Using Child Allowances to Cut Black and Latino Poverty

Clio Chang has a post at The Century Foundation about combatting the resilience of Black child poverty with a child allowance. In it, Chang notes that Black and Latino families with children are far more likely to suffer from lower earnings than their white counterparts, and concludes in this way:

This is important as currently, our main child poverty-cutting benefits are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), which do not apply to parents who are not earning any income. Additionally, parents who make less than $3,000 are ineligible for the CTC and for those who do make more than that, the credit is only partially and regressively refundable, meaning that the less money parents make, the less they get back. All this results in the most impoverished children, many of them minorities, missing out on this essential benefit. A cash allowance would help to fill in these gaps.

As a supplement to the figures in Chang's piece, consider the following graphs that break down poverty by life status and race.

White Poverty

Under the Official Poverty Metric, white poverty looks like this:1

Children are the largest of the eight groups by a slim margin, but in part because of the age demographics of whites, elderly and disabled people also grab rather large shares of white poverty.

Under the Supplemental Poverty Metric, white poverty looks like this:

Here, children drop to third place among the eight groups. This drop is mainly a function of the fact that the SPM's income concept includes child-related tax credits (lowering child poverty) and counts out-of-pocket medical expenses as income reductions (increasing elderly poverty).

Black Poverty

Under the Official Poverty Metric, Black poverty looks like this:

Under the Supplemental Poverty Metric, Black poverty looks like this:

Under both the OPM and SPM, children are by far the largest of the eight groups of Black people in poverty.

Latino Poverty

Under the Official Poverty Metric, Latino poverty looks like this:

Under the Supplemental Poverty Metric, Latino poverty looks like this:

As with Black poverty, Latino poverty is heavily shouldered by children.

Conclusion

In addition to being one of the easier anti-poverty programs to implement, a robust system of child benefits (including a child allowance) would also be the most advantageous welfare state expansion imaginable for Black and Latino families. It would go further than any other welfare program at closing racial poverty gaps and easing racial gaps in income more generally.

 


1. The definition of the categories for these graphs are as follows. Children - ages 0-17. Elderly - ages 65+. Disabled - has one of the serious disabilities the Census tracks or was out of work for some or part of the year because of an illness or disability. Student - was out of work for some or part of the year because of school. Carers - was out of work for some or part of the year taking care of family. Unemployed - was out of work for some or part of the year (mostly part of the year) because couldn't find work. Fully Employed - worked 50+ weeks. Other - everyone else. Where individuals belong to more than one category, they are placed in the highest category (on the graph's Y-axis) that they qualify for.

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