Urban Wire Are older Americans "winning" the war on poverty?
Zachary J. McDade, Austin Nichols
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Fifty years after declaring war on poverty, it’s clear we lost heart for the battle a decade in. We made huge strides up until about 1973 in lowering poverty rates, but the only poverty rate on a steady downward trend since then is the poverty rate of senior citizens. In 1959, the senior poverty rate was a whopping 35.2 percent; by 2012 it had fallen to just 9.1 percent. Despite a sharp drop in the 1960s, child poverty is nearly back to 1964 levels (22.7 percent); by 2012 it was 21.3 percent.

In fact, the whole pattern of poverty by age has changed over time. The chart below shows the poverty rate at every age under 80 in three different years: 1968, 1979, and 2012. Historically, poverty has fallen as people (or their parents) have gotten older and become more experienced, higher-wage workers, until the peak earning years of ages 40-50; poverty tended to rise again at older ages when people cut back on work. There was also a dramatic drop in poverty rates in past decades at ages 18 to 20 when people formed new households and found gainful employment.

But decades of investment in the elderly through Social Security and other programs has caused poverty rates to keep falling after age 40 in the 2012 data. In sharp contrast, poverty among young adults now spikes upward at ages 18 to 20, as they frequently fail to find gainful employment or avoid entering the labor market altogether.

Poverty rates are higher among all children in 2012. In fact, poverty is higher in 2012 than in 1968 or 1979 for every age group younger than about 55. This is partly due to a shift in antipoverty strategy away from any cash assistance for parents and working-age single adults, and toward tax credits and in-kind assistance, especially food assistance. Unfortunately, programs that tend to offer the most support to poor children, including food stamps and nutrition assistance for women, infants, and children, have faced cuts in recent years.

Many will think critically about poverty policy this week as we commemorate the 50th anniversary of the War on Poverty. Let’s be sure to remember the research that shows what a good investment it is—economically and socially—to alleviate child poverty. Let’s also remember that there are many creative solutions out there to do it, if we have the will.

Research Areas Wealth and financial well-being
Tags Poverty Economic well-being Retirement