Impact of Government Policy on Poor Children
This article will focus on the impact of American government policy on poor children. While childhood poverty is a global concern, the United States, as reported by UNICEF in 2012, has the second highest rate of childhood poverty among industrialized Western countries. Reasons for the high childhood poverty rate in the United States will be explored. Areas of discussion and analysis include American social and fiscal policies, approaches to defining and measuring the childhood poverty rate, the political economy of American anti-poverty policies and American welfare state, and the present and future impact of American anti-poverty properties on poor children. United States government anti-poverty policies will be explored within the larger context of international anti-poverty policies and initiatives.
Keywords Childhood Poverty; Fiscal Policy; Poverty Rate; Social Policy; Welfare State
Whether they are generated by a government or by the public sector, policies impact poor children in different ways and in varying amounts depending on the scope and type of the public policy initiatives. Governments of industrialized countries use social, fiscal, and urban policies to combat childhood poverty and its related conditions. Childhood poverty is considered by governments and international development organizations to be an especially important demographic: disproportionately large numbers of childhood poverty tends to influence and often limit adult economic production and quality of life (Ashworth, 1994).
Poor children are a global and national concern. The United Nations Convention on the Rights of Children is a treaty that defines the social, civil, economic, health, and cultural rights of children. It went into effect in 1990 and as of July 2012 was signed by 193 countries (United Nations General Assembly, 2012). It serves a global pact against childhood poverty and its related conditions. Articles 4 and 27 of the Convention on the Rights of the Child together establish the elimination of child poverty as a global goal (Corak, 2006). Globally, significant childhood poverty exists in all industrialized countries. In 2012, the child poverty rate is lowest in Iceland, Finland, and Cyprus (4.7–6.1 percent) and highest in Romania (25.5 percent). The United States is second highest with 23.1 percent. The child poverty rate is related to a government's social expenditures as measured by a percentage of the gross domestic product (GDP). Countries with higher social expenditures have significantly lower childhood poverty rates. Data illustrates that high social expenditures do not negatively impact a country's fiscal performance. For example, a country such as Finland with high social expenditures and a low child poverty rate continues to compete in the global marketplace with high competitive productivity rates and income growth (Allegretto, 2006).
The United States spends approximately $550 billion per year (or the equivalent of nearly 4 percent of gross domestic product) to combat childhood poverty and its related problems (Worstall, 2012). While the sum is large in dollars, the sum is a small percentage of the overall United States' gross domestic product. As a result, childhood poverty rates have (with periodic dips, reductions, and plateaus) risen since 1960. Childhood poverty rates have risen as has age inequality, the gap between rich and poor children, dependence on welfare income, and incidence of chronic or persistent poverty (Lichter, 1997).
Measuring Childhood Poverty
Childhood poverty, and poverty in general, is measured through poverty rates and poverty lines. These measures are subjective and influenced by the values and standards of the countries in which they are created. There are absolute poverty lines and relative poverty lines. There are fixed poverty lines and moving poverty lines. Budget studies illustrate that poverty lines must be developed within the context of the consumption norms, habits, and patterns of particular communities and must be updated to reflect inflation and consumption needs. Governments track economic patterns and changes and set poverty rates and poverty lines. That said, poverty lines are value judgments and require input and approval from citizens. Corak developed a set of six principles to serve as a guide for countries in best practice of poverty-line development (2006):
- Avoid unnecessary complexity
- Measure material deprivation directly — areas of direct measurement include income, health, nutrition, clothing, housing, services, and opportunities.
- Set a poverty line determined by social norms.
- Implement a consistent monitoring system.
- Establish a target with which to measure progress.
- Provide leadership and increase public support for poverty reduction.
Countries use these guidelines differently. Indeed the practice of poverty rate development varies greatly between countries. Countries either do not define or measure child poverty, attempt but fail at the complicated task of child poverty measurement, or establish clear poverty rates, definitions, measures, monitoring, and targets.
The US federal government established a base-line poverty income threshold in the 1960s at three times the necessary income for maintaining an economy food plan created by the US Department of Agriculture for families of all different sizes. The poverty income threshold is revised annually using the Consumer Price Index to incorporate and account for inflation. The United States began revising consumer trends to calculate consumer price indices every two years beginning in 2002 (Corak, 2006). Governmental agencies use the poverty income threshold rates, as well as the poverty rates measured and determined annually by the US Census Bureau, to determine eligibility criteria for social welfare programs and public assistance.
Critics of the US government's measurement approach argue that the poverty income threshold (and its annual adjustment for inflation) is an inaccurate and partial measurement tool for documenting childhood poverty. Criticisms of the poverty income threshold include the following (Lichter, 1997):
- The poverty income threshold does not incorporate consumption by children, near-income such as food stamps, and in-kind public assistance such as subsidized school lunches.
- The poverty income threshold does not account for the geographic differences in the costs of feeding, clothing, and housing children.
- The poverty income threshold does not account for income representing costs associated with working such as childcare.
- The poverty income threshold does not consider economies of scale or quantify poverty income for different family sizes or adult-children composition.
- The poverty income threshold does not reflect increasing share of children reared by single parents.
- The poverty income threshold implicitly presumes that parental resources are equally invested in all children.
The ecology of the American family changed significantly in the twentieth-century due to industrialization and to rising divorce rates and out-of-wedlock birth rates. The changes in the American family have created both new patterns of poverty and new social policy to aid people (particularly children) in need. The American government's efforts to aid poor children come primarily through the welfare system. The political economy of American welfare (or anti-poverty) policy illustrates the interrelationship between political institutions, the political environment, market forces and structures, and morals and values.
Social policy in the United States serves and functions as a social safety net for citizens. The United States has a welfare state that serves, protects, and provides for its members through social welfare provisions, social policy, social programs, and social welfare initiatives. Public sector (or governmental) social policy and support became common practice in the early twentieth-century. Twentieth-century socio-economic history is characterized, in part, by a switch in national perspective from individualism to interdependence. The social safety net switched from private sector (family, charity, community) to public sector (social policies such as welfare). The government became a source for social welfare provisions, such as public education, welfare payments, pensions, and social security for disadvantaged groups such as the poor, elderly, disabled, and students.
The modernization argument for social policy contends that the twentieth-century economic expansion and transition to industrialized production created the reasons and means to finance social policy and programs in the United States. The needs of populations changed as society transitioned from small-scale production...
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