Anti Poverty

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Anti Poverty

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Posted: Dec 17, 2008 |Comments: 0 | Views: 549 |

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Anti Poverty

By: Garima Dasgupta

About the Author

Garima Dasgupta Graduate student

(ArticlesBase SC #688499)

Article Source: http://www.articlesbase.com/ – Anti Poverty

Anti Poverty in USA

Even the wealthiest nation in the world like the United States does notescape the problem of poverty. This paper takes a critical look at poverty andanti-poverty policies in the United States. In this paper, I have argued thatpoverty is caused by several factors. This paper also discusses the liberal andconservative perspectives for reducing poverty in America. The conservativeshave focused on individual factors such as wide wage gaps, breakdown of family,racial factors and other reasons while the liberals have focused on thestructural transformation of the American economy to explain the persistence ofpoverty. Since 1960, both the federal and state governments have beenresponding with policies that address the problem with mixed results. In thispaper, I have analyzed the policies and have also recommended the possible waysto deal with this intractable nature of poverty.

According to Sen (1981), ‘the poor are those people whose consumption standardsfall short of the norms, or whose income lie below that line’. The word“poverty” suggests destitution, an inability to provide a family withnutritious food, clothing, and reasonable shelter. Over thirty-six millionAmericans live below the official U.S. poverty line (Blank, 2007). This means afamily of three earns less than less than $ 16,000 or a single individual earns$10,300 per annum (Blank, 2007, p. 17). Millions more struggle each month topay for basic necessities, or run out of savings when they lose jobs or facehealth emergencies. Job cuts, high rates of unemployment, foreclosures and highfood and gas prices continue to stimulate policy formulation designed toimprove the condition of the poor.

Poverty is integrally associated with misery and suffering. The lost potentialof children in poor households and the lower productivity and earnings of pooradults are all intertwined with poor health, increased crime and brokenneighborhoods. Childhood poverty typically leads to poor health care and highcrime neighborhoods. Persistent childhood poverty is estimated to cost theUnited States $500 billion each year, or about 4% of the nation’s grossdomestic product (Blank, 2007, p.1).

One in eight Americans lives in poverty and poverty in the United States is farhigher than in many developed nations (Rebecca Blank, 2007, p1). Inequality hasreached record high. The richest 1 percent of Americans in 2005 held thelargest share of the nation’s income (19%) since 1929 (Rebecca Blank, 2007, p.2). At the same time the poorest 20% of Americans held only 3.4% of thenation’s income (Rebecca Blank, 2007, p.2).

Colorado in spite of being surrounded by the beautiful Rocky Mountains andexperiencing a cool, mountain climate has many homeless people. Scholars haveidentified that, a growing number of single parent households, a shortage ofjobs for lower wage workers and a low rate of high school graduation havecontributed to the growth of poverty in Colorado. The Colorado poverty rate hasincreased from 9.2% in 2000-2001 to 10.6% in 2005-2006 while the poverty rateof United States has increased from 11.5% in 2000-2001 to 12.5 % in 2005-2006(Center on Law and Policy, 2006, p.1). Most of these ill-fated poorpeople suffer from mental and health problems.

Causes of Poverty

Policy analysts are trying to explore numerous perceived direct and indirectcauses of poverty in the United States to formulate effective policies toalleviate poverty. The work of scholars such as Corley (2003), Sowell ( 2004),Iceland (2006), Jencks (1992), James Tobin (1993) and others have shown thatthe intractable nature of poverty is a result of not any one factor but of theinteraction of a variety of causes. The breakdown of family and other socialcauses as well as the structural changes in the economy, have all contributedto society’s failure to eradicate poverty inspite of ardent efforts by policyanalysts.

Individual Explanation of poverty mainly stresses the attitudinal ormotivational factors and human capital factors. Thus lack of motivation amongindigents causes poverty. Generous welfare programs sometimes affect themind-set of recipients and they prefer to stay at home and enjoy the benefitsrather than work outside. Murray (1984) argues that individuals prefer toremain on welfare because of insufficient motivation to come out from publicwelfare programs.

