The War on Poverty was a success

Poverty still exists in America, but it is much reduced thanks to LBJ

“I have called for a national war on poverty. Our objective: total victory. There are millions of Americans—one fifth of our people—who have not shared in the abundance which has been granted to most of us” — Lyndon Johnson, March 1964

The other day, conservative media personality Ben Shapiro declared that the War on Poverty has been a colossal failure:

This is a common belief on the Right, but I also encounter it sometimes on the Left. This makes sense, of course; conservatives generally like to think that government action to alleviate poverty is doomed to failure, creates a culture of dependency, etc., while socialists like to think that the U.S. is a neoliberal hellhole of poverty, and that capitalist systems are never able to redistribute enough income to make life bearable for the masses, and so on.

As proof that LBJ’s War on Poverty was a failure, people will cite the official poverty rate. Here’s what that looks like:

As you can see, poverty was already falling in 1964-65, when LBJ announced the economic program that would come to be known as the War on Poverty or the Great Society. And it continued to fall for a few years afterward, before bottoming out around 12.5%. After that, it has oscillated around that level for most of the time since.

To many on the Right, this suggests that poverty was decreasing on its own due to economic growth before LBJ’s programs halted the decline by creating a culture of dependency and discouraging poor people from working. Ronald Reagan declared in 1988 that “The Federal Government declared war on poverty, and poverty won.” Meanwhile, many on the Left decry the fact that the rate is still so high, and often blame Reagan and the neoliberal era for halting the decline.

Neither narrative quite fits the timeline. Poverty continued to fall for several years after the War on Poverty began, before halting in the 1970s; after that, poverty rose during recessions and fell during booms. Neither LBJ’s programs nor Reagan’s presidency look like much of a trend break. (Besides, Reagan didn’t even cut welfare very much.)

But in fact, this is a bit beside the point, because the official poverty rate is not the right measure to evaluate the success or failure of government efforts to fight poverty. The reason is that it doesn’t actually include most of the government programs. The official poverty measure includes only cash benefits, and not stuff like food stamps, government health insurance, and so on. It also doesn’t include benefits like the EITC and the child tax credit, which we think of as cash but are actually classified as tax credits.

That stuff really matters! Recall that Medicare, Medicaid, and food stamps (SNAP) were all Great Society programs. It’s a little odd to evaluate the success of the Great Society while leaving out the value of those programs, don’t you think?

In recent years, various teams of economists have been trying to come up with poverty measures that reflect the value of government assistance. The most famous of these is the Census’ Supplemental Poverty Measure, but there are various others as well. All of these show poverty falling by much more than the official rate since 1963.

In a recent paper, Burkhauser, Corinth, Elwell & Larrimore compare these measures. They find that when the measures are set to all equal 20% in 1963 — which was the official poverty rate at the time, and also the rate that LBJ quoted in his 1964 speech — they show a steady decline to less than 10% in 2019.

This looks a bit better than the official rate! Also notice that these measures all show poverty falling not just in the late 60s, but throughout the 70s. In other words, once you add in the Great Society programs, you see that poverty kept falling throughout the 70s, even as growth and wages stagnated. Amazingly, giving people money makes them less poor!

Burkhauser et al. also construct their own poverty measure, which they call “full income poverty”. In addition to some technical changes (using households instead of families, using a different inflation index), they make one big change, which is to add in the value of health insurance. Since Medicare and Medicaid were major parts of the War on Poverty, it makes sense to count these things when evaluating how much LBJ’s programs reduced poverty!

(The issue is complicated, however, because Burkhauser et al. also include employer health insurance contributions in their poverty measure. This makes sense in terms of assessing poverty — if your employer gives you health insurance, that’s worth something! — and it’s true that the government does subsidize employer-provided health insurance through the tax system. But lumping together public and private insurance makes it harder to break out the contribution of the Great Society programs themselves.)

Anyway, when they add in health insurance and make a few other smaller changes, here’s what Burkhauser et al. find:

This is an absolutely massive decrease, and most of it happens in the decade immediately following LBJ’s War on Poverty speech. We can’t attribute all of the difference between the red line and the other lines to the Great Society, but it’s clear that Medicare and Medicaid made up a big part of the difference.

In other words, once we actually account for LBJ’s programs in the statistics, we see that the War on Poverty was actually a big success.

Now, it would be premature to say we won the War on Poverty; we threw the enemy back, but didn’t achieve total victory. The kind of grinding, abject poverty that was more common in LBJ’s day still exists for a small percent of Americans, and that’s unacceptable.

And there are other forms of poverty as well, against which the country has made less progress. There’s relative poverty, which measures how well low-income people are able not just to survive, but to afford the things that our society has decided are the essentials of a respectable, dignified life. And then there’s precarity, which takes risk into account; scraping by is less satisfying when what little material comfort you’ve accumulated could be ripped away from you at any moment by a surprise medical bill or a spell of unemployment.

These other forms of poverty are important, and we need to attack them. But we should also recognize that our big assault on the absolute poverty that prevailed among much of the populace in the early 1960s was successful. Never let anyone tell you that the War on Poverty failed.