While Massachusetts is a comparatively wealthy state, with the third highest per capita income in the nation, poverty remains widespread across the state. Using the most current data from the U.S. Census Bureau, this report analyzes the prevalence and face of poverty in the Commonwealth. The picture that is drawn will be familiar in many respects, but is counter to the stereotypes of poverty held by many people. In particular, poor people in Massachusetts are often well-educated, are primarily white, often live in the suburbs, and are often engaged in the work force in significant ways. Moreover, another large number of families is above the official poverty line but still very close to poverty; their lives are little different from those in poverty, except that they often have less access to government assistance. Understanding and addressing the problems of the poor and near poor in Massachusetts should be a high priority for policy makers.
Nothing in a report of this sort can capture the difficulties and challenges that poor people actually face in their day-to-day lives, nor is this report intended to be a comprehensive survey of the many challenges poor people face. A series of brief sketches of poor and low-income families included here — representing real people in Massachusetts, but whose names have been changed to protect their privacy — gives only the briefest of glimpses into the lives of people who are otherwise described in statistical averages. The report can, however, cast light on the broad characteristics of poverty in Massachusetts, lending hard data to help understand just who the poor really are. This is particularly important as massive changes in state and federal programs for the poor are underway.
The federal welfare reform law enacted in 1996, while intended by its authors to address the problems of non-working welfare recipients, will instead likely further impoverish poor families, both those who work and those who, for a variety of reasons, are unable to work. Unfortunately, the plight of the working poor — a major emphasis of this report — is largely ignored and as a result exacerbated by these reforms. The final section of this report makes several recommendations that could manifestly improve the lives of those who have been left behind during the recent decades of economic growth.
In the current debates over welfare reform and other proposed reductions in safety net programs, many critics of government aid have claimed that such programs actually create poverty, rather than reduce it. They generally cite as evidence the fact the federal government has spent billions of dollars on anti-poverty programs since the days of the New Deal, yet poverty remains high. This criticism is not new. In his 1988 State of the Union Address, President Ronald Reagan said, "My friends, some years ago, the Federal Government declared war on poverty, and poverty won."
Reagan's critics countered that the federal government did not lose the war on poverty, it simply retreated from the battlefield. In their recent book, The War on the Poor, economists Randy Albelda and Nancy Folbre document the steady reduction in the percentage of people living in poverty after new Great Society programs were enacted in 1964.2 Despite the fall in poverty rates, however, the U.S. still lags behind many industrialized countries that spend more on low-income families and have lower poverty rates. Comparing the U.S. to other countries, they find:
The U.S. devotes a small percentage of its Gross Domestic Product to social expenditures than Sweden, France or the U.K. Poverty rates in those countries would have been higher than in the U.S. absent government intervention. With government intervention, the poverty rates in the mid-1980s were 4.3 percent in Sweden, 4.5 percent in France, 5.2 percent in England, and 13.3 percent in the U.S.
The countries of northwestern Europe also provide much more support for parents than the U.S. does in the form of family allowances, publicly subsidized child care, and paid family leaves from work.
The Center on Budget and Policy Priorities, a national research organization that analyzes the impact of public policies on the poor, has joined the debate with a new study showing that federal and state anti-poverty programs have lifted millions of children, disabled, and elderly out of poverty, and have reduced the level of poverty among those who remain poor.3 This study also shows that poverty increases when federal spending on the poor declines and decreases when federal spending rises. The findings seem intuitive; their significance is that the report contradicts the contention that cutting government spending causes, rather than alleviates, poverty. Highlights from the study include the following:
In 1995, without government programs, 57.6 million people would have been poor. When government benefits are counted — including food stamps, housing assistance, school lunch programs, and the earned income tax credit — the number of poor people drops by 27 million to 30.3 million.
Census data show that the stronger the safety net, the more people are lifted out of poverty. When the safety net is weakened, the poverty rate increases.
The Social Security program has been remarkably successful in shrinking poverty among the elderly. Nearly one out of two elderly people would have been poor in 1995 if they had not received government benefits; fewer than one in 10 were poor after calculating the value of their government benefits.
Between 1983 and 1995 the number of children removed from poverty by government benefits programs nearly doubled; of particular importance in this regard is the federal earned income tax credit, available almost exclusively to working parents raising children. Federal expenditures for children increased 50 percent on a real per capita basis during that period.
The results of this study led the CBPP to conclude that the new welfare reform law, which cuts federal safety net expenditures by $54 billion over the next six years and allows states to withdraw an additional $40 billion in state funds from the programs, will likely lead to a significant increase in poverty in the coming years. With that backdrop, this report looks at poverty in Massachusetts as it existed in the early 1990s in order to recommend new state policies that will begin to end poverty — not just welfare — as we know it.
2. Nancy Folbre and Randy Albelda, The War on the Poor, The Center for Popular Economics, The New Press, 1996.
3. Wendell E. Primus, et al., The Safety Net Delivers: The Effects of Government Benefit Programs in Reducing Poverty, Center on Budget and Policy Priorities, Washington, D.C., November 15, 1996.