Formulation and proliferation of policies to alleviate poverty has been a majorconcern of the United States Government since 1960. Educational attainment isnecessary to get a high paying job. Elementary school education, as well aslack of adequate skills and motivation among indigents to come out of thesituation is the major causes of poverty. People well equipped with technicalskills get high salaried jobs while people who are school drop outs get low payon an hourly basis. During the 1960s when the then- President of United StatesLyndon Johnson began to implement the United States ‘war on poverty’, he placedgreat emphasis on education (Jencks, 1992). The Lyndon Johnson administrationeven invested in programs like Head Start and occupational training to upgradethe skills of the poor and also to prevent future generations from working inlow-paying jobs. Scholars like Sowell (2004) and Corley (2003) have emphasizedindividual level factors as the central causes of poverty. They argue that aperson’s compensation is based on his or her educational qualification andmarketable skills. Sowell (2004) argues that the lack of appropriate skills hasaffected the ability of many indigents to climb out of poverty. He also arguesthat there has been an increase in the poverty rate of unskilled Americans, whohave lost jobs to Asian immigrants. Corley (2003) also supports the aboveargument and regards ‘lack of educational attainment’ as one of the entrenchedsources of poverty. Low quality education from poorly funded inner-city schoolsresults in few marketable skills which leads to low-wage jobs and othermiseries associated with it such as less ability to pay for housing, food,clothing, medical care, bad neighborhoods, funding problems for schools, andincreased risk of serious illness (Corley, 2003).

Many scholars have argued that structural changes are the primary reason forthe persistence of poverty in the United States. Structuralists emphasizeissues such as joblessness, discrimination in education, institutional racismand economic transformations in explaining the causes of poverty. Scholarsargue that the inability to provide decent paying jobs for some Americanfamilies and the ineffectiveness of American public policy to reduce povertyare basically the result of structural failures and processes. Poverty isrooted in the structure of American society. Rank, 2004 supports the above viewand argues that lack of human capital tends to place individuals in avulnerable state when events and crises occur. The incidence of these eventslike loss of a job, family break-up and ill-health often result in poverty.These ill-fated people unable to handle these situations often end up in payingmore. Scholars also argue that the acquisition of human capital is stronglyinfluenced by the impact of social class on this process (Rank, 2004). Apartfrom poor family, race and gender also play a role in the acquisition of humancapital (Mark Robert Rank, 2004).

Globalization, the expansion of credit markets leading to greater indebtnessand foreclosures leading to recession in 2008 all point to the growth ofpoverty. Iceland (2006) primarily focused on economic factors and hasargued that poverty is also the product of deindustrialization. As the U.S.shifts from a manufacturing, industrial society to a service-oriented,high-tech society, many of the blue-collar jobs that required little educationbut paid well are disappearing or are being outsourced. Rural areas, such asAppalachia, suffer losses of mining jobs, and cities such as Detroit lose manymanufacturing jobs to automation or overseas factories. Some people are unableto follow the jobs or commute to work are left in neighborhoods withoutemployment or tax-basis to support needed social functions, such as schools,public transportation, police departments, and so forth. Others simply cannotfind jobs because of the shift towards a service-based economy; in economicterms these people are structurally unemployed due to the changing skillsneeded. Tobin (1993) supports the above viewpoint and emphasizes on thedisappearance of jobs in the 1900s as the main reason for the country’s failureto eradicate poverty. Recent employment data shows that the US housing slumpand the crisis in America’s credit markets are threatening to increase povertylevels. Isidore (2008) mentions that the job losses are widespread, withthe battered construction sector losing 51,000 jobs and manufacturingemployment falling by 48,000 in the year 2008 . Retail employment dropped by12,000 jobs, and business and professional service employers cut staff by35,000. The unemployment rate jumped to 6.1% in September from 4.9 % in January(Bureau of Labor Statistics, 2008).

Kelso (1994), argues that over the last forty years,there has been a major shift of American firms first to the west and then tothe south. Part of this shift was due to the rise of the Cold War and thedecision of the government to enlarge U.S. military power (kelso, 1994). Heargues that as America elected to invest more in defense and in the aerospaceindustry, cities like Seattle and Los Angeles on the West Coast began to boomwhile the growth of a high technology and information based technology led tothe growing affluence of California and the San Francisco Bay area. Later withthe expansion of inter-state highway system and growth of jobs, markets werecreated in the south.

Iceland (2006) also argues that although the service sector of the economy hasgenerated millions of jobs, but again polarized earning distribution based oneducational attainment separates better paying jobs from poorer paying jobs. Hesupports a Marxian analysis of class conflict and exploitation and emphasizeson business owners favor hiring inexpensive labor to maximize profit. This alsoaccounts for the inflow of cheap labor to the United States from Mexico andother countries. Greater access to credit has put cars, computers, creditcards, and even homes within reach for many more of the working poor. But thisremaking of the marketplace for low-income consumers has a dark side. Roubininotes that, “Having access to credit should be helping low-income individuals,but instead of becoming an opportunity for upward social and economic mobility,it becomes a debt trap for many trying to move up (Grow and Epstein, 2007).

