4 Poverty
Reducing poverty was a major goal of federal social programs during the reform period. Policymakers aimed to increase financial support for poor people through various initiatives like the War on Poverty. While many believe that poverty improved significantly during the 1960s due to these programs, the truth is more complicated.
Official data shows that poverty did decline from 18 percent in 1964 to 13 percent in 1968, but this trend had already started before the reforms began. The Great Society programs had limited budgets, and in the following decade, poverty rates stopped improving despite increasing financial support. By 1980, the poverty rate was back up to 13 percent, higher than in 1967. The paradox lies in the fact that even as government assistance increased through checks and beneficiaries, there was no further decline in poverty. This contradiction raises questions about why poverty remained an issue despite the growing financial aid during those years.
“Of Course Progress Stopped—The Economy Went Bad”
In the 1970s, economic growth did not reduce poverty, despite an increase in Gross National Product (GNP) that was higher than in the 1950s. The economy faced challenges like inflation, the Vietnam War, and rising energy prices, which led to the cancellation of programs aimed at reducing poverty. Although GNP growth rates were relatively high, the expected decrease in poverty did not occur. The benefits of economic growth failed to reach those living in poverty, creating a paradox in the relationship between economic improvement and poverty levels.
“Of Course Progress Stopped—Because of the Old People”
The book talks about how social policy affects working-aged people and their kids, while acknowledging that the elderly need separate discussion. It suggests that as the number of elderly people increased from 1970 to 1980, more people started relying on government help, which may explain why poverty rates stagnated. Although financial support for the elderly was working, it hid the fact that working-aged individuals were not making any progress against poverty. Their situation became worse during that time compared to the overall population.
“Progress Didn’t Really Stop—Blacks Kept Gaining”
Despite the overall drop in poverty rates, the progress for black people in America stalled during the 1970s, similar to the situation for white people. Even though government programs aimed at reducing poverty were credited for the improvements seen in the 1960s, the actual funding for these programs was low at the time. Black poverty significantly decreased between 1959 and 1969, dropping from 58% to 30%. However, this progress coincided with the civil rights movement and an economic boom, and the downward trend stopped around 1969. This situation raises questions about the effectiveness of the social welfare reforms that began in the 1970s.
“Progress Didn’t Really Stop—The Poverty Measure Is Misleading”
The official poverty statistic only considers cash income, ignoring the value of in-kind assistance like Food Stamps and Medicaid. A more accurate measure, called "net poverty," accounts for these benefits and income underreporting. In the 1950s, the difference between official and net poverty was small, but by the early 1970s, progress in reducing net poverty slowed despite increased in-kind benefits. By 1979, net poverty was nearly the same as in 1972, highlighting that more spending did not lead to further reductions in poverty.
The Most Damning Statistic: Latent Poverty
Latent poverty refers to the hidden level of poverty that exists when government assistance is not included in income calculations. In the past, programs aimed to eliminate dependence on public assistance, with a focus on helping people achieve a decent standard of living. The official poverty statistics often mask the true situation of many individuals who rely on government support to stay above the poverty line. By examining latent poverty, it becomes clear that many people are still economically dependent, even if they don’t appear poor in official measures. From the 1950s to 1965, the rate of latent poverty declined significantly, indicating that more people were able to support themselves. However, after 1968, this trend reversed, showing an increase in latent poverty. This decline in economic independence is concerning, as it affects families' quality of life and challenges the effectiveness of the American economic system.
“It Would Have Been Worse Otherwise”
During the 1970s, the fight against poverty faced challenges, including a halt in progress and even a reversal for some individuals. A significant increase in the labor force, including many women and young people, made it hard for a strong economy to provide enough jobs. Antipoverty measures, especially cash transfers, helped support those left out of the job market. The federal government expanded programs to assist the poor, such as public assistance, Social Security, and unemployment insurance, alongside in-kind support like Medicaid and Food Stamps. The eligibility rules for these programs were loosened over the years, leading to larger benefits. Expenditures on antipoverty programs grew significantly, reaching over $100 billion annually by the late 1960s and surpassing $200 billion by the mid-1970s, highlighting the scale of federal efforts to reduce poverty during this time.
