The year 2014 marks the 50th anniversary of President Lyndon B. Johnson’s declaration of an “unconditional war on poverty in America.” The legislative initiatives that followed included the Economic Opportunity Act of 1964, which created an array of urban and rural education, training, and community-action programs; the formalization of the Food Stamp Program (since renamed the Supplemental Nutrition Assistance Program, or SNAP); and the Social Security Act of 1965, which created Medicare and Medicaid. Since that time, the Economic Research Service (ERS) has monitored trends in poverty through its research on the extent and impact of 15 separate USDA-administered food assistance programs, on household food security, and
on rural poverty and well-being.
Poverty in America, Then and Now
In 1959, 22.4 percent of the population of the United States lived in families whose incomes were below the federal poverty threshold. This threshold reflected the estimated cost of the USDA’s “economy” food budget for families of various sizes, along with the assumption that food expenditures should account for no more than one-third of total money income. The current official poverty thresholds reflect these same assumptions, and are updated annually for inflation.
By 1963, on the eve of President Johnson’s call to action, the poverty rate had declined to 19.5 percent, and it continued to fall throughout the 1960s and early 1970s, reaching a low of 11.1 percent in 1973. These reductions in poverty primarily reflected the benefits of rapid economic growth during that period. Poverty rose in the wake of the recessions of the early 1980s and early 1990s, fell during the expansion of the later 1990s, rose again during the 2000s, particularly during the recession of 2007-09, and has continued to rise since then, despite the resumption of economic growth. In 2012, 15.0 percent of the total population was poor, but poverty rates were higher for children and many racial and ethnic minority groups.
In assessing the relationship between poverty reduction and the programs that were initiated as part of the War on Poverty, it is important to realize that neither food assistance nor Medicare and Medicaid payments are counted as income for the purposes of determining the official poverty rate. These programs support consumption and provide health insurance, but do not directly reduce poverty as officially measured. However, ERS research using alternative measures of poverty that account for the cash value of food assistance programs reveals that SNAP payments effectively raise many families above the official poverty threshold. Increases in Social Security benefit levels since 1965, which are counted as cash income, have also played a large role in reducing elderly poverty as officially measured, which has had a particular impact on rural areas, given their older age profiles.