Inspite of public assistance and wide initiatives taken by both Federal andState governments, poverty still exists. Meticulous analysis of the situationand effective formulation of policies is needed to solve the problem of povertyin the United States. Scholars like Rank (2004), Blank (2007) and others haveshown that the United States Government spends fewer funds addressed towardspoverty than any other industrialized country. Thus a major structural failureis found at the political level (Rank, 2004). Most European countries provide awide range of insurance programs, unemployment assistance, and wide universalhealth coverage along with considerable support for child care (Rank, 2004).Such social programs are far more generous than those in the United States(Rank, 2004). While, low-income families in the United States work more thanthose in other countries, they are still not able to make up for lowergovernmental income support relative to their European counterparts (Blank,2007, 141-142).

The gross disparities among impoverished people in the UnitedStates along racial lines have led many scholars to speculate thatinstitutional racism is responsible for much of the poverty in the UnitedStates. Racial discrimination in employment and educationcontribute to the growth of poverty. Some scholars like Massey and Denton(1993) interpret the statistics in terms of institutional racism while otherslike Kelso (1994) interpret the statistics as evidence of deficiencies andsuffering of blacks. In spite of efforts to remove racism, slaveryand Jim Crow segregation, Massey and Denton (1993) argue that racialsegregation still exists and that the fundamental cause of poverty amongAfrican Americans is segregation. They argue that segregation has created andperpetuated a black underclass by limiting educational and employmentopportunities. Massey and Denton (1993) have shown that Blacks were shown homesin racially mixed areas or areas adjacent to predominantly black areas.

Also, changing patterns of family formation are more pronounced among racialand ethnic groups. Family patterns are also one of the causes of poverty in theUnited States. There is a wide gender gap in wages. In 2004 the median incomeof FTYR male workers was $40,798, compared to $31,223 for FTYR female workers(DeNavas-Walt et al, 2005) Pearce (1978) argues that ‘poverty is rapidlybecoming a female problem’. Iceland (2006) supports this statement and showedthat in 2000, the female poverty rate (12.5%) was 26% higher than the malepoverty rate (9.9%) (Iceland, 2006). According to Iceland, women have fewereconomic resources than men, and they are more likely to be the head of single-parent families. It also leads to the greater likehood that single, divorced orwidowed women will be poorer than their male counterparts because of lesssocial security income or other retirement income in addition to higher femalelife expectancies. Women’s lower wages, lower retirement benefits and theincreasing number of single mothers have led some scholars to talk about the“Feminization of Poverty.”

Federal policies

After the Second World War, by 1963, creation of jobs by President John F.Kennedy’s tax policies could not remove the problem of poverty. Poverty wasstill recognized as a major national problem. President Lyndon B. Johnson’s Waron Poverty led to a host of programs that included Medicare, Medicaid, FoodStamps, Aid to Families with Dependent Children, and others. These entitlementseventually consumed half the federal budget and could not alleviate poverty.The U.S. economy had been devastated by the recession of 1979-83 when theUnited Statess manufacturing infrastructure was shattered by the FederalReserve’s skyrocketing interest rates causing unemployment to shoot up bysixty-five percent in four years (Cook, 2007). By the end of the 1980s theeconomy was in another recession, leading to the election of Bill Clinton whoin 1992 replaced the incumbent George H.W. Bush. The investment boom of the1990s was fueled by foreign capital lured in by the Treasury’s strong dollarpolicies. Jobs were created as the dot.com bubble expanded, trade barriersfell, and utility trading giants like Enron took off. NAFTA was enacted topromote free trade, welfare-to-work brought low-income women into the jobmarket, and the Earned Income Tax Credit was extended. The party ended when thestock market crashed in December 2000 and millions of people lost theirretirement savings and other investments. Recession was returning even asGeorge W. Bush was being declared president by the U.S. Supreme Court inDecember 2000. The economic crisis deepened after the September 11, 2001attacks when $1.4 trillion in wealth vanished during the worst five days of thestock market since the Great Depression (Cook, 2007). Cook (2007) argues thattoday, poverty is becoming a national catastrophe. Cook (2007) argues that from2002 through 2006 the economy was floated by the housing bubble, with manylower income people getting into homes of their own through the proliferationof sub prime mortgages. With the financial woes in late 2008, many Americancitizens are left with inflated home prices and no way to pay for them.