Reducing poverty was a major goal of federal social programs during the reform period. Policymakers aimed to increase financial support for poor people through various initiatives like the War on Poverty. While many believe that poverty improved significantly during the 1960s due to these programs, the truth is more complicated.
Official data shows that poverty did decline from 18 percent in 1964 to 13 percent in 1968, but this trend had already started before the reforms began. The Great Society programs had limited budgets, and in the following decade, poverty rates stopped improving despite increasing financial support. By 1980, the poverty rate was back up to 13 percent, higher than in 1967. The paradox lies in the fact that even as government assistance increased through checks and beneficiaries, there was no further decline in poverty. This contradiction raises questions about why poverty remained an issue despite the growing financial aid during those years.
“Of Course Progress Stopped—The Economy Went Bad”
In the 1970s, economic growth did not reduce poverty, despite an increase in Gross National Product (GNP) that was higher than in the 1950s. The economy faced challenges like inflation, the Vietnam War, and rising energy prices, which led to the cancellation of programs aimed at reducing poverty. Although GNP growth rates were relatively high, the expected decrease in poverty did not occur. The benefits of economic growth failed to reach those living in poverty, creating a paradox in the relationship between economic improvement and poverty levels.
“Of Course Progress Stopped—Because of the Old People”
The book talks about how social policy affects working-aged people and their kids, while acknowledging that the elderly need separate discussion. It suggests that as the number of elderly people increased from 1970 to 1980, more people started relying on government help, which may explain why poverty rates stagnated. Although financial support for the elderly was working, it hid the fact that working-aged individuals were not making any progress against poverty. Their situation became worse during that time compared to the overall population.
“Progress Didn’t Really Stop—Blacks Kept Gaining”
Despite the overall drop in poverty rates, the progress for black people in America stalled during the 1970s, similar to the situation for white people. Even though government programs aimed at reducing poverty were credited for the improvements seen in the 1960s, the actual funding for these programs was low at the time. Black poverty significantly decreased between 1959 and 1969, dropping from 58% to 30%. However, this progress coincided with the civil rights movement and an economic boom, and the downward trend stopped around 1969. This situation raises questions about the effectiveness of the social welfare reforms that began in the 1970s.
“Progress Didn’t Really Stop—The Poverty Measure Is Misleading”
The official poverty statistic only considers cash income, ignoring the value of in-kind assistance like Food Stamps and Medicaid. A more accurate measure, called "net poverty," accounts for these benefits and income underreporting. In the 1950s, the difference between official and net poverty was small, but by the early 1970s, progress in reducing net poverty slowed despite increased in-kind benefits. By 1979, net poverty was nearly the same as in 1972, highlighting that more spending did not lead to further reductions in poverty.
The Most Damning Statistic: Latent Poverty
Latent poverty refers to the hidden level of poverty that exists when government assistance is not included in income calculations. In the past, programs aimed to eliminate dependence on public assistance, with a focus on helping people achieve a decent standard of living. The official poverty statistics often mask the true situation of many individuals who rely on government support to stay above the poverty line. By examining latent poverty, it becomes clear that many people are still economically dependent, even if they don’t appear poor in official measures. From the 1950s to 1965, the rate of latent poverty declined significantly, indicating that more people were able to support themselves. However, after 1968, this trend reversed, showing an increase in latent poverty. This decline in economic independence is concerning, as it affects families' quality of life and challenges the effectiveness of the American economic system.
“It Would Have Been Worse Otherwise”
During the 1970s, the fight against poverty faced challenges, including a halt in progress and even a reversal for some individuals. A significant increase in the labor force, including many women and young people, made it hard for a strong economy to provide enough jobs. Antipoverty measures, especially cash transfers, helped support those left out of the job market. The federal government expanded programs to assist the poor, such as public assistance, Social Security, and unemployment insurance, alongside in-kind support like Medicaid and Food Stamps. The eligibility rules for these programs were loosened over the years, leading to larger benefits. Expenditures on antipoverty programs grew significantly, reaching over $100 billion annually by the late 1960s and surpassing $200 billion by the mid-1970s, highlighting the scale of federal efforts to reduce poverty during this time.