Going Global: International Inspiration to Tackle US Child Poverty
By Natalie Branosky, Megan Curran, and Jane Mansour
The National Academies of Sciences, Engineering and Medicine (NASEM) in Washington, DC recently released A Roadmap to Reducing Child Poverty, declared the most important report on child poverty in years. The research should be widely-covered for its most telling revelations about child poverty in America in 2019: that an unrestricted free-market economy characterized by low-wage employment, combined with work requirements and sanctions, were not effective over time at reducing the percentage of American children living below the poverty line.
The 1996 reforms of the US welfare system and related policies affecting children were implemented during years when the unemployment rate was nearing 4%, much as it is today, and the balanced Federal budget of 1998 was within sight. The theme of the US approach, therefore, was to push families off of public benefits, rather than to pull them safely into sustainable, family-supporting employment – the latter being an aspect of American life most agree should be a reasonable standard.
Instead, policies were passed without a binding target to hold the US Government, individual States, and service delivery partners collectively accountable for reducing the child poverty rate. Now an example of what not to do, our global counterparts are reading our own research which shows certain work-based approaches and means-tested supports aren’t enough to adequately reduce child poverty in a wealthy, civilized society.
When tested by the National Academies of Sciences, Engineering and Medicine, no single program or policy option in the study (four are linked to employment, three are existing safety net programs, and two are modest ideas from other countries), met the goal of reducing child poverty by 50% within 10 years. But a combination of investments specific to children can. At the expense of millions in research dollars and the unyielding testimony of poverty reduction advocates, the conclusion for the wealthiest country in the world is clear: the Clintonian approach hails from a by-gone era, and it should stay there.
Looking forward, the “Roadmap” study demonstrates that child poverty is solvable. Yes, solvable. It requires political will, a binding commitment that transcends changes in government, and dramatically altered concepts about legislative targets and program design.
So, let’s go global for a moment: today’s global economy is one in which income inequality has increased in most OECD Member Countries over the past two decades, exacerbated further by the Global Recession of 2008-2009. This is because incomes before taxes and transfers have become more unequally distributed, and because the extent of redistribution through taxes and transfers has fallen. Due to different standards of living across the globe, there’s no absolute income level to define child poverty. Rather, the OECD defines child poverty as the share of a country’s population under age 18 who live on household incomes that are “less than half of that nation’s median income.”
As the wealthiest country in the world, is the United States taking the most modern approach possible to addressing child poverty in the economy of 2019?
Our global neighbors offer ways forward. For starters, one of the biggest misconceptions about poor children in wealthy countries is that a disproportionate percentage of public spending is already directed toward poor families with children. This is false, particularly for the United States. The “Roadmap” study sets the record straight and we emphasize it here. The chart below details spending on programs that benefit children, as a percentage of each country’s gross domestic product (GDP).
All nations allocate a portion of their budgets to programs that benefit children. The NASEM study included the figure below (a reproduction of Figure 4-12) charting total family-related spending on financial supports, expressed as a percentage of a country’s GDP, for the US and a set of peer countries: Australia, Canada, Ireland, and the United Kingdom annually from 1990 - 2015. It is unsurprising that year on year, the United States reports the highest rate of child poverty among the countries represented, yet it spends the least on an economic and social reality that influences both our internal struggles as a nation, and our global position as a leader.
LEARNING FROM OUR PEERS: THE UK STORY – VISIONARY PROGRESS (LOST)
The United Kingdom launched a concerted attack on child poverty in 2000, with the introduction of a child poverty target and a pledge from then Prime Minister Tony Blair to reduce child poverty by half within a decade and eradicate it within a generation. The next ten years saw a reduction in child poverty by nearly half against an absolute measure of poverty and nearly 18% against a relative measure of poverty. This during a decade which saw a deep global recession.
Income raising measures, including the introduction of the national minimum wage and a system of tax credits for those in and out of work
Programs to increase employment, with incentives for single parents to move into work including an improved childcare offer and additional support to improve skills levels and find work. Initially voluntary, levels of conditionality for employment support for single parents (and disabled people) increased over time.
Increasing funding and support for early years. This included increased universal pre-k hours, Sure Start (a program of support developed from the US Head Start program), tax incentives to offset childcare costs, paid leave and legal requirements for employers to consider flexible working.
The election of the Conservative Party-led coalition in 2010, and the Conservative Party on its own in the subsequent 2015 and 2017 General Elections, however, saw the introduction of austerity budgets and significant cuts to benefits, incentives and support services. Children and young people were at the sharp end of these cuts – creating what is now called ‘the austerity generation’ – and today there are 3 million children living in poverty in the UK, many with at least one working parent.
Recent evidence has been damning. The report from the United Nations Special Rapporteur following his mission to the UK in November 2016 found that poverty was systemic following the deliberate removal of the social safety net in the name of austerity. His report notes that government policies since 2010 have ensured ‘systemic immiseration’. Universal Credit has been plagued with massive design and implementation problems, jeopardizing the economic security of the most vulnerable families. Programs like Sure Start have been cut by two-thirds – despite recent cost benefit analysis showing that it significantly reduced hospitalizations among children by the time they finish primary school, with poorer children benefitting most. This represented a saving to the UK national health system equivalent to 6% of the Sure Start budget while in place.
The UK Child Poverty Action Group have detailed how 700,000 children could be lifted out of poverty with five changes to the tax and benefit system. These changes would carry a cost of £8.3bn ($10.5bn) for the Government but would represent a restoration of just 20% of the recent annual cuts to the UK social safety net system and would see families with children around £1000 ($1300) a year better off.
MOVING FORWARD: DRAWING NEW INSPIRATION FROM OUR GLOBAL NEIGHBORS
On making child poverty reduction a national goal: IRELAND
With a national child poverty target (here: a whole-of-Government approach operating out of the Irish Department for Children and Youth Affairs) and children’s rights infrastructure (ex: National Children’s Ombudsman) in place, plus the recent launch of the No Child 2020 campaign, a national, coordinated media and public policy focus has been placed on child poverty reduction and the idea that “no child should live without” the basic fundamentals of child well-being and development: food, shelter, health, education, and societal participation/inclusion.
On making child well-being a budgetary priority: NEW ZEALAND
In 2019, New Zealand made history by becoming the first Western nation to launch a national “Well-Being Budget,” designing its entire budget based on wellbeing priorities and instructing its ministries to design policies to improve well-being. This follows the December 2018 passage of national child poverty reduction and child well-being legislation that centers child poverty reduction at the top of the Government, and names the Prime Minister to also be the Minister for Child Poverty Reduction.
On making child poverty an