Why the U.S. is rethinking its approach to poverty

Why the U.S. is rethinking its approach to poverty

At least one Saturday each month, Arlean Younger volunteers handing out boxes of donated food at church. Last time, she helped distribute provisions to more than 100 people. At the end of the shift, she took home a box, too — for herself and Mylie Jai, the little girl she has been taking care of since infancy.

Before the coronavirus pandemic, the number of American households in poverty was shrinking. In 2019, 34 million people lived in poverty, a decrease of 4.2 million individuals from a year earlier, according to the Census Bureau. Children made up a substantial portion of those in low-income households, according to the latest available data from a recent National Academies of Sciences study. A year since the coronavirus began its deadly rampage in the U.S., economic stresses have pushed millions more households to the brink, with some estimates suggesting it also forced an additional 2.5 million more children into poverty.

At the end of 2020, more than 50 million people were facing hunger, up 15 million from the year before, according to data from Feeding America, an anti-hunger organization. Millions of Americans have turned to food banks, with four out of 10 doing so for the first time during the pandemic.

Each month, Younger earns roughly $2,000 from her job at a company that hires home health aides. But the money is spent almost as soon as her deposit clears. Rent gobbles up $800. Utilities cost $300. Water adds $130. And $400 goes for the gas she needs to reach her health care clients. There are credit card bills and the new cost of daycare for Mylie Jae, whose school, the cost of which is normally subsidized by the state, shut down. The COVID-19 pandemic has made everything more precarious, including her own work.

Younger’s role is usually that of a manager but often demands more than overseeing client needs and people’s schedules. She supervises eight employees. Because of pandemic-driven demand, Younger said she often cares for clients herself, working far more than 40 hours, sometimes seven days a week. She drives up to 40 minutes each way to reach the clients farthest from her house; the costs are always greater than what her company reimburses her. She feels like she is struggling to provide a good home for the girl who calls her “Mama.”

Lawmakers in the U.S. have for years debated how to track poverty, and child poverty in particular. Now, in the midst of a pandemic, when the country is caught in a deep recession that has forced families deeper into financial difficulty amid widening inequalities, “it’s not surprising” that politicians have found renewed interest in curbing this hardship, said Rebecca Blank, a macroeconomist who worked on anti-poverty policy for the the Clinton and Obama administrations and now serves as chancellor at the University of Wisconsin-Madison.

Along with what it provides in COVID relief, the $1.9 trillion American Rescue Plan signed into law by President Joe Biden this month offers one of the most sweeping anti-poverty packages in recent memory. Along with one-time stimulus checks to most children and adults and an extension of unemployment benefits, the legislation increases the child tax credit to between $3,000 and $3,600, depending on the age of the child, and makes that money available over the course of the year rather than only at tax-filing time. It offers housing vouchers for those nearing homelessness, as well as health care subsidies for people whose states have not expanded Medicaid.

One estimate by the Urban Institute suggests these measures will cut child poverty in half for children, and significantly for families experiencing job loss.

In the pandemic, advocates have an opportunity to generate sufficient political will for the U.S. to not only sew up some of the holes in its social safety net, but make it big enough to catch more families and individuals in need. “One thing we know out of American history is when we expand these programs, it tends to be in response to more than just the very poor having need,” Blank said. “When need is more expansive, people are more willing to think about new things.”

The bill only guarantees the expanded tax credit for a year, though Democrats have promised to extend the benefit. The question now: Could this become permanent? If the tax credit expires, the child poverty rate will double again by 2022. Many Republicans, who are seeking to regain control of Congress in the next midterm elections, have voiced concerns about supporting continued assistance, citing costs or because the measures don’t do enough to incentivize work. But advocates say the idea of a long-standing safety net has now entered the conversation, and there are a number of small models of success across the country and over time that lawmakers can draw from when considering solutions.

For years, the United States has maintained a stubbornly high rate of child poverty compared to other developed countries, the Organisation for Economic Co-operation and Development reported in November 2019. Traditionally, Americans have bristled at giving taxpayer money to alleviate poverty, especially if that means the government will assume a greater role in people’s daily lives. But not making a serious investment in solving the problem comes with major costs.

