Government Programs Can Reduce Poverty

Chapter 15 provides an analysis of the effectiveness of social welfare programs in reducing poverty. Comparing pretransfer with post-transfer rates of poverty across a range of OECD countries demonstrates that poverty can be substantially reduced. The myth that government programs do not work in addressing poverty is simply incorrect. A number of European countries are able to cut their rates of poverty by up to 80 percent as a result of robust social policies aimed at reducing poverty and inequality. In the United States, the Social Security and Medicare programs have been particularly effective in reducing the poverty rate among the elderly population.

Why Do the Myths Persist?

Chapter 19 reviews why, despite strong evidence to the contrary, the poverty myths continue to exist. Two sets of factors are examined—psychologically based factors and sociologically based factors. Psychological factors include particular personality traits, system justification, the use of stereotypes, confirmation bias, and attribution errors. Sociological factors include an understanding of who in society benefits from the existence of these myths. They include political actors, the affluent, and society as a whole. Summoning a newfound willingness to interrogate the role of individualism and meritocracy in shaping our attitudes toward each other and the distribution of resources is likely to prove especially difficult. Changing the paradigm toward one based on fact and reality moves us closer to effectively addressing and alleviating poverty.

The Moral Ground to View Poverty Is Injustice

Chapter 12 examines poverty through the lens of injustice. Poverty has traditionally been understood as a failure at the individual level. The poor have thus been viewed as undeserving of support. Examples of using the broad brush of individual blame to paint the poor as undeserving can be found across a wide spectrum. One of the pernicious results of this myth is that it provides a comfortable justification for doing nothing to address poverty. In contrast, this chapter argues that poverty is a condition resulting largely from a failure at the structural level. The appropriate moral grounds to view poverty should be one of injustice, rather than blame.

Poverty Is Preventable

Chapter 9 addresses the myth that poverty is inevitable. This idea goes back to Biblical times and is often expressed by conservatives. In contrast, this chapter argues that poverty is preventable. Three examples are given in which poverty has been substantially reduced: (1) the War on Poverty during the 1960s and early 1970s; (2) the elderly poverty rate from 1959 to 2019; and (3) single-parent families in Denmark. In each case, poverty has been reduced through social policies. The chapter concludes that the problem is not a lack of solutions. There is considerable evidence demonstrating what strategies are effective in reducing poverty. The problem lies in a lack of political will to implement these strategies. Politicians have used the myth of poverty’s inevitability to reinforce their agenda of a smaller federal government footprint.

The United States Is No Longer a Land of Upward Mobility and Opportunity

Chapter 16 explores the extent of economic mobility in the United States compared with other industrialized countries. The amount of relative intergenerational mobility as measured by the intergenerational elasticity statistic is lower in the United States than in most other OECD countries. Furthermore, the extent to which adult children are earning more than their parents has been declining over the past 50 years. The American dream of each generation doing economically better than the previous generation is becoming harder to achieve. We are a society in which the rungs on the ladder of opportunity have grown further apart, resulting in greater numbers of Americans struggling and falling further behind.

Poverty Spells Are Short but Frequent

Chapter 4 examines the dynamics of poverty spells. The time spent living in poverty tends to be of fairly short duration, generally less than 3 years. Poverty entrances and exits are most often caused by changes in employment status and financial resources, as well as changes in family structure and health status. While spells of poverty tend to be short, the likelihood of returning to poverty at some point during adulthood is high. In addition, the use of a social safety net program tends to be of short duration but frequent.

The Playing Field Is Uneven

Chapter 17 argues that the economic playing field in the United States is not level. Rather, the process is characterized by cumulative advantage and disadvantage. Those starting off with advantages or disadvantages with respect to their social class background will tend to experience a cumulative process of escalating advantage or disadvantage. This includes the quality of education one receives, the acquisition of human capital, the likelihood of being exposed to crime or environmental hazards, and the overall quality of life. In addition, race plays a prominent role in the process of cumulative inequality.

Hard Work Is Insufficient

Chapter 6 explores the role of hard work in avoiding poverty. It is often assumed that anyone can get ahead and avoid poverty by working hard. This chapter argues that hard work is a necessary but not a sufficient condition for getting ahead in life. Consequently, although it is difficult to imagine individuals doing well in life without a decent amount of effort and work, working hard and being motivated by no means guarantee success. Several examples are given of individuals working hard but finding it difficult to escape poverty. The number and nature of low-wage work are also discussed.

The Economic Cost of Poverty Is Enormous

Chapter 11 analyzes the overall economic cost of poverty to the United States. Childhood poverty is estimated to cost the United States approximately $1 trillion a year. This is the result of a loss of economic productivity, higher health expenses, and increased criminal justice costs. It is also estimated that for every dollar spent in reducing poverty, the nation would save up to $12 in reduced expenses. The argument of equality versus efficiency is discussed, and shown to be lacking in strength. High rates of poverty are viewed as leading to greater inequality as well as reducing economic efficiency.

The U.S. Welfare State Is Minimal

Chapter 13 examines the size of the social safety net in the United States. Compared with European and other OECD countries, the United States has a fairly small safety net. The amount spent is approximately 2 percent of our GDP. In particular, programs aimed at protecting children from poverty are minimal. These programs have also been reduced over time, especially since the 1996 welfare reform changes. Challenging the myth of the bloated welfare state requires tackling multiple intersecting misperceptions, including erroneous portrayals of U.S. welfare expenditures as exorbitant and low-income programs as driving up the national debt. It will also require shattering myths that legitimize keeping welfare benefits low.