Pew Research has released a new report that highlights post-recession statistics on multi-generational living, as a means of getting by in an economy that has been slow to recover. Pew Research notes in the report, “the declining employment and wages of less-educated young adults may be undercutting their capacity to live independently of their parents. Unemployed adults are much more likely to live in multi-generational households than adults with jobs are.”
As American’s continue to struggle financially in the post-recession economy, here’s a look at Sixty Years of Poverty in the United States:
In the past fifty to sixty years, poverty in America has been a political issue that is tossed about quite a bit during the Presidential and Congressional elections, yet, we see very little progress with each new president and Congress, towards effective ways to combat poverty. In fact, since the late 1960’s there has been only one time period that we saw a decrease in poverty, in the late 1990’s. Particularly troubling is the idea that child poverty has been on the rise in the United States, even as overall poverty rates fluctuate. The current lingering recession, which includes long-term high unemployment rates, sluggish wages, income inequality, high debt and multiple cuts to federal anti-poverty programs, make the issue of poverty in America today more disturbing as we again see new cuts to long standing programs designed to aid the poor.
Following the Great Depression and President Franklin Roosevelt’s New Deal, poverty had eased some in the United States but by the late 1950’s; the poverty rate had reached 22.4%. Statistics show that in the mid to late 1960’s poverty dropped by more than half. President Johnson’s War on Poverty begun in the mid 1960’s had made significant strides in reducing poverty by the late 1960’s – early 1970’s, achieving a low poverty rate of 11.1%. The poverty decline in the 1960’s was in part due to a 35% increase in per capita Gross Domestic Product (GDP). Subsequent GDP growth was not strong enough again to lift poverty until the late 1990’s.
Since the 1960’s, poverty levels have never come close to reaching their low of 1969. In fact, by 1983, the poverty rate had risen to 15.2% and it remained between 12.8% to 15.1% for the next decade. In the late 1990’s with low unemployment, good wages and economic stability under President Clinton poverty levels declined to 11.3% by the year 2000, which included the “deepest decline in child poverty since the ‘60s.” Poverty rates for the elderly have decreased since the 1960’s, but as statistics show that single women and children are still seen with high poverty rates:
Data released in September 2011 by the Census Bureau indicate that 16.4 million children in the United States, 22.0 percent of all children, lived in poverty in 2010. More than six million of these children were under six years old. Of the 16.4 million poor children, nearly half, 7.4 million, lived in extreme poverty, which is defined as an annual income of less than half the official poverty line (i.e., $11,157 for a family of four).
There are two modes for measuring poverty levels in America. The United States measures the official poverty rate based on poverty thresholds issued yearly by the U.S. Census Bureau. Although the thresholds are updated each year for inflation, the method of setting the threshold has not changed since it was instituted in mid-1960. Mollie Orshansky, a Social Security Administration employee, developed the procedure used for establishing poverty thresholds in the 1960’s.
The U.S. Department of Health and Human Services (DHHS) issues poverty guidelines yearly, in the winter. The complex guidelines are for administrative use, used to determine financial eligibility in various federal programs including Head Start, Low Income Home Energy Assistance, SNAP, National School Lunch and Job Corps. The poverty guidelines are adjusted according to family size and geographic data. The larger “means-tested programs that do not use the poverty guidelines in determining eligibility include Temporary Assistance for Needy Families (TANF), Supplemental Security Income, the Earned Income Tax Credit, and the Social Services Block Grant.”
There are many contributing socioeconomic factors to poverty, which include high unemployment, low wages, family makeup, education, geography, age and ethnicity. Long term, high unemployment rates are always a catalyst for poverty. The longer a person remains unemployed, the higher the probability that they will fall into the poverty level. When wages on the low wage end of the spectrum remain stagnant or worse fall, it makes it challenging to reduce poverty. Research shows that “tight labor markets accompanied by rising wages are required to effectively fight poverty.”
When we look at the types of families that fall into the poverty level, single mother families have on average lower incomes and there has been a 28% increase in single mother families since 1970. It is difficult to fight poverty when more and more families fall into the probable categories of poverty level factors. The contributing factors that have increased single mother homes include lower marriage rates, more women having children on their own and divorce.
Education is another contributing factor to poverty levels. Research has shown for some time that the more education a person receives, the higher the wages earned. High school dropouts tend to fall into the lowest wage category, followed by high school graduates and then college graduates. Politicians, policy makers, and scholars all tend to argue that individuals have choices in their role in their own poverty that many fail to apply or follow through on, like finishing high school and attending college. There can also be contributing social and economic factors that hinder some from receiving higher education.
People who live in some rural areas of the country suffer from a form of geographic poverty caused by a lack of sufficient employment in their area. Geographic poverty can also inhibit people who live in impoverished areas from continuing education. Like various geographic regions, “the landscape of poverty is a result of many forces acting independently and in interaction with other social and structural forces to produce a set of opportunities and constraints.”
Poverty rates vary between ethnic and racial groups, with rates highest for African Americans and Hispanics. The National Poverty Center reports that in “2010, 27.4 percent of blacks and 26.6 percent of Hispanics were poor, compared to 9.9 percent of non-Hispanic whites and 12.1 percent of Asians.” Looking at poverty rates among subgroups gives a stark view:
Poverty rates are highest for families headed by single women, particularly if they are black or Hispanic. In 2010, 31.6 percent of households headed by single women were poor, while 15.8 percent of households headed by single men and 6.2 percent of married-couple households lived in poverty.