Lack of a political will has obstructed greater progress on child poverty are cold and straightforward, said Cara Baldari, vice president, family economics, housing and homelessness at First Focus on Children, a child advocacy organization. “Kids can’t vote,” she said. That has helped perpetuate a trend in the U.S. where children are more likely than adults to live in poverty because a child’s fortune matches that of the grown-up who cares for them.

Child poverty affects an estimated 9.6 million children and costs the U.S. as much as $1.1 trillion each year, according to a 2019 report from the National Academies of Sciences, Engineering and Medicine. Studies suggest children accumulate these costs over the course of a lifetime due to worse health outcomes that end up adding up to expensive treatment and lost productivity in the job market. Children who grow up in poverty are more likely to report lower incomes, worse health outcomes and less likely to experience social and emotional turmoil.

In the 2016 National Survey on Children’s Health, parents reported that 25.5 percent of children have experienced economic hardship “somewhat” or “very often.” By that measure, poverty is the most common adverse childhood experience in the United States — more common than divorce or separation of parents or living with someone struggling with alcohol or substance use. These events offer a heightened risk of trauma that can have potentially lasting effects on a child’s physical, mental and emotional health, according to Child Trends, a research organization focused on studying child development and well-being.

Other countries have made explicit moves in recent years to tackle those kinds of issues. In 2019, Canada’s Poverty Reduction Act became law, part of a $22 billion package to create poverty reduction targets and funnel resources toward programs that can help meet the social and economic need. The country is on track to reduce child poverty by half, according to the National Academies of Sciences, Engineering and Medicine. New Zealand has also released intermediate and long-term targets designed to cut child poverty dramatically within a decade. In both countries, people receive direct monthly payments to give families a cushion against poverty.

The U.S. hasn’t yet gotten that far, instead operating multiple policies entangled in a way that sometimes pits them against one another. To stem hunger, the federal government funds Supplement Nutrition Assistance Program, or SNAP benefits. To help working families, the Earned Income Tax Credit refunds money to individuals based on what was earned and household need. And those who qualify to receive Temporary Assistance for Needy Families are often flagged to receive job training or help securing employment. But families often bump up against income thresholds, earning too little to live comfortably but too much to receive government benefits. Younger, 49, has been caring for Mylie Jai for five years, ever since she offered help to a friend who had just given birth and was hopping between rundown motels in Jackson, Mississippi, without a stable home, car or job. Mylie Jai is now in preschool, and Younger is her official legal guardian. Younger was told she earns too much money to qualify for SNAP benefits, she said.

The Mississippi Department of Human Services normally covers the cost of Mylie Jai’s school, but in late February, the building was shut down after pipes burst in a historic snowfall and ice storm. Younger was forced to instead send Mylie Jae to a small daycare operated by a friend, but the state’s vouchers got caught in bureaucratic red tape, so she said she had to come up with $90 per week out of pocket.

Medicaid covers Mylie Jai’s doctor visits, Younger said, but she herself visits a community health center if she gets sick and cannot afford health insurance, despite being a health care worker.

Those ill-fitting pieces are problematic, said Beryl Levinger, a child policy expert and professor at Middlebury Institute, and policymakers need to take a more holistic approach, rather than hunt for a silver bullet that doesn’t exist.

Levinger also served as a researcher on a new report from child advocacy group Save the Children that used data to analyze which states offered kids the best and worst COVID-19 responses. Minnesota, Utah and Washington state ranked highest while Louisiana, Mississippi and Texas were among the lowest. This latest report suggested 6 million more children endured hunger during the pandemic, and a quarter of children lacked resources for remote learning, which made completing school work virtually impossible for many families. The report urged states to protect child care, which has unraveled during the pandemic, and address child hunger through SNAP and other federal programs.

“This problem will not end even when the last of the vaccine is distributed,” the report said. “The additional benefits and supports for these children and families will need to be made permanent until all children have access to the food they need.”