The 1960’s policy initiatives and declaration of ‘unconditional war on poverty’by the then president Lyndon Johnson marked a discrete change in the federalgovernment’s willingness to intervene for the purpose of improving the economicsituation of poor Americans. Despite the billions of dollars spent on programslike CETA (Comprehensive Employment Training Act), The Manpower Development andTraining Act, Head Start, and the Elementary and Secondary Education Act, thegovernment efforts to deal with the origins of poverty have met with minimalsuccess. During this period, implementation of the Social Security old-ageprogram insured virtually all retired workers against the risk of outlivingtheir savings. The Social Security Act of 1935 sought to protect the incomes ofthose who did not work because of age or a poor economy by establishing afederal framework for unemployment insurance, old-age benefits, and assistanceto women. In early 1964, the two most pressing priorities of PresidentJohnson’s antipoverty agenda involved passing a massive tax cut designed tostimulate the economy and organizing a task force to shape the ‘War onPoverty’. The Economic opportunity Act (EOA) signed by Johnson created a longlist of programs designed to help individuals develop marketable skills,political power, and civic aptitude. But this anti-poverty legislation oversawother programs like Community Action Program, Job Corps, VISTA, Head Start(1965), Legal Services (1965) which were not included in its framework. Whileextensive programs like the Food Stamp Program, Medicare for elderly, Medicaidapplied to qualified poor residents, the Elementary and Secondary Education Actfor poor students overshadowed the EOA. The Higher Education Act eased thefinancial burdens of millions of college students. The Civil Rights Act openedup new spaces in the American marketplace, while the Voting Rights Act did thesame for the political marketplace. The Fair Housing Act established animportant base of law to combat housing discrimination. As a result the EOAslowly lost importance. Again, Murray (1984) argues that welfare benefits hadsoared so high so as to make living in poverty a meaningful option for thepoor. Even Burton (1992) has supported the above viewpoint and argues that theprograms have done more to cause poverty than to alleviate it.

When Nixon assumed power, he tried to deal with poverty in amore direct way than emphasizing social programs. . Although President Nixonexpressed dislike for much of the War on Poverty, his administration respondedto public pressure by maintaining most programs and by expanding the welfarestate through the liberalization of the Food Stamp program, the indexing ofSocial Security to inflation, and the passage of the Supplemental SecurityIncome (SSI) program for disabled Americans (Rank, 2004). The Nixonadministration also endorsed a “New Federalism” in which the federal governmentshifted more authority over social welfare enterprises to state and localgovernments. His plan to implement the ‘Family Assistance Plan’ (FAP) consistedof various income provisions, work provisions, and training provisions forthose below the poverty line (Rank, 2004). It failed to pass the Senate muchlike the ‘Programs for Better Jobs and Income’ initiated by President Carter inlater years. Welfarereform continued as a focus of federal policy debates even after thelegislative defeat of FAP. Even though a cash ‘Negative income Tax’ (NIT) forall poor persons never passed, the Food Stamp program provided a nationalbenefit in food coupons that varied by family size, regardless of state ofresidence or living arrangements or marital status. The number of AFDCrecipients increased from about 6 million to 11 million and the number of foodstamp recipients, from about 1 million to 19 million during the Nixonadministration (Danziger, 1999, p. 8). Danziger (1999) also argues that ashigher cash and in-kind benefits became available to a larger percentage ofpoor people, the work disincentives and high budgetary costs of welfareprograms were increasingly challenged. The public and policy makers came toview increased welfare recipients as evidence that the programs weresubsidizing dependency and encouraging idleness.

Despite the failure to enact a guaranteed incomeprogram, both the number of recipients and the amount of money spent on welfareprograms increased substantially during the 1970’s (Rank, 2004). Rank (2004)has given an overview of Reagan’s policies and noted that Reagan emphasizedindividual action unhampered by government interference, rejected the socialengineering of the 1960’s and also supported federalism, that is, returningpower to the states rather than centralizing them within the federalgovernment. Reagan tried to address the problem and set the tone for welfarereform that occurred in 1990 during his successor’s administration. The Reaganadministration thought eligibility for welfare benefits had increased so much,that many persons who were not “truly needy” were receiving benefits. TheReagan Administration opposed simultaneous receipt of wages and welfarebenefits. Rather, it proposed that welfare become a safety net, providing cashassistance only for those unable to secure jobs.

