Public neglect, official inaction fuel rise of US poverty

Proportionately more Americans are poor. The income of middle-class households has slipped a little. Income inequality has worsened a bit.

Those are the highlights of Census Bureau reports last week on poverty and income in the United States in 2001.

Poverty usually increases when the economy weakens and unemployment rises. But boom or slump, the US has a higher poverty level by most measures than any other industrialized nation. To many poverty experts, Americans don't seem to care enough to end this embarrassment.

"It's real simple: We choose not to," says Timothy Smeeding, an economist at Syracuse University's Maxwell School. "It's not a priority."

President Bush proposed a tax cut that benefits primarily the well off. Congress approved it with some Democratic help.

As to a hike in the minimum wage that might lift some families out of poverty or at least make them less poor, it's been frozen in Congress for years, though Sen. Edward Kennedy (D) of Massachusetts hopes to attach a minimum-wage boost to a pension reform bill before Congress adjourns for the November elections.

In contrast, Britain's Prime Minister Tony Blair has tackled his country's high level of child poverty head on.

"A very ambitious program," says Jane Waldfogel, an economist at Columbia University, New York. It's estimated that 1 million British children have already been lifted out of poverty.

Starting in 1998, the British government offered universal childcare for 4-year-olds. Next year, 3-year-olds will be eligible under the plan.

Mr. Blair's Labour government has introduced a national minimum wage at a relatively higher level than in the US.

Britain's "Sure Start" program, helps provide children up to 3 years old with home visits, family support, and health services. It covers proportionately more children than early Head Start in the US. Adolescents in poor families get money to stay in school.

Britain's equivalent of the Earned Income Tax Credit (EITC) is more generous than the US program. It provides poorly paid workers with extra income. To a degree, it offsets the free market's tendency to pay those at the bottom less than needed to raise a family properly.

In the US, the poverty rate for children in the 1990s was worse than in 19 other rich countries, according to a study by Sheldon Danziger, an economist at the University of Michigan, Ann Arbor.

Referring to Mr. Bush's campaign slogan, he titled the study, "No Child Left Behind?" – with a question mark.

It shows that 22.3 percent of children in 1997 lived in families with incomes less than half the median. The median is the level where half of households have more income, half have less income.

By this measure, Italy had 20.2 percent, Britain 19.8 percent (perhaps less today), Sweden 2.6 percent, Germany 10.6 percent. The overall average was 10.8 percent.

Asked why the US devotes relatively less effort to reducing child poverty, Mr. Danziger notes the popular view that poor people are poor because they don't study hard enough at school or don't work hard enough at work. They accept less the idea that institutional factors, such as inadequate schools, also are important. Or that government can offset to a degree the disadvantage of inept parents.

"Americans have a relative distrust of government," he adds.

A political factor may be that poor Americans are also poor voters. Politicians have less to fear from their voting power.

"They don't have the money to buy influence either," says Mr. Smeeding, thinking of campaign contributions.

During the l990s, shrinking unemployment did reduce poverty. The percentage of households that were poor fell from 15.1 percent in 1993 to 11.3 in 2000 and back up to 11.7 percent last year. The experts figure poverty is growing again this year.

"The best way to lower poverty is to run a full-employment economy," says Jared Bernstein, an economist at the Economic Policy Institute in Washington. "You need a tight labor market to deliver the fruits of the economy to the lower 20 percent."

Beyond this, government programs could lift more working Americans out of poverty. Mr. Bernstein estimates that a boost in the national minimum wage from its present $5.15 an hour to the proposed $6.65 an hour could trim two-tenths to three-tenths of a percentage point off the poverty level.

If all eligible families with children participated fully in key federal safety net programs, 3.8 million people could escape poverty, an analysis by the Urban Institute in Washington, finds. This 20 percent reduction in poverty is a rationale for improving access to such programs as food stamps, Supplemental Security Income, welfare, and the EITC.

For comparison, the number of poor Americans rose 1.3 million to 32.9 million last year.

The number of households on welfare has been cut to about 2 million – an extremely low level. But many of the often single mothers pushed or encouraged into work still can't adequately feed, clothe, or otherwise provide for their children.

An extra $30 billion invested in reducing poverty would help a lot, Smeeding says. "Can't we be a little more creative?"