After some initial progress in the s, and continuing progress for the elderly, the nation has made surprisingly little progress against poverty. A review of the leading causes of poverty shows why trends in the economy, demography, and education make progress against poverty so difficult to achieve. Akerlof and Janet L. Sawhill and Quentin Karpilow Monday, July 1, In the United States, with the important exception of those on Social Security, the only way for most adults and families to avoid poverty is to work. Yet between and , work rates for men declined from The trend for young black men ages is even worse.
Starting from the very low base of Work among young black males is a national crisis. The work rate of women stands in sharp contrast to that of men.
In before the Great Recession set in, Equally impressive is the 20 percent rise in work by lone mothers over the same period, a trend that bears directly on child poverty rates because children in female-headed families are four or five times depending on the year more likely to be in poverty than children in married-couple families. These mothers and their children have always been the group most likely to be in poverty, including long-term poverty, in large part because their work rates have been so low. After the welfare reform legislation of , their work rate exploded, increasing from Equally surprising, after a lengthy period of employment stagnation and decline associated with the mild recession of and the deep recession of , in their work rate was still more than 25 percent higher than it had been before welfare reform in the mids.
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The fact that in — before the Great Recession — the work rates of males and females were 72 percent and 58 percent respectively, combined with the fact that the poverty rate for individuals in families in which no one works is nearly eight times as high as the poverty rate for individuals in families with at least one full-time, year-round worker, shows that there is plenty of room for improvement.
Without high work levels, it will be difficult to mount an effective fight against poverty. Wage rates are a second work-associated factor that has a major impact on poverty. Based on data from the U. Census Bureau, trends in wages since can be succinctly summarized. Wages at the 10th percentile fell and then recovered and ended the nearly three decade period almost exactly where they were in The general trend of wages at the 50th percentile was a slow increase amounting to about a 10 percent rise over the entire period.
At the top, by contrast, wages did very well, increasing 32 percent over the period at the 90th percentile. If we were to plot wages higher up in the distribution, they would rise even higher. It is an amazing mathematical fact that 10 percent of all workers will always be at the 10th percentile of earnings or below.
Thus, if wages do not improve at the bottom, all single parents with two or more children at or below the 10th percentile — and even many above the 10th percentile — will always be in poverty if earnings are their only income. In , the poverty rate for children in married-couple families was By contrast, the poverty rate for children in female-headed families was In , 6.
By , One way to think of the shift to female-headed families is that even if government policy were successful in moving people out of poverty, the large changes in family composition serve to offset at least part of the progress that otherwise would be made. In fact, a Brookings analysis shows that if we had the marriage rate we had in , the poverty rate would fall by more than 25 percent.
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There now appears to be universal agreement that the combination of technological advances and globalization have resulted in education being a major factor in determining the employment and earnings of many American workers. Some of the differences are huge. Without a college degree, 45 percent of the children from families in the bottom fifth of income will themselves be mired in the bottom fifth as adults. By contrast, with a college degree, adult children cut their odds of staying in the bottom fifth all the way down to 16 percent from 45 percent. The odds of making it to the top quintiles indicate similar abrupt changes if youngsters from poor families manage to achieve a college degree.
Despite the great advantages of having a college degree, James Heckman has demonstrated that the high school graduation rate reached its highest level at about 80 percent in the late s and has since decreased by 4 to 5 percentage points. A high school degree is usually required for college admission.
Moreover, a significant gap remains between the graduation rate of white students above 80 percent and black and Hispanic students both about 65 percent. The four-year college enrollment and graduation rates of students from families with varying levels of income renders the education picture discouraging. Youngsters from higher-income families are more likely both to enroll in and graduate from college than youngsters from poorer families.
For example, 79 percent of children whose parents were in the top income fifth enrolled in college and 53 percent earned a four-year degree. But only 34 percent of children whose parents were in the bottom income quintile enrolled in college and only 11 percent received a four-year degree. If education is one of the routes out of poverty, the American educational system seems to be perpetuating poverty and income distinctions as much as it facilitates movement up the income scale. Thus, not only will the modest educational achievement of many Americans continue to make progress against poverty difficult, but American competitiveness in the global economy seems threatened.
Until the recent recession, America had been experiencing one of the greatest waves of immigration in its history.
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For the past two decades, an average of about one million immigrants has obtained legal permanent resident status in the U. However, as George Borjas of Harvard shows, about 20 percent of immigrants have less than a 9th grade education as compared with a little less than 3 percent of non-immigrants. In , the age-adjusted average wage of first-generation male immigrants was 5.
This figure fell to 1.
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It comes as little surprise, then, that the poverty rate among immigrants is higher than the poverty rate among native-born Americans. In , the immigrant poverty rate was Given that the overall poverty rate for the nation was Reflecting on these five major causes of poverty leads one to understand why it has been so hard for the U. Declining work rates, stagnant wages, the rise of female-headed families, inferior education, and the arrival of millions of immigrants with poor education and low skills are little engines pushing up the poverty rate.
Conditions in the U. Even so, the nation has done a lot to reduce poverty and has even achieved a few victories as we shall now see. Many analysts think that the nation could greatly reduce poverty by spending more money on programs for the poor. Figure 2, based on a Brookings analysis of federal budget data published by the Office of Management and Budget, shows that federal spending since in the ten biggest means-tested federal programs has increased dramatically. The Congressional Research Service has conducted a study that divides means-tested spending into eight categories health, cash, nutrition, employment and training, etc.
