The Startling Decline in Child Poverty

It’s one of the most famous quotes by Republican President Ronald Reagan: “The federal government declared war on poverty, and poverty won.”

The quip became an easy way to support attacks on government aid for the poor, because such spending supposedly didn’t alleviate poverty. But according to a comprehensive new study by Child Trends, a nonpartisan research group with an expertise in statistical analysis, done in cooperation with the New York Times, childhood poverty in the U.S. has declined by 59% since 1993.

The number of children in poverty dropped from 19.4 million — or 28% of all children — in 1993, to 8.4 million — 11% of all children — 2019. This was just before the COVID-19 epidemic, when federal pandemic aid helped to further reduce poverty.

In Wisconsin, meanwhile, the percent of children in poverty dropped from 18.7% in 1993 to 6.5% in 2019 — a stunning 65% decline.

The study found that child poverty fell in every state during that period, and by about the same degree among children who are white, Black, Hispanic and Asian, living with one parent or two, and in native or immigrant households.

What explains this remarkable decline? The study found that “lower unemployment rates, increases in single mothers’ labor force participation, and increases in state minimum wages explained about 33 percent of the overall decline in child poverty.”

But even more important was the government social safety net which was “responsible for much of the decline in child poverty from 1993 to 2019, cutting poverty by 9 percent in 1993 and by 44 percent in 2019—tripling the number of children protected from poverty over this time… The number of children protected from poverty by the social safety net more than tripled, from 2.0 million children in 1993 to 6.5 million children in 2019.”

As of 2019, the Earned Income Tax Credit, Social Security, and the Supplemental Nutrition Assistance Program (SNAP) contributed the most to protecting children from poverty, the study found. Also important were government housing subsidies, free and reduced price school meals and federal Supplemental Security Income.

The study found the average family lifted out of poverty received nearly $18,000 in benefits — more than 40 percent of its after-tax income.

This remarkable change has come since President Bill Clinton signed a law from a Republican Congress to end the old AFDC program and “welfare as we know it,” slashing payments to parents without jobs. But Clinton also expanded the earned income tax credit.

“Conservatives say the landmark law pushed more parents to work and call it the main reason child poverty declined,” the Times story noted. “Progressives say many working families would still be poor without the expanded safety net, which grew in part to compensate for stagnant wages amid decades of rising inequality.”

The study suggests both are right, but with government aid the more important factor.

“This is an astounding decline in child poverty,” said Dana Thomson, a co-author of the study. “Its magnitude is unequaled in the history of poverty measurement, and the single largest explanation is the growth of the safety net.”

Renee Ryberg, another co-author, said the poverty reduction means a much brighter future for millions of children. “A childhood free of poverty predicts better adult outcomes in just about every area you can imagine, including education, earnings and health,” she said.

While Wisconsin did better than the national average in reducing child poverty during this period, it trailed some of its neighborhood states. Illinois and Michigan showed the same decline (65%) as Wisconsin from 1993-2019, but Minnesota had a 76% decline and Iowa a 68% decline in child poverty. Back in 1993 Wisconsin had the lowest percent of children in poverty among the five states, but by 2019 Minnesota (at 4.8%) and Iowa (6%) ranked below Wisconsin (6.5%) in the percent of children in poverty.

Why the change in Wisconsin’s ranking among neighboring states? One possible factor is that Republican Gov. Scott Walker and the Republican-led Legislature took steps to cut the government safety net for the working poor, passing a reduction in the earned income tax credit and adopting policies to reduce SNAP payments.

The new study shows a greater reduction in child poverty than previous studies due to an approach that used the Census Bureau’s Supplemental Poverty Measure. “Unlike the outdated Official Poverty Measure, the supplemental measure counts billions in tax credits, SNAP and other benefits, and adjusts for local living costs, providing a more accurate tally of household resources,” the Times noted.

And while all groups of children saw similar declines in poverty, that still left a racial gap, with Black and Latino children about three times as likely as white children to be poor. Past studies have shown Wisconsin has a larger gap than the nation in the relative level of minority versus white childhood poverty.