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On January 8, 1964, President Lyndon B. Johnson officially began the “war on poverty,” saying in his address to Congress: “It will not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won. The richest Nation on earth can afford to win it. We cannot afford to lose it.” After decades of fighting poverty, have we won the war?
If you ask Kevin Hassett, the chair of the Council of Economic Advisers, his answer is “yes.” Well, pretty much. As he told an audience of college students, policy wonks, and interest group advocates at AEI last Wednesday, the war on poverty is “largely over, and largely a success.”
Hassett remarked that policymakers on both the right and the left claim poverty in America has not gotten much better since the 1960s. Republicans point to a relatively stagnant poverty rate as evidence government welfare programs have spent trillions in taxpayer money without much to show for it. Democrats point to the same as a sign that far more must be done to fight poverty in America.
Although the official poverty rate has not significantly declined since Johnson implemented the Great Society programs, research from Bruce D. Meyer and James X. Sullivan indicates the war on poverty has been won. Meyer and Sullivan argue that rather than examine the official poverty rate, policymakers should rely on measures of consumption. The official poverty rate does not take into account the income boost welfare recipients receive from government transfers, and income itself can be difficult to accurately measure. If poverty is measured by consumption rather than income, then the poverty rate has fallen to only 3 percent today from 31 percent in 1961.
If the war on poverty truly is over, what should be done next to improve the lives of the vulnerable in the United States? Hassett argues that work requirements for welfare programs would promote self-sufficiency and improve well-being. But he agrees that work requirements are not the only policy needed to strengthen the American economy for those on the bottom of the income distribution.
At Wednesday’s event, a panel — composed of Hassett, Meyer, the Urban Institute’s Demetra Nightingale, and Brookings’ Isabel Sawhill — discussed other ways to continue to alleviate poverty in the United States. The panelists honed in on two policy focuses. One, job training: There are more job openings than job seekers, in part because job seekers do not possess the necessary set of skills to fill available jobs. Government job training programs and commitments from firms to train workers could both help close the skills gap.
Two, the Earned Income Tax Credit: A larger EITC could act as a carrot, while work requirements act as a stick. Rather than simply increase consumption, the EITC can create greater incentives to find and hold a job.
Work requirements could generate greater self-sufficiency, especially if those living in poverty can gain the skills they need to obtain higher paying jobs and can supplement their income with the EITC. But work can do more than simply improve material well-being. As AEI President Arthur Brooks said after the publication of his book, “The Conservative Heart,” “Work is the secret to dignity. Study after study shows that for the big majority of people, work (both market work and non-market work) is an intrinsic source of worth, of earned success, and human happiness.”
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Amelia Irvine is an AEIdeas intern and a student at Georgetown University.
Poverty cannot be completely eradicated with increased welfare spending. But we can further alleviate poverty by preparing the unemployed for jobs and boosting their income when they work.
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