The Census Bureau has released its annual poverty report, which shows that in 2015 the poverty rate of families with children was 16.3 percent. That’s a decrease from the previous year but still higher than the rate before the last recession.
In the long-term view, the poverty rate of families with children today is almost 50 percent higher than in the late 1960s, shortly after the War on Poverty began. This long-term increase has been driven by the extraordinary rise in single-parent families.
In 1960, only one in 10 families with children was headed by a single parent. Today, one in three is. Since two parents with two incomes will generally have a higher combined income than one parent alone, the absence of the second parent triples the odds of child poverty.
Because single-parent families are much more likely to be poor, the dramatic rise in single-parent households has driven up the overall child poverty rate nationwide.
Policymakers should reverse course and take aggressive steps to reduce welfare’s anti-marriage penalties, starting with the earned income tax credit. Reducing marriage penalties should increase future marriage rates; increased marriage would in turn lead to improved self-sufficiency, personal well-being and upward mobility.
Oddly, the long-term rise in the child poverty rate doesn’t mean there’s been an actual deterioration in living conditions. This paradox stems from the misleading way the Census Bureau measures “poverty.”
The Census Bureau defines a family as poor if its income falls below a specified income threshold. For example, the poverty threshold for a family of four in 2015 was $24,036. But in counting family “income,” the census excludes nearly the entire welfare state.
Last year, government spent $221 billion on cash, food and housing benefits for low-income families with children, more than twice the amount needed to end all child poverty. But the census ignored more than 90 percent of these benefits for purposes of measuring poverty. When welfare benefits are counted, the poverty rate for children is cut by half or more.
Because Census Bureau poverty measurements ignore a large part of family income, it isn’t surprising that poor families routinely report spending $2.20 for every $1 of income the census claims they have. In fact, many families labeled as “poor” do not appear particularly poor at all.
Today the average family with children identified as poor by the Census Bureau has a computer, a car, cable TV, air conditioning and a DVD player. The typical poor American lives in a house or apartment that is in good repair and is larger than the dwelling of the average non-poor Frenchman, German or Englishman. According to the U.S. Department of Agriculture, 96 percent of poor parents report their children were not hungry for a single day in the last year.
Since the official poverty numbers do not measure actual family finances or living conditions, are the numbers meaningless? The answer is no. What the bureau measures could be called “prewelfare poverty,” in effect, it determines whether a family is poor before welfare benefits are received.
This is linked to the idea of self-sufficiency: a family’s ability to support itself above poverty level without reliance on welfare aid. Prewelfare poverty measures a lack of self-sufficiency.
Official census poverty numbers correctly show a substantial long-term decline in self-sufficiency among families with children since the 1960s. As fathers disappeared from the home, an increasing number of single mothers fell into prewelfare poverty and relied on welfare aid to prop up their living conditions. Welfare spending increased 12-fold.
But welfare is a social and economic bandage. It covers up but does not cure the fundamental causes of child poverty and social problems.
The erosion of marriage has negative effects far beyond increased welfare dependence. For example, a healthy marriage is one of the two most important factors contributing to personal happiness. Recent research by prominent economist Raj Chetty finds the presence of marriage the “single strongest correlate of upward income mobility” among children.
As families fragment, social problems such as crime, school failure and drug abuse rise. Regrettably, since the beginning of the War on Poverty, marriage has been nearly wiped out in many low-income communities.
President Ronald Reagan presciently warned that the ongoing collapse of marriage would bring “an America of lost dreams and stunted lives.” Reagan was particularly distressed that the welfare system penalized low-income parents who married; he understood that pushing fathers out of the home was a disaster.
Yet anti-marriage penalties still abound within the welfare system. Policymakers should reverse course and take aggressive steps to reduce welfare’s anti-marriage penalties, starting with the earned-income tax credit. Reducing marriage penalties should increase future marriage rates; increased marriage would in turn lead to improved self-sufficiency, personal well-being and upward mobility.
It is time to stop pushing the poor down – and help them to rise.
Robert Rector is a senior research fellow at The Heritage Foundation (www.heritage.org).