Fifty years ago, Lyndon Johnson announced the war on poverty as the central message of his first State of the Union, less than two months after John F. Kennedy’s assassination. Conservatives, following Ronald Reagan’s quip, like to joke that the War on Poverty is over and poverty won. But as usual, the facts disagree.
We haven’t vanquished poverty, it’s true. But it’s not Johnson’s anti-poverty policies that have failed us. They’ve performed much better over the past 50 years than America’s capitalist economy has, which has actually made poverty worseover that same period of time. If we want to make real, dramatic progress toward realizing the American Dream for all Americans, we need to arm ourselves with an accurate understanding of what the War on Poverty has actually achieved, as well as how it has fallen short, in order to make better policy for the future. What follows is a list of some of the most important facts to help guide our way.
The US economy has failed to keep reducing poverty as it did before 1964.After a few good years, the economy weakened substantially after 1973, undercutting the progress LBJ and his advisers had counted on. GDP grew 4.0 percent per year from 1948 through 1973, but only grew 2.7 percent annually from 1973 through 2011. The average annual unemployment rate from 1948 to 1973 was 4.8 percent, but since then it’s been 6.5 percent, roughly 40 percent higher. That labor market weakness, combined with all-out attacks on labor unions, and a declining minimum wage, has significantly undercut the ability of tens of millions of Americans to raise themselves out of poverty simply by working an 8-hour day.
We see this in the shifting fortunes of the 1 percent and the 99 percent. From 1948 to 1973, the average income of the bottom 99 percent rose 102 percent, compared to just 46 percent for the top 1 percent. But from 1973 through 2012, the bottom 99 percent saw no increase whatsoever, while the top 1 percent gained an average of 187 percent. With this vast wealth shift to the top, it’s no wonder the economy as a whole produced a net increase in the rate of poverty over this time, using new measures of market poverty.
The War on Poverty wasn’t just means-tested programs for the poor.The most important single program it included was Medicare, a social insurance program covering almost all Americans. In addition to the legislative agenda Johnson laid out in his State of the Union speech, there were eleven goals contained in chapter 2 of the 1964 Economic Report of the President, titled “Strategy against Poverty.” In their book Legacies of the War on Poverty, editors Martha Bailey and Sheldon Danziger wrote, “These goals include maintaining high employment, accelerating economic growth, fighting discrimination, improving regional economies, rehabilitating urban and rural communities, improving labor markets, expanding educational opportunities, enlarging opportunities for youth, improving the Nation’s health, promoting adult education and training, and assisting the aged and disabled.”
Thus, direct assistance for the poor was just one side of a multi-faceted approach. The part that failed—mostly after Johnson left office—was the side of the macro-economic goals of maintaining high growth and employment.