On the poverty rate and presidential leadership | American Institute of Enterprise
Our country’s performance on poverty reduction since the end of the Great Recession has been disappointing – and today’s good news that the poverty rate has fallen from 14.8% in 2014 to 13.5% in 2015, does not change much to the general story.
Admittedly, the official poverty measure (OPM) is one of the most misleading statistics produced by the government. Based on surveys that have proven increasingly inaccurate as respondents under-report their income, and calculated using a definition of income that does not include SNAP (formerly known as food stamps), housing allowances, or refundable tax credits, the official measure is not an accurate account of how many Americans actually live on an income below the poverty line (an annual income of $24,036 for a family of 4 with 2 children).
But while other statistics — such as the additional grounded measure calculated by researchers at Columbia University or consumption poverty rates prepared by Bruce Meyer of the University of Chicago — may be more reliable measures of hardship material resources, the OPM is helpful in one respect: it tells us how many Americans say they have not earned enough through work to raise their families above the poverty line without needing help from the government. And on this point, the nation has only recently experienced significant progress.
What is the role of presidential leadership in the fight against poverty? Let’s say a president shouldn’t be held responsible for the poverty rate in his first two years in office, because the previous president’s policies probably had a lot to do with those numbers, and let’s exclude the years when the economy was in recession, when macroeconomic forces can overwhelm poverty reduction efforts.
Under these restrictions, even after the decline from 2014 to 2015, the average poverty rate for the Obama administration was 14.5% from 2011 to 2015. Under the Bush administration, the average poverty rate from 2003 to 2007 was by 12.5%. During the 1995-2000 period under President Clinton, who encouraged the state to experiment with work requirements and then signed the Welfare Reform Act in 1996, the average poverty rate was 12, 8%.
Certainly, one force at play is that a recovery from a major financial crisis, such as the one we endured in 2008-2009, will be more tepid than that from the recessions of the early 2000s and 1990s. accuse the tax and regulatory policies of the Obama administration of imposing an additional drag on economic growth. And others say the stimulus should have been much bigger.
In my twenty years working in social services in New York and New York State, it was clear that a thriving economy was the single most important ingredient in helping low-income Americans get ahead. An improving economy with more working Americans appears to have been what led to the long-awaited and significant decline in 2015, but for various reasons we did not have a strong enough economy during the Obama years.
Besides the weak economy, there is another reason for the high poverty rates since the Great Recession. In both policy and rhetoric, the Obama administration has underemphasized the importance of poor Americans getting to work and has been too quick to focus on increasing aid. as the main way to help those who are struggling.
Take the SNAP program as an example: As part of the stimulus bill, monthly SNAP benefit amounts have been temporarily increased. Meanwhile, SNAP work requirements for able-bodied adults without dependent children have been waived until this spring in most states, and the Obama administration has resisted calls to end waivers early. In the Unemployment Insurance program, the administration chose not to pursue interesting ideas like bonuses for beneficiaries who find jobs, but instead supported a temporary increase in the unemployment insurance benefit deadline by 26 at 99 weeks. Although their flagship policy achievement, the Affordable Care Act, increased insurance coverage, it is likely, as AEI’s Jim Capretta and Joe Antos explained, that this will eventually lead to fewer hours worked. .
The political vision and rhetoric of the Obama administration is too focused on what government, society and employers need to do to help.
And the rhetoric of Secretary of Labor Tom Perez calling the wages provided by low-skilled jobs “unacceptable” and President Obama lamenting that Americans are working full time and living in poverty due to an inadequate minimum wage. , is of no use. These talking points are misleading — only 2.4% of Americans who worked full-time, full-year lived in poverty in 2015, and that statistic doesn’t include work supports like EITC and SNAP benefits. But most importantly, statements like this undermine the message that poor Americans had better work.
As a former New York City welfare commissioner who administered programs that provided millions of dollars in aid, I understand the need to help poor Americans with government assistance. Government benefits often provide an essential safety net and, when administered correctly, can encourage and support the work of poor adults.
But I have never stopped saying – and Mayor Bloomberg has never failed to say this – that an entry-level job is better than no job, and that an essential key to getting out of poverty is the personal initiative. In contrast, the political vision and rhetoric of the Obama administration focuses too much on what government, society and employers should do to help, and does not pay enough attention to how individuals can improve their own situation while working.
No wonder the official measure of poverty, which we might call a measure of American achievement, remains a full percentage point above what it was in 2007.