Darren Walker, president of the Ford Foundation, recently told the New York Times that economic opportunities for poor people in the United States may have been better in the 1960s than they are today. Could this be true?
Walker, an African-American, was born in 1959 in Lafayette, Louisiana, to a single mother and grew up in small towns in Texas, including Ames, an all-black town. His prospects might not have seemed bright but in fact he attended the University of Texas at Austin, where he earned a law degree; he joined a prominent law firm, then the Union Bank of Switzerland (UBS), and subsequently entered the nonprofit world.
In the Times interview, Walker gave credit for his success to his mother, who was a nurse’s assistant, and to the federal childhood program Head Start. “I’m grateful to America, because I was a boy at a time when America believed in little poor black boys and girls living on dirt roads in shotgun houses in small towns across this country.”
He explains: “In 1965, I was sitting on the porch with my mother and a lady approached and told my mother about a new program called Head Start. And I was fortunate enough to be in the first class of Head Start, in the summer of 1965.”
1965? That was the year of the Watts (Los Angeles) riots, two years after Martin Luther King’s March on Washington, three years before King’s assassination, and a year after three young men were killed in Mississippi for trying to bring voting rights to blacks.
Can Walker really believe that things were better for poor people, especially African-Americans, back then? Apparently so. He says:
The economic system then made it possible for my mother to never be on welfare. We were always on the edge, but my mother, even with just a high school diploma and a technical degree as a nurse’s assistant, was able to eke out a living. She could not do that today because the economic system for low-skilled workers produces a wage that does not allow for a worker to provide a decent standard of living for their family. That’s what I worry about.
His mother could not eke out a living today? Surely that’s wrong. The employment rate for African-Americans is the lowest it ever has been.[1] The nation has more jobs available than it has unemployed people.[2] True, there may be relatively fewer jobs for low-skilled workers, but the access to training is surely better than it was for his mother when she obtained a technical degree.after high school.
Yet there is a way in which Walker’s statement may be true. The war on poverty may have had detrimental effects that are hurting the poor today.
In 1986, economists James D. Gwartney and Richard Stroup wrote about President Johnson’s “War on Poverty,” initiated by the president in 1964.[3] Gwartney and Stroup observed that the official poverty rate had been declining for many years—from 32 percent in 1947 to 13.9 percent in 1965 and to 9.7 percent in 1975. But then it stalled, just as the war on poverty got into high gear. In fact, in 2017 it was up to 12.3 percent—not much improvement given the billions of dollars that have been spent on anti-poverty programs.
For families whose household head was under 25 years, the poverty rate was 13.2 percent in 1968. By 1984, it was 29.4 percent—more than double! “The poverty rate of working-age Americans, which had previously been declining, started to rise during the period of rapid growth in means-tested programs.” (Means-tested programs are those for people who meet a low-income threshold.)
Gwartney and Stroup concluded that as transfer programs grew, the incentive to work deteriorated , stifling the ability to climb out of poverty.
The magnitude of this impact was hard to see, however. Why? Because older people’s poverty continued to decline—their incentives did not change much as transfer programs grew. Their poverty rate continued to fall, although it is back up to 9.2 percent today. [4] Basically, that decline in poverty masked what was happening with younger people.
Even Head Start has a rocky record. Initial studies suggested that it benefited low-income children by giving them cognitive skills. But then studies showed little impact, and that impact deteriorating by the early elementary years. The debate over Head Start continues.[5]
I am sure that Darren Walker benefited from Head Start, because he was a child with talent, ambition, and a supportive family (he also has an engaging personality). But with or without Head Start as a child, he would be successful today.
So, while I disagree with Walker’s description of today’s economy, it may be that he is partly right. Something has changed for the worse—the drive to succeed has been stunted. Some cynics say that we fought a war on poverty and poverty won.
[1] “Black and Hispanic Unemployment Is at a Record Low,” CNBC, Oct. 4, 2019. https://www.cnbc.com/2019/10/04/black-and-hispanic-unemployment-is-at-a-record-low.html.
[2] Bureau of Labor Statistic, “Job Openings and Labor Turnover Summary, Oct. 9, 2019, https://www.bls.gov/news.release/jolts.nr0.htm. Bureau of Labor Statistics, “The Employment Situation—September 2019.” Oct. 4, 2019, https://www.bls.gov/news.release/pdf/empsit.pdf.
