PRB

(September 2009) The percent of children in poverty (19 percent based on data released on Sept. 10 by the U.S. Census Bureau) is far higher than that of the working-age population or the elderly. Prior to 1972, the elderly actually had a higher poverty rate than children, but pensions, social security, and Medicare have dramatically improved the lives of the elderly. While raising the next generation of Americans is clearly important, the U.S. government spends nearly $5 on the elderly for each $1 spent on children.

During a PRB Discuss Online, Bill O’Hare, senior fellow at the Annie E. Casey Foundation, answered participants’ questions about child poverty in the United States.

Thank you for taking part in this lively and important discussion about child poverty in the United States. And many thanks to Bill O’Hare for moderating the discussion.

New state- and city-level data on U.S. children in poverty have just been posted to the Annie E. Casey Foundation’s KIDS COUNT Data Center website (http://datacenter.kidscount.org).

Sept. 30, 2009 1 PM EST

Transcript of Questions and Answers

J Kishore: Child poverty report is an interesting finding and challenges our concept of development. Indian children are also facing poverty that can be easily understood by the level of malnutrition. Planning commission of India reported that there are 17 million working children in India however, other reports stated that these numbers are highly underestimated. These children are actually suffering from poverty inspite of their working status. Now US government need to increase funding and change their strategy to handle child poverty. We are interested to learn more.
William P. O’Hare: Comparing child poverty in the U.S. to that in developing or less developed countries is complicated. And it raises the question of whether poverty should be seen as an absolute concept or a relative concept. While many U.S. children who are deemed poor have more material wealth than poor children in other countries, the gap between the poor children and the middle-class children in the U.S. is enormous.

Richard Cincotta: Why the disparity in spending given the likely dividends from investing in a cohort that will have bearing upon workforce productivity, international competitiveness, morbidity and its future costs, and the future crime rate? While poverty of the elderly is a serious social issue, it engenders none of these imperatives for investment. Is it only seniors’ power to lobby that produces this differential in spending, or are there other factors impeding greater US investment in its own children?
William P. O’Hare: I would certainly agree with you that there is a strong case to be made for investing in children in terms of the country’s future and remaining competitive an an increasingly globalized economy. I don’t have a completely satisfactory answer to why seniors get so much more assistance than children, but here are a couple of thoughts. First, despite the warnings of demographer Sam Preston in his PAA presidential address in the early 1980s, the disparity between federal spending on children and elderly is not widely known. A recent series of reports by the group First Focus (including one released this morning), has made this situation more widely known but still there has been little debate about the disparity because relatively few leaders seem to be aware of it. Certainly, the fact that seniors vote and have powerful lobbying groups such as AARP, makes cutting senior assistance difficult. It is noteworthy that prior to 1972, the poverty rate for the elderly was higher than that for children, but due in large part to government programs (social security, medicare, Supplemental Security Income- SSI), the poverty rate of the elderly has fallen while that of children has remained high. In 2008, the poverty rate for seniors (9.7%) was about half that of children (19.0%).

John Morgan: Any data on how the anticipated “jobless recovery” will lengthen the duration of recession-induced poverty? In other words, will children newly impoverished by this recession have a longer stay in poverty than was typical in past recessions? And, what about chronic poverty? Any evidence that this recession will make it extremely more diffficult for those who were poor before the recession to get out of poverty? For poor kids, newly poor and chronically poor, it seems that the effects of the recession will be long-term, lasting far beyond the point where the economy has fully recovered.
William P. O’Hare: Recently released estimates/projections from Isabel Sawhill and her colleagues at the Brookings Institution indicate that the child poverty rate in 2009 will be around 21% and their projections indicate child poverty rates will stay above 20% for the next ten years unless something is changed.

Joy Francis: Financial resources are important for realization of economic, social and cultural rights for children, however more resources required. The question is what other resources are availabale for children and mechanisms are in place to ensure that these resources are being utilized to their maximum extent?
William P. O’Hare: About 75% of means-tested benefits for low-income families in the U.S. are noncash benefits, things like food stamps, health care (medicaid and SCHIP), free school lunches, and housing subsidies, for example. However, for each of these programs many eligible families do not participate. The fact that many of these programs are run in isolation from each other, with separate application forms, eligibility criteria, and documentation requirements, discourages some eligible families from applying. Recent efforts in some places to make these programs available in one central location have helped.

