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The Poverty Management System Has Had Minimal Effect on Poverty Rates in Five Decades

Despite numerous initiatives such as the War on Poverty and various government programs at federal, state, and local levels, the poverty rate in America has not experienced significant declines since the 1960s.

The current system manages poverty rather than reducing it. It is accountable to providing random and fragmented services to address the symptoms of poverty.

President Lyndon B. Johnson introduced War on Poverty legislation in 1964, which created programs that became our modern-day social safety net. In 1963-64, a Social Security administrator named Mollie Orshansky devised a poverty rate based on a formula using the cost of a subsistence food budget. Income roughly three times the cost of that food budget was considered to put families above the poverty line. Those official poverty rates have remained an important longitudinal barometer.

However, unequal inflation rates for necessities such as healthcare and housing have caused census analysts to create updated calculations known as the Supplemental Poverty Measure (SPM) and Alternative Poverty Measure (APM). Using these more accurate calculations, researchers at Columbia University calculated new poverty rates from 1967 to 2012 and compared them to the official poverty rates. While the official poverty rate was stable at 12% to 15%, the updated measures showed that the poverty rate was 25.6% prior to 1967 and has dropped to 16% today.

Number in Poverty and Poverty Rate 1959 to 2021

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The advent of Social Security dropped the poverty rate dramatically from 25.6% to 16% today. However, there has been no significant decrease since then.

Modern Data and the Effects of COVID-19

 

Current Poverty Statistics

According to the U.S. Census Bureau, the official poverty rate in 2022 was approximately 11.4%, up from 10.5% in 2019. The Supplemental Poverty Measure (SPM), which provides a more comprehensive understanding of poverty by accounting for government assistance programs and necessary expenses, estimated the poverty rate to be around 9.1% in 2022, highlighting the critical role of social safety nets.

The Impact of COVID-19

The COVID-19 pandemic significantly affected poverty rates in the United States. Here are some key points:

  • Economic Disruption: The pandemic caused widespread job losses and economic instability. At its peak, unemployment rates soared to levels not seen since the Great Depression, with an estimated 14.7% in April 2020.

  • Government Response: The government implemented several relief measures, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided direct financial assistance to individuals and expanded unemployment benefits. These measures were instrumental in preventing a sharp increase in poverty.

  • Child Poverty: Child poverty notably declined due to enhanced child tax credits and other relief measures. According to Columbia University's Center on Poverty and Social Policy, the monthly child poverty rate fell to an estimated 12.1% in December 2021 due to these interventions.

 

Long-Term Effects

The long-term effects of the pandemic on poverty are still unfolding. Here are some projections and concerns:

  • Job Market Recovery: While the job market has shown signs of recovery, certain sectors, particularly those involving low-wage and service jobs, have been slower to bounce back, potentially prolonging poverty for affected workers.

  • Inflation: Rising inflation rates have increased the cost of living, particularly in housing and healthcare, two critical areas that disproportionately affect low-income households.

  • Housing Instability: The expiration of eviction moratoriums has raised concerns about housing instability and homelessness, which could exacerbate poverty rates.

The fight against poverty in the United States has made strides since the War on Poverty was declared in the 1960s. However, modern challenges such as unequal inflation rates, economic disruptions caused by the COVID-19 pandemic, and rising living costs continue to pose significant hurdles. Government safety-net programs remain crucial in mitigating these impacts and supporting vulnerable populations. Continued attention to accurate poverty measurements and responsive policy-making is essential for addressing and ultimately reducing poverty in the United States.​

The current poverty management system:

  • Requires social service providers to focus on documenting units of service rather than actively assisting families in escaping poverty.

  • Places heavy emphasis on regulation and audits, prioritizing compliance with eligibility criteria above all else.

  • Delivers crisis intervention, stabilization, workforce readiness, placement, and advancement programs in separate, disconnected entities rather than as part of a coordinated and comprehensive system.

  • Creates disincentives for families to make progress by imposing benefit cliff effects that force them to choose between earning more income and ensuring their families' well-being.

  • Encourages dependence by diverting individuals' time and energy towards accessing a multitude of programs for meeting their basic needs instead of pursuing gainful employment.

In summary, the current poverty management system in the US lacks accountability, fails to prioritize poverty alleviation, and perpetuates a cycle of dependence rather than empowering individuals and families to achieve self-sufficiency.

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