The United States has enjoyed eight years of unparalleled economic expansion. It was not until recently, however, that the new prosperity reached the nation’s poor. Unemployment is near a thirty-year low, long-stagnant wages have begun to rise, and welfare rolls have been cut in half. But despite this good news, the U.S. poverty rate is higher than it was in the 1970s and the disparity between the rich and the poor has caused some to call the so-called "information" economy a new Gilded Age. One in eight Americans still lives in poverty. For children, the situation is even worse-one in five children, including 40 percent of all minority children, is poor. Poverty among American children is twice as high as it is for their peers in Europe.
The reasons for the persistence of such high levels of poverty in the United States are, of course, hotly disputed. Advocates of the 1996 welfare reform, which ended the federal entitlement and put in place work requirements and time limits for welfare benefits, argued that work was available and that the dignity and independence provided by employment would solve the problem of poverty. Thanks to a booming economy and the incentives for work built into the reform, many former welfare recipients have found jobs. Few people, least of all welfare clients, dispute the value of work or the benefits of not relying on a government handout. Nonetheless, most of the jobs available to low-skilled workers remain low paying. To require the poor to work is not morally problematic if work is rewarded by a living wage. But, as the poverty statistics demonstrate, a living wage remains an elusive goal for most of the working poor.
Texas Governor George W. Bush, the Republican party’s presumptive presidential nominee, has made helping the poor and the disadvantaged a central theme of his campaign. Whatever one thinks of Bush’s "compassionate conservatism," at least in tone it reflects a shift in the national mood concerning what government can do for the less well-off. Several recent polls have indicated that Americans think government action on problems such as education, health care, and poverty is more important than paying down the national debt or cutting taxes. In short, after a period when the idea that government could help the poor was loudly derided, the tenor of the political debate has shifted. Ironically, it seems that ending "welfare as we know it" may have contributed to renewed public confidence in the competence of government. Feeling good about their own economic prospects and having regained a measure of faith in government, the public now appears more willing to consider society’s obligations to the poor.
Much can be done to aid the poor by better administering programs already in place. Shockingly, only 40 percent of families eligible for food stamps are currently receiving them. Only a third of children entitled to Medicaid coverage are getting it. These astounding oversights can be explained in part by the sharp reduction in the welfare rolls. Having left welfare, many poor families severed their ties to the government agencies responsible for administering food stamps and Medicaid. In other instances, states have erected unnecessary and sometimes illegal barriers for eligible recipients to overcome (see, E.J. Dionne, "Keeping Promises," May 19). A concerted effort by community groups, churches, government agencies, and politicians should help to dismantle these barriers as well as reconnect needy families with the government assistance to which they are entitled.
Low wages, however, remain the bane of the American economy and the greatest disincentive for the poor seeking work. Getting more money into the pockets of the working poor is crucial. Currently, the nation’s most extensive and successful antipoverty program is the Earned Income Tax Credit (EITC). This program now puts about $25 billion annually, or up to $3,800 in tax rebates per worker, into the hands of the poor. The efficacy of EITC is so widely acknowledged that some states add to the federal refund with EITC programs of their own. Because it is tied to work, there is broad, bipartisan support for the EITC. Raising the amount of money the working poor can earn while remaining eligible for the EITC is a good way to expand the effects of the program. Lowering the income-tax rate for the poor who earn too much to qualify for EITC would alleviate the perverse incentive not to seek better-paying jobs for those just beginning to climb the economic ladder.
There is much more that can and should be done to help America’s working poor. Better public transportation is needed to get the urban poor to the suburbs, where the real growth in new jobs is taking place. The suburban poor need better public transit as well. Affordable housing and housing subsidies are also essential. Unionizing workers is, of course, the surest way to raise wages. Finally, better schools and access to health care are key to lifting the next generation out of poverty. No single approach or program will be sufficient. Both public and private initiatives are essential. Social, moral, and religious efforts to discourage the proliferation of single-parent families will also be high on the list of realistic antipoverty initiatives.
Americans, by and large, want to help those trapped in poverty. But Americans are, by and large, a pragmatic people, and they will support only government programs that bring results. Building on what already works is the best way to begin to include the poor in the prosperity enjoyed by the majority of their fellow citizens.
