How Sweet It Was

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/.