The Earned Income Tax Credit (EITC), enacted in 1975, provides families of theworking poor with a refundable income tax credit (i.e., the family receives apayment from the Internal Revenue Service if the credit due exceeds the incometax owed). Thus the EITC raises the effective wage of low-income families, isavailable to both one- and two-parent families, and does not require them toapply for welfare. The maximum EITC for a poor family was $400 in 1975 and roseto $550 by 1986 (Danziger, 1999, p. 14). The 1986 Tax Reform Act increased theEITC so that by 1990 a low-income working parent received a maximum credit of$953 (Danziger, 1999, p. 14). The number of families receiving creditsincreased from between 5 and 7.5 million families a year between 1975 and 1986to more than 11 million by 1988 (Danziger, 1999, p. 14). Danziger, 1999 arguesthat as the expanded EITC supplements low earnings, it became easier for policymakers to emphasize welfare reform policies that could place recipients intoany job, rather than training them for “good jobs.” Thus he argues that if anonworking recipient took a low-wage job, a substantial EITC could make workpay as much as a higher-wage job would have paid in the absence of an EITC.

The Family Support Act (FSA) of 1988 expanded the scope of the AFDC program fortwo-parent families, instituted transitional child care and Medicaid forrecipients leaving welfare for work, and added funds and required states toestablish programs to move greater numbers of welfare recipients intoemployment. When the welfare rolls jumped in the late-1980s and early-1990s,from about 11 to about 14 million recipients, dissatisfaction with welfareagain increased ( Danziger, 1999).

President Nixon identified the two main economic problems, inflation andunemployment, that justify the need for economic recovery to the Americanworker. Reagan has emphasized despair caused by unemployment combined with highinflation. Reagan’s rhetorical construction of welfare recipients and thewelfare system was aimed at reducing anxiety among Americans caused byincreasing taxes, inflation and the continuous fear of losing jobs. To end thisvictimization, Reagan proposed a plan for economic recovery (Rank, 2004). Apartfrom cutting government spending, specifically spending on social programs,Reagan also proposed to have State governments assume control of Aid toFamilies with Dependent Children (AFDC) and the food stamps program in exchangefor the Federal Government control of Medicaid. Although this proposal failedto reach the Congressional floor, his presentation of the proposal to exchangeAFDC and food stamp program with Medicaid made poverty a local concern (MarkRobert Rank, 2004).

Liberals and conservativesstill disagreed on other goals of welfare-to-work programs. Liberals thoughtwelfare reform should expand opportunities for welfare mothers to receivetraining and work experiences that would help them raise their families’ livingstandards by working more and at higher wages. Conservatives emphasized workrequirements, obligations welfare mothers owed in return for government supportwhether or not their families’ incomes increased (Mead, 1992).

In later years President Clinton’s approach also emphasizedempowerment as a way of helping welfare recipients and to accumulate moresavings without being penalized and expanding the earned income tax credit(Blank, 2007). By the mid-1990s, the focus of policy concern shifted fromfighting poverty to reducing welfare dependence. President Clinton’s signing ofthe Personal Responsibility and Work Opportunity Reconciliation Act of 1996(the PRWORA) ended the entitlement to cash assistance and dramatically changedthe nature of the social safety net. The Act created the Temporary Assistanceto Needy Families Program (TANF). TANF began on July 1, 1997, provides cashassistance to indigent American families with dependent children through theUnited States Department of Health and Human Services (The Center for AmericanProgress Task Force on Poverty, 2007). Danziger, 1999 argues thateach state can now decide which families to assist, subjectonly to a requirement that they receive “fair and equitable treatment.” In instituting a block grant program, the PRWORA granted states theability to design their own systems, as long as states met a set of basicfederal requirements. The bill’s emphasis on ending welfare as an entitlementprogram, places a lifetime limit of five years on benefits paid by federalfunds, and also aims to encourage two-parent families and discouragesout-of-wedlock births. In granting states wider latitude for designing theirown programs, some states have decided to place additional requirements onrecipients. Although the law placed a time limit for benefits supported byfederal funds of no more than 2 consecutive years and no more than 5 years overa lifetime, some states have enacted more stringent limits. All states,however, have allowed exceptions with the intent of not punishing childrenbecause their parents have gone over the time limit. Federal requirements haveensured some measure of uniformity across states, but the block grant approachhas led individual states to distribute federal money in different ways.Certain states more actively encourage education, others use the money to helpfund private enterprises helping job seekers. The PRWORA offers no opportunityto work in exchange for welfare benefits when a recipient reaches her lifetimelimit of 60 months of federally-supported cash assistance. But the reform hascertain limits. States may not use federal block grant funds to provide morethan a cumulative lifetime total of 60 months of cash assistance to any welfarerecipient, no matter how willing she might be to work for her benefits, andthey have the option to set shorter time limits. States can grant exceptions tothe lifetime limit and continue to use federal funds for up to 20 percent ofthe caseload. The extent of work expectations has also been increased.Single-parent recipients with no children under age one will be expected towork at least 30 hours per week by FY 2002 in order to maintain eligibility forcash assistance (Danziger, 1999, p 20). States can require participation inwork or work-related activities regardless of the age of the youngest child.Thus PRWORA emerged from research that sought both to reduce poverty andwelfare dependency (Danziger, 1999). In the 1990s, following Clinton’scall to “end welfare as we know it,” policy makers escalated their demands forrecipients to work and reduced government obligations toward and funds to servethem (Danziger, 1999).