Sandra Yin: Which programs have been successful at helping children rise out of poverty? Which haven’t? And why?
William P. O’Hare: It is difficult to point to any one program that has had a major impact, but I think we saw a combination of programs all aimed as supporting the “working-poor” lead to a dramatic decline in child poverty in the late 1990s. Let me illustrate this with one quick example. Prior to 1996 when cash welfare (AFDC then TANF) were de-coupled from medical care, if a poor working mother (usually in a job without health insurance) needed medical attention, she often had to quite her job so she would become eligible for welfare and thus medical attention for her child. The expanion of Medicaid and the implementation of the State Child Health Insurance Program (SCHIP) in the 1990s, allowed those mothers to continue working while they got health care for their children.

Henry Tagoe: The relationship between education and income and its effects on poverty are well documented. What can this current phenomenon of child poverty in America be attributed to – education, job opportunities (global financial crisis) or the dynamics of the society which has led to some behavioural change among the population. What is the correlation between socio-economic status and current child poverty? Are children from the lower income quintile becoming poorer or is the reverse.
William P. O’Hare: The high child poverty level in the United States relative to other developed countries is closely linked to a lack of government supports for low-income families in the U.S. When one looks only at income from work, several other countries have child poverty rates about as high as that in the U.S. But most other developed countries provide much more extensive support for poor families, which dramatically lowers their child poverty rates.

Issa Almasarweh: Is poverty rate higher among children living in households headed by single female parents?
William P. O’Hare: The poverty rate is much higher for children living with single parents. In 2008, the poverty rate for children living in female-headed families was 43% compared to 10% for children in married-couple families.

Rita Henley Jensen: How has the end of AFDC and the creation of TANF influenced the rising rate of poverty among children, especially those headed by unmarried women.
William P. O’Hare: I think it is fair to say that the enactment of TANF in 1996 had some positive impact in the late 1990s, as the poverty rate for children in single-parent families fell. The impact of TANF was due partly to new requirements that welfare recipients work, but also because TANF provided more child care subsidies and other work supports to help single-parents meet their work and family responsibilities. Of course, this all took place in the context of a rapidly expanding economy in the late 1990s. Since 2000 I think the record is less clear, partly because the economy never regained the momentum it had in the late 1990s, partly because the people left on welfare after 2000 were those with the most barriers to entering the workforce, and partly because in the post-2000 era, the government did not continue the expansion of programs to help working-poor families.

Joy Francis: what are some of the national initiatives to deal with Child poverty?
William P. O’Hare: In the late 1990s, the British government set a goal of cutting their child poverty rate in half over ten years. They did not meet the goal of cutting it in half, but their concerted effort did reduce child poverty. The targeted goal approach has been adopted by a few states (and cities) in the U.S., but it has highlighted some of the short-comings of our poverty measure which are documented in other responses, namely that a lot of the things governments do to reduce hardship (provide food stamps, housing subsidies, medical care) do not affect our poverty rate because our poverty measure only looks at cash income.

S. CLAUDE: What can we do to prevent or to put an end to that poverty
William P. O’Hare: I am not sure we can end child poverty in the U.S., but there is clear empirical evidence that we can reduce it. The child poverty rate fell from 23% in 1993 to 16% in 2000… a remarkable decline in a relatively short period… the child poverty rate is now 19%. It is also clear that most other developed countries have child poverty rates much lower than ours. The decline in child poverty during the late 1990s was due to a strong economy which provided jobs for most people. But the decline was also due to the fact that a number of government assistance programs to help low-income working families were initiated or expanded during that period. This includes things like expanded EITC program in 1993, the implementation of the State Child Health Insurance Program in 1997, and an increase in the minimum wage in 1997. These trends are discussed in more detail in my monograph entitled “Trends in the Well-Being of America’s Children,” published by PRB and Russell Sage Foundation around 2003 (available by calling PRB at 202-483-1100).

Antonio Cafoncelli: Would you please discuss the reasons for child poverty. In my judgement is the structural crisis of capitalism, with the growing and massive inequality in income distribution as the main cause of child poverty. Just 1% of the top of our population has the wealth of the 95% of the rest of population. The supply side economics and the Milton Friedman glorified free Market is a delusion. There is a need for more government intervention and extend, intesify programs such as SCHIP, with massive investment in health, education and housing for poor children .This intervention of the state is necessary to correct the structural and foundational fallacies of capitalism(Maynard Keynes).It is time to state the truth and expose the total defeat of neoliberalism and free market policies to paliate or diminish poverty in America, and particularly in children. Please comment on this and I would love to discuss the failure of capitalism with you.
William P. O’Hare: I am not sure that capitalism per se is the main culprit here. Many countries in Europe that would be considered capitalists countries have low child poverty rates. But as you point out, the U.S. system has done much less to help children in poor families than other capitalist countries. So maybe it is the American brand of capitalism rather than capitalism itself.

