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This year marks the 50th anniversary of the start of the War on Poverty and Wednesday, January 8th in particular marks the 50th anniversary of LBJ’s speech in which America’s War on Poverty was declared. National media and political figures have been weighing in on whether the War on Poverty has worked, is a “Mixed Bag”, or has missed the mark. The Budget and Tax Center will be launching a blog series this month which will look in depth into the lasting effects of the War on Poverty, its successes, and the challenges that still lie ahead. We’ll also be doing some must-read myth busting as it relates to income and poverty.

What we do know is that the poverty rate has declined since the War on Poverty was declared, and it has declined even more significantly when supplements such as the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) and the Earned Income Tax Credit (EITC) are factored in. What we also know is that even as productivity of workers has increased, wages have stagnated for middle and low income families and inequality has continued to rise.

The War on Poverty and associated safety net programs, which have been a lifeline for millions of families, have done their job to the extent that we have let them. Going forward it is imperative to make adequate and real investments in the programs that we know work in lifting families out of poverty such as the EITC and SNAP, but also to tackle the broader issue of wage stagnation and inequality by ensuring, among other strategies, that we have a minimum wage that reflects the cost of living in the 21st century, and by taking a long hard look at the racial and class inequity that still plagues our nation and our state.

Poverty continues to impact 1 in 5 North Carolinians, according to 2012 Census Bureau Data released last week. The extent of poverty would be far greater without the safety net and work supports, however. This post is part of a blog series that will explain how the new poverty data demonstrates the important role public programs play and the need for continued support.

Widespread poverty and stagnant living standards have become the status quo in North Carolina, according to the Budget and Tax Center’s analysis of Census data released last week. 2012 marked yet another year of the official economic recovery whereby the gains of economic growth passed over low- and moderate-income North Carolinians. High rates of hardship are persisting because of the state’s ongoing job shortage and the rapid acceleration of low-wage work that fails to provide a pathway to the middle class.

There is some good news in the Census data, however. The poverty rate would have been much worse if public policies weren’t in place to provide a necessary safety net. Read More

According to a new report released by the conservative Cato Institute, the “welfare system provides such a high level of benefits that it acts as a disincentive for work.” This so-called hidden prosperity of the poor theory just doesn’t stand up to reality.

The report’s findings should not be seriously considered by any policymaker, or anyone else, because there are several major flaws in the analysis. The authors incorrectly assume that a “typical” family qualifies for and receives assistance from all seven of the most common safety-net programs while non-working families get none. There are two crucial blunders with this methodology.

First, the authors greatly exaggerate the public benefits that most people living in poverty actually receive. To bolster their case, the authors assume that the “typical welfare family”—which they define as a single mother with two children—receives each of the following services: Temporary Assistance for Needy Families (TANF), SNAP (formerly food stamps), WIC (a nutrition program for pregnant and postpartum women and young children), Medicaid, housing assistance, utilities assistance, and emergency food assistance. But this is simply not the case in North Carolina or anywhere else in the United States. The vast majority of poor people do not receive all the services they are eligible for, in part because there are not enough funds to allow that. Read More

Dean BakerOne of the country’s keenest economic policy observers, Dean Baker, has an excellent take down of Washington Post columnist Robert Samuelson’s latest demands that the U.S. slash social spending this morning at the Center for Economic and Policy Research website. His message: America’s obsession with near-term deficits remains utterly illogical and counterproductive: 

“First, the budget is only constrained at the moment by superstition. There is no obstacle to the government borrowing more money to meet needs and put people back to work. We are not spending more money because we have superstitious people with large amounts of power who are making claims about the dangers of deficits that they cannot support with evidence. Rather than lecturing seniors, who have a median income of $20,000, on the need for lower Social Security and Medicare benefits, Obama could try to confront the people spreading superstitions about deficits….

…In fact, according to the Social Security Trustees projections, Read More

Senior Researcher Arloc Sherman of the Center on Budget and Policy Priorities put up an extremely helpful and illuminating post yesterday afternoon on the group’s Off the Charts blog about poverty.

It shows a critical fact that is frequently misrepresented or not reported in the public debate:  While poverty has been on the rise over the last decade, non-cash public benefits like housing assistance and food stamps (SNAP) do make a significant difference in keeping it in check.  He notes that because the “official” poverty rate is based on pre-tax cash income, it ignores important non-cash benefits that, when factored in, lower the poverty rate.

This does not mean, however, as conservatives frequently try to argue, Read More