These spending data are for only the ten largest means-tested programs. The Congressional Research Service estimates that in , spending on these ten programs represented about 75 percent of total federal means-tested spending. The Congressional Research Service has estimated that state and local governments supplemented federal spending on means-tested programs by around 27 percent in But this estimate should be considered in light of several caveats.
The first is that not all of the spending on means-tested programs goes directly to individuals and families. Second, some of the money in programs that provide cash or in-kind benefits directly to households goes to individuals and families that are not below the poverty level.
Children in families of up to percent of the poverty level, for example, are eligible for Medicaid or the Child Health Insurance Program CHIP in almost every state. Thus, means-tested spending has increased enormously no matter how it is measured. Although there have been some periods of comparatively rapid growth, such as during the recession of to , Figure 2 shows that spending has grown almost every year for the last five decades.
The increase in spending has been the most rapid in health programs, but cash, nutrition, and several other types of spending have also increased rapidly. Spending per person in poverty has also increased substantially, although not quite as rapidly as total spending. The first is to give money to people who are not expected to work and the second is to use welfare policy to strongly encourage work and then to subsidize earnings because so many of the poor have low skills and often cannot earn enough to escape poverty.
Before reviewing these and other strategies for reducing poverty, I want to emphasize the importance of individual initiative in reducing poverty and promoting economic success. My Brookings colleague Isabel Sawhill and I have spent years emphasizing the importance of individual responsibility in reducing poverty and increasing opportunity. One of our arguments, based in part on a Brookings analysis of Census Bureau data, is that young people can virtually assure that they and their families will avoid poverty if they follow three elementary rules for success — complete at least a high school education, work full time, and wait until age 21 and get married before having a baby.
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These numbers were almost precisely reversed for people who violated all three rules, elevating their chance of being poor to 77 percent and reducing their chance of making the middle class to 4 percent. Call it blaming the victim if you like, but decisions made by individuals are paramount in the fight to reduce poverty and increase opportunity in America. The most straightforward way to help people escape poverty, primarily when they belong to a group, such as the elderly or disabled, who are not expected to work is to give them cash and in-kind benefits that will bring their income above the poverty threshold.
The Social Security program, for example, is designed specifically to help the elderly avoid destitution. Indeed, research shows that virtually the entire decline in poverty among the elderly is accounted for by the rise in Social Security benefits. If the value of taxes, in-kind benefits except health insurance , and the imputed return on home equity are taken into account, poverty among the elderly drops even further, from the official rate of 8.
The strategy of reducing poverty by providing government benefits touches on one of the major fault lines in American politics. As polls consistently show, Americans think able-bodied, non-elderly people should earn their own way. But it seems likely that simply giving welfare to the able-bodied poor, even if they are single mothers, will never be an effective strategy for reducing poverty in the U. At the other end of the continuum from policies that give money and other benefits to the poor are policies that encourage work.
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Well over 75 percent of families with children that lack a full-time, year-round worker are in poverty. Passed on a strong bipartisan basis, and signed by Democratic President Bill Clinton, the new law required individuals to meet work requirements in order to qualify for welfare benefits. Mothers on welfare had to participate in state-designed welfare-to-work programs that provided training, job search assistance, or actual work experience.
If the mothers did not participate, states were required by federal law to impose financial sanctions on them in the form of reduced or even terminated cash welfare although they remained eligible for non-cash benefits. In addition to work requirements and sanctions, the reform law imposed a 5-year time limit on benefit receipt for most mothers who accepted welfare.
After passage of the reforms, poor mothers entered the workforce in unprecedented numbers. Between and , for example, there was an increase of more than 40 percent in the number of never-married mothers, the poorest of the poor, who found employment. Similarly, poverty among black children, who live disproportionately in female-headed families, reached its lowest level ever in It is a book I recommend to all who want to be delivered from the bondage of poverty and those who want to be mightily used by God in these last days for the great harvest that is to come!
Despite popular perception there is absolutely nothing godly, holy or spiritual about poverty. A natural father would never wish or pray for his children to live in poverty. So, why would God? If ye then, being evil, know how to give good gifts unto your children, how much more shall your Father which is in heaven give good things to them that ask him? Poverty births a grasshopper mentality, giving a myopic perspective of God. It breaks up families, cripples churches, dissolves the passion in many, and is a killer of vision.
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At its worst, poverty robs people of their will to live. In this book I confront head-on misconceptions concerning prosperity and uncover an escape route from the deadly grip of poverty. Poverty is a lack of the resources needed to complete a divine assignment. It is characterized by things of inferior quality and a pressing need for money.
While poverty can be reflected in a shortage of finances and other material resources it reaches into every avenue of life, displaying itself as a lack of ideas, and a dullness in your walk with God. Poverty is not just lack of finances but a mindset that makes people settle for less.
There are so many areas into which poverty reaches its destructive claws that it becomes clear why Jesus said,. The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly.
Jesus came to eradicate the effects of poverty! His mission is to provide abundant life for those who will believe and receive it. This manifests when you believe erroneously that where you are now is the furthest you will ever get, that you have no responsibility for your financial standing and that earthly things can provide you with wealth. Therefore, once you convince yourself of these wrong viewpoints, your life will reflect the limitations of these thoughts. Also, if you are constantly blaming others for your financial standing and never reflect on the things you need to change, you will continue to remain at your current spot.
This action might not be possible to undo. Are you sure you want to continue? Upload Sign In Join. Save For Later. Create a List. Summary After putting my nose to the grindstone by much study and searching of scriptures, I humbly submit that there is absolutely nothing good, godly or spiritual about poverty. Read on the Scribd mobile app Download the free Scribd mobile app to read anytime, anywhere.