Don’t Believe the Hype: Poverty Drop Signals Need for Real Progress

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The nation’s poverty rate dropped below 14 percent last year, a modest decline to 13.5 percent from 14.8 percent in 2014 that signaled the need for new ideas and structural changes to reducing poverty rather than any major breakthrough.

This year the US Census Bureau’s annual report, released Tuesday, was full of good news, at least in the short term. The percentage of people living below the poverty line hit its lowest level in seven years. Household median income jumped 5.2 percent to $56,516 in 2015 from $53,718 the year before. And the poverty rate for children slipped slightly to 19.7 percent from 21.1 percent.

But within this news is a sobering reality. The US poverty rate remained higher than before the country plunged into the Great Recession of 2007-09, with 43 million people officially poor, and this year’s decline came seven years into an economic recovery.

You have to look back to 1974 for a truly dramatic drop in the poverty rate, when it fell to 11.2 percent from 19 percent in 1964. That drop was fueled, in part, by the War on Poverty and its push to create Medicare, Medicaid and beef up Social Security.

What will it take for the next breakthrough that will push the percentage of Americans living below the poverty line into the single digits?

It will take a rethinking of what poverty really is and structural changes to public policies designed to support low-income families, economists, analysts and grassroots advocates say.

The modern approach to fighting poverty is based on getting as many people as possible into the workforce, but too many entry-level and low-wage jobs today don’t pay enough to lift a family out of poverty, according to Ann Stevens, director of the Center for Poverty Research at the University of California at Davis.

It will take creating more jobs that pay enough for families to reach financial stability and a stronger safety net that helps them when they fall short of that stability, Stevens said.

There is reason for optimism. Both of these changes can build upon the momentum of recent grassroots victories that raised local and state minimum wages, added new protections for renters and created new training for workers.

“There are clear pressures. People are starting to understand that low wages are part of the problem,” Stevens said.

Perhaps nowhere is that pressure stronger than in recent worker-led campaigns that successfully raised minimum wages in cities and states across the country.

In recent years, workers and labor advocates won wage increases in major urban and suburban areas, including Los Angeles, Los Angeles County, Chicago, San Francisco, Washington, D.C., Long Beach, San Diego, Seattle and cities in Silicon Valley.

Lawmakers in states, including California, New York, Massachusetts and Oregon, also approved higher pay for workers. In corporate America, labor strikes and attention to wages prompted some large companies to raise hourly pay. For workers and labor advocates, corporate wage wins have occurred at Walmart, Costco, Facebook, T.J. Maxx, Marshalls and Ikea.

In addition, domestic workers secured wage wins in recent years.

“I most definitely do feel hopeful. We are kind of getting to a place where some of the most longstanding and biggest issues are coming to the forefront for discussion,” including soaring housing costs and increasing displacement of low-income families, said Kevine Boggess, policy director at San Francisco-based Coleman Advocates for Children & Youth. “I really feel like we are…seeing stuff happen because people are more involved, [taking] more steps and actions to change things.”

Last year, though, 13.5 percent of US residents were poor, a rate that hasn’t changed much in decades. During the last 30 years, as the country enjoyed much economic growth, the gap between the haves and the have nots has widened, said Isabel Rubio, executive director of the Hispanic Interest Coalition of Alabama.

“We haven’t reduced poverty because people have quite literally turned their back on it, gotten in their cars and driven over the mountain,” she added. “They don’t think about it.”

NCLR, the civil rights and advocacy organization, welcomed progress on some fronts for Latinos, including the lowest poverty rate for Hispanics [21.4 percent] since 2006 and an increase in median household income for the group. But the organization called for more structural changes to help families, including a federal $15 per hour minimum wage that it said would benefit more than 8 million Latinos and, overall, an estimated 35 million Americans.

“While the new numbers are encouraging, with years of stalled growth, wages and financial insecurity for many Latinos, poverty remains an issue. It is important to note that Hispanics still have a poverty rate that is nearly double the national average. Future progress in this area depends heavily on continuing or expanding policies that can help Latinos find greater economic security,” NCLR said in a statement.

In the wake of Tuesday’s census report, a group of organizations launched the US Child Poverty Action Group (CPAG) to make sure people remember that 20 percent of US children live in poverty. The group will push for “a National Child Poverty Target to guide future budget and legislative decisions,” borrowing a strategy from the United Kingdom that is credited with helping to reduce child poverty by half in the U.K in 2009.

“Every child deserves a strong start in life,” said John Bouman, president of the Sargent Shriver National Center on Poverty Law, a member of the group. “Action by the states is essential to reducing child poverty, and there has been progress in many states. The federal government must do more to incentivize, reward and resource the states so that this progress can continue and expand.”

If economist Ann Stevens could give the next US president one piece of advice on his or her first day in office about how to do this and tackle poverty reduction overall, she would tell the person to focus on work and good pay.

“Complete the country’s commitment to work as a solution to poverty by making sure that work actually pays enough to escape poverty,” Stevens said.