The US reduced child poverty by more than half. Here’s how

(NewsNation) — The U.S. has reduced child poverty by almost 60% since 1993, a new analysis of four decades of data has found. 

In 1993, one in four children lived in poverty; by 2019, that number dropped to one in 10, according to Dana Thomson, a researcher for Child Trends, a nonpartisan research organization focusing on children and youth. 

The story of how the US got there is a mix of social services, work incentives and economic factors resulting from the varied policy strategies under both Democrat and Republican administrations. 

Despite two recessions in the 2000s, an overall stronger economy contributed to an estimated 33% of the decline, specifically: 

  • Lower unemployment
  • Higher state minimum wages
  • Fewer teen pregnancies
  • More single moms in the workforce 

But social services played an even bigger role in protecting an estimated 6.5 million poor children, researchers said. Black and Latino children remain disproportionately in need of anti-poverty services, as do children in immigrant families.

Proponents argue widespread growth in poverty-reduction programs created an improved “social safety net” from which we can learn from.

“We need to make work, work for today’s families,” Thomson said. “We need to ensure that wages are high enough to pay the bills. We need to ensure that families have access to affordable childcare and things like paid family and medical leave.”

Work incentives for parents led to dramatic decreases

The earned income tax credit (EITC) that gives tax breaks to lower and middle-class families was highlighted as the single most important program protecting poor children — reducing poverty by 22% if it was fully taken advantage of. (The impact of the EITC is likely somewhat overstated, the report states, as not everyone who is eligible claims EITC.)

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Yet the EITC’s impact cannot be separated from welfare reform in the ’90s, which also focused on rewarding working parents, said Angela Rachidi, the Rowe Scholar in poverty studies at the conservative-leaning American Enterprise Institute. 

“When you offer people additional income if they are working, they will work more,” Rachidi said. “And that’s exactly what happened.”

Still, the social safety net did not impact the poorest children in the same way, possibly because tax credits and other services are designed to help low- to moderate-income families — the ones most likely to rise above the poverty line in good times and fall below it in bad. 

“There’s lots of discussion out there about whether we need more work-based programs or whether we need more out-of-work based programs,” Thomson said. “The reality is that we need both.”

Fewer restrictions can lead to efficiency

Work incentives alone are not enough to protect the poorest children whose parents may be disabled or lack childcare, said Christopher Wimer, of the Center on Poverty and Social Policy at Columbia University.

This may be most clearly seen in the role of housing assistance and SNAP (food stamps). An estimated 1.8 million children would’ve lived in poverty in 2019 if not for these programs, according to the Child Trends report.

But for these programs to continue working long-term, they should increase as inflation does, Wimer says. They are also often most efficient when cash payments do not have restrictions on how it is used, such as when receiving Social Security or unemployment.

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One type of restriction-free social help, guaranteed basic income, is gaining popularity in cities across the country. Some worried such a program, which gave certain poor families $500 a month for two years, would de-incentivize work.

Yet data from one of the first pilots showed recipients increased full-time employment by 12%, while also experiencing reduced anxiety and stress. The majority of the money was spent on family needs, with less than 1% going to alcohol or cigarettes.

“Needs vary on a case by case basis or household by household,” Rachidi said, and families should be able to use the money as they need.

Still, she believes that cash should be tied to an employment requirement due to the benefits you can’t capture by income alone.

“There’s evidence to suggest that employment has benefits for mental health, personal health, social ties, self-esteem,” she said.

Addressing child poverty positively impacts the economy

It’s important to note that “people in poverty” are not a monolith, Wimer said. Hardships can put a family in poverty for a period of months, while others need services for years.

“What you’re actually seeing when you look at data, where you follow people over time, is that there are lots of Americans who experience a spell of economic insecurity and a spell of poverty,” Wimer said. “(Social) programs operate jointly and operate together” during economic downturns.

In recent years, researchers have seen families increasingly needing “a combination of benefits” to lift a child out of deep poverty.

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The pandemic was a remarkable, real-time experiment of social programs, experts say. After rounds of stimulus checks and increased unemployment payments, child poverty in 2021 hit record lows. 

While critics of that program tie it to the current rise in inflation, “we’ve learned a lot about what works,” Thomson said, adding it is notable the 2021 decrease extended to include the poorest kids. 

“Growing up in poverty impacts virtually every dimension of child development, from physical and mental health, to behavioral health, to educational attainment, and later labor market success,” she said. “It has documented long term effects and benefits for society as a whole.”