NC Budget and Tax Center, Poverty and Policy Matters

Poverty and its many myths

There are many wildly misleading claims about poverty in America. Unfortunately, many of these myths are taken as truth despite plenty of evidence to the contrary. And yes, self-identified think-tanks peddle these myths far too often. As we mark the 50th Anniversary of President Johnson’s launch of the War on Poverty, here are the top 5 myths that should be put to rest in 2014:

1.      The War on Poverty Failed

Many pundits often assert that poverty-reduction efforts have failed and likely point to the official poverty level to support their claims. But, when you examine a more accurate measure of poverty the evidence is clear that the War on Poverty launched during the Johnson era and those implemented thereafter—such as the Earned Income Tax Credit—have helped make substantial progress against poverty. Still, without question, much more needs to be done to help further reduce poverty and hardship and promote economic opportunity.

2.      “Welfare” Pays Better than Work

Folks insisting that it pays better to be jobless have yet to produce findings that stand up to serious scrutiny. Studies, such as the CATO report that was published last year, tend to incorrectly assume that a “typical” family qualifies for and receives assistance from all of the programs for which they potentially qualify (even those that only a small share of eligible households receive) while working families receive no benefits. Of course, the dark irony in all of this is that by propagating myths about welfare, flawed studies serve to undermine public support for important programs, such as SNAP (formerly known as food stamps) and the EITC that help large numbers of hard working, low-income families keep a roof over their head and food on the table. I expose the several truck-size flaws in CATO’s analysis here.

3.      The Poor are Not that Poor Anyway. They Have Assets, Like Microwaves

To help justify dismantling public structures and tax-shift policies, facts are distorted to argue that families living on the margins are doing just fine. Case in point, the Heritage Foundation tried to claim that people living in poverty aren’t really poor—they’re more like the middle class—because they have access to everyday necessities like a microwave, refrigerator, and air conditioner. As I wrote before, these household appliances have limited re-sale value and cannot be sold to lift a struggling family out of poverty. And, to borrow from the Center for American Progress, “a refrigerator does not a middle-class family make.” In fact, poor and low-income households face real-world difficulties affording the basics.

4.      No Extreme Poverty Exists in North Carolina

Just when we thought assertions couldn’t get much further from the truth, State Representative George Cleveland made this very uninformed claim during a legislative committee meeting in 2012. At the time, 1 in 10 children living in his home county were living in extreme poverty (also known as deep poverty)—which equated to an annual income of half the poverty line, or roughly $11,100 for a family of four. It costs about that much, on average, merely to pay rent for a modest two-bedroom apartment, let alone pay for food, utilities, childcare and healthcare.

5.      Marriage is the Key to Beating Poverty

There are serious limitations to this claim. Marriage is not poverty-proof. Case in point, there are more than 73,000 married families living in poverty in the Tar Heel State. It is true, however that the poverty rate is far lower for married households than it is for single-parent households and that—all else being equal—kids growing up in a healthy two-person household do better in school and earn more as adults on average. With that said, this claim and its implicit policy prescription is disconnected from real-world trends in the structure of American families (i.e. substantial rise in non-marital births across all classes). Pro-marriage policies, like President Bush’s Healthy Marriage Initiative, tend to be expensive and ineffective and they also raise domestic violence and stability concerns. Simply put, we just don’t have a magic wand that will change marriage trends in the United States.  In terms of bang-for-the-buck investments, we are better off investing in efforts to help both men and women succeed in the labor market, to provide greater access to family planning to reduce unplanned pregnancies, to ensure that jobs pay a living wage, and that low wage workers have access to work supports such as child care and paid sick leave. Read more on this here.

As the poverty rate remains stubbornly high in North Carolina, it is important for legislators to start reconciling the trends and facts about poverty in our state with viable and effective policy solutions.

This post is part of a blog series on poverty in North Carolina. Other posts in this series are available here, here, here, here, and here.

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