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Understanding Poverty Programs

Understanding Poverty Programs
January 9, 2018 Poverty Facts

In this Insights with Dick Goldberg podcast, Dick takes a big-picture look at US Poverty Programs. To do this, he talks with Dr. Tim Smeeding, director of the University of Wisconsin’s Institute for Research on Poverty from 2008-2014 and the Lee Rainwater Distinguished Professor of Public Affairs and Economics. Tim provides an overview of US poverty programs, discusses some challenges they face and provides suggestions for improvements in the future.

Income inequality in the US has increased for the past 30 years and now is as high as it has ever been, making the US one of the developed countries with the highest income inequality. Yet before taxes and other government transfers, the US is fairly comparable to other developed countries. Dick and Tim show that one of the main underlying issues is that we do less for the poor in our country than many other countries do.

Figuring out how to best respond to poverty is difficult—and starts with creating a definition for what poverty is. In the US, measures are set up to define poverty. For a family a four, that line is around $26,000/year. The “welfare” system, a term many people use without really understanding what they mean, was redone in 1996 with TANF, Temporary Assistance to Needy Families—sometimes called “welfare to work.” Under this system, states have a great deal of autonomy over how they run their poverty programs.

In Wisconsin, the main components (including state and national programs) of assistance for the poor include Badger Care for insurance, the EITC (earned income tax credit), SNAP (Supplemental Nutrition Assistance Program called FoodShare in Wisconsin, also known as “food stamps”), child care assistance, various housing programs, unemployment insurance and programs for those with disabilities (SSDI and SSI). Some programs achieve a significant degree of success, but many also have staggering issues. For example, Dr. Smeeding stated that only about 1 in 5 people who qualify for housing assistance receive it. Also, determining who is truly disabled is complex and the programs don’t provide nearly enough to live on for those who are.

Dr. Smeeding discusses some of the challenges faced by different segments of the population—in particular young, single men with a prison record. These individuals qualify for almost no assistance and yet find it very difficult to secure employment.

Dr. Smeeding suggests we focus our biggest attention on children in poverty—and in increasing the likelihood that these children escape poverty. Many other countries provide further assistance to poor children and their families and have seen significant results from doing this. Dr. Smeeding talks through a couple of ways we could improve our system, most notably by providing a child allowance in the form of payments to parents with children. This creates a floor—ensuring all children have access to basic resources.

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