[3] James Gwartney and Richard Stroup, “Transfers, Equality, and the Limits of Public Policy,” Cato Journal 6, no. 1 (Spring/Summer 1986): 111-137. (Richard Stroup is my husband.)
[4]j Juliette Cubanski, Wyatt Koma, Anthony Damico, and Tricia Neuman, “How Many Seniors Live in Poverty?” Kaiser Family Foundation, Nov. 19, 2018, https://www.kff.org/medicare/issue-brief/how-many-seniors-live-in-poverty/.
[5] Lillian Mongeau, “Is Head Start a Failure?” Hechinger Report, August 9, 2016, https://hechingerreport.org/is-head-start-a-failure/.
Hello and I just wanted to say im very excited to find you and your blog fellow Shaw.
I believe social mobility is essentially dead for my generation. I own a business and the only reason why I’m not bankrupt is because my family has had enough money to deal with corruption and extortion by my local governments and the police are all too afraid or paid off to go after corruption which turns into the wealthy having a fraction of the taxes that anybody who isn’t paying the politicians off would ever be able to get and targeting of upstarts by corrupt and frivolous regulators. Then we have massive payroll taxes then we have income taxes which means that many Industries are far more efficiently run illegally and illegitimately.
I believe that most of the Working Poor which is over 60% of the population of the u.s. is stupid to work from a mathematical perspective and that is very sad because they can live easier by lying and using government money then doing something on the side that the government doesn’t know about. The taxes on poor people in states like New York and Colorado are so severe that they can’t afford barely anything and at the same time Amazon received a hundred million dollar tax net on 11 billion dollars in profits last year. We also have three sometimes four generations of a family who have never added value to society and don’t see any type of incentive to do so and this is on top of their local communities and peers insulting those who go and work these minimum wage unlivable jobs.
I think that the bulk of the very smart American business leaders are already leaving this country and trying to go somewhere else and for me that meant learning Japanese and the reality that taxes in Japan are far more fair than the lie of a free country that we have so many ignorant people believing.
One of the other major problems with the complete demise of social mobility in this country is that even those companies that the government is giving massive tax advantages to, with the hope of giving America an advantage, are run very nepotistically for example YouTube. The woman who was running YouTube for years was losing money and when you looked at their books what you discovered was their executive did not even understand the business model of YouTube sourcing all of the content that they didn’t need to produce from people like you… “You.. Tube” and she spent billions of dollars per year creating content that nobody wanted which made the company unprofitable only because of that point thus they decimated the revenue share for their actual good content producers which not only has created a significant increase in their competition but even got their headquarters shot up by disgruntled YouTube content producers. Then I found out she was the cousin of some board member or executive of Google… Ugh..
It’s just amazing to me how no one has even considered the upside of letting working poor keep their money. Id bet my liver they would spend it and they would spend the bulk of it locally. If they had a friend that had a moderately okay restaurant, it would go from failing to surviving, if they had a friend who had a mediocre t-shirt business, their friends would support it because it was their friend. I believe that giving the Working Poor economic capacity to decide things is a huge boost to the entire economy. Our economic and government system give us false options and really feels like fascism to the unfortunate people who are under 40 years old and we’ll never be able to own a home yet are expected to work 80 hours a week with no benefit. Even the American right of bankruptcy has been voided for my generation and I believe that the television and news media are working so closely with those in power that the true good ideas will always be blocked from the eyes of the suffering poor Americans.
Im my generation there is a contempt for the competition of the incompetent inheritors. When the smartest and best are used and those in hard power have no soft power we will see the strongest of the soft power rebel.
As a start.. End payroll taxes and income taxes on the working poor.
So many moving parts to the economy of poverty and so many ways to slice and dice the data–regions, single parent families vs two parent, urban vs rural, decline of urban public schools, increased welfare benefits, etc. So, you’re right, maybe Walker has a point, maybe not–depending on the correlations.
Head Start, of course, fares poorly in studies of whether gains are permanent. However, we do know from recent neurological research that enriched early childhood experience means more adaptive brains. But it may not mean better school performance given the quality of schools, parenting, etc.
It may simply mean more effective drug dealers or gang leaders.
The best we can get from anecdotes like Walker’s is questions to investigate.