The United States is among the wealthiest nations in human history. And every year, it allows about one in six of its children to live in poverty. This makes the U.S. an outlier among developed countries, with a child-poverty rate more than four times as high as Denmark’s; in terms of relative income, child poverty is more prevalent in America than it is in the far poorer nations of the Slovak Republic, Portugal, and Latvia.
This is a choice. There are many genuinely vexing policy problems in the world, but poverty is not one of them. To end it, you simply need to give poor people money. The nations with the lowest rates of child poverty in the world (among them Denmark, Finland, Norway, and Sweden) provide parents with cash payments to reduce the costs of caring for children, a form of labor upon which the entire society depends. This helps ensure that only a minuscule percentage of the children in such societies suffer material deprivation.
Historically, there has been a larger — or at least more powerful — anti-child-welfare constituency in the United States than there has been in other developed countries. A significant portion of America’s economic elite never made peace with the welfare state, while a significant portion of white society is susceptible to propaganda portraying anti-poverty programs as a scheme for subsidizing the idleness of undeserving Black people. Ronald Reagan’s election brought these factions to power, and genuine flaws in the design of the Aid to Families With Dependent Children program enabled conservative policy wonks to dress up their movement’s anti-poor animus in the respectable garb of technocracy: Conservatives did not oppose anti-poverty spending because they privileged the right of rentiers to hoard their wealth over the right of poor children to eat regularly; they did so because welfare discouraged work, thereby perpetuating the deprivation it was designed to relieve. By the mid-1990s, such arguments had gained enough elite credibility and popular purchase to persuade a Democratic president to effectively gut social support for America’s poorest families.
But a lot has changed in the past quarter-century: The failure of wage growth to keep pace with the costs of raising children swelled the constituency for child assistance. The 2008 crisis discredited market fundamentalism among the policy elite, while the shifting class composition of the Republican coalition has dampened enthusiasm for Reaganite verities within Red America. The median American got a bit less racist.
Most critically, in just the past few months, the paradigm of child-welfare policy in the U.S. shifted away from targeted aid to the poor and toward a (nearly) universal child allowance.
Last week, Utah senator Mitt Romney unveiled a plan for providing a monthly child allowance to every nonaffluent American family in the U.S. Crucially, unlike past welfare programs, Romney’s child benefit does not “phase in” — meaning it does not withhold aid to the poorest of the poor in order to punish them for being unemployed — and the value of the benefit does not start phasing out until household income exceeds $200,000. President Joe Biden put forward a similar proposal earlier this week.
All this posed a challenge to the Reaganite right’s certified poverty scholars. The all but universal nature of the Romney and Biden child-allowance programs neutered the core conservative rationalization for opposing aid to poor kids — that such aid might discourage their parents from seeking more work hours or higher wages lest they earn too much to qualify for public support. Meanwhile, the leftward drift in technocratic opinion since 1996 — combined with the treachery of welfarist social conservatives — meant that their arguments could no longer lean on elite sympathy and would have to stand on their own merits. Which is to say anti-welfare conservatives would need to explain why lifting millions of American children out of poverty — by providing the vast majority of American families with the kind of child allowance that is nearly ubiquitous in other developed countries — would actually be bad to an audience that is not predisposed to believe such things.
It’s not going well.
In a blog post and email to the Washington Post, the American Enterprise Institute’s Angela Rachidi and Scott Winship did their darndest to explain why a child allowance would be bad. Alas, there are five flaws with their case.
1. Their core arguments boil down to, “Reducing child poverty sounds nice — but if we did that, then single mothers would have a bit more time to spend with their kids each week.”
Of course, Rachidi and Winship do not phrase their point in these terms. But it is the plain implication of Rachidi citing the following as a knock against the child allowance:
The authors (a reputable but politically left-leaning group) of a National Academies of Science’s (NAS) report on reducing child poverty in the US … estimated the employment and earnings effects of a child allowance (among other policies) similar to what the Democrats are proposing. They concluded that more than one third of unmarried women would reduce their employment by at least one hour per week and the policy would result in an aggregate loss in employment hours of 277.4 million (see page 546).
Winship touted this finding as vindication of his concerns about the disemployment effects of a child allowance.
Which is strange. The average reduction in working hours among unmarried mothers in the NAS study was 1.15 hours per week. Rachidi tries to make this decline sound macroeconomically significant by citing the aggregate loss in working hours it implies (277.4 million). But that large-sounding decline would represent a 0.087 percent reduction in total working hours in the U.S. — a nation that is wildly overworked by international standards. To an ordinary person, “If we rescue millions of children from poverty, a significant number of single mothers will have an extra hour to spend with her kids each week” sounds like an argument for anti-poverty spending, not against it.
