Poverty and Government Aid: Facts and 90’s Trends
I was wondering what had happened to welfare spending over time. The adjacent table from the 2003 Statistical Abstract shows changes in income-tested government transfers during the 1990’s. Compare 1990 and 2000, in constant dollars. Federal and state medical benefits rose from 69 to 225 billion dollars per year. Cash payments went from 61 to 91, peaking at 109 in 1995. Food went from 29 to 34, peaking at 49 in 1994. Housing went from 21 to 34 billion, peaking at 36 in 1996.
AFDC, a cash benefits program, was reformed in 1996– the well- known “welfare reform”– but other programs were not. As a Heritage Foundation report says,
The rate of caseload decline varies enormously among the 50 states, which shows that welfare policies were the key factors behind falling dependence, not economic conditions. If economic conditions were the main factor driving down caseloads, the variation in state reduction rates would be linked to variation in state economic conditions. But the relative vigor of state economies had no statistically significant effect on caseload decline….
Only one federal welfare program–AFDC–was reformed in 1996. The other 69 major means-tested programs, including food stamps, housing, and Medicaid, were left largely unchanged with no requirements to be engaged in constructive activity, such as work or education, as a condition for receiving aid.
Another Heritage report, on poverty and inequality, has evidence on the peculiarity of the official definition of poverty: Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio….
According to the Census Bureau and other various government reports, nearly three-quarters of poor households own a car; 30 percent own two or more cars… Today, the typical American defined as poor by the government not only has a refrigerator, a stove, and a washing machine, but also has a car, air conditioning in his home, a microwave, a color TV, a VCR, and a stereo. His home is in good repair and is not over-crowded. He is able to obtain medical care. By his own report, his family is not hungry, and in the past year, he had sufficient funds to meet his essential needs. While this individual’s life is not opulent, it is equally far from the popular images of poverty conveyed by politicians, the press, and activists. Most of America’s “poor” live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.
July 27th, 2005 at 7:45 pm
I grew up poor in the United States in the 70s and 80s and we certainly did not have the lifestyle you describe.
We had two cars: one was a 10 year old datsun station wagon and the other was my car, which I paid for by working summers from the time I was 14 until I was 16. It was a beat up Dodge Dart.
There were 10 people living in a 1100 sq ft house. Two adults, five teenagers and three children shared one bathroom. One pair of children slept on the porch, which we walled in. One pair of kids slept in the garage. The oldest boy slept in a camper shell parked in the front yard.
We ate every night, mostly due to food stamps, but things like meat and milk were always in short supply. At the end of each month, we ate rice and beans mostly and sometimes some vegetables in the garden. We had a TV set, but no cable, no VCR, no stereo and no air conditioning. This was in the central valley, near Sacramento, where it would routinely get over 100 degrees on a summer day. Our way of staying cool as kids was to spend all day down at the watering hole.
We were hardly the poorest or worse off family in the nieghborhood. Our parents did not do drugs, my stepfather had steady work and my mother stayed home cooking and cleaning and did things like maintain a garden and raise rabbits and chickens.
I don’t know where this Heritage Foundation report gets its information from, but it appears badly off the mark to me.
July 27th, 2005 at 9:13 pm
That’s part of the Heritage point, I think: being in poverty now means something different than it used to. In 1940, lots of people had no electricity. In 1960, lots of people had no TV or indoor toilets. In 1980, lots of people had no air conditioning.
When I grew up in the 1960s, we had no cable TV or VCR– because they didn’t exist. Not even the rich had those things then.
I was in a household with above average income– a professor’s family– but for my first decade or so we only had one car and no air conditioning, and when we did get air conditioning, it was a living room air conditioner.
Remember, too, though, that the Heritage and other stats I report do not apply to all or even nearly all poor families, even today. If the typical poor family has air conditioning, it is still possible that 49% of poor families do not. The thrust of the Heritage report is that the government method of defining poverty is such that what the governmetn calls poverty now would have been called prosperity not long ago.