How to Reduce Poverty in the United States
Statement in response to the U.S. Census Bureau report on poverty in 2015

The Census Bureau’s latest poverty statistics show that last year 13.5 percent of Americans still lived below the federal poverty line. The official poverty rate is a valuable measure of how well we as a nation ensure opportunity for those who earn the least. However, just as important is understanding why the poverty rate has not changed, how it affects those who are poor and what policies can make a difference.

The official poverty measure is based largely on whether a household’s cash income can support basic needs, so there is a strong connection between the health of our labor markets and the poverty rate. While U.S. unemployment declined 1.6 percentage points from 2014 to 2015, earnings and wages remained flat, especially for those near the bottom. Among the bottom fifth of U.S. workers, most of whom earn less than $10 per hour, even working full-time all year will not allow an individual worker to reach the $24,036 annual income required to keep a family of four out of poverty.

For those not able to work, the social safety net provides assistance, though at levels well below the poverty threshold. As of 2014, in every state the combined support from Temporary Assistance to Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP), two major anti-poverty programs, amounted to less than 80 percent of the federal poverty threshold.

We know from research that poverty today has consequences that reach across generations. The Census Bureau reports that the poverty rate among children under 18, consistently higher than the rate for the total population, was 19.7 percent last year. Child poverty is of particular concern because chronic poverty during childhood often leads to adult poverty. Emerging research in psychology suggests that it disrupts physical and cognitive development. Research by our own affiliates finds that the level of neighborhood affluence during childhood or adolescence is the single strongest predictor of biological risk for health problems in adulthood.

The official poverty measure does not reflect the benefits of our social safety net, but the Census Bureau’s supplemental poverty measure, which counts in-kind and after-tax transfers as income, shows that many antipoverty programs do make a difference. In 2015, SNAP, which provides food vouchers to low-income individuals and families, reduced poverty by 1.44 percentage points. Refundable tax credits, including the Earned Income Tax Credit (EITC), reduced poverty by 2.88 percentage points.

Research in the social sciences also demonstrates that many safety net programs produce benefits well beyond those shown by federal statistical measures. For example, work by our affiliates in economics has shown that both the WIC program and EITC expansions reduced the incidence of low birth weight, a key indicator of infant health.  We have supported research demonstrating that school nutrition programs for poor students raise student achievement.

Social science research has made many advances in recent decades that make it possible to learn more about poverty and to design better solutions. These include pre-school curricula that address the effects of early childhood stress, or training interventions that enable people to succeed in the workforce.

Research continues to help us understand when additional income from safety net programs makes a difference in the lives and outcomes of the poor. This means that despite the apparent persistence in the nation’s official poverty rate, we can make big strides on increasing mobility for millions of economically vulnerable children and families.

Ann Huff Stevens is a professor of economics at UC Davis and director of the Center for Poverty Research.

Marianne Page is a professor of economics at UC Davis and deputy director of the Center for Poverty Research.

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