The Changing Face of Poverty in America

"Water, water everywhere, nor any drop to drink."

-- Samuel Taylor Coleridge, The Rime of the Ancient Mariner

in 1960 american workers produced a gross domestic Product of $13,847 (in year 2000 dollars) for every man, woman, and child in the country. By 1969, GDP per capita rose to $18,578. In that period, the poverty rate for American children dropped almost by half, from 26.5 percent to 13.8 percent. The most recent data, for 2005, show child poverty has risen again, to 17.1 percent, while the GDP per capita stood at $37,246, roughly double the value in 1969. How did the nation become twice as wealthy but its children become poorer?

In 2000, the number of poor Americans reached an 11-year low at 31.6 million, and the poverty rate stood at a 26-year low at 11.3 percent. While the nation again became richer after the post-2001 recovery, more than 5 million Americans fell into poverty, and the latest figures put the number of poor Americans at 36.9 million people.

To put a face on American poverty, it is important to first put that poverty in context -- to understand not just who is poor today but to examine how poverty changes over time. With that perspective, we can appreciate that in a nation as wealthy as the United States, poverty is not intractable.

"The federal government declared war on poverty, and poverty won."

-- Ronald Reagan

that line from president reagan's 1988 state of the Union address, was used to ridicule Lyndon Johnson's efforts to fight poverty. President Johnson launched that fight in March 1964, submitting the Economic Opportunity Act to Congress and saying these words: "Because it is right, because it is wise, and because, for the first time in our history, it is possible to conquer poverty &"

Johnson believed that a wealthy nation produces enough for each individual citizen to live above poverty. This was a question of political and moral will, not an economic constraint. So, he differentiated between the day's global struggle to end poverty in countries like Mali and Haiti, where there was a real economic constraint to be overcome, and the situation in America, a land that was not poor in resources but that lacked moral conviction. The Johnson legacy chart on the following page shows the path of poverty for black children, a primary beneficiary of LBJ's programs. In 1965, almost 66 percent of black children lived below the poverty line. In four short years, that share was cut to 39.6 percent, a tremendous accomplishment. By contrast, the Reagan legacy chart shows the path of poverty for black children from 1981 to 1989, the era of Reagan and George Bush Senior. In 1980, 42.1 percent of black children lived below the poverty line; and by 1988 that share had risen to 42.8 percent. Yes, poverty won.

How Policy Influences Poverty

The face of poverty in America is the result of policy choices, of political will, and of moral conviction -- or its absence. The incidence of poverty is heavily concentrated in the United States across the South and the Southwest. The legacy of slavery is part of that story. Forty percent of America's poor live in the South. Four of today's five poorest states were ones that existed in the old Confederacy. Of the onetime Confederate states, only two -- Florida and Virginia -- do not rank in the current 20 states with highest poverty levels.

Why do some people lack the income to rise above poverty? For many, the reason is that they do not work; for others, the reason is that they work but do not earn enough money. Nonworkers include the elderly, the disabled, and children, as well as the unemployed. And public policy treats different groups differently.

The Social Security old-age program insures virtually all retired workers against the risk of outliving their savings. The old-age benefit formula is tied to the rising productivity of current workers, indexing the benefits to the average national wage. The shared risk, and the insured shared prosperity, explain why the poverty rate for those over 65 has declined from more than 28 percent in 1966 (nearly double the national poverty rate of 14.7 percent) to 10.1 percent today (below the national rate of 12.6 percent). In 1974, the poverty rate for the Census category of white non-Hispanic seniors, at 12.5 percent, was double the poverty rate for working-age (18

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