Drew Wilson
State and federal governments have gotten pretty good at pulling people out of poverty through social programs according to Robert Doar of the American Enterprise Institute, but when it comes to improving incomes and opportunities for poverty-stricken Americans there’s a long road ahead.
Data shared by Doar during a Thursday presentation to the Florida Chamber of Commerce showed that “consumption poverty,” which measures all resources a household receives including the value of government assistance benefits, less than 5 percent of American children were living below the poverty line in 2016 — a reduction of more than two-thirds over the past 30 years.
“Market poverty” tells a different tale, however.
That method, which only accounts for earnings and incomes brought in by a household, shows nearly 15 percent of American children are under the poverty line — currently $25,100 a year for a family of four.
“That’s the real challenge,” Doar said. “How do we make the market poverty line look like the consumption poverty line?”
There’s no single solution to that question, nor is there a single cause behind poverty.
Doar noted that event though “more people are working and more people are getting incomes from earnings” in the current economy, there’s been a sharp reduction in working-age men participating in the workforce — about 94 percent of men aged 25 to 54 were working in 1980 and compared to 88 percent in 2016.
There’s also the problem of the country’s high incarceration rate. A recent study pegged the unemployment rate among formerly incarcerated Americans was as high as 27 percent. The current unemployment rate for the general population is 4 percent.
Finding an effective way help people facing these and other issues requires a three-pronged approach that focuses on family, schools and work according to Doar. Focusing on one method, such as improving education for impoverished youth, is simply not enough.
“We need all three spheres working to move people up and out of poverty,” he said.
Doar also addressed losses in government assistance as a parent’s income rises, a dilemma sometimes referred to as a “fiscal cliff.” Programs ideally should taper off as incomes rise so higher earnings aren’t disincentivized, he said, pointing to the way the Earned Income Tax Credit tapers off.
As the Florida Children’s Council showed in a study released earlier this year, two of the biggest “fiscal cliffs” are child care and children’s health insurance. Those kinds of disincentives, Doar said, may not keep people from working, but they do keep people from trying to move up the ladder.
“We do a lot to shore up entry level work,” he said. “There’s not a cliff for that first job, but there is one for that second job.”
Doar’s presentation was a follow-up to the Florida Chamber’s Summit on Prosperity and Economic Opportunity, which was held in May. The Florida Chamber said it will continue the prosperity discussion during its 2018 Future of Florida Forum, to be held Sept. 26 and 27 in Orlando.
