January 2018: The New York Stock Exchange closing bell rang, accompanied by thunderous applause. The stock market had just hit a record high [1]. 200 miles south of Wall Street, a very different story was unfolding. “How has your day been so far?” a teacher asked his class. “Cold!” his third graders exclaimed. The temperature in Aaron Maybin’s school had just dipped below forty degrees [2]. The heating system in this Baltimore school was broken and the school district didn’t have enough money to fix it. As he encouraged his young students to huddle together for warmth, he wondered how, in the richest nation on earth, something like this could happen.
The paradox of widespread poverty in spite of a flourishing national economy has stumped many of our leaders through the years. Since President Johnson’s “War on Poverty” (1964), we have spent over $22 trillion on welfare programs, created 92 government agencies to fight poverty, and enjoyed long periods of economic growth. Despite this, the poverty rate has remained stagnant between 12 and 15 percent [3]. This cyclical poverty has persisted throughout generations—but why? Former mayor of Denver, John Hickenlooper, outlined this frustration perfectly in 2014: “[We] have a vibrant and explosive economy that attracts the best and brightest minds from not only across the country—but across the world. Yet at the same time the boys and girls that grow up on the wrong side of town are unprepared and unqualified to fill those jobs” [4].
As leaders of the future, we have to ask ourselves, how do we bridge this gap? How do we ensure that future economic growth benefits all Americans?
To truly fight a war against poverty, we need to do more than just spend money. We need to create a solvent strategy that attacks the root causes that afflict the poor and keep people trapped on the margins of society.
In order to strike deep into the roots of this issue we must understand the “infrastructure of poverty.” When a young man or a young woman grows up in deep poverty, we have to ask ourselves some basic questions about what life is like for them. What kind of schools are they going to? What kind of water are they drinking? Are they getting enough to eat? Is their neighborhood safe? Is their community rife with opportunity? Overlooking these core needs is a crucial misstep in helping children build pathways for a better tomorrow.
If education is power, we should empower our future. 18 percent of the 40 million Americans living in poverty are children [5]. We must do everything in our power to give those 18 percent the opportunity to escape poverty through education. But as it stands today our education system is not producing the results we want. Our current system is based only on preparing students to attend four-year universities. We need to restructure and reform elementary, middle, and high schools across the country to make sure they are the equalizing forces we need them to be. Increasing teacher pay, specifically in economically distressed areas, would play a key role in improving schools. Allowing parents the autonomy to choose where their kids can go through school choice is also vital. Finally, expanding non-traditional opportunities such as apprenticeships would give more tools for success to those who don’t plan to go to a four-year college.
Another conundrum navigated by poor Americans is the bureaucratic nightmare that is our modern welfare system. With thousands of confusing rules, regulations, and dictations, it can be immensely hard for poor Americans to transition from welfare to self-sufficiency. One example of the structural flaws in our welfare system is the “all or nothing” nature of benefits. Most means-tested welfare programs (programs that have an income threshold) cut individuals off completely once they hit a pre-defined income threshold. This structure incentivizes families to work less. The income limit for Supplemental Nutrition Assistance Program (also known as “SNAP,” often referred to as food stamps) benefits in South Carolina is about 130 percent of the federal poverty level. For example, a family of three whose income is $26,556 per year or less would qualify for these benefits. The average SNAP benefit is $3,132 a year. But if that same family’s breadwinner worked hard and got a $1 per hour raise ($2,080 per year), the family would lose 100 percent of their SNAP benefit, worth about $3,132 a year [6]. In other words, they would lose money by working harder. Pell Grants, child care vouchers, and many other welfare programs operate similarly.
So where do we go from here? As 2020 nears, we need to rededicate ourselves to ensuring that the American Dream isn’t out of reach for anyone. It’s time to reevaluate our battle plan in the War on Poverty and put the partisan dogma aside. Our anti-poverty policies for the next decade should focus on what matters most: empowering poor Americans to partake in the American Dream. If we reform welfare, spend smarter, and rethink the way we educate our young folks, we can do just that.
[1] https://www.cnbc.com/2018/01/24/stock-market-off-to-best-start-in-31-years-bodes-well-for-2018.html
[3] https://www.census.gov/prod/2010pubs/p60-238.pdf
[5]https://poverty.ucdavis.edu/faq/what-current-poverty-rate-united-states
[4] https://psmag.com/economics/the-talent-migration-paradox