percent. Official U.S. poverty rates are calculated by multiplying
an average low-cost food basket by three and then adjusting for
household size. But the assumption that poor families spend
one-third of their household budget on food has routinely been
proven wrong by consumer-spending data. No other cou ntry
measures poverty this way; in fact, most countries in the LIS
use at least 50 percent of median income.8
All LIS countries spend government resources on social
programs to lower poverty rates. The United States spends a
significantly lower portion of GDP per capita than other LIS
countries, again except for Mexico. “Simply put,” explains
Timothy Smeeding, a U.S. researcher working on the LIS, “the
United States does not spend enough to make up for low levels
of pay, and so we end up with a relatively higher poverty rate
than do other nations.”9
Goals to Reduce Poverty
Richard Lord
U.S. voters want the government to do more to fight hunger
and poverty. Moreover, they say they would approve of increased
government spending to solve these problems. Those are some
of the findings in surveys of voters in the last year conducted by
Spotlight on Poverty and Opportunity and the Alliance to End
Hunger.10
Some policymakers have responded to this public concern.
In New York City, Mayor Michael Bloomberg has launched
an ambitious poverty-reduction campaign, receiving strong
support from residents. In addition to adding several new antipoverty programs, Bloomberg has scrapped the federal poverty
measure, using an alternative developed by the National
Academy of Sciences in the 1990s. The poverty rate in the city
increased when the new measure was applied, but now it reflects
something much closer to the real cost of living in New York.
While some critics have faulted Bloomberg for “increasing
poverty”—though only by making the statistics match the daily
reality—common sense says you can’t adequately respond to a
problem until you know the extent of it.
The New York City anti-poverty initiative is one of several
that have been launched across the country. A total of 15 states
4 Briefing Paper, February 2009
have embarked on poverty-reduction plans and three have
passed laws that set poverty-reduction goals. Connecticut was
the first state to do so, enacting a law in 2004 that required
reducing child poverty by 50 percent in 10 years. The poverty
rate in Connecticut is 7.9 percent, the second lowest in the
country, and the state child poverty rate of 11 percent is well
below the national rate of 18 percent.11 But state-level data hides
some staggering inequalities, such as in Hartford, New Haven,
and Bridgeport, where poverty rates are three and four times
higher than in the rest of the state.
Setting a goal is the easy part. Building coalitions to gain
consensus for lasting changes at the policy level is another
matter. In Connecticut, it was not until 2007 that the Child
Poverty Prevention and Reduction Council delivered a blueprint
for action. A Republican governor and a Democrat-controlled
legislature have clashed over strategy.
At the national level, pressure is increasing for the
federal government to follow the lead of New York City and
Connecticut and other states. In the 2008 Hunger Report,
Working Harder for Working Families, Bread for the World Institute
proposed setting a goal to reduce domestic poverty and hunger.
Working Harder for Working Families includes the following main
recommendations:
• Establish a poverty-reduction goal and timeline to achieve
it.
• Make sure all jobs provide a standard of living above the
poverty line.
• Improve federal work-support programs like tax credits,
nutrition assistance, and health care for all low-income
families.
• Increase ways for families to save and build assets so that
they may become economically self-sufficient.
The report focused on working families because one in
four U.S. workers has a job that does not pay enough to raise
a family of four out of poverty.12 A lasting solution to hunger,
like a solution to poverty, means a job that pays a living wage,
provides affordable health insurance, and offers other forms
of social insurance, such as paid leave and a savings plan for
retirement. This should be something a wealthy nation like the
United States can ensure for all workers.
U.S. policymakers have been loath to
increase social spending to reduce poverty
rates, but they would do well to pay
attention to what has occurred in the United
Kingdom. In 1997, the Labor government
launched an initiative to eliminate child
poverty by 2020. When the campaign
began, the child poverty rate in the United
Kingdom was roughly equal to the U.S. rate.
Since then, the child poverty rate has fallen
by a third.13