Martin Plaut: How is child poverty defined and how does the US data compare with other developed countries?
William P. O’Hare: The official U.S. poverty definition compares a family’s cash income to a set of income thresholds to determine if the people in the family are poor or not. The thresholds, which vary by family size, were developed in the 1960s and updated every year to account for inflation. The threshold for a 4-person family in 2008 was $21,834. A National Academy of Science study in the mid-1990s outlined a number of ways in which the poverty measure should be updated and improved. Legislation has been introduced in the U.S. House of Representatives (HR 2909) and the Senate (S 1625) to update the poverty measure. The child poverty rate in the United States is much higher than most other developed countries. About 20% of children in the U.S. are poor compared to less than 5% in Denmark, Sweden, Finland, and Norway. A recent OECD study shows that while the U.S. has the second highest average income among the 30 countries in the study, it has the 4th highest child poverty rate. The only three countries examined in the study with a lower child poverty rate were Poland, Mexico and Turkey

Gregory Brown: How effective is the EITC in reducing the child poverty rate?
William P. O’Hare: There are two ways of answering this question. First since the official poverty measure does not take taxes into account (and Earned Income Tax Credit – EITC– is a tax program), the income poor working families receive from EITC is not counted in calculating the official poverty rate. Second, if the income from EITC were counted as income, the Center on Budget and Policy Priorities estimates 2.6 million children would have been lifted out of poverty. It is worth noting that the total amount the Federal government spends on on EITC (about $50 billion in 2008) is much larger than that spent on what is often viewed as the main cash welfare program for poor families, TANF ($18 billion).

Stephanie Geller: (1) The 2008 ACS child poverty rates just came out today and showed declining child poverty rates in a number of states (though these declines were not always statistically significant). Given the current economic crisis, what may be behind these numbers? (2) We are concered that the size of the ACS sample is not large enough to produce reliable estimtes of child poverty for many areas in our state, even if multi-year averages are used. What are the chances that the sample size will be increased, given that we will all have to rely exclusively on ACS numbers from now on?
William P. O’Hare: It is important to recognize that the poverty rates in the 2008 ACS reflect income in 2007 and 2008. When the data for the 2009 ACS come out, the child poverty rate is likely to top 20%. I think there is growing momentum for increasing the ACS sample size. I understand funding for such an increase is likely to appear in the Census Bureau’s FY 2011 budget request. It is also worth noting that increasing the sample size is not the only approach to producing more reliable local estimates from the ACS. If the Census Bureau could increase the response rates, that would have the same effect as increasing the sample size. Right now the Census Bureau sends out about 3 million ACS surveys every year, but only gets about 2 million returned.

Cliff Cook: Given widely acknowledged shortcomings in the definition of poverty, is this a good measure of poor children in this country?
William P. O’Hare: While the shortcomings of the current poverty measures are well-documented, I think it is reasonably good at identifying a group of families in need and at identifying recent short term changes in need.

Jeremy Haynes: How else can governments focus on eliminating child poverty besides a focus on social expenditure of health and education?
William P. O’Hare: I think one of the most important things government can do is provide support for low-income working parents…. things like good quality child care, and medical care for their children. The expansion of those types of programs in the last half of the 1990s helped reduce child poverty.

Nora Sjoblom Sanchez: I work on both policy and practice issues with children, and produced two Kidscount reports for the Casey Foundation over the past decade. Although you are primarily addressing the issue of our nation’s crisis of child poverty, I am struck by a glaring need to address our system’s lack of responsiveness to the plight of children from racial and ethnic minorities in our child welfare system – aren’t they disproportionately represented in your statistics? What supports are available to educate child protection professionals to address the needs of this particularly disadvantaged population, or to develop a capable workforce to help this population? What organizations can help provide support or service in this regard at the local level. This situation is particularly dire in the state of Massachusetts.
William P. O’Hare: It is clear that children of color make up a disproportionate share of the child welfare population, and this is a system that it underfunded almost everywhere in the country. And it is linked to poverty in two ways. Children in poor families are more likely to end up in the child welfare system and children who age out of foster care are likely to be poor as adults.

Joy Francis: What is the role of child budgeting in child poverty?
William P. O’Hare: I am not sure what you mean by child budgeting?

Jeremy Haynes: What method is best suited for measuring budgetary allocations towards children and child poverty?
William P. O’Hare: Getting precise figures for budget allocation devoted to children is difficult for a couple of reasons… just getting data on expenditure is often difficult, especially at state and local area. Furthermore, many programs serve both adults and children and it is difficult to break out the children’s portion.

