Poverty in the USA

By: Leon Felkins

Written: 1/8/1999 -- Revised 1/13/2001


This essay is an introduction to the concept of poverty, its prevalence in the United States, and the various government efforts that have attempted to diminish it -- or so they claim.

Definition of Poverty

"Poverty" is a vague term just like "fat", "tall", "smart", "friendly", etc. and is therefore is not precisely definable. The range from having everything to having nothing is a continuous spectrum with no obvious point that is clearly seen to be the point where "adequate" becomes "inadequate". [Consult my essay, "Dilemmas of Ambiguity and Vagueness" for a discussion of vagueness in some detail].

The fact that "poverty" is a vague term and cannot be defined precisely, does not, of course, stop the government from using the word as if it were precise and the press going along with the scam, as is their way. In fact the government is not beyond declaring that poverty has increased or that it has decreased when the primary factor in the increase or decrease may be that the government has simply changed its definition of poverty.

So, the criteria for a person being in or out of poverty is simply a measurement of some major component of poverty and comparing it to some arbitrary level. The commonly used component is "salary" as it is relatively easy to determine compared to other factors that could be more meaningful but more difficult to measure. According to the online essay, "The Meaning and Measurement of Poverty", by Simon Maxwell, a popular definition of poverty for the rest of the world is an income of less than one US dollar per day.

Of course, that definition will not do in the USA for to accept that would put a lot of people out of work; the many employees of the many government agencies that thrive based on a very liberal definition of poverty, to say nothing about the massive allocation of funds to the "poor" that Congress so enthusiasticly dispenses.

Therefore, the poverty level in the USA is set much higher and is more complex than that simple criteria of $1 per day. As of 1999, the threshold for poverty for a family of four was an annual income of $17,029. The poverty threshold varies by size and "number of related children" from $8,501 for one person to $34,417 for a family of 9 or more. The chart is online at the Census Bureau's Poverty Thresholds: 1999.

Since "poverty" is not absolute but a relative term, one has to wonder how does this definition of poverty compare with how we used to define poverty and how others countries of the world still define it. Robert Rector has made a detailed and very well documented study of this very question in his online paper, "How 'Poor' are America's Poor?" and the update, "THE MYTH OF WIDESPREAD AMERICAN POVERTY". Some interesting comparison's surface (as of 1990, the date of the original article):

Trends and Statistics

The present massive level of spending on welfare for the poor started with the President Johnson in 1964 when he declared his "War on Poverty". Since that time there has been an estimated $7 trillion spent on this "war" with no noticeable impact on the poverty rate, as reported by the Census Bureau. Obviously the government can make these numbers come out anyway they want so we can only conclude that the reported constant rate of poverty is in the best interest of the massive bureaucracy who's jobs depend on this program continuing. If the poverty rate was shown to be declining then that would mean that we could start cutting back the program. Of course that would never do. On the other hand, if the rate was shown to be increasing, then that would show that the program was failing and we can't have that either. Better to just keep it constant!

The most comprehensive paper on the history of the welfare program is an essay, one of many, by Robert Rector, probably the most well known expert on welfare and poverty. The essay is online and is called "Welfare, Expanding the Reform" and can be read directly or downloaded as a PDF file. This paper is a must read for it describes in well documented detail what a tragic program this has been -- the massive expenditures, the lack of any progress, and the destruction of millions of lives. I give you one very telling quote: ".. the $6.98 trillion cost of the War on Poverty nearly equals the entire cost of the private-sector industrial and business infrastructure of the United States".


Due to public pressure, the politicians will periodically start new programs to "reform" the welfare mess. No matter what they say, there are two things you can always count on when there is a "reform": there will be no significant improvement and the cost will go up.

In 1996, the Republican congress managed to get President Clinton to sign a bill (he fought it all the way, but then later took full credit for it!) that would significantly change the way some parts of welfare was being doled out by the government. The "Personal Responsibility and Work Opportunity Reconciliation Act" (PRWOR) of 1996 (Public Law 104-193, better known as the Welfare Reform Act) was signed by Clinton on August 22, 1996. In summary (from Municipal Research & Services Center):

This law changes how governmental financial assistance is administered including: changing federal funding to states from an open-ended entitlement to a series of capped block grant allocations; sets time limits on entitlements and cash assistance to welfare recipients; requires most welfare recipients to engage in job activities (this includes work experience, community service, job training, vocational education); changes the disability definitions for Supplemental Security Income (SSI) for children who apply; mandates states to establish methods to enforce collection of unpaid parental child support; denies many legal immigrants from collecting SSI and food stamps; consolidates all child care programs into the Child Care and Development Block Grant, and changes foodstamp recertification requirements.

The major change brought on by the bill was that the 61-year-old Aid to Families with Dependent Children (AFDC) program was repealed and replaced with a federal block grant program called Temporary Assistance for Needy Families (TANF), which imposed time limits and work requirements on welfare recipients. Note however, the AFDC/TANF is just one, relatively small, component of the total welfare system in the US.

This so-called "Welfare-to-Work" program has been successful in moving many people off the welfare dole. Dr. Rector acknowledges in his essay mentioned above that, while the results vary tremendously from state to state, there has been some qualified success in getting some people off welfare. However, as Lisa E. Oliphant shows in her essay, "Four Years of Welfare Reform: A Progress Report", most of this gain is just the usual "smoke and mirrors" so routine with the government. Just as there was no decline in Welfare spending in the Reagan regime, as was so profoundly proclaimed by the politicians and the press, there is no real reduction in Welfare spending now. In fact, welfare spending is growing at twice the inflation rate and is expected to continue that trend indefinitely.

One other factor that helps explain why the much touted success of the PRWOR act made no impact in the growth of welfare costs is that the TANF program that it invoked is only one of over 75 federal welfare programs and numerous state programs. That fact is never mentioned by the politicians and their cohorts, the press.


Just like almost every other social problem that the government tries to solve, the results of the "War on Poverty" has been a massive disaster. After $7 billion of wasted expenditures (more than twice the cost of World War II!), the number of official poor remains fairly constant. But the story is much worse: millions of people are now on the morale destroying dependency on the government, the institution of marriage among African Americans has been essentially destroyed, criminal activity among welfare recipients is much higher than among the working poor, and education is a total failure. It would be easy to conclude that this was done on purpose for how else could such a damaging program be enthusiastically continued.

It is so obvious to anyone with half a brain (which apparently excludes most politicians) that the "War on Poverty" approach can only make things worse. To illustrate, I will quote form Rector's paper:

The welfare system that has existed for the past 30 years may best be conceptualized as a system that offered each single mother with two children a "paycheck" of combined benefits worth an average of between $8,500 and $15,000, depending on the state. The mother had a contract with the government. She would continue to receive her "paycheck" as long as she fulfilled two conditions:

1.She must not work.

2.She must not marry an employed male.

That is just one example of the logic used in the government's welfare programs but it is very representative of every other aspect of their programs.

For an in depth look at the logic and the follies of the government's efforts to "help" the poor, see my essay, "Poverty's Paradoxes and Intractable Dilemmas".

Leon Felkins

Copyright © 2001 Leon Felkins