Miscounting Poverty Again: The War On Poverty After Fifty Years

Robert Rector Contributor
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Today the U.S. Census Bureau released its annual poverty report. The report is noteworthy because this year is the 50th anniversary of President Johnson’s launch of the War on Poverty.

But this morning, the Census Bureau reported that 14.5 percent of Americans were poor in 2013. This is essentially the same rate as in 1966, two years after the War on Poverty was announced. According to Census, the country has made no real progress against poverty for more than 40 years.

This lack of progress is remarkable. The government has spent some $22 trillion on means-tested welfare programs since the War on Poverty began (in constant 2012 dollars). Adjusted for inflation, this is three times more than the nation has spent on all military wars combined since the American Revolution.

Today the federal government runs more than 80 means-tested welfare programs providing cash, food, housing, and medical care to poor and near poor Americans. Last year, more than 100 million people, or roughly one in three Americans, received aid from at least one of these programs. In FY 2013, federal and state spending on these programs came to $943 billion or around $9,000 per recipient. (These figures do not include Social Security, Medicare, or Unemployment insurance.)

Adjusting for inflation, annual welfare spending is 16 times greater today than when the War on Poverty began. How can government spend so much while the poverty rate remains unchanged? The answer is it can’t. Census defines a family as poor if its “income” falls below certain thresholds. But in counting “income,” Census ignores some 97 percent of the $943 billion in means-tested welfare spending.

In reality, the living standards of Americans defined as poor by Census have improved substantially over time. When LBJ launched the War on Poverty, about a quarter of poor Americans lacked flush toilets and running water in the home. Today, such conditions have all but vanished. According to government surveys, over 80 percent of the poor have air conditioning, three quarters have a car, nearly two thirds have cable or satellite TV, half have a computer, and 40 percent have a wide screen HDTV.

The media often depict the poor as homeless, but less than 2 percent of the poor are. The typical poor person, as defined by Census, lives in a normal house or apartment that is in good repair and is larger than the dwelling of the average non-poor Frenchman, German or Englishman. Nearly 40 percent of the poor own their own homes, typically a three-bedroom house with one and a half baths.

On average, poor children have the same protein and nutrient intakes as upper middle-class children. According to the U.S Department of Agriculture only 4 percent of poor children are hungry at any time during a year.

Clearly, many Americans do face significant material hardship, but they remain a small fraction of the more than 40 million persons identified as poor by Census. The higher living standards among the poor are, in part, a reflection of the high level of welfare benefits given by government. Does this mean the War on Poverty was a success? Not really.

To assess the War on Poverty, we must remember Lyndon Johnson’s original goal. President Johnson did not seek to prop up the living standards of the poor by greatly expanding welfare spending. He sought to reduce the “causes,” not just the “consequences” of poverty. He claimed his war would enable the nation to make “important reductions” in future welfare spending by turning the poor from “taxeaters” into “taxpayers.”

In other words, President Johnson’s aim was not expand welfare dependence, but to make the poor prosperous and self-sufficient. By those standards, the War on Poverty has been an utter flop.

Look at the record. By ignoring the vast increase in welfare benefits, the official Census poverty rate fails to reflect real changes in living standards, but it does accurately report wages. This means the Census poverty numbers are a good record of Johnson’s original goal of promoting “self-sufficiency”: increasing the capacity of families to support themselves above poverty without welfare aid.

By that measure, the long-term record is bleak. For a decade and a half before the War on Poverty began, self-sufficiency increased dramatically. The share of Americans who lacked self-sufficiency was nearly cut in half, falling from 32.2 percent of the population in 1950 to 17.3 percent in 1965. But since 1970, there has been no improvement at all.

The halt in the progress in self-sufficiency has many causes. One is the slowdown in the wage growth of lower-skill male workers. But the welfare state itself, by discouraging work and undermining marriage, has played a harmful role as well.

When the War on Poverty began, 7 percent of American children were born outside marriage; today the number is 41 percent. The share of poor families with children headed by single parents has risen from 38 percent at the beginning of the War on Poverty to 68 percent today.

Welfare has financially sustained the rapid growth of single parent homes and penalized those low income couples who do marry. In consequence, it has dramatically undercut Americans’ capacity for self-support.

We must re-focus welfare toward President Johnson’s original goal of increasing Americans’ capacity for self-support. Non-elderly, able-bodied adults who receive cash, food or housing from the welfare system should be required to work or prepare for work as a condition of receiving aid. Welfare should encourage not weaken marriage. Anti-marriage penalties embedded in the welfare system should be reduced.

Traditional welfare with its vast system of unconditional handouts has eroded social capital, those habits of the heart that lead over time to self-sufficient prosperity. It is time for rebuilding.