Dr. Nancy Cauthen is deputy director of the National Center for Children in Poverty, the nation’s leading public policy center dedicated to promoting the health, economic security, and well-being of America’s most vulnerable children and families. NCCP is a non-partisan, public interest organization that creates knowledge to find solutions at the state and national levels. For more information, visit: www.nccp.org.
In the wake of the devastation caused by Hurricane Katrina—and the contribution of various governments to the catastrophe—we suddenly have national leaders talking about poverty. Not surprisingly, they’re simply talking past one another.
For starters, they can’t agree on the nature and depth of poverty in the United States. Using the federal government’s official poverty measure—which is about $16,000 annually for a family of three and $19,000 for a family of four—17 percent of the nation’s children are living in poor families. That’s 12 million children, and the number is increasing.
Perhaps most stunning is that 7 percent of children—5 million—live in families with incomes of less than half the poverty level. That’s a paltry sum—less than $8,000 for a family of three and $9,600 for a family of four.
These are the official statistics. But just about everyone agrees that the feds’ current measure is woefully out of date. We measure poverty by a standard set more than 40 years ago. Data collected in the 1950s indicated that families spent about one-third of their income on food. Poverty is still measured by multiplying the cost of the U.S. Department of Agriculture’s “economy food plan” by three.
Our national poverty figures obscure dramatic variation by place and race. In New Hampshire, 7 percent of children are poor, whereas in Arkansas, the figure is 25 percent. About 10 percent of white children live in poverty, while roughly 30 percent of African-American and Latino children do. Before Katrina, 38 percent of children in New Orleans were poor.
Of course these days, food comprises far less than a third of an average family’s expenses, while housing, child care, heath care, and transportation costs have grown disproportionately. What’s more, the official poverty measure doesn’t take in account government benefits, payroll and income taxes, or work-related expenses such as child care and transportation. Does a national poverty standard make sense in a country where the cost of living varies substantially not only from state to state—say, from California to Kansas—but also between cities and rural areas within states?
Most analyses—including those from the U.S. Census Bureau—suggest that taking all these factors into account would increase poverty rates. No administration has wanted to take on this burden, so we continue to measure poverty by an irrelevant metric.
But research indicates that it takes an income of anywhere between one and a half to three times the current poverty level to meet basic family needs. Using twice the poverty level as a proxy, 38 percent of the nation’s children—some 29 million—are living in families with inadequate incomes. The bottom line is that by any reasonable standard, we have a big problem.
So what can be done? First, we’re long overdue for an intelligent conversation about why the richest country in the world has the highest poverty rate among advanced democratic nations.
There simply aren’t enough jobs that pay decent wages, especially for those who lack a college degree. We spend far more money on medical care than other nations, yet we have 44 million people without health insurance. Our neglect of public education leaves many graduates unprepared for work or for college. And mounting tuition means that higher education is increasingly out of reach. Many of our preschoolers languish in child care settings that lack appropriate supervision, stimulation and nurturance, their caregivers often making poverty-level wages themselves.
These realities also make maintaining a middle-class existence more precarious. Many middle-income families are merely one crisis—a medical emergency, job loss or divorce—away from financial ruin. Fewer employers offer the kind of job stability they used to, and fewer provide employees with pensions and affordable health care.
The divide between the affluent and average working American families—let’s not forget that the majority of poor families have at least one worker—is most clear when it comes to assets. The richest 5 percent of American households control nearly 60 percent of the nation’s wealth, while the bottom 40 percent have less than a percent. What’s more, low- and middle-income families are increasingly saddled with debt. Given an inability to make ends meet, not to mention the spiraling cost of housing, millions of Americans are literally mortgaging their futures.
Only after we acknowledge this growing divide between the well-heeled haves and everybody else can we begin to have a meaningful dialogue about policy. We need to confront two major challenges.
We need a bold agenda that supports working families so that parents can once again aspire to providing their children with a better future. This means addressing stagnating wages and families’ need for workplace flexibility. It means improving public education—including integrating our schools not just across race and ethnic lines but also across income—and increasing access to higher ed. It means figuring out how to make decent housing, health care and child care affordable for all. It means rebuilding our public institutions and national infrastructure.
A clear lesson from the New Deal and Great Society is that the most successful programs—Social Security, Unemployment Insurance and Medicare—target people across income. In contrast, means-tested programs tend to be meager and stigmatizing. As the saying goes, programs for poor people are poor programs.
The second challenge is to address the needs of the most disadvantaged. Before Katrina, more than half of New Orleans residents did not own their homes; one in five households did not have a car, and eight percent had no phone service. Families trapped by this kind of deep poverty—and living in neighborhoods with high concentrations of poor people—need more than the Band-Aid© approaches that have passed for anti-poverty programs in the past.
Thousands of Americans have been prompted by Katrina to ask what kind of society we want to have. Rising inequality—and the near absence of any meaningful level of social mobility—belie America’s promise of equality, opportunity and justice for all. After 25 years of talk about “personal responsibility,” it’s time to talk also about the obligations of government to its citizens.