Sharon Simone: What is the single best approach to lifting US kids out of poverty?
William P. O’Hare: Helping low-income working parents balance their work and family responsibilities and making low-income workers get a family-supporting wage. Three-quarters of children in poverty have at least one parent in the workforce. Supporting working parents through programs like EITC has received strong bipartisan support.

Barb Wollan: You’ve explained that in the U.S., our definition of poverty does not take into account the impact of gov’t assistance programs, which increase a family’s well-being while not raising their position in relation to poverty. In other countries, is the impact of gov’t assistance factored in? I’m horrified at our position compared to other countries, and wonder if poverty is being measured differently elsewhere.
William P. O’Hare: The most common definition of poverty in other developed countries is income below 50% of the median income in the country and it is my understanding that the share of benefits that are cash benefits is usually higher in other countries. However, it is pretty clear that U.S. children trail those in other countries in a numbers of ways beyond income. A recent study of OECD countries by Johnathan Bradshaw, at York University in Great Britain, combined a large number of indicators of child well-being into an overall index, and the U.S. came out next to last of the 21 developed countries examined.

Sharon Simone: Who REALLY speaks for children at the Policy level…not who is supposed to but do they REALLY hava a voice? Seniors now do on many fronts…
William P. O’Hare: While voices for children in Washington are nowhere near as plentiful or as powerful as those for seniors, there has been a growing present in DC over the past 10-15 years. A relatively new organized called First Focus has done a great job of using data to get policymakers’ attention for children’s issues. And the Children’s Defense Fund has been around a long time. Recently, a number of children’s groups have joined together to form the Children’s Leadership Council to give children a more organized and powerful voice in DC. Also, Voices for American Children and the KIDS COUNT network that have both been around for more than 20years often provide a voice for children at the state level.

Nora Sjoblom Sanchez: Thank you for your reponse on my question -but with regard to part 2 of the issue – are you aware of government or private foundation support available to these children (of color) and to assit in educating child protection professionals to address the needs of this especially vulnerable population i.e.through culturally appropriate training, or expanding relevant workforce/educational supports? So many of these children are facing virtually hopeless lives – and fostering a cyle poverty due to racial and ethnic background.
William P. O’Hare: A number of foundations including the Annie E. Casey Founation, Casey Family Services, and Casey Family Program focus on improving the child welfare system. Having said that, the problems in the child welfare system are long-standing and difficult.

Missy Warrens: I believe that the TANF programs and programs like it help those who truly want that help. So, how can we encourage low-income mothers and low-income families to see Jobs and Family Services and other programs as an OPPORTUNITY TO better themselves? I know that since funding for transportation and child care has been cut parents have had to stop going to some free programs such as GED, work hours, EFNEP classes, and other programs. The decline in the economy has cut the ability of these programs to work.
William P. O’Hare: You are right that many work support programs are being cut just as people need them more. Given the budget calamity facing many states (and the U.S.), I am not sure what can be done about this, except fighting to save programs on the margins. I believe most (but probably not all) low-income families want to work. But many of them need supports to help them get and maintain jobs, and I think it is in the best interest of the country to make sure parents working at low-wage jobs have sufficient resources to take care of their families. This may mean wage subsidies, health care, and other benefits from the government.

Missy Warrens: I see the problem of child poverty as a workforce problem for the parents here in Southeastern Ohio. Parents do not have good life skills, budgeting, retaining a job, education, work ethic to pass on to their children. Therefore child poverty will increase … so what can we do to help parents obtain skills to better themselves? Programs that are available – I do not see working or are to lenient in their appropriation of services. So second question how do we fix that? To bring back up the newly unemployed…due to lay offs and downsizing many of them have a problem understanding the system because they are have never had to use it.
William P. O’Hare: See the answer to Miss Warrens’ question.

Joy Francis: Child budgeting is an attempt to examine what resources government is allocating to programmes that benefit children, and whether these programmes adequately reflect the needs and rights of children. The question is: Are the resources aimed specifically at children or resources are identified in other social initiatives?
William P. O’Hare: I think there is an increasing trend to use data-based budget allocations that use a more rational approach to allocating resources… so child budgeting fits neatly into this frame. However, the trend is slow, and uneven. As we all know, politics often gets in the way of rational decision-making.

Jeremy Haynes: Would you consider the US approach to tackling child poverty a suitable model for developing countries to follow?
William P. O’Hare: Probably not… The U.S. approach has not worked very well.

For more information on child poverty in the United States:

“Poverty Is a Persistent Reality for Many Children in U.S.,” by William P. O’Hare

“Children in Immigrant Families Chart New Path,” by Mark Mather,