When Bush took office in 2001, the U.S. was experiencing a national surplus,unemployment and poverty had been on the decline for years, and the economy wasbooming. Now, almost six years later, poverty is on the rise, healthcarecoverage is on the decline, and the country is faced with the largest nationaldeficit in history. Lower middle class families are slowly slipping below thepoverty line and the poorest are becoming even more destitute. Most of thesefamilies are headed by women.

President Bush has extended the TANF. There has been a general economicstimulus policy initiative during the Bush administration but nothing targetinglow income Americans has been enacted. President Bush signed the economicstimulus package (H.R. 5140) into law with the hope that it will provide amuch-needed boost to the lagging economy. The package includes tax rebates forindividuals, tax breaks for businesses, and a temporary increase of the FederalHousing Administration loans from $417,000 to $729,750 (White House report,2008). More than 130 million people are expected to get tax rebates rangingfrom $300 to $1,200 per household for individuals earning $75,000 or less andcouples earning up to $150,000 (White House report, 2008). While the stimuluspackage will provide much needed financial help to millions of people, it failsto target those most in need as it will not include an extension ofunemployment benefits, energy assistance, food stamp benefits, or fiscal reliefto states for Medicaid.

From the above analysis, the question arises whether poor are responsible fortheir own condition. The above analysis implies that recipients becomedependent and lethargic due to vast welfare measures. Scholars such as Murray(1984) and Kilty and Segal (2006) have emphasized on individual factors. Theyargue that welfare measures and lack of spirit and motivation among indigentscontribute poverty. Danziger, 1999 argues that during the Nixon era increasedwelfare measures encouraged idleness. Kilty and Segal, 2006 also argues thatpoor people can come out into a state of self-sufficiency from dependency bylearning proper work attitude and skills. Kilty and Segal, 2006 argue theimportance of welfare reform and a ‘tough love’ approach would ultimately helpthe poor by making them conscious of their condition and forcing them to taketheir own responsibility. Bill Clinton’s emphasis on ‘personal responsibility’and measures to ‘end welfare as we know it’ in 1992 all supports the aboveargument.

Due to the implementation of TANF, the numbers of people on welfare havedecreased. As a result more funds are accumulated. In 1996 the number of ADFCrecipients was 12,644,076 while in 2001, the number of TANF recipients was5,91, 811 and the poverty rate also reduced from 13.7 to 11.3 ( Kilty andSegal, 2006) and while in 2008 it is 1,628,422 ( US Dept of Health andHuman Services). The share of single mothers on welfare (based onadministrative caseload counts divided by population numbers) rose from 38percent in 1969 to 48 percent in 1980, but had fallen to 30 percent by 1998 (Kilty and Segal, 2006). These caseload changes are widespread, with every statein the country experiencing substantial caseload decline. This decline has beenwidely hailed by politicians as an indication that policies designed to reducedependence on public assistance and move less-skilled adults into the labormarket have been extremely effective ( Blank, 2007). But however Blank arguesthat declines in welfare do not affect the poverty rate. The poverty rate in2007 was 12.5 percent, increasing slightly from its level of 12.3 percent in2006. The poverty rate increased for four straight years from 2000 to 2004. In2007, the poverty rate was 1.2 percentage points higher than it was in 2000(Blank, 2007).

