LEGACIES OF THE WAR ON POVERTY

Martha J. Bailey

Associate Professor of Economics and Research Associate Professor, Population Studies Center University of Michigan January 8, 2014

A Declaration of War on Poverty

 January 8, 1964: Lyndon Johnson declares “unconditional war on poverty” in his first State of the Union Address

Has the War on Poverty Failed?

What Was the War on Poverty?

“no doles” “a hand up, not a hand out” Objective: go beyond treating the symptoms of poverty Agenda: safety net but also anti-discrimination efforts, and human capital and economic growth initiatives

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Strategy Against Poverty

Ch. 2, 1964 Economic Report of President Maintain high employment Accelerate economic growth Fight discrimination Improve regional economies Rehabilitate urban & rural communities Improve labor markets Expand educational opportunities Enlarge job opportunities for youth Improve the nation’s health Promote adult education & training Assist the aged & disabled

Lasting Legacies

• • Pioneering Programs for Early Childhood o o o o Food stamps (now SNAP) improved infant health and test scores Head Start increased educational attainment Children go on to lead healthier and more productive lives Some early childhood investments more than pay for themselves Racial integration and greater equity o Medicare reimbursements encouraged hospitals to desegregate o Infant mortality among African Americans fell sharply o Health improvements translated into better test scores for black teens into the 1980s

More Lasting Legacies

• • Reduction in elderly poverty o o Medicare + Social Security benefits = elderly poverty fell by half from 35% in 1959 to 16% in 1973 Improved financial security of American families Synergies of programs working in concert o o o Hospital and school integration is aided by Medicare and funds for public schools Better infant health and child nutrition make education dollars more effective and increase the returns to college financial aid and job training Medicare increases family resources for college tuition

War on Poverty Programs Swimming Upstream

• • Countervailing social, demographic and economic forces o Rising incarceration rates o o Increase in single-headed household Changes in the way economic growth benefitted the lowest income earners Poverty today would have been higher than in 1964 without the War on Poverty

Supplemental Poverty Measure

• Excluding Social Security benefits would raise national poverty rates from 16 to 24 %  more than 50% of the elderly would be poor vs. 15% today • Excluding SNAP would increase child poverty by 3 points from 18 to 21%

Let’s Be Frank about Failures…

• Not all War on Poverty programs worked o o Medicare’s design has encouraged the increase in health care costs Child poverty now at 22% versus 23% in 1964 • Costs have exceeded expectations

But Own Up to Many Successes

• Focusing on costs forgets large returns • Focusing on poverty rates ignores lasting legacies o More integrated schools, hospitals and workplaces o o o o Peace of mind and financial security for families with aging parents Financial aid for college students Federal support of poor public school districts Early childhood investments in poor children • The War on Poverty shows how much directed policy can accomplish