Fifty years ago, President Lyndon Johnson declared “war on poverty in America.” Poverty is winning.
At the time of Johnson’s speech, the poverty rate in New England (the federal government did not yet report this data on a state‐by‐state basis) was just under nine percent. That was about half the national average of 19 percent.
Since then, federal, state, and local governments have spent more than $16 trillion fighting poverty. In 2012 alone, the federal government spent $668 billion to fund 126 separate anti‐poverty programs. State and local governments kicked in another $284 billion, bringing total anti‐poverty spending to nearly $1 trillion.
That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.
Yet today, 15 percent of Americans still live in poverty, with 22 percent of children still stuck there too (barely a point less than 1964). In Massachusetts, the poverty rate is 13.6 percent, suggesting that it has actually increased since the War on Poverty began!
How could we have spent so much and achieved so little?
The entire concept behind how we fight poverty is wrong.
The vast majority of current programs are focused on making poverty more comfortable — giving poor people more food, better shelter, health care, etc. — rather than giving people the tools that will help them escape poverty. As a result, we have been successful in reducing the worst privations of poverty.
But our goal should not be a society where people struggle along in poverty, dependent on government for just enough to survive, but rather a society where as few as possible live in poverty, and where every American can reach his or her full potential.
It would make sense therefore to shift our anti‐poverty efforts to efforts to create the conditions and incentives that will make it easier for people to escape poverty.
What would such a policy look like? We actually have a pretty solid idea how to get out of and/or stay out of poverty: (1) finish school; (2) do not get pregnant outside marriage; and (3) get a job, any job, and stick with it.
An effective War on Poverty would reform our failed government school system to encourage competition and choice. High school dropouts are roughly three and a half times more likely to end up in poverty than those who complete at least a high school education, while few college graduates are poor for any extended period of time.
This doesn’t mean throwing more money at failing schools. Rather, it means putting the interests of children before those of the teachers unions, and giving parents more control over where and how their education dollars are spent.
We should also recognize that too many of our current welfare programs actually subsidize out‐of‐wedlock birth. In 1964, just 6.4 percent of children were born out‐of‐wedlock. Today, nearly 41 percent are.
Children growing up in a single parent family are almost five times more likely to be poor than children growing up in married‐couple families. Roughly 63 percent of all poor children reside in single‐parent families. Yet, as Charles Murray demonstrated years ago, the overwhelming body of research shows that the increased availability of welfare benefits is directly correlated with an increase in out‐of‐wedlock births. A successful War on Poverty would change these incentives.
Finally, if we want to win the War on Poverty, we need to encourage work as an alternative to welfare. Fewer than three percent of full‐time workers are poor, compared to nearly 25 percent for those without a job. Even an entry level, minimum‐wage job can be the first step on the road out of poverty.
That means removing tax and regulatory barriers to job creation. But it also means taking a hard look at the way welfare benefits can discourage work. Massachusetts currently offers the nation’s third highest package of welfare benefits. A family of three receiving the seven most common welfare benefits could receive as much in benefits as a job that paid $24 an hour.
If we really want to win the War on Poverty, we need to stop thinking that we can solve the problem by throwing more money at more government programs.
We shouldn’t judge compassion by how much we spend to help the poor, but by how few people ultimately need our help. By that standard, the War on Poverty has failed. It’s time for a change.