It’s Up to Individuals to Fight the War on Poverty

The most recent debates on income distribution in the United States have degenerated into a clash among statisticians and those who use those statistics. Some experienced analysts conclude, from their inspection of the data, that the distribution of income is becoming more unequal, and especially that the upper income classes are gaining at the expense of people with lower incomes.

Simultaneously, other professionals conclude that the degree of income equality did not change significantly in the 1980s and that, when fringe benefits and income-in-kind payments are properly taken into account, the poverty problem is far less severe than it has been portrayed.

I take a “plague on both your houses” view. Whether the total tally of the poor has been rising or falling, the hard fact is that there are a great many poor people in the United States. The basic thrust of the debate should be shifted to a far more useful set of questions: How do people fall into poverty? How can they be helped to move out of poverty?

First of all, it is inaccurate for Americans to castigate themselves as a heartless society. Over the past 25 years, federal spending for income support to individuals multiplied over five times in constant dollars. Any way it is measured, the per-capita outlay of public funds to fight poverty has been expanding faster than inflation and real outlays also have grown faster than the number of poor people.

The continuing problem is that, while these expensive efforts now represent a far larger share of the nation’s resources than was devoted when Franklin D. Roosevelt and Lyndon B. Johnson sat in the Oval Office, the large outlays have not produced the promised results.

There is virtually universal agreement in the United States that those who are physically or mentally unable to support themselves should be helped by society. Such assistance should be provided in adequate amounts and with a minimum of hassle. Over the years, however, a profound broadening has occurred in the qualification for such aid. Low or no income has become the only basis necessary to qualify for the receipt of welfare. The earlier terms, “handouts” and “charity,” have been transformed into “transfer payments” and “entitlements.”

Many long-term welfare recipients are beset by deep-rooted personal and social problems not quickly cured by money. There is a powerful connection between the health of the family as an institution and the depths of the poverty problem.

A few examples will help. Nine out of 10 families on welfare are headed by women. Men living alone have twice the unemployment rates of family men. Nearly three-fourths of the children on welfare are on the rolls because neither of their parents is willing to support them. Frequently, the father has left the home or never took responsibility for the child in the first place.

Without judging the moral basis of these alternative lifestyles, it is apparent that much of the cost of such actions is not borne by the individuals making those decisions, but by the children and by society as a whole.

Focusing on a positive approach, a distinguished panel of both liberal and conservative analysts issued a report, “The New Consensus on Family and Welfare.” The panel stated, “An indispensable resource in the war against poverty is a sense of personal responsibility.” The panel also noted that climbing out of poverty is something the individual must do, albeit with some help from society.

More often than not, all it takes for a person to leave the ranks of the poor is three things: 1) completing high school, 2) getting and staying married (even if not on the first try), and 3) staying employed, even if at modest pay such as the statutory minimum wage. The three factors are closely interrelated. The high school diploma helps in getting a job. The wages received enable the person to get married and to begin raising a family. The obligation to support a family encourages the person to stick with the job or to quickly find another.

An examination of the available data is useful in destroying some widely held myths. Poverty is primarily a children’s, not a senior citizens’, problem. Three and a half million of the elderly are poor, while 13 million children are. About three-fourths of the elderly own their homes. The average family headed by someone 65 to 74 years of age holds more than twice the dollar assets than the typical family headed by a person 35 to 44 years old. The older the head of the family, the wealthier the family is likely to be--through age 74.

Also, very few men, black or white, who are heads of households are even near poverty--if they just have a high school education. In 1986, less than 5% of black males and less than 10% of black females who met these simple requirements were in poverty. Of adult black males who were high school graduates in 1986, 86% had family incomes more than twice the poverty level.

When a woman on welfare takes on a full-time job, the odds are overwhelming that she is lifting herself out of poverty. Few women working steadily earn only the minimum wage. The median annual earnings of full-time female workers without a high school diploma are higher than the minimum wage. Raising a child is often cited as a reason for unmarried women staying on welfare. The fact is that most mothers are now working, including a slight majority of those with children under six.

There is much that government can and should do to reduce poverty. That includes conducting a sensible macroeconomic policy that yields a growing economy, which in turn generates a rising supply of jobs. Strengthening the educational system--perhaps by opening up more competition--would surely help. And continuing to provide large sums of money to alleviate distress will be necessary for the foreseeable future.

Nevertheless, the most important actions generating poverty are personal--producing children out of wedlock, getting divorced, dropping out of school and waiting for the dream job to come along before starting to work.

All in all, however, the message that arises from any detailed examination of poverty in the United States is upbeat. The solution is within reach of most people. Marriage and family prevent poverty. Schooling prevents poverty. Working at almost any job prevents poverty. Individual actions--rather than more generous government expenditures--are required to escape the poverty trap.