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The Poverty Management System Has Not Reduced 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 and Alternative Poverty Measure. 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.

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Number in Poverty and Poverty Rate 1959 to 2017

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

There is evidence, however, that the rate would have been higher without the safety net programs. Researchers compared the updated poverty measures for a five-year time period (2007-2012) with and without government safety-net programs such as benefits provided by the U.S. Department of Housing and Urban Development (HUD); the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); Temporary Assistance for Needy Families (TANF); and others. Without government programs, poverty rates would have increased 5.1%, but with those programs, poverty rates rose only 1.3%. The updated measures are more accurate and reveal how important government programs are in managing poverty rates.

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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