Why Poverty is a Much Bigger Problem than the Government Thinks

A new study suggests the problem is worse than the official numbers say. Chances are that you probably know someone who’s poor.

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This post originally appeared at ThinkProgress

By John Halpin

Much has changed in American society since President Lyndon B. Johnson declared “unconditional war on poverty” in his State of the Union address on January 8, 1964. Women, people of color, the elderly, and people with disabilities are more strongly protected by law and more integrated into our national economy than they were in the 1960′s (Republican efforts notwithstanding).

But unlike the 1960′s, when GDP and median wages rose together at a steady clip, today’s economy remains woefully bad for millions of Americans. A massive new study from the Half in Ten Campaign and the Center for American Progress of American attitudes about work, the war on poverty, and new proposals to fight poverty in the future underscores just how bad the problem is. Indeed, poverty, far from being a niche concern of “the poor,” is something that touches the lives over half of Americans.

As the chart below highlights, one-quarter to one-third of Americans, and even higher percentages of people of color and Millennials, reported suffering serious economic hardship within the past year. That includes falling behind in rent, mortgage, or utilities payments; being unable to afford enough food or necessary medical care; and failing to keep up with debt payments. A majority of Americans — 54 percent — say that someone in their immediate or extended families is poor, a figure that has increased two points since 2008, when CAP last did polling on poverty issues. Almost two-thirds of African Americans and nearly 60 percent of Latinos report a direct family connection to poverty.

It’s also clear that official government statistics are not capturing the economic reality facing many Americans today. We asked respondents to estimate the official poverty line for a family of four ($23,550 in 2013) and Americans on average believe that it takes just more than $30,000 in annual income for a family of four to be considered poor — nearly $7,000 higher than the official measure.

Americans also believe that the average family of four requires more than $55,000 in annual income to be considered living out of poverty and safely in the middle class. Given these findings, it’s not surprising that the public vastly overestimates the percentage of Americans living in “poverty” as defined by official statistics. While the federal government poverty rate in 2013 was about 15 percent, Americans themselves believe, on average, that 39 percent of their fellow citizens are living in poverty:

Why is there such a large divergence between official statistics and perceptions of actual economic conditions? Primarily because Americans believe the economy is broken. In a forced choice test of competing ideas about structural economic reasons for poverty and personal ones, Americans overwhelmingly choose economic causes. Nearly two in three Americans (64 percent) agree that “Most people who live in poverty are poor because their jobs don’t pay enough, they lack good health care and education, and things cost too much for them to save and get ahead.” By contrast, only 25 percent of Americans agree with a competing idea that “Most people who live in poverty are poor because they make bad decisions or act irresponsibly in their own lives.” Even white conservatives and libertarians prefer the structural explanation for poverty over the personal by a significant margin, 63 to 29 percent.

Because Americans believe the economy is unfairly condemning their fellow citizens to poverty, they support economic policies that would do something about it. We find that anywhere from three-quarters to more than 80 percent of Americans back a range of concrete proposals to help fight poverty. These include an increased minimum wage, universal pre-k, expanded college access, and measures to make health care more affordable.

The implications of this research are clear. The War on Poverty programs that lift millions of out of poverty aren’t failing the poor; our economy is. It’s high time our policymakers took the challenges of a low-wage economy seriously.

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Photo: sander_123/Flickr