12 Special reportPoverty in America The EconomistSeptember 28th 2019
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canbefoundat:Economist.com/specialreportsquiresa programmeof serious public policy, which first requires
publicattention.Thisdoes not exist at present in America. That is
partiallybecausethepoor do not vote. But much more it is because
the debate gets bogged down in the futile attempt to separate the
deserving poor from the undeserving. According to the American
National Election Studies, voters on all sides feel more warmly to-
wards “poor people” than towards “people on welfare”.
The consequences of inaction are clear. Poverty, unfortunately,
is an inheritable condition. For some, like the black descendants of
slaves in the South and those in the forcibly segregated inner cit-
ies, the ancestry can be drawn to previous government policies.
The same is true of Native Americans. Others, like recently immi-
grated Hispanics and rural whites, are left behind because the
economy rewards high levels of education and clusters in cities.
Given these trends, the poor children of every race are likely to be-
come the next generation of poor adults. The national shame of
such penury will endure.
This is not just the fault of the federal government and the un-
willingness of conservatives to believe that government interven-
tion can help. The driving force behind income segregation and
the worsening concentration of poverty is rising house prices,
which are pushing the poor together, concentrating disadvantage
in the suburbs and small towns least equipped to deal with it. The
problem is most acute in America’s most thriving cities—the ones
governed by unabashed liberals—driven by poor housing supply
blocked by local control over zoning.
Rent can consume as much as half the income of the poorest
residents. The housing assistance that might buffer some of these
trends is underfunded relative to need. Competition drives rents
up, particularly around good schools. Homelessness—perhaps the
most extreme form of poverty—is a symptom, surging in high-cost
cities. In 2018 New York estimated its homeless population to be
over 79,000, or 48% more than in 2010. It spends $3.2bn on home-
less services each year. California now accounts for one in four
homeless Americans.
What is needed is recognition that the anti-poverty pro-grammes have indeed helped the poor as intended—a point that is
obscured by the inadequacies of the official poverty accounting.
Unencumbered by such fatalism, a new war on poverty would be
most effective if centred on children. That is partly because of poli-
tics, since aiding poor children avoids the paralysing debate over
culpability. But it is also a question of simple cost-benefit analysis.
Earlier intervention boosts earnings (and thus tax revenue) and re-
duces spending on prisons and anti-poverty programmes. Re-
search by Nathaniel Hendren and Ben Sprung-Keyser of Harvard
University, assessing the return on public investment in various
government schemes, finds that the benefits of programmes tar-
geting poor children yield returns many times higher than those
targeting poor adults. Simple measures like a universal cash allow-
ance for children and enabling poor families to move to opportu-
nity would be relatively inexpensive national goals.
The war on poverty has improved countless American lives, but
there is much that still needs to be done. Amid the other controver-
sies in a nation sorely divided, many are struggling to live out their
own version of the American Dream because of forces beyond
their control. It may need another half-century before victory can
be declared in the war on poverty begun by Lyndon Johnson, but
that is surely no reason to stop trying. 7Two worlds collide2