The University Record, June 17, 2002

Policies to reduce poverty explored in newly released book

By Dana Fair
News and Information Services

“Understanding Poverty,” a new book by leading researchers on the subject, provides an expert analysis of poverty in the United States at the end of the 1990s when, despite a period of unprecedented growth and prosperity, poverty levels were higher than in the 1970s and higher than that of many industrialized countries.

The book–edited by Sheldon Danziger, U-M professor of social work and public policy, and Robert Haveman, economics and public affairs professor at the University of Wisconsin at Madison–looks back over four decades since President Lyndon B. Johnson declared the War on Poverty. The authors noted that since the late 1960s:

  • Income has grown markedly, but due to economic changes such as loss of manufacturing jobs, globalization and the move of jobs from city to suburb, it is more difficult for the poor to earn their way out of poverty. Between the mid–1970s and the mid–1990s, the inflation adjusted hourly wage for a man with a high school diploma fell by about 35 percent.

  • The trend toward people living alone or in arrangements other than a two-parent family with children has become more common, especially one-parent families headed by mothers.

  • Government programs of the 1960s and early 1970s that emphasized cash assistance, such as increased Social Security retirement benefits, decreased poverty levels. In more recent years, however, cash assistance benefits have eroded, to be replaced by in-kind benefits, such as Food Stamps and Medicaid. While the latter may improve quality of life, the policy shift to in-kind benefits has kept the official poverty rate high.

    The book’s contributors offer a variety of policy recommendations based on their different analyses of the factors producing poverty:

  • Economic growth alone is not sufficient to reduce poverty substantially. Reductions in income inequality, a reversal in family trends, improvements in health insurance coverage, income support to the indigent elderly and disabled, and supplements to work and earning are necessary to reduce poverty rates in the future.

  • Issues such as substance abuse and learning disabilities need to be addressed in developing ways to help those people who are most difficult to employ move from welfare to work.

  • Offering tax credits for the purchase of basic health insurance plans and requiring that insurance companies join together to offer such basic insurance would address a significant problem.

  • Increased investments in early childhood programs targeted to disadvantaged children and expansion of high quality early childhood programs, home visiting services to young, high-risk first time mothers, reduced class sizes in early grades for schools serving disadvantaged children, and Job Corps for school dropouts would represent important steps. These are the kinds of programs needed to get at the causes of low earnings.

    Danziger and Haveman conclude that by the end of the century, antipoverty policies had achieved one vision of the planners of the War on Poverty: a substantial set of income supports was in place for the working poor, regardless of where they lived or their marital status. However, the vision of universal income support for the nonworking poor had been rejected many times, and cash assistance for the nonworking poor has become less available and less generous now than in the late 1960s.