Who is Responsible For Poverty?

Professor Angelo J. Gonzales

University of Kansas

Personal Responsibility?

“What we have found in this country, and maybe we’re more aware of it now, is one problem that we’ve had, even in the best of times, and that is the people sleeping on the grates, the homeless, who are homeless, you might say, by choice.”

Ronald Reagan 1984Good Morning America

Personal Responsibility?

“Don’t blame Wall Street, don’t blame the big banks. If you don’t have a job and you are not rich, blame yourself!”

Herman Cain 2011Washington Post

Many people in poverty are not expected to work simply because they are too young, elderly, or somehow incapacitated.

Almost half of the poor are under 18 or over 65.

Let’s just focus on the work experience of “prime age” (25 to 54) men and women.

How Much Do The Poor Work?

In 1998, a year when unemployment was at it’s lowest in a generation (4.3 %), about

65 % of poor “prime-age” adults worked.

One in four worked full time the entire year.

Among families led by a “prime-age” adult◦70 % of household income came from job

earnings◦10 % came from public assistance◦In many of these families there was more

than one earner.

Mishel et al. 2001

How Much Do The Poor Work?

In comparing Mishel’s data from 1979 and 1998, we find that in 1998, more poor families had members who worked.

Those who worked put in longer hours for lower real wages, with the net result that they earned fewer dollars than similar families in 1979.

Mishel et al. 2001

How Much Do The Poor Work?

“Income and Poverty in the United States: 2010,” U.S. Census Bureau

1964: Johnson’s War On PovertyMain FeaturesSocial Security Act(1965)

Food Stamp Act(1964)

Economic Opportunity Act(1964)

Elementary and Secondary Education Act (1965)

*Created Medicare and Medicaid

*Improved levels of nutrition among Individuals with low-incomes

*Community Action Programs*Job Corps*VISTA*Work Study Programs*Loans to Rural Families*Employment and Investment Incentives*Neighborhood Youth Corps

*Funding to schools with a high percentage of students from low-income families*Grants to strengthen State Departments Of Education

“Income and Poverty in the United States: 2010,” U.S. Census Bureau

Beginning of Backlash Family Assistance Plan Failed Instead of Reform, major expansion…

◦ States required to provide Food Stamps. Supplemental Security Income (SSI) consolidated aid for aged, blind, and disabled

persons. The Earned Income Credit

1969: Nixon

“Income and Poverty in the United States: 2010,” U.S. Census Bureau

Huge critic of welfare The most dramatic cut in domestic spending

during the Reagan years was for low-income housing subsidies.

By the end of Reagan’s term in office federal assistance to local governments was cut 60 percent.

In 1980 federal dollars accounted for 22 percent of big city budgets.

By the end of Reagan’s second term, federal aid was only 6 percent.

1980: Reagan

Consider Child Poverty

Consider Adult Poverty

Child Allowance$300/mo child allowancetreats all kids the same no matter

how much their parents makeIt does not give more assistance to

those with higher incomesa child allowance is substantially

related with childhood poverty reductions

Child Allowance

A flat benefit like this would have cost around $265 billion in 2012.

we should get rid of the Child Tax Credit (saving $57 billion)

Thus, the net cost of the total reform would amount to somewhere a little above 1% of GDP.

What other idea out there can, for around 1 extra point of GDP, cut poverty by a quarter and child poverty by half?

Cost of Child Allowance

Gilbert, Dennis L. "The Poor, The Underclass, and Public Policy." The American Class Structure in an Age of Growing Inequality. N.p.: n.p., n.d. 215-40. Print.

Bruenig, Matt. "This One Weird Trick Actually Cuts Child Poverty in Half." Demos. N.p., 21 July 2014. Web. 22 Apr. 2015.

Mathews, Dylan. "Poverty in the 50 Years since ‘The Other America,’ in Five Charts." Washington Post. The Washington Post, 11 July 2014. Web. 22 Apr. 2015.

Sources