States welfare initiatives

Most states took a significant decision about reform, and this decision wassensible in light of state goals and experience. A few states did not seriouslymake reform policy. New York was so deeply divided that it took no seriousdecisions about AFDC (Mead, 2002). Alabama and Missouri were pushed into reformby federal action and appeared to have little welfare policy of their own(Mead, 2002). In several other Southern states (Florida, North Carolina),policymaking appeared to be casual and personalized, with the governor orlegislators offering reform plans with, apparently, little inquiry or evidencebehind them( Mead, 2002) . Texas policymaking was incoherent as the stateclaimed to pursue work first but based its policy on an experimental programand focused far more on education and training (Mead, 2002). States have alwaysemphasized on reform. But sometimes lower contribution towards these plansresult in total failure of the program. Mead (2002) argues that in Florida andGeorgia, however, officialdom was dragged into reform but showed littlecommitment to it. In Arizona and California, the agency or major localities hadbeen heavily committed to a skills-oriented approach to welfare and resistedthe shift toward work first. In Texas, welfare reform was a lower priority toadministrators than rebuilding non-welfare employment programs and otherinitiatives. In Colorado and New Jersey, local agencies had a history ofdefiance toward the state government, and this prevented them from fullyendorsing reforms decided in the capital. Mead (2002) argues that inspite ofestablishment of Employment Service (ES), a federally-funded job placementagency, and training programs under the federal Job Training Partnership Act(JTPA), poverty rate did not improve. After national welfare work programs werefirst enacted in 1967, the ES engaged in welfare practices. But because theES’s routine stressed serving job seekers who came to it voluntarily, itgenerally performed poorly with welfare clients (Mead, 2002). These jobseekerscame to it on a mandatory basis, as a condition of receiving aid. To succeedwith them, the agency had to enforce work but also support employment withspecial services. The ES often found both these roles uncongenial (Mead, 2002).The ES was denoted to the role of contractor to welfare and later in 1988 theWorkforce Investment Act (WIA) merged the ES, JTPA, and other non-welfare workprograms. But this merging also created confusion. The problems included lackof clear procedures to refer clients to WIA, to serve them there, or to reportresults back to welfare. The states that lacked coordination and inadequatemanagement information systems (MIS) were Massachusetts, Rhode Island,Tennessee, Washington, West Virginia, Florida, Georgia, and Tennessee.

Colorado’s public reform has been associated with decline inpoverty rate. By the close of 2000, Colorado’s unemployment rate dropped to 2.6percent, personal income showed steady gains, state welfare cases declineddramatically, and State legislators wrestled with an estimated $833 millionrevenue surplus (Colorado Fiscal Policy Institute, 2001). But inspite of allthe above facts poverty still persists as expenses like child care,out-of-pocket medical expenses and geo-graphic differences in housing costsincreased. The increases occurred even after adjusting for income support suchas tax relief, food stamps and school lunch programs, housing subsidies andenergy assistance. A report published in 2001 by the Colorado Fiscal PolicyInstitute determined that a single parent with two small children living inDenver County would need to earn an annual salary of approximately $39,924 inorder to meet their basic needs such as housing, food, health care, childcareand transportation without public or private assistance. Even child povertyrate is high in Colorado. About 180,000 children, 15.7 percent of the statetotal was living in poverty in Colorado in 2006, a 73 percent increase since2000 (Frosch, 2008). The state of Colorado purchases childcare for incomeeligible families through the Colorado Child Care Assistance Program (CCCAP).The state allows individual counties to set the purchase price of childcare andmake payments to providers from a combination of parental fees and federal,state and county funds. However, the Colorado Office of Resource and ReferralAgencies (CORRA) found in a 2001 study that the average county payment fellbelow 75 percent of market value (Colorado Fiscal Policy Institute, 2001, pp9). As a result counties forced providers to subsidize the cost of service tolow-income families, which many were simply unwilling to do when limited slotscould be filled with families that could afford to pay full rates. Otherproviders that chose not to simply refuse service to CCCAP families saved moneyby limiting the number of children on CCCAP that they would accept, cuttingprograms, or reducing workers’ wages. All of these actions limited availabilityand sacrificed quality of care to low-income children. Poverty still exists inColorado despite initiatives to alleviate poverty as too many working familieslives with incomes below the poverty line and more families earn wages simplytoo low to afford their basic needs. The Colorado government started the CommonGood Caucus in 2007 to develop a 2009 agenda, emphasizing on K-12 education anddetermined to bring technologies out of the laboratory and into the marketplaceby investing $4.5 million dollars in bioscience industry, supporting the CleanEnergy fund to reduce high family utility costs , creating the Colorado SolarIncentive Program with $2 million to provide rebates for photovoltaic and solarthermal systems to help Coloradans join the new energy economy and cut theirutility bills ( State Rep. Kerr Andy, 2008). Poor people cannot pay thefull cost of heating and lighting their homes. Governments and social serviceagencies have long assisted low-income ratepayers in paying their bills throughsuch programs as the Low Income Home Energy Assistance Program (LIHEAP),charitable fuel funds, levelized billing, discounts, home weatherization,energy efficiency, energy usage education and debt management. If all Americanslive in weatherized and energy efficient homes and have the income to pay theirfull share of utility bills, all other ratepayers would save nearly $6 billionin poverty costs, including fuel assistance, lifeline and other rateassistance, weatherization and efficiency costs, the costs of late payments andservice disconnections (Oppenheim and MacGregor,2007).