Native-born residents tend to have lower poverty rates than foreign-born residents, with non-citizen foreign residents at the rate of 26.7%.
In 1964, President Johnson’s Economic Opportunity Act (EOA) supplied for job training, adult education, and small businesses loans to strike down the sources of poverty and unemployment. Other programs included: VISTA (Volunteers In Service To America); the Job Corps; Head Start; Family Planning Clinics; Community Health Centers; Economic Development Centers; Legal Aid Services; Summer Youth Programs and Senior Centers. In conjunction with the EAO, Community Action Agencies (CAA’s) were established at the local level to put into action the various programs instituted by the EOA of 1964.
Johnson’s War on Poverty included other important legislation passed after the EOA was passed in 1964. Some of this legislation includes: the Civil Rights Act of 1964, the Revenue Act of 1964 (11 billion dollar tax cut), the Elementary and Secondary Education Act of 1965, Social Security Amendments creating Medicare and Medicaid in 1965, creation of the Department of Housing and Urban Development (HUD) in 1965, the Voting Rights Act of 1965, and the Fair Housing Act of 1968.
Although President Nixon did not support Johnson’s War on Poverty, he bowed to public pressure and maintained Johnson’s programs. Nixon also expanded programs including liberalizing the Food Stamp program, indexing Social Security for inflation, and passing the Supplemental Security Income (SSI) program for disabled Americans. Nixon also “replaced OEO with Community Services Administration” in order to “to shift control of social welfare programs to be facilitated through federal bureaucracies.” President Reagan “replaced the Community Services Administration with the Community Services Block Grant.” The Reagan Administration also “redesigned job training, cut back on the Food Stamp Program,” in a move that many viewed as a “counter-productive effect on the War on Poverty.”
Isabell V. Sawhill and Ron Haskins, Senior Fellows at the Brookings Center on Children and Families, cite the mid-1990’s welfare reform as public policy that helped people at the poverty level “improve their choices and reward them for doing so.” The 1996 Welfare Reform Act received bipartisan support in Congress and was signed into law by President Bill Clinton. Perhaps the best-known anti-poverty legislation under the Clinton Administration, the work requirements of the Welfare Reform Act created a decrease in welfare rolls by 60% and single mother poverty fell by 30%.
The economy took a hard turn under the George W. Bush presidency. America began to witness the dismantling of programs created to help the poor. Bush’s tax cuts for the rich and two concurrent wars in Afghanistan and Iraq, decreased federal funds available for federal expenditures referred to as “entitlements.” As cuts were made to programs designed to help the poor, we began to see an increase in the number of people living below the poverty level. By less than four years into Bush’s first term, we saw poverty rise, health care coverage decline and the advent of the largest federal deficit in history. The Bush Administration’s record on poverty is quite dismal. Contrast to the year 2000, when President Clinton left office, the U.S. Census counted nearly “31.6 million Americans living in poverty.”
When Bush left office in 2008, the number of poor Americans had jumped to 39.8 million (the largest number in absolute terms since 1960.) Under Bush, the number of people in poverty increased by over 8.2 million, or 26.1 per cent. Over two-thirds of that increase occurred before the economic collapse of 2008.
Following George W. Bush’s 8 years in office, President Obama’s administration has had success in passing a cumbersome health care act, The Affordable Care Act, which will no doubt help many living at poverty level. However, little else has been done to ease the plight of the poor, as Republicans in Congress practice the art of obstructionism rather than the art of legislation. Jobs bills and other legislation that would help the economy and the poor have either been blocked in Congress or stalled. The recent government shutdown over the federal budget also saw concessions by Democrats to cut federal programs for the poor, like the SNAP program.
The most recent poverty rate figures released for the United States were in 2012. Those rates show that the poverty rate and median household income were not different statistically from 2011. Census Bureau data shows that the “median household income in the United States in 2012 was $51,017, not statistically different in real terms from the 2011 median of $51,100,” and this stabilization follows “two consecutive annual declines.” Likewise, for the second year in a row, the “official poverty rate in 2012 was 15.0 percent, which represents 46.5 million people living at or below the poverty line.”
Until we see an uptick in jobs and an increase in wages and cooperation between Congress and the president, research shows that a substantial decrease in poverty is not on the horizon. An increase in taxes paid by the richest sector in America would go a long way to decrease the federal deficit and provide funding for desperately needed “entitlement” programs that are eschewed by Republicans in Congress. To decrease poverty in America, Congress and Americans need to work together in the common goal of providing living wages, affordable housing and health care for all.
- Brownstein, Ronald. “Closing The Book On The Bush Legacy.” The Atlantic 11 September 2009.
- “Entitlements.” Article. 29
- “History.” Article on History of Community Action. 29
- Holt, James B, PhD, MPA. “The Topography of Poverty in the United States: A Spatial Analysis Using County-Level Data From the Community Health Status Indicators Project.” 15 September 2007. Article. 28
- “How many children are poor?” Article. 29
- “Income, Poverty and Health Insurance Coverage in the United States: 2012.” 17 September 2013.
- “Poverty in the United States.“
- Sawhill, Isabel V. and Ron Haskins. “Ending Poverty in America: Using Carrots and Sticks.” 7 May 2007. Article. 25
- “What are poverty thresholds and poverty guidelines?” Article . 25