2. They suggest that negative-income-tax experiments conducted a half-century ago provide useful information about the likely effects of a universal child allowance in 2021.
The empirical support for AEI’s position is so limited that Winship cited the results of a 1970s experiment with a negative income tax — which provided a guaranteed income to the very poor and phased out abruptly as household income rose — as a useful precedent for gauging the likely impact of a universal child allowance. Matt Bruenig of the People’s Policy Project helpfully illustrated the absurdity of this comparison:
3. They ignore that, by definition, not everyone can be “middle class” and, therefore, increasing social mobility is not a scalable solution to poverty.
It can be deceptive to focus solely on the number of people a proposal “lifts out of poverty” at a point in time, as my colleague Scott Winship points out. A child allowance would reduce poverty by raising families’ income just above the poverty level, but families also need a chance at mobility. For a vast majority of low-income families, employment is the only viable path to the middle class.
Here, Rachidi confronts the fundamental problem facing conservatives who claim to oppose both poverty and policies that would demonstrably end it. She acknowledges that a child allowance would reduce poverty in the sense of raising families’ incomes to the point where they cease to be poor — but suggests that this fact can be deceptive. Alas, she does not offer any coherent explanation of how this is so. She tries to make it sound like giving poor people money offers them only a temporary reprieve from poverty. But if public cash assistance is unconditional and set at an adequately generous level, then public cash assistance will not lift a family out of poverty “at a point in time” but shelter them from such deprivation permanently. The only reason why welfare is not a permanent solution to poverty is because AEI-style conservatives do not want it to be and will fight to slash or repeal whatever aid is put in place. (Of course, one can imagine pathological parents who spend their child allowance on narcotics or what have you. But that is less a problem for the welfare state than for the health-care system or social services.)
Rachidi suggests that anti-poverty programs don’t really solve poverty, because they do not promote social mobility. Whether this is correct or not, it’s a non sequitur. Not everyone can be middle class. To the contrary, judging by AEI’s scholarship on the minimum wage, a functioning capitalist economy requires roughly 40 percent of workers to toil for less than $15 an hour. Increasing social mobility may change the demographic characteristics of the poor and working poor. But unless we guarantee every American job — and require employers to pay workers “middle class” wages — there are going to be millions of working-age, nondisabled Americans whose market incomes leave their families in poverty. Giving them sufficient unconditional cash assistance would lift them out of poverty. In a debate over whether the government should provide such assistance, it is not deceptive to focus on that fact. What is deceptive is conflating mobility promotion and poverty reduction to prevent readers from dwelling on the efficacy of a policy intervention that you oppose.
4. They ignore the large body of evidence that suggests rescuing children from poverty increases their educational attainment and likelihood of employment as adults.
The past two decades have produced a wealth of studies demonstrating that giving cash support to low-income parents tends to improve their children’s health, test scores, earnings, compliance with the law, and rates of employment as adults. Even as Rachidi warns that a child allowance could “jeopardize the best long-term path out of poverty for vulnerable families,” she declines to grapple with any of this research on the long-term benefits that cash assistance has for poor children.
5. They ignore that the U.S. labor market condemns millions to unemployment at any given time.
I touched on this point above, but it bears repeating: Unless you are willing to endorse a federal job guarantee that brings the unemployment rate to near zero — no matter the consequences for inflation — your solution to poverty must account for the fact that the U.S. economy will never produce enough jobs for all who want them. Rachidi and Winship’s entire perspective is premised on the notion that America suffers from a perpetual crisis of voluntary joblessness. They frame chronic unemployment as a symptom of the defects of the unemployed person, not those of the economic system. This individual-centric analysis is indispensable to the conservative perspective on poverty, because it is only at the level of the individual that their analysis makes any sense. The notion that external pressure to perform can bring out the best in us — while excessive leisure can lead to lethargy and despondence — resonates anecdotally with many individuals’ personal experiences. Similarly, the idea that what poor families really want is to move up the economic ladder — not to live more comfortably on the bottom rungs with the aid of cash assistance — surely speaks to many households’ aspirations. But absent the implementation of socialistic reforms, many millions of people will lack the external motivator of a job, and millions more are going to live on the bottom rungs of the economic ladder.
“Sit in the front row of the lecture hall” may be good advice for an individual student looking to ace a class, but it is a path to success that cannot be universalized; there are only so many front-row seats. And in the economy that AEI champions, there are only so many jobs (let alone jobs that pay a living wage). “The only true answer to poverty is to help the poor secure good-paying jobs” is no more coherent than saying, “The only way to ensure that all 150 students pass this class is to help them secure seats in the 20-person front row.”
There was a time when America’s political climate was so reactionary that conservative “poverty scholars” could get a respectful hearing for such incoherence. That time might finally be over.