Monthly Archives: January 2014

Spinning Upward Mobility

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Today (January 23, 2014), the New York Times had an article with the headline: “Upward Mobility Has Not Declined.” Reading just the headline, you might wonder what all the fuss is about. The lead paragraph states:
“The odds of moving up — or down — the income ladder in the United States have not changed appreciably in the last 20 years, according to a large new academic study that contradicts politicians in both parties who have claimed that income mobility is falling.”

But is the headline accurate? Not really. The author of the study, it appears, made the case that “Despite less discrimination of various kinds and a larger safety net than in previous decades, the odds of escaping the station of one’s birth are no higher today than they were decades ago.”

So, while mobility rates have not declined, they have not increased either. The more accurate summary would be that upward mobility has not changed in the past 2 decades. Continue reading »

PEW Poll on Income Inequality

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PEW released a report on its polling data about income inequality. To see their report: Click Here
They state:
pew income inequality poll 2014“There is broad public agreement that economic inequality has grown over the past decade. But as President Obama prepares for Tuesday’s State of the Union, where he is expected to unveil proposals for dealing with inequality and poverty, there are wide partisan differences over how much the government should – and can – do to address these issues.”

“Partisans Agree Inequality Has Grown, But Differ Sharply over Gov’t Action: The new national survey by the Pew Research Center and USA TODAY, conducted Jan. 15-19 among 1,504 adults, finds that 65% believe the gap between the rich and everyone else has increased in the last 10 years. This view is shared by majorities across nearly all groups in the public, including 68% of Democrats and 61% of Republicans.” Continue reading »

Have the Anti-Poverty Programs Failed?

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The growing consensus is that the war on poverty has not failed once you use more appropriate measures, according to John Cassidy in the New Yorker. To see the article: Click Here.

He shows a chart using the official poverty measure. The official poverty measure was created in 1963 based on a multiple of a thrifty meal plan.  It has long been regarded as an inaccurate measure in terms of actually measuring what people need to meet basic costs of living (technical term: it lacks content validity). However, it has the benefit of being reliable because it is the same measure merely adjusted for inflation, so it is an apples-to-apples comparison.

Poverty different measures Cassidy

 

Other measures have been proposed, and he shows how the data looks using a revised measure created by the Census Bureau and used by researchers to do a more accurate analysis. Cassidy writes about the solid red line: “It represents the Columbia researchers’ estimate of historical poverty rates according to a new and more comprehensive measure of need that the Census Bureau created in 2011, known as the supplemental poverty measure (S.P.M.). According to this revised metric, the poverty rate in 1967 was as high as twenty-six per cent. It has since fallen dramatically, to sixteen per cent in 2012; in the period immediately before the Great Recession, it fell below fifteen per cent.” Continue reading »

Assessing the War on Poverty

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erase povertyNicholas Kristof wrote an OpEd piece in the NY Times (january 8, 2104) looking at the efforts by the federal government to end poverty.  Find is article:Click Here

He notes:

“A Columbia University study suggests that without government benefits, the poverty rate would have soared to 31 percent in 2012. Indeed, an average of 27 million people were lifted annually out of poverty by social programs between 1968 and 2012, according to the White House Council of Economic Advisers.

The best example of how government antipoverty programs can succeed involves the elderly. In 1960, about 35 percent of older Americans were poor. In 2012, 9 percent were. That’s because senior citizens vote, so politicians listened to them and buttressed programs like Social Security and Medicare.

In contrast, children are voiceless, so they are the age group most likely to be poor today. That’s a practical and moral failure.”

He points to a new book:  “Legacies of the War on Poverty,”

He concludes:

“Critics are right that antipoverty work is difficult and that dependency can be a problem. But the premise of so much of today’s opposition to food stamps and other benefits — that government assistance inevitably fails — is just wrong. And child poverty is as unconscionable in a rich nation today as it was half a century ago.”

Continue reading »

The War on Poverty: 50 Year View

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The Center  on Budget and Policy Priorities has prepared a report that looks at the war on poverty advocated by President Lyndon Johnson and passed by the U.S. Congress 50 years ago. Other programs have been added over time, but it has been tough going. Over 20 percent of all children in America live in poverty.
cbpp poverty rate 2014

 

 

 

 

 

 

 

 

 

 

 

The debate continues–not only about whether the war on poverty has worked but how to measure poverty. The CBPP provides an overview of the issues along with its perspective that the programs have worked to reduce poverty but there is still way too much poverty and that it has impacted some groups more than others. To read more Click Here

The New York Times has also published an interactive map of poverty in America. Clearly, some areas have much higher rates of poverty–well over 30 percent. To check it out:Click Here

Of course, some of the programs provide supports and services to lessen the impact of poverty, such as Head Start and Medicaid. Neither of those programs reduce poverty, although certainly there is great hope that Head Start will provide children with early skills that will enable them to be successful in school and go on to college. Medicaid provides health care so poor children have access to services that their families can not afford.  Measuring the impact is certainly challenging, but only the most hardened Scrooges among us would be unwilling to grant that without these programs, far more people would live in poverty and would suffer far more deleterious effects if no safety net was in place.

Changing the Minimum Wage

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Center on Budget and Policy Priorities posted a story on movement in the Senate to change the minimum wage. When the minimum wage is standardized to 2013 dollars, it is clear that the minimum wage has not kept pace with inflation. The dollar is worth less.Minimum Wage over time
They write:
“The Senate is soon expected to consider a proposal to raise the minimum wage from $7.25 to $10.10 in three annual increments and then index it to inflation. The proposal — the Fair Minimum Wage Act of 2013 (FMWA), introduced by Senator Tom Harkin (D-IA) — also would raise the subminimum wage paid to those who also receive tips, which has been frozen at $2.13 for over two decades. The FMWA would provide low-wage workers with a much-needed boost to their paychecks: today’s minimum wage is 22 percent below its late 1960s peak, after adjusting for inflation. It also would help offset some of the unfavorable trends facing low-wage workers, including stagnant or falling real wages, too little upward mobility, and a deep deficit of bargaining power that leaves them solidly on the “have-not” side of the inequality divide.”

Read the article: Click Here