Thursday, January 30, 2014

Getting Poverty Wrong

What the the GOP gets wrong about poverty:

The war in poverty isn't lost. While it is still too high, the poverty rate has fallen in the last few decades thanks to government programs.

The cost of welfare is the the $1 trillion per year that is touted by the Cato Institute.  A more honest figuru is about $212 billion per year.

Poverty isn't caused by moral decay.  Worker productivity have gone up some 80% while wages have only gone up 4%.  Workers are not reaping the full benefits of their labor.

Poverty reduction programs are not wasteful.  In six of the largest anti-poverty programs, 90 to 99% of the money actually gets into the hands of the clients.

Food stamps don't keep people on welfare.  Some 87% of the food stamp recipients who can work work and that number has been growing.

Big government doesn't keep people poor.  The programs successfully 40 million people out of poverty in 2011, 9 million of whom were children.  Nothing harms opportunity more than poverty and nothing improves it more than the lack thereof.

Anti-poverty programs are not short term solutions.  They yield long-term benefits in children's health, education, and eventual careers.

The statistic that is quoted as the official poverty rate that hasn't changed much is a bad statistic.  It doesn't reflect some sources of income.  The real poverty rate has, in fact, been declining for decades.

Income inequality is a big deal.  It's the highest it's been since 1928.

Marriage doesn't really lift people out of poverty.  The synergy of shared expenses isn't as large as is assumed in the way we take our statistics.

The number of people in poverty is much larger than the official statistic.  According to the census, 1 in 3 fall below the poverty line.

Contrary to the GOP talking point, raising the minimum wage would actually lift half of our working poor out of poverty.

Rather than kill the economy, a higher minimum wage would improve it.  It would grow by $22 billion and add 85,000 new jobs.

"Economic Freedom Zones" won't help poverty.  They just move it around.

1 comment:

OztN Miller said...

2. Cost of Welfare- I think it is honest to include Medicaid and Headstart in the cost of welfare. ($212 billion excludes these)

3. Moral Decay- Worker productivity will increase as technology and capital investment increase (even if workers don't work any harder/smarter). Wages may not be increasing as fast because humans are not as valuable as computers.

5. Food Stamps and Work- The percentage of total food stamp recipients that work has only increased by about 25% (though the total number tripled). It was about 11.7% in 2000 to 14.5% in 2011.

Note: If 87% of can-workers do work, then only 17% of food stamp recipients are able to work--which might make sense if you consider how many food stamp recipients are children.