Saturday, May 4, 2013

The strange persistence of poverty in the United States

I should confess my ignorance. I never actually looked at the time series of poverty in the United States. The graph below shows poverty from the late 1950s to the most recent data (source here).
Around 1960, close to 22% were poor, while after the War on Poverty, brought about by the new consciousness after Michael Harrington's The Other America, and arguably by John Kenneth Galbraith's The Affluent Society, during the Kennedy-Johnson administrations, the poverty rate was closer to 11%. That is, poverty was halved in a decade. [Talk about the failure of progressive policies!]

Note that since then poverty has more or less maintained its level, with an increase in the recessions, reaching around 15% after the Reagan one, and again after the current crisis, falling during booms. The absolute number of poor is now higher than in 1960, with more or less 46 millions in poverty. The composition has also changed, with the proportion of poor living in female-headed households being larger than before, and the number of extremely poor, in the total poor population, also being larger.

Mind you, a lot of the poor are working poor, and some of the explanation for the persistence of the poverty rates are associated to wage stagnation, no doubt. If nothing else, the poor performance of the labor market and the slow recovery hurt disproportionally the working poor. Only one more reason for repealing the Sequestration, and for expansionary fiscal policy, including some kind of work program.


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