The war on the War on Poverty

In talking about poverty and opportunity, however, candidates easily fall prey to a widespread misconception about poverty in the U.S., citing the “facts” that the number of poor Americans, at more than 45 million in 2013, is near a record high and the poverty rate, at 14.5 percent, is actually higher than it was when President Lyndon Johnson launched the War on Poverty in 1964.

Those statistics have led politicians on both sides of the aisle to say the effort has been a failure.

“Roughly two out of three American households live paycheck to paycheck. Any unexpected expense can push them into financial ruin. We have a record number of Americans on food stamps and living in poverty,” former Florida governor and soon-to-be presidential candidate Jeb Bush said in a speech on economic opportunity kicking off his nomination effort.

“For too long, we’ve attached some mythic notion to government solutions and yet, 40 years after we began the War on Poverty, poverty still abounds,” Kentucky Sen. Rand Paul wrote in a Time op-ed on the riots in Ferguson, Mo.

Bernie Sanders, the independent candidate from Vermont who has described himself as a socialist, has made a similar argument from the other direction in his young campaign, claiming that the government hasn’t done enough to cure poverty. “There is a greater perception in this country that the middle class continues to decline, that we have more people living in poverty today than we do ever in the history of the United States and our childhood [poverty] rate is the highest in the industrial world,” Sanders told U.S. News and World Report on the 50th anniversary of the War on Poverty.

But the numbers are not what they seem, which President Obama tried to clarify Tuesday.

“I think it is a mistake for us to suggest that somehow every effort we make has failed and we are powerless to address poverty. That’s just not true,” Obama said at a forum on poverty at Georgetown University. “First of all, just in absolute terms, the poverty rate when you take into account tax and transfer programs, has been reduced about 40 percent since 1967.”

Academics who have studied poverty trends tend to side with Obama: The government programs started in the 1960s may not have worked as hoped, but they have alleviated poverty in meaningful ways that are not captured by the official poverty measure.

Poverty experts agree that the official poverty measure calculated by the Census Bureau is “pretty flawed,” says Chris Wimer, a researcher at the Columbia School of Social Work who has studied the measurement of poverty.

The official poverty rate is badly outdated. It was set in the 1960s to reflect the basic level of income a family would need to feed its members, with families back then spending about one-third of their income on food. Then, the measure was simply indexed for inflation, even though food accounts for less of the typical household’s expenditures and is down to less 10 percent of average household spending. Today the poverty rate is $24,008 for a family of four.

The poverty rate only includes cash income and doesn’t count many of the antipoverty programs that have made up the War on Poverty, Wimer notes. That includes food stamps, housing benefits, free school meals and energy assistance.

Nor does it include post-tax benefits, which include some of the biggest antipoverty programs today. Those include the Earned Income Tax Credit, which subsidizes work at low-income levels, and the Child Tax Credit.

In other words, the poverty rate fails to capture the effects of most of the government programs meant to lower it.

To address that problem, the Census Bureau in recent years has calculated a supplemental poverty measure that does account for programs such as food stamps and tax credits. That poverty line, however, is not comparable over time, because it is pegged to the 33rd percentile of total spending by households on basic goods like food, clothing, shelter and utilities, making it more a measure of inequality than of material deprivation.

Wimer and a team of researchers made that measure useful for comparisons across time by estimating what the current level would have been in past years, correcting for inflation. The most recent calculation puts the cutoff for the supplemental poverty measure at $23,624 for a family of four.

What they found is that poverty fell by roughly 40 percent between 1967 and 2012.

That drop, says University of Wisconsin economist and poverty expert Robert Haveman, is attributable to the government programs implemented since then.

“The only effective way to measure the effect of policy on poverty is to talk about what the poverty rate would be if you didn’t have these policies in place and then the poverty rate if you did have these policies in place,” Haveman said, citing research like that conducted by Wimer. “And, you know, that makes a really big difference.”

Adjusting the poverty rate to take into account in-kind government benefits, tax transfers and a more accurate index of inflation, poverty was below 5 percent in 2013, Harvard social scientist Christopher Jencks estimated in April, well below the 19 percent it was in 1964.

That is a result that both conservatives and liberals might have trouble acknowledging: Conservatives, because they doubt the effectiveness of government programs, and liberals, because they are reluctant to acknowledge the scale of government intervention that has been conducted.

The fact that poverty dropped by 40 percent since the War on Poverty began won’t settle arguments about the wisdom of those programs. Republicans such as Wisconsin Rep. Paul Ryan, for instance, have pointed out that Johnson intended the programs to end poverty and allow for self-sufficiency, rather than create a permanent need for the programs.

“[W]e must distinguish between material deprivation and dependency when we talk of poverty — the former has plummeted since the 1960s War On Poverty, but the latter has skyrocketed,” emailed Nicholas Eberstadt, a scholar at the right-of center American Enterprise Institute and the author of The Poverty of “The Poverty Rate,” a book on the shortcomings of the official poverty measure.

Nevertheless, Obama will be hard pressed over the next year or more to defend the programs he favors from attacks.

“Sure, it’s frustrating when you have political leaders who say, ‘we fought the War on Poverty and poverty won,’ ” Haveman said.