The Most Confusing Case That the War On Poverty Failed

To the extent that there is still poverty, the War On Poverty has failed. With that said, anti-poverty programs have done a lot to reduce poverty since the 1960s. By one pretty solid measure, anti-poverty programs pulled 40 million people out of poverty last year, cutting the U.S. poverty rate from 28.7 percent to 16 percent. That is an enormous gain, especially when you add in the fact that the 16 percent who still remain in poverty also have their lives improved by our social programs, just not enough to bring them above the poverty line.

Despite this record of significant success, Zachary Goldfarb wrote an ill-conceived piece at Wonkblog making the "best case that the war on poverty has failed." Goldfarb writes:

But to the degree that the War on Poverty should have led U.S. companies to pay their workers adequate wages and prompted sufficient enough demand to ensure full employment, the war has been a failure. If you return to the interactive chart above, and click on "poverty rate without the safety net," you'll see that 28.7 percent of the country would be in poverty today without government policies to help them -- actually higher than it was 50 years ago.

Why on earth should this have been the result of the War on Poverty? What does it matter, for the specific purposes of poverty reduction, where the money that brings someone out of poverty comes from?

To be sure, there are plenty of people who are utterly obsessed with market incomes for normative and ideological reasons. But such an obession, no matter how intense it is, does not turn unpoor people into poor people just because the source of their income is social benefit programs. Grandma is not basically still poor because, without her generous Social Security check, she would be below the poverty line. She is not poor, full stop.

Also, it would be really foolish to primarily focus a War on Poverty towards causing "U.S. companies to pay their workers adequate wages." Don't get me wrong: we should do absolutely everything we can to squeeze money out of employers and into the pockets of employees. But how much does Goldfarb think the government can do to change the kinds of jobs generated by the evolution of our economy's sectoral composition?

We hear from conservatives that pumping up human capital through increasing education and training will do it. The problem is that we did that. College and high school attainment has rocketed up enormously since the 1960s. We have the most educated and well-trained workforce we have ever had, but it turns out that this doesn't magically create more high-paying jobs for people to move into. Despite what some seem to think, we can't literally all be highly-paid executives and bankers and middle managers because, at the end of the day, someone has to do the work.

A War on Poverty should probe every possible avenue through which we can push more money and resources to those at the bottom. That includes measures that pump more money to the poor through the paycheck channel. But it also, and more importantly, includes measures that pump money through transfer and social benefit channels. It is the latter two channels that the famed low-poverty countries of Western and Northern Europe have used in order to get that way. We should not be shy about following their lead on this, our incoherent cultural fixation on market income notwithstanding.