Rebuilding the American Dream

The Imperative of Developing a New Anti-poverty Agenda

By Jane Knitzer
Autumn 2006

All Americans want the next generation to succeed. But what most Americans do not know is that some 40 percent of American children are growing up in low-income families with the odds stacked against them.

Analyses of family budgets repeatedly show that it takes at least twice the federal
poverty level for a family to meet its basic needs.

These include the 13.5 million children who are growing up at or below the federally defined poverty level of a $20,000 annual income for a family of four, as well as more than 15 million children in families with annual incomes between $20,000 and $40,000. The latter families are in situations where one disaster—an increase in rent, a divorce, an unexpected health problem, a job loss—can tip the balance. Analyses of family budgets repeatedly show that it takes at least twice the federal poverty level for a family to meet its basic needs.

Although the common stereotype suggests that families lack income because they don’t work, 81 percent of low-income children have parents who work. It is also said that marriage protects against poverty; although it is true that single parents are disproportionately likely to be poor, half of low-income families include married couples.

Even less widely known are two other facts that should inform efforts to help families without enough money. First, 35 percent of adolescents are in low-income families, compared with 43 percent of children under 6. Second, and perhaps more startling, there is considerable state-by-state variation in the percentages of low-income children, ranging from 21 percent to 53 percent.

Poverty is bad for children. Research shows that the greatest predictor (although fortunately not always an accurate one) for poor educational, social, health and other outcomes is poverty, particularly poverty in early childhood. Poor children start out at a disadvantage and often end up at a disadvantage. Education researchers have identified startling differences between young children in poor families and their more affluent peers. By the time a poor child is 6, the child will have heard onethird as many words as a more affluent child. This matters because language skills are important to early school success, which in turn predicts later school success. In sum, there is a clear relationship between educational success and income. The higher the income, the greater the chance of success in school; the lower the income, the lower the chance. Similar disparities exist for healthcare outcomes. Low-income children are also less healthy than their more affluent peers.

Many people believe that child poverty is a problem that cannot be solved. But the data do not support this. Building on research both about children and about effective policies, a serious and pragmatic, rather than ideological, effort to reduce child poverty should have three focuses:

1. Set clear local, state and national anti-poverty goals

Over the past decade, the United Kingdom’s pioneering anti-poverty program has set and tracked a national child poverty reduction goal. The results have been impressive. Since 2000, while the number of children in poverty in America has increased by 12 percent, in the UK it has decreased by 17 percent. The UK has systematically striven to make sure parents are working to strengthen early care and education. In the US, one state, Connecticut, has set a poverty reduction goal, calling for a
50 percent reduction over 10 years. While simply naming a goal will not change anything, setting a clear child poverty reduction target opens the door to other action—seeding broad coalitions; developing media and other strategies to increase awareness of the societal cost of child poverty; and building a substantive policy agenda with the capacity to monitor changes over the long haul, not
just for those in poverty, but for all lowincome families.

2. Make work pay and provide effective supports when income is not high enough

The major problem facing low-income families is that the cost of basic necessities— in particular, child care and healthcare—takes up a disproportionate share of their income. According to the Census Bureau, families below poverty on average spend 25 percent of their income for child care, while those earning 200 percent or more of the poverty level spend about 7 percent on child care. Similarly, a recent study shows that lowincome families spend disproportionately on out-of-pocket healthcare costs, averaging $120 per $1,000 of family income, compared with $38 per $1,000 for families with incomes above 400 percent of the poverty level.

A focus on those in poverty alone will not be enough. Without child care, healthcare and other work supports, parents often cannot work. To make it, families need jobs that pay enough to support them, or a benefit system that provides them access to the work supports they need, or some combination of the two.

The National Center for Children in Poverty has carried out research that reveals a startling reality. As low-income families earn more, they lose access to the benefits that make it possible for them to work. The result is that working more doesn’t always improve a family’s financial bottom line. In the worst cases, families end up with less disposable income than they had while working fewer hours. The poverty center’s Family Resource Simulator ( 24modeler/modeler.cgi) is a tool that policymakers and others can use to show what happens to families’ benefits as they
work more.

A pattern emerges across the 50 cities that the poverty center has examined. Even with benefits, a single-parent family of three cannot make ends meet until earnings reach 150-300 percent of the poverty line, and current policies make it difficult for families to get ahead, because they lose benefits before they are self-sufficient. This suggests two principles, both consistent with core American values, that should govern family economic security strategies: Full-time workers should be able to provide for their families’ most basic needs, and earning more should always improve a family’s bottom line.

3. Suppoer parenting and quality early childhood experiences

Over the past decade there has been a remarkable growth in scientific understanding of what helps children thrive and succeed. Brain science teaches us that risks and opportunities start early. Like houses, brains need strong foundations, and to build strong foundations children need to be in nurturing, warm families that can provide age-appropriate structure.

Many low-income families provide this kind of environment even in the absence of adequate income, but others are not able to. For families facing the most impoverished circumstances, it is crucial
that we invest in programs that help both parents and children—programs like Early Head Start, targeted to families with infants and toddlers. Research shows that Early Head Start improves parenting and that the gains are reflected in children’s behavior and cognitive abilities
at age 3.

But we cannot stop there. We also need to invest in quality preschool experiences for 3- and 4-year-olds and continue on as they enter kindergarten. High-quality and continuous early childhood
programs that engage parents and help teachers to be more effective can get young disadvantaged children on a trajectory where they can perform as their peers do. Of course, parents don’t stop investing in their children after age 6, and neither should society. But starting early is crucial.

Building a meaningful anti-poverty agenda will not be simple. But the faithbased community, with its deep commitment to social justice, can play an important role in mobilizing action. At a recent Northeastern University School of Law commencement address, Professor David Hall, calling upon the students to hold on to their ideal of the law as an instrument of social justice, made a pointed and poignant comment. He said that America has so stigmatized the poor that as a society, we have become poor in spirit. It doesn’t have to be that way. Drawing not only on religious values but also on emerging research knowledge about how best to use public and private resources, we can rebuild a commitment to the next generation that will make all of us stronger.

NCCP Child and Family Poverty Graph

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