From Clinton, a Promising War Plan Against Poverty

While most eyes were focused on America’s New War (as CNN likes to call it), the Census Bureau last week disgorged its annual progress report on an older American conflict: the war on poverty. The results deserve a second look. In the numbers are both an extraordinary success story and clear guidance for confronting an enduring challenge--reducing want at home--that shouldn’t be forgotten even amid this new threat from abroad.

The census numbers, which tracked the trends through this spring, closed the books on the nation’s record at reducing poverty during the two terms of former President Clinton. From any angle, it was one of his era’s most extraordinary accomplishments. From 1993 through 2000, the poverty rate in America fell from 15.1% to 11.3%--a reduction of 25%.

That’s by far the biggest drop in the poverty rate during any presidential term since the 1960s (when a booming economy and Lyndon B. Johnson’s launch of the Great Society cut the poverty rate by 40%). By contrast, the economic boom under Ronald Reagan in the 1980s cut the poverty rate by just 7%. Put another way, during Reagan’s eight years, the number of Americans in poverty fell by 77,000. During Clinton’s eight years, the number of poor Americans dropped by 8.1 million. The poverty rate today is the lowest since 1974.

What makes that record even more impressive is that the groups that had been the most bitterly impoverished scored the biggest gains. From 1993 to 2000, the poverty rate among blacks and Latinos dropped significantly faster than it did for whites. For blacks and Latinos, the poverty rate is now the lowest ever recorded. The poverty rate dropped faster for female-headed households than it did for married couples. African American single mothers made even bigger gains than white single mothers. Although still high, the poverty rates for all female-headed families, and black female-headed families in particular, are by far the lowest ever recorded.

The trends are especially encouraging among children. During last year’s Democratic presidential primaries, Bill Bradley said that Clinton and then-Vice President Al Gore had slighted the problem of childhood poverty. But during the Clinton years, poverty among children fell by nearly 30%. That was also, by far, the biggest decline in any presidential term since the 1960s. Again, the contrast with the Reagan administration is revealing. During Reagan’s two terms, the number of children in poverty fell by 50,000. During Clinton’s eight years, the number of poor children plummeted by 4.1 million. Today, fewer than 1 in 6 children live in poverty, the smallest share since 1978.

Critics who say these poverty levels are still too high for such a rich society have a point. But the gains over the past eight years are undeniable. And they offer several clear guideposts for squeezing poverty further.

Guidepost one: A job really is the best social policy. Perhaps the critical reason poverty dropped so much more in the 1990s than it did in the 1980s was because unemployment was even lower under Clinton than it was under Reagan. Even when unemployment drops as low as 6% (as it did in Reagan’s second term), low-skill workers have little bargaining power. But when unemployment dropped below 5% in Clinton’s second term, more low-skilled workers were able to find work, increase their hours and in some cases even boost their wages.

That spread the benefits of the 1990s expansion more widely than the fruits of the 1980s’ growth. One measure of that trend: Census numbers also released last week showed that under Clinton, the median family income for blacks and Latinos increased much faster than it did for whites. The lesson: “For folks at the bottom to get anywhere . . . you don’t just need low unemployment, you need full employment,” says Jared Bernstein, a senior economist at the left-leaning Economic Policy Institute.

Guidepost two: Government must encourage and honor work. Through the 1990s, Washington used both carrots and sticks to move more low-income families into the workplace. The result was a steady increase in the share of working-age Americans seeking and holding jobs.

The stick was the welfare reform bill of 1996, which established time limits on aid and set the expectation that able-bodied mothers would find work. Critics predicted that those new requirements would produce a surge of poverty; instead, the declining poverty rate among children and female-headed households have shown the value of moving more families into the labor force, where they could benefit from the boom.

Just as important, government rewarded work in the 1990s. Both Clinton and former President George Bush signed increases in the minimum wage (whose value fell in the 1980s). Clinton also pushed through big increases in government aid for working poor families, centered on a major expansion of the earned-income tax credit. The result was to encourage more work by making work more attractive. How much more attractive? When those expanded government benefits are factored into family income, the poverty rate in 2000 declined by nearly another 25%, even after taxes paid are subtracted, according to Census Bureau calculations.

Guidepost three: Culture counts. Another reason poverty fell so much in the 1990s is that cultural trends improved in poor neighborhoods. Declining crime rates and the ebbing of the crack epidemic put more young men on track for a job rather than a rap sheet. The share of households headed by women (the families most prone to poverty) fell after 1993 as the teen pregnancy rate declined. “Some of [the story] is social learning,” says economist Stephen Rose.

Last month’s spike in unemployment underscores the fragility of these gains. Reviving the economy is the indispensable first step for further progress against poverty; if unemployment remains high for the next several months--as seems likely after the Sept. 11 attacks--an increase in the poverty rate next year is probably unavoidable. In the short run, the slowdown may also require flexibility in administering the work requirements for welfare recipients. But the formula that’s worked over the last eight years--both rewarding and demanding work--still offers the best long-term strategy for the war against the domestic scourge of poverty.

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Ronald Brownstein’s column appears every Monday. See current and past Brownstein columns on The Times’ Web site at: https://www.latimes.com/brownstein.