Right On: Have we won the War on Poverty?

Stock image, St. George News

OPINION — “Based on historical standards of material well-being and the terms of engagement, our War on Poverty is largely over and a success.”

So says the White House Council of Economic Advisors. Whether or not you believe that statement depends on your definition of poverty.

President Lyndon Johnson kicked off the war in his 1964 State of the Union speech, saying: “This administration today, here and now, declares unconditional war on poverty in America.”

What followed was the Economic Opportunity Act, Head Start, the Job Corps and a parade of other programs and program expansions over the next 50-plus years.

In 1966 the official poverty rate was 14.7 percent and has remained in the 11-15 percent range ever since. The official rate in 2017 was 12.3 percent.

So how can the CEA claim that the war on poverty is “largely over?” They argue persuasively that the official measure of poverty is vastly out of step with today’s social welfare programs.

Per the federal Census Bureau, “Poverty thresholds are the dollar income amounts used by the U.S. Census Bureau as a statistical yardstick to determine a household’s poverty status.”

The CEA counters that dollar income alone does not count in-kind benefits like food stamps, housing benefits and the like. Another shortcoming: The earned income tax credit alone forgave $65 billion in taxes to low income workers in 2017, cash in hand not counted as income. Excluding this along with in-kind benefits ignores some of the nation’s most successful antipoverty programs.

A National Bureau of Economic Research paper found that if the Census Bureau counted all in-kind assistance, the poverty rate would be 3 percent. This rate was calculated based on what low income families consume, including in-kind benefits, rather than just their cash income.

The CEA victory declaration begins with the phrase, “based on historical standards.” By this, the CEA means that the vast majority of today’s poor live as well or better than did much of the middle class in the 1960s. Color televisions with cable service, mobile phones, homes with microwave ovens and without leaking roofs and lead-based paint are today’s norm for most Americans including the poor.

So should the country declare victory?

Not so fast says a chorus of critics. Their argument is based on what might best be called “relative poverty.”

Megan McArdle, a respected libertarian columnist for the Washington Post, said, “As society progresses, one generation’s luxuries become another’s necessities, not merely because they indicate status but also because they are embedded deep in economic and social life.”

She continued, “A person without a car in 1900 was average; a person without a mobile phone in 2000, fairly standard. But without those things today, most people have a hard time staying employed or conducting anything close to a normal social life.”

The crux of her argument is that “the poor are still poor because, despite their material goods, they still lack public dignity and control over the most important facts of their lives, such as where they live and how their children are educated.”

The CEA focused on material goods, McArdle on a “normal social life.”

I take issue with McArdle. Automatically claiming that those with the lowest incomes are living in poverty makes winning the war impossible. By definition, there will always be people in the lowest income percentiles and they will always be disadvantaged in one way or another.

The fundamental question is how much government support is enough for these people. Is more always better?

Answers to this question are subjective. Heart-rending stories abound describing where this or that program left some poor soul on the outside looking in.

Likewise there is a pernicious aspect to the War on Poverty. Stories about “welfare queens” and “perpetuating the cycle of poverty” cast a dark shadow over all attempts to eradicate poverty.

In 1964 President Lyndon Johnson declared, “The War on Poverty is not a struggle simply to support people. It is an effort to allow them to develop and use their capacities.” By Johnson’s criterion, the War on Poverty has failed.

Antipoverty transfers have devastated the work ethic in far too many poor and lower-middle income families. Surveys show a steady increase over the last 50 years in the percentage of families in which no adult is working.

President Franklin Roosevelt predicted this result: “The lessons of history show conclusively that continued dependency upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber.”

We need programs that provide a hand up, not a hand out. That’s why I support Social Security Disability Insurance reform. That’s why I support work requirements for able-bodied adults who receive Medicaid and food stamp benefits.

These folks are the “walking wounded” in the War on Poverty and we need them back on the front lines of the economy and our social life.

Howard Sierer is an opinion columnist for St. George News. The opinions stated in this article are his own and may not be representative of St. George News.

Email: hsierer@stgeorgeutah.com

Twitter: @STGnews

Copyright St. George News, SaintGeorgeUtah.com LLC, 2018, all rights reserved.

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