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Some battles being won in war on poverty, economists say

ann huff stevensW

Ann Huff Stevens. Courtesy photo

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From page A1 | January 10, 2014 | 3 Comments

When President Lyndon Johnson declared an “unconditional war on poverty” in his State of the Union address, 50 years ago this week, the official poverty rate was 19 percent.

Last year, it stood at 15 percent. And so the war goes on.

What that official measure of poverty fails to capture are other, harder-to-quantify successes, according to Ann Huff Stevens, economics professor and director of the UC Davis Center for Poverty Research.

“Because we now provide a substantial number of low-income families with Medicaid, with health insurance for their children, with food stamp nutrition support, with school lunch, we see improvement in the health of the poor people,” Stevens said.

“Those victories are not as easy to show on a graph and they don’t show up on official statistics.”

On Thursday and today, the center hosted a conference looking more deeply at where the country stands in Johnson’s war, 50 years on.

About 50 million Americans live below the official poverty line, which in 2012 was set at $23,492 for a family of four.

Income inequality, which President Barack Obama has called “the defining challenge of our time,” has grown to the point where a family in the top 1 percent has a net worth a record 288 times greater than the average family.

But are the poor relatively better off than at the time of Johnson’s speech and does that speak to the merits of programs like food stamps?

“One thing that I think there is consensus at this conference about, because it is a group of people who have studied pretty carefully many of the safety-net programs, is that many of these safety-net programs are actually quite effective,” Stevens said. “But many of them have been cut, so one thing we should be doing is to restore or maintain these programs that we do have.”

Economists say that the official poverty rate does not paint a full enough picture. It does not include noncash benefits, like public housing, Medicaid and food stamps or tax credits, like the earned income tax credit and child credit.

When gauged by consumption, for instance — what people actually have in terms of food and housing — the poverty rate dropped 26.4 percent between 1960 and 2010, with 8.5 percent of that decline since 1980. That’s according to paper offered at the conference by economists Bruce Meyer of the University of Chicago and James Sullivan of the University of Notre Dame.

They credit that improvement to cuts in tax rates at the bottom in the 1960s and expanded tax credits, deductions and exemptions beginning in the 1980s.

Increased Social Security benefits, especially in the late 1960s and 1970s, and increased educational attainment are among the other factors that also have played a role, Meyer and Sullivan write.

Said Stevens, “If you measure poverty by looking at data on consumption … you get a more optimistic picture. Those numbers actually suggest that people at the bottom are substantially better off today than back when the war on poverty started.”

In 2011, the earned income tax credit kept 6 million people above the poverty line. Food stamps did so for 4 million people.

Food stamps may do more than that, however.

Hilary Hoynes, a UC Berkeley economist affiliated with the UCD research center, on Thursday presented a study that found that those with exposure to food stamps up to age 5 have a reduced incidence of obesity, high blood pressure, diabetes and heart disease in adulthood.

“The differences are significant,” she said. “We find that having exposure through age 5 versus not having food stamps at all leads to more than a 10 percentage-point difference in the risk of obesity.”

Hoynes and her co-authors, Diane Whitmore Schanzenbach of Northwestern University and Douglas Almond of Columbia University, looked at about 3,000 people born between 1956 and 1981 whose parents had less than a high school education.

Because the food stamp program (now officially called the Supplemental Nutrition Assistance Program) was rolled out between 1961 and 1975, it allowed the researchers to compare the long-term health of their subjects to the varied availability of the assistance.

Previous research has shown that exposure to better nutrition in early life reduces later-life chronic conditions. Scientists believe that’s because the metabolic system develops in response to available nutrients.

“To date, there has not been much interest in whether these sort of general assistance programs could lead to effects on health,” Hoynes said. “No one has really thought that this would matter.

“The work has been much more about to what extent does it change what people eat and to what extent does it remove people from poverty, which is really important, and people also look at to what extent does providing this assistance cause any reductions in work effort. That’s where most of the debate has been …

“We still need to think of the bigger picture of the costs versus the benefits of this program, but what we’re looking at no one has really looked at before.”

Hoynes said it is important to note that those she studied remained relatively young, so only time will tell if the differences hold over their full lifetimes.

The study also found a positive, though not statistically significant, association between early exposure to food stamps and adult income for women.

Online: http://poverty.ucdavis.edu

— Reach Cory Golden at cgolden@davisenterprise.net or 530-747-8046. Follow him on Twitter at @cory_golden

Cory Golden

Cory Golden

The Enterprise's higher-education and congressional reporter. http://about.me/cory_golden
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Discussion | 3 comments

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  • greg johnsonJanuary 10, 2014 - 6:48 pm

    Estimates I've seen say we've spent about 15 trillion dollars in this war (Iraq and Afghanistan pale in comparison), and all 3 wars have yielded us a net zero. To think we could have no national debt and be really no worse off is quite disheartening.

    Reply | Report abusive comment
  • ontJanuary 10, 2014 - 7:59 pm

    The Washington Post had a piece recently showing that poverty among the elderly currently is about a third of what it was in the sixties thanks in part to Medicare and Medicaid.

    Reply | Report abusive comment
  • greg johnsonJanuary 10, 2014 - 8:34 pm

    I'm not sure that Medicare is counted in the 15 trillion. I know you think conservatives have no hearts, but I truly believe that there are a percentage of people (not small) who will do as little as possible to ride the system, and a percentage (also not small) who are dysfunctional and cannot be helped. I have had extensive conversations with people who worked themselves or whose spouses worked for the county directly in the food stamps programs. None of them were conservatives, and they all told me the same thing--SCAM. I imagine if you talk to a vast majority of these people who work where the rubber meets the road, you will find the same response. The US has to work for the middle class. The rich and poor have never had it so good as they have under Obama, but the middle class is getting crushed. If they have to support the rich and the poor, there will no longer be a middle class.

    Reply | Report abusive comment
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