Recommendations

From the above analysis it is clear that poverty remainspervasive due to the economic system, social stratification and welfaremeasures. According to Iceland (2003) on one hand, economic growth andtechnological changes contribute to increase in wages and overall standard ofliving. Economic growth accompanied by rising education levels improves thecondition of people. On the other hand, the market economy often exerts acontrary effect on poverty levels (Iceland, 2003). To maximize profits,businesses usually seek to pay low wage to workers which increase inequalityand poverty. Again policy may increase or decrease the harmful effects ofinequality. Combining the factors emphasized by both liberals andconservatives, poverty is multifaceted. I believe that a strong national effortwould alleviate poverty. Employment opportunities for all so that that workerand their families can avoid poverty, meet basic needs and save for the future.Increasing hourly wages would definitely improve the condition of these people.A smaller share of unemployed low-wage workers, receive unemployment insurancebenefits. I believe that states (with federal help) should reform “monetaryeligibility” rules that screen out low-wage workers, broaden eligibility forpart-time workers and workers who have lost employment as a result ofcompelling family circumstances. Workers should use this period of unemploymentand the money received from the Unemployment Insurance System and upgrade theirskills and qualifications. Thus adults should have opportunities throughouttheir lives to connect to work, get more education, and live in a goodneighborhood and move up in the workforce.

Child care assistance to low-income families and emphasis on K 12 educationwould definitely reduce the rate of poverty in the United States. Low-incomeyouth hardly attend college than their higher income peers. Pell Grants play acrucial role for lower-income students. Simplification of the Pell grantapplication process, and encouragement of institutions to do more to raisestudent completion rates would definitely improve the condition. Expansion ofPell Grants would make higher education accessible to residents of each state.The states at the same time should also develop strategies to makepostsecondary education affordable for all residents. Expansion of the Saver’sCredit would encourage saving for education, homeownership, and retirement. Asa result all Americans would have assets that would allow them to weatherperiods of volatility and to have the resources that may be essential forupward economic mobility. Apart from Saver’s credit, expansion of Earned IncomeTax Credit would raise incomes and helps families build assets. Thus thereshould be opportunity for all so that children grow up in conditions thatmaximize their opportunities for success.

References:

Blank Rebecca (2007); Poverty to Prosperity; Center for American task forceon Poverty;

www.americanprogress.org/issues/2007/04/pdf/poverty_report.pdf – Similar pages

Colorado Statewide Homeless Count (2007), School of Public Affairs,University of Colorado,denver.www.dola.state.co.us/cdh/Publications/Winter_2007_Statewide_PIT.pdf –Similar pages

Cook Richard (2007), Poverty in America

www.globalresearch.ca/index.php?context=va&aid=5905 – 61k – Cached –Similar pages

Corley Mary Ann (2003); Poverty, Racism and Literacy; ERIC Clearinghouse onAdult Career and Vocational Education

Danziger Sheldon (1999), Welfare Reform Policy from Nixon to Clinton,Institute for for Social Research, University of Michigan.

De Navas-Walt, et al., “Income, Poverty and Health Insurance in the UnitedStates: 2005.

Diana Pearce Diana Pearce (1978) “The Feminization of Poverty: Women, Work,and Welfare,” Urban and Social Change Review.

Iceland John (2006); Poverty in America; University of California Press

Isidore Chris (2008); the Trillion-Dollar Mortgage Bomb,

money.cnn.com/2008/04/21/news/economy/fannie_freddie/?postversion=2008042103– 66k –

James Tobin (1993); Poverty in Relation to macroeconomic Trends, Cycles andPolicies; Cowles foundation discussion paper.

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