Created as part of the Taxpayer Relief Act of 1997, the child tax credit offered a $500-per-child nonrefundable credit to ease the tax burden of middle-income households. Since then, it has become more tightly woven into the U.S. social safety net over time, said Elaine Maag, who studies programs for low-income families and children for the Urban-Brookings Tax Policy Center at the Urban Institute. Decades later, she said the policy has evolved and holds the potential to become a permanent fixture to help families.

But government programs, no matter how well designed or executed to fit a certain set of circumstances, often miss the mark, Maag said, because life is messy. She pointed to SNAP benefits as an example.. With them, a person may have food, but if they get sick, do they have money to pay for a doctor’s visit or to fill a drug prescription? A mountain of research that suggests direct cash payments are the most effective way to alleviate poverty and documents a “growing understanding that people know how to solve their problems the best way,” Maag said. “Cash can be used to meet all your needs.”

Of all of the provisions in the latest relief bill, the $1,400 cash payments have the most potential to reduce poverty, according to the Urban Institute’s analysis. In recent years, there has been growing discussion of using a universal income to alleviate poverty, but it is not politically popular. Democratic presidential candidate and philanthropist Andrew Yang campaigned on this idea, but just a fraction of Democrats supported it, much less the country overall. In a July 2019 poll from PBS NewsHour, NPR and Marist, only 26 percent of Americans said they supported giving each U.S. adult $1,000 per month, a proposal that was more popular among Democrats than Republicans.

Despite robust evidence supporting the use of direct payments, Americans historically do not like to give people tax-payer dollars unless society deems them to be deserving, Maag said. Since the Great Depression, older adults, people with disabilities or some survivors of people who die have received cash benefits. But distributing cash payments to families or other more specific groups is an easier political sales pitch than to do so for all able-bodied adults, Maag said.

So for generations, the U.S. has pursued anti-poverty policies that are very specific about how people spend their resources, said Aisha Nyandoro, chief executive of Springboard to Opportunities, a direct service organization. “Why not try something different?”

That is what Nyandoro’s organization did in 2018 when it founded the Magnolia Mother’s Trust. The project gave $1,000 per month for 12 months to Black mothers living in extreme poverty in Jackson, Mississippi. The goal was to target systemic problems by empowering women with cash payments so they could decide how to improve their lives. The project has grown from helping 20 women to more than 100. During that time, Nyandoro said she has witnessed women pay off debt, return to school, cook more nutritious meals for their families and become better parents.

Tamara Ware was one of those women. In late February 2020, she had to leave her job at a child care facility, afraid she might bring the coronavirus home to her three daughters, ages 13, 14 and 17, who were struggling in school even before the virus forced classrooms to close and instruction to go virtual. She had been earning $11 per hour and had no savings to pay for food or housing.

Within weeks, Ware was accepted into the trust. She found tutoring help for her daughters and counselors for them to address trauma they had endured, including the grief and loss of Ware’s twin sister, who had been shot and killed eight years earlier. She threw a party to celebrate her daughters’ birthdays, something she hadn’t been able to afford to do in years. She became a more patient and understanding mother, she said, and developed a deep sense of community with other mothers who worked to overcome struggles that had ensnared them for years.

“I could be in the moment,” Ware said. “Look, I ain’t gotta worry about nothing this month.”

She graduated from the program last month, and it gave her a chance to build her own business as a child care provider.

“My head is in the right direction,” Ware said. “I have the tools I need now.”

Many women in the program report feelings of joy, Nyandoro said. Often, that is because they struggled to survive. With a guaranteed income in place, the women’s focus could broaden beyond meeting basic needs and tapping to what they actually wanted in life.

“If you have lived a life of scarcity so often, joy is something you feel like you haven’t been allowed either. You’re constantly trying to survive,” she said. “You tell yourself dreams are something for other people.”

After the implementation of the “Great Society” programs in the 1960s, such as Medicaid and federal funding for education, the U.S. saw its child poverty rate cut in half. If successful, advocates say the American Rescue Plan could help bring the U.S. and other countries closer to a global goal set in motion by the United Nations (long before COVID-19) to end extreme child poverty by 2030 and cut child poverty rates in half worldwide.

Researchers behind a pilot universal income program that gave participants in Stockton, California, $500 a month released data that showed a 12 percent increase in full-time employment after one year, and 62 percent reported paying off debt, a 10-percent increase from before the program began.

The biggest spending category was food, their research showed, followed by merchandise, utilities and auto costs, which all have an impact on someone’s ability to get and keep a job, researchers said.

More than 40 mayors across the country who are part of a Mayors for Guaranteed Income initiative are launching similar programs.

“COVID-19 has made it very, very clear that you could play by all the rules, that you could be working, and that still may not be enough,” Michael Tubbs, the mayor of Stockton, told the PBS NewsHour in December.

Some economists reviewing Stockton’s pilot have also pointed out the complicated questions that arise around deciding who is eligible for these kinds of programs and how to reach them. Certain requirements may unintentionally cut out people who need help most, in favor of people who don’t have as much need. And cash can only go so far in solving structural issues like access to health care and education.

During the pandemic, fighting poverty has drawn some bipartisan support. Sen. Mitt Romney, R-Utah, proposed the $254 billion Family Security Act to replace some existing programs with a monthly child allowance — $350 for each young child and $250 for every school-aged child. But the cost of this program would mean making choices about discontinuing others, and some experts have raised concerns about the possible unintended consequences of replacing programs, such as TANF, that have been used to connect families to other services. That could lead to families falling through the cracks and needs going unmet.

But some critics say these programs don’t go far enough to incentivize work as a way to alleviate poverty. Robert Rector, a welfare policy expert for the conservative Heritage Foundation, said he doesn’t think the pandemic justifies the child poverty policies passed into law. Instead, he said, the U.S. already has “a very large welfare state,” adding that roughly $500 billion he said is currently devoted to poverty-alleviation programs should be “more efficient” and “targeted to be more supportive of work.”

READ MORE:How the economic relief law narrows the equity gap for farmers of color

The policies targeting child poverty in the American Rescue Plan represent “an enormous expansion of the welfare state” and are only exceeded by the Affordable Care Act, Rector said.

“You want to be compassionate to be people who need assistance, but you don’t want free handouts where an individual can take advantage of the charity extended to them,” he said.

In the 2019 report, researchers suggested expanding benefits to target food and housing insecurity, along with the earned income tax credit and the child tax credit, and creating a child allowance, as Romney’ proposed, which the study found would have the biggest impact on low-income households. Families who claim children as dependents could receive these funds as deposits from the Social Security Administration or even the Internal Revenue Service, according to proposals currently before policymakers. They predicted that those measures could stabilize families in need and reduce child poverty by almost half in the U.S. On a basic level, putting targets in place would help policymakers see if programs like these are making a difference in reducing child poverty, such as how many children and households receive SNAP benefits or if the Census Bureau develops a more accurate measure of poverty based on who actually gets benefits or has health care coverage due to household income.

Rep. Danny Davis, D-Ill., said he sees increased interest in alleviating child poverty as “investing in the future of our country.” While U.S. politics are still intensely polarized, people can still rally behind children, added Davis, who authored the Child Poverty Reduction Act.

“We are at a tremendous crossroads right now in the future of our country, and so, this will help to move America forward and not move America backwards,” Davis said.

That includes people like Younger. She said she feels one major setback away from economic catastrophe, and doesn’t know how long she can keep herself and Mylie Jai afloat.

“Any help at the time of need we’re in right now, I’m thankful for,” Younger said.

She doesn’t allow Mylie Jai to attend birthday parties because she is afraid she might get sick. Her daughter plays with baby dolls and imaginary friends, and loves to play in the park.

For Younger, having a little more money could release her from being pinned down into survival mode each day. She could focus more fully on the moments she spends with Mylie Jai and be empowered to help her secure a better future.

“What would help me is to make sure the little girl I take care of every day grows up to be a prosperous adult,” Younger said.