VI. RodgersMarketApproach - Americas Market-Oriented...

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America’s Market-Oriented Approach to Poverty: A Comparative Perspective Harrell R. Rodgers, Jr Professor Department of Political Science University of Houston 1
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America’s Market-Oriented Approach to Poverty: A Comparative Perspective Since the mid-1960s the United States Bureau of the Census has gathered data on the extent of poverty in America (Bureau of the Census, 2008). The data have been backdated to 1959. Figure 1 shows the poverty count and the percent of all Americans living in poverty from 1959 to 2007. 1 In 2007 the Census Bureau’s calculations showed 37.3 million poor Americans, some 12.5 percent of the total population. Figure 1 also shows that in the 1960s and most of the 1970s progress was made in lowering poverty, but advances have been modest since the early 1980s. The best evidence suggest that some of the major reasons for the continuing and sometimes even rising rates of American poverty include A) significant increases in the number of families headed by single women; a family type that is highly vulnerable to poverty; B) declining earning potential for high school graduates (Alesina, Glaeser, and Sacerdote, 2005); C) the failure of social welfare spending to increase per capita with rising numbers of poor (Rodgers, 2006, 29-32); and D) poorly designed welfare programs that do not effectively assist the poor. (Figure 1 about here) Despite the lack of major progress in substantially reducing the poverty rate over the last twenty-five years, poverty has declined quite significantly for one major group. As Figure 2 shows, in 1959 citizens 65 and over suffered a poverty rate of about 35 percent. The poverty rate for this group declined quite dramatically between 1959 and 1975, sank modestly over the next twenty years, and has remained at a rather constant level since 1995. In 2007 the poverty rate for senior citizens was 9.7 percent. The reason poverty has declined for this group is that in the 1960s the Medicare program was established and Social Security benefits were increased and indexed to inflation. In other words, poverty among the elderly has declined 2
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quite substantially because Congress established a program to cover much of the retired populations’ health care costs, increased cash benefits to the retired population, and voted to keep benefits current by indexing payments to the inflation rate. By contrast, during the good economic times of the 1960s and 1970s and before the rapid growth in single-parent families, poverty among children 18 and younger and citizens 18 to 64 declined, but no major declines have taken place since the early 1980s. A primary reason is that on a per capita basis, Congress has reduced spending for these poor Americans (Burke, 2003; Rodgers, 2006, 130- 142). (Figure 2 about here) Because of differences in welfare support programs and other factors discussed below, poverty rates for Americans also vary significantly by race, ethnicity, and family type. As Figure 3 shows, poverty is a much more serious problem for black and Hispanic Americans than for Asian or non-Hispanic white Americans. Over twenty percent of all Hispanics live below the
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