Last week the Census Bureau released the 2008 figures for poverty in the US. As I noted in my diary on Thursday after the release of this data, the results were not very good. Child poverty in the US increased by around 1 percentage point and now stands at 19%. This was truly one of the most disturbing of all the figures in the report.
To put this into historical perspective, throughout the 1970s child poverty was around 15%. It increased to 20% in the early 1980s and stayed at around this level until the early 1990s, when it fell back to close to 15%. This drop was mainly due to the rapid economic growth and increased earnings experienced by most families during the Clinton years.
During the Bush years, child poverty rates pretty much rose steadily, reaching 19% last year. However, the worst of the damage from the current recession is not reflected yet in the data. It is virtually certain that child poverty will exceed 20% when data gets released next year at around this time. In brief, two terms of Bush will have reversed all the gains in reducing child poverty during the two Clinton terms, and pushed child poverty rates up even more. Alas, lots of children have been left behind during the Bush years!
Putting the US situation into an international perspective, I have estimated child poverty for 2004 using the Luxembourg Income Study, a set of data from around 30 different countries, which have been made comparable in order to allow meaningful international studies of poverty and income distribution. 2004 is the latest data available in the Luxembourg Income Study for the US and other developed countries.
I used a relative definition of poverty, rather than the US official definition, so I get numbers a little different than the government reports. Using a relative definition of poverty is preferable in international comparisons, especially for dealing with the difficulty of comparing incomes denominated in different currencies. This problem is circumvented by using a relative definition of poverty, and defining poverty as having half the national median income (adjusted for the size of the household).
The results of my study are pretty embarrassing for the US. In one of the richest countries in the history of the world, 25% of US children in 2004 were poor. Of 9 developed countries for which I had data, this was by far the highest. The next closest countries were Australia, Canada, Luxembourg and the UK-- with child poverty rates of around 15%. The average of all 9 countries (including the US) was around 12%, and many countries (Denmark, Finland, Norway and Sweden) had child poverty rates at around 5%.
These figures are disturbing not only because the US comes out so badly compared to other countries, and not only because we have such a high child poverty rate, but also because of the consequences of growing up poor.
Child poverty has many negative effects. Some main ones are their impact on: (1) the educational and intellectual development of the child, (2) health problems, and (3) the social and psychological development of the child.
According to a 1994 study by the Children’s Defense Fund, Wasting America’s Future, poor children are twice as likely as non-poor children to repeat a grade (29 percent versus 14 percent), are twice as likely to be suspended or expelled from school compared to non-poor children (12 percent versus 6 percent), and are twice as likely to be high school dropouts (21 percent versus 10 percent).
The study also reports that young (1-5 years of age) poor children were less likely to receive the recommended dietary allowance of 12 nutrients. Particularly important, these young, poor children were more likely to have low levels of iron. Low iron levels have been shown to reduce the ability of children to concentrate, to solve problems and are associated with a long-term reduction in IQ scores.
Poverty also hinders the social and emotional development of children, leads to increased rates of juvenile delinquency, and to greater chances that someone will engage in criminal activity.
A study released in 2007 by the Center for American Progress, provide some estimates of the cost of child poverty. Childhood poverty costs the US $500 billion per year, or nearly 4 percent of GDP. It does this through lowering productivity (and hence income), increasing crime rates and raising health expenditures. Each of these factors contributes around one-third of the overall loss according to the authors.
For those who are interested, here is the link to the Center for American Progress study--
www.americanprogress.org/issues/2007/01/poverty_report.html