Wednesday’s passage of the American Rescue Act signals an ideological shift on how to move the needle on poverty.
Because clearly, any recent attempts have not worked.
Today, almost 12% of Americans live in poverty, jumping up 2.4% in the last half of 2020.
That this occurs in the world’s largest economy points to our extreme inequalities. Though home to the most billionaires — 664 with a total net worth of $2.95 trillion — a majority of Americans live paycheck to paycheck.
The reason poverty matters so much is that, as a country, it’s keeping us from being better: More prosperous, more equitable and just smarter.
That’s because poverty disproportionately affects children. Of those living in poverty today, more than one-fourth are children. That’s one in seven of American children, double the rate of our European counterparts.
When children lack adequate nutrition, shelter and essential resources, their physical, emotional, and cognitive development suffers — oftentimes irreparably. The consequence is that more students drop out of high school, resulting in lower adult earnings and worse adult health outcomes.
Simply put, poverty not only hurts individuals, but society as a whole.
The COVID-19 pandemic has exacerbated this dire situation. Unemployment soared. And children whose schools have closed are left without the resources to keep safe as well as up with their studies offered remotely.
ATTEMPTS at eradicating poverty have fallen short because they are piecemeal and increasingly inadequate.
Unemployment benefits today are far behind wages, paying on average one-third of one’s prior income. States also make the application process purposefully cumbersome. In Arizona, nearly 70% of unemployment applications are denied with only 15% getting any kind of assistance. Kansas isn’t much better. Only 19% of those who apply receive help.
Assistance through TANF (Temporary Assistance for Needy Families) also falls far short of the goal because of its minimal benefits, roadblocks, and the ability of states to set a threshold for need.
Today, roughly one-third of families in poverty receive assistance such as food stamps or cash stipends, down from two-thirds when TANF was created in 1996. If implemented as designed, TANF would be helping 3.1 million families, instead of the 1.1 million it aided in 2019.
Here, too, Kansas fares poorly, reaching fewer than one in 10 families in need of support.
Another reason the poor have been left behind is that up until now, child tax credits apply only for families that earn enough to pay income taxes, bypassing our poorest, the 10% of Americans who don’t earn enough to pay taxes.
