity and reduce poverty by half between 1959 and 1973."

So he announced the war in 1964. And the real spending and enactment of these reforms began in later years. Yet we'll credit those reforms for helping reduce poverty in 1959, 1960, 1961, 1962, 1963, 1964 and 1965?

The fact is, poverty had been dropping since 1950, during the post-war boom. And that rate of decline even accelerated in the early 60s - coinciding with the Kennedy tax cuts and continued economic growth. The rate of decline only leveled off AFTER the Great Society legislation and spending really kicked in - coinciding with our transition from net EXPORTERS to net IMPORTERS and perpetual deficit-spenders.

Poverty was reduced over decades as a by-product of a healthy, productive, manufacturing-based economy that provided jobs. Poverty declines then stagnated over the following decades as a by-product of an unhealthy, financialized, globalized, consumption-based, welfare-state economy that realized phony growth by way of excessive credit expansion.

http://danieljmitchell.wordpress.com/2010/09/14/does-the-war-on-poverty-fight-destitution-or-subsidize-it/
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Gestas
Mountain Man
04:50 PM on 07/10/2012
90% of Working Americans haven't had a wage increase in the 30 years...Paid Vacations is something they can only dream about...And, pension Plans,,,as Romney would say.."That's a real Kick in the Gut"
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HUFFPOST PUNDIT
procrustes13
07:34 PM on 07/11/2012
That's the fault of right wing economics that has been forced down our throats for the last 30 years. In Montreal we're going to have hundreds of thousands in the street on 22 July to protest that thanks to a bunch of kids. They get it.
01:56 PM on 07/10/2012
Poverty does not exist in America.
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Gestas
Mountain Man
04:50 PM on 07/10/2012
But, Poor People working 2 or3 jobs is a reality...
07:20 PM on 07/10/2012
REAL poverty is all over the world.  It does not happen here unless the person chooses.
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HUFFPOST PUNDIT
procrustes13
07:36 PM on 07/11/2012
So, unless someone is near death it's not poverty. Therefore we are free to lower the standard of living of millions of people until that level is attained. Why does this remind me of the Bush torture memos and talk of how it's only torture when the activity causes people to think they're about to experience organ failure?
09:43 PM on 07/15/2012
What?
12:11 PM on 07/10/2012
Does the "Elderly Poverty Rate" take into account benefits, healthcare and entitlements from the Gov't?

I mean Medicare eligibility entitlements is worth AT LEAST $35k a year - so when we look at the big picture here - even that 10% listed as Elderly in Poverty is making $50k a year. That is not poverty.
11:34 AM on 07/10/2012
One need only hang out with the "poor" in this country to see why the war on poverty is a failure in the sense of getting people off welfare. Why are most poor people poor? Mostly dure to bad decisions on their part. Single moms with multilple children. Dropping out of high school.. Drugs and alcohol. Which of these problems were caused by a rich white guy? None. Which can be solved by continuing to dole out money to the non-productive? None.
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HUFFPOST PUNDIT
procrustes13
07:37 PM on 07/11/2012
As long as there's a deliberately-created and maintained reserve army of labour under the NAIRU doctrine there will always be people who are unemployed. If those people somehow got jobs the Fed would raise interest rates so that the unemployment rate stays above NAIRU, now estimated at 7%. NAIRU was adopted in around 1980, and it's a Milton Friedman invention.
HUFFPOST SUPER USER
Allene Stucki
11:24 AM on 07/10/2012
America's "war" efforts are on a long losing streak. We've been fighting wars on poverty, wars on drugs and war in Afghanistan for decades, and we can't even win a battle, much less a war. Might be time to admit defeat and cut our losses.
11:13 AM on 07/10/2012
The first job of any welfare program should be to get people off welfare.
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HUFFPOST PUNDIT
procrustes13
07:38 PM on 07/11/2012
But with an official reserve army of labour under the NAIRU doctrine, that's quite impossible. If we're going to have a reserve army of labour at least have the decency to keep those people alive! Whenever unemployment goes under NAIRU they cry "The economy is overheating! The economy is overheating!" and the interest rates are raised until that unemployment rate goes back over the NAIRU line.
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HUFFPOST PUNDIT
TRex86
Enjoying life in West Ohio
11:11 AM on 07/10/2012
No question Medicare and social security have reduced elder poverty from being the highest segment of poverty to the lowest. In fact, if SS checks to wealthy elderly people were redirected to the ten percent of elder poor there would be NO ELDER POVERTY. At this time it is mainly confined to those over age 85, who are overwhelmingly female. Frail, elderly females have exhausted their assets by that age and scrape by on Medicare, Medicaid and meager social security checks. When the right wingers whine about "the 47% who don't pay taxes" they're referring to the horrific reemergence of poverty. Nearly half that group who don't even make the bottom bracket (or zero out with the EITC) are elderly who don't even have to report their income. There are many ways to wipe out elder poverty. Some of my favorites include eliminating the cap on FICA, funding SS and Medicare (part A) with income taxes, and means-adjusting entitlements so that high net worth elderly pay much, much more towards their benefits (redistributing that money to boost the bottom tier of the elderly). Of course, we could also strengthen Medicare by opening it to enrollment of all ages, again with means-adjusted premiums (public option). In so doing we would broaden and strengthen Medicare such that the extremely poor would get special consideration. In fact, medicaid should be rolled into Medicare, consolidating the program and removing it from the states, where the Republican governors are in the process of dismantling it anyhow. Why shouldn't we stand behind the most noble programs of the 20th century? Oh, I forgot those old folks have been drawn into a "culture of dependency (or is it Depends)?" Shame on them for not being born a Hilton.
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Inkosi
The gods themselves rage against stupidity
11:44 AM on 07/10/2012
TRex86 - no wonder I am a fan. definitely a favorite. You are spot on. Is TRex short for Teddy Roosevelt? He is my hero. One of the last good republicans.
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HUFFPOST PUNDIT
TRex86
Enjoying life in West Ohio
12:39 PM on 07/10/2012
Thanks. Rex is my middle name, and my sometimes aggressive personality earned me the "T."
HUFFPOST SUPER USER
gateking
01:04 PM on 07/10/2012
If fantasizing about all the ways to redistribute wealth makes life enjoyable, you must enjoy life very much.
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HUFFPOST PUNDIT
TRex86
Enjoying life in West Ohio
01:51 PM on 07/10/2012
To hell with those geezers! I've got mine, Jack!
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demisfine
Often correct, NEVER right.
10:20 AM on 07/10/2012
The top 1% has felt no pain in the last two decades.
While the national treasury was depleted, their personal wealth increased.
The guys at the top have been writing the rules in their own favor for decades.
They have been insulated from and blind to the problems plaguing the middle and working classes.
Nothing will change if Republicans gain power.
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Inkosi
The gods themselves rage against stupidity
10:59 AM on 07/10/2012
It will change - it will get worse. Romney is a creature of Wall Street and the .001%. He has said he likes firing people, He has proved that at Bain (Bane) Capital. He does not care about the poor! He has stated he will repeal health care (even though some thugs kids are benefiting from it). He will privatize Social Security by handing it over to Wall Street. He will sell off/privatize/outsource every American asset - there is gold/oil in Yellowstone and the Grand Canyon has copper. The enviroment will be a toilet for big industry. But Robme and his buddies will get richer!
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demisfine
Often correct, NEVER right.
02:57 PM on 07/10/2012
We cannot allow it to become a reality.
09:58 AM on 07/10/2012
We used to have a war on poverty in this nation, now we have a war on the impoverished.
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Inkosi
The gods themselves rage against stupidity
10:17 AM on 07/10/2012
TheFriendly Atheist- already a fan - definitely faved. You have such a way with words.
09:52 AM on 07/10/2012
The poverty rate on Seniors must be down since 90% of those I see in the casinos are seniors. Apparently they have lots of disposable income now, so much so they can pi** it away.
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Inkosi
The gods themselves rage against stupidity
10:17 AM on 07/10/2012
denny8844 - My mom lived in a Senior Community - their weekly bus trip to the Casino (Atlantic City) cost $10.00 and they got $10.00 in nickels to use on the slots! Mom would go on the trip - get her $10,00 in nickels - buy lunch with it and sit on the boardwalk or just walk around with her friends. Then go home. The Casinos do this figuring that some of these Seniors will gamble after their $10.00 in nickels is gone. It also fills the Casino during the down times. It is not a money maker for the Casinos. Also, real gamblers do not want to gamble in an empty Casino so they seniors are :"window dressing". The servers hate the seniors - they don't tip!
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demisfine
Often correct, NEVER right.
10:21 AM on 07/10/2012
They are throwing coins into slot machines, not sitting at Baccarat tables.
They are hoping for a payoff to help them pay their bills.
It's desperation, not boredom.
11:05 AM on 07/10/2012
yeah yeah yeah typical Liberal victimization rationale with no relationship to reality. They do it because they enjoy it. Not out of desperation. You have a 1950s view of reality not what is really going on in this century.
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HUFFPOST SUPER USER
Blogging Patriot
Facts instead of Faux
09:45 AM on 07/10/2012
Americans living in communities of extreme poverty (annual income of $22,314 for a family of four) soared by one-third between 2000 and 2005. Compared to 2000, residents of extreme-poverty neighborhoods were more likely to be white, native-born, high school or college graduates, homeowners, and not receiving public assistance. The numbers rose twice as fast in suburbs as in cities. Poor residents in extreme-poverty tracts increased by 41% in the suburbs.

Americans then saw a record decline in wealth during the GOP Recession. The median wealth of American families dropped from $126,400 (2007) to $77,300 (2010) and the bottom 25% had their net worth drop $14,800 (2007) to $8,300 (2010), but the top 10% had a net worth of $955,600 (2007) to $952,500 (2010), a decline of less than 1%. Duke University reports that virtually all the progress made in family economic well-being since 1975 was wiped out by 2010.

Until wages are returned to the middle class there will be no sustained recovery. 70% of GDP is consumer spending. Consumers are the job creators.

More jobs were lost in the recession of 2007-09 than the previous four recessions combined. There were six million jobs outsourced under Bush and then we lost 8.5 million jobs under the recession the GOP passed to the current administration.

http://www.nytimes.com/2011/11/04/us/extreme-poverty-is-up-brookings-report-finds.html
http://www.brookings.edu/papers/2011/1103_poverty_kneebone_nadeau_berube.aspx
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demisfine
Often correct, NEVER right.
10:22 AM on 07/10/2012
Fanned.
And the republican solution would be to gut all safety net programs.
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HUFFPOST PUNDIT
procrustes13
07:39 PM on 07/11/2012
That's entirely the fault of neoliberal economics, the fault of people who don't believe in this war on poverty, who prefer instead a war on the poor.
09:24 AM on 07/10/2012
Most southern states would become even more 3rd world like if it was not FDR and Johnson. They all receive much more in federal dollars than they send in. Cut the extra Federal money out and the Teabaggers would cry like a baby.
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demisfine
Often correct, NEVER right.
10:23 AM on 07/10/2012
But they refuse to see or accept our donations toward their well being.
And THEY whine about entitlements.
Hysterical, if it weren't so sad.
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Inkosi
The gods themselves rage against stupidity
11:07 AM on 07/10/2012
When did "entitlement" or "Welfare" get to be dirty words? The Constitution promotes the General Welare! Entitled means a bonafide right to something. I work and therefore I am entitled to my pay check. I earned it, the pay check is mine by right. I am entitled to my social security insurance payment. I paid into it my entire working life and went the time comes, I have a right to it. It is not a gift! It is an INSURANCE payment that I have a right to collect. Just as these politicians are entitled to their lavish pensions, I am entitled to my social security. I have paid into medicare during my working life and I am entitled to collect on it.
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09:17 AM on 07/10/2012
The Federal Government's "War on Poverty" has been about as effective as the "War on Drugs" or any of the other real shooting wars American polliticians have committed American troops to in the period since WW 2. The fact is that 50 years after Martin Luther King's Dream the American gettos, even in the Chicago community Barack Hussein Obama organized, are still filled with poverty stricken American government entitlement dependent American blacks who, in spite of all the Democrats promises of "equality" stiil have the worst schools and health care and the highest crime rates in the nation. The "War on Drugs" has given way to Democrats legislating "decriminalization" and "legalization".and the Justice Department sells guns to Mexican Drug Lords while requiring American law enforcement officers like Brian Terry to respond with "non-lethal" force. And from Korea to Afghanistan, while thousands of brave young American's have been killed or crippled the nations "leadership" has refused to allow the American military to win a single real war.
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Inkosi
The gods themselves rage against stupidity
09:48 AM on 07/10/2012
csgae89546 - drop the war on drugs. Legalize it like alcohol and tax the crap out of it. Amen! Sadly, more and more of our veterans are falling into this category of poverty. We, as a nation, have failed them. They made the sacrifice (which is more than Romney, Newty did) and this country has not held up our side of the bargain. In addition to physical disabilities - emotional damage such as PTS is not being properly addressed. These veterans are fathers, mothers, brothers, sisters, sons and daughters. We owe them more.
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HUFFPOST SUPER USER
verita vincera
Lies only extend suffering
08:33 AM on 07/10/2012
"We fought a war on poverty and poverty won." Funny I've never heard that "quip?" Starting an article with false statements is a strange way to write?

I sort of remember that day we celebrate... Oh ya, Thanksgiving. Now that was a group that suffered from tremendous poverty.
HUFFPOST SUPER USER
HabeusPorpoise
2 wrongs are only the beginning
09:30 AM on 07/10/2012
I've heard it, but not in an overtly partisan context.
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demisfine
Often correct, NEVER right.
10:24 AM on 07/10/2012
Thanksgiving is a celebration of community - not wealth.
It was about being grateful for what you had, not a celebration of abundance.
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HUFFPOST SUPER USER
verita vincera
Lies only extend suffering
11:36 AM on 07/10/2012
Close It was actually a Time of Thanksgiving to God for a Harvest in Plymouth.  The pagan Indians joined in the celebration Honoring God for the harvest.   If the puritans crops did not produce the camp would have been lost from death.  Wealth is a relatively modern word.  In the past it meant you had  an abundance of fabrics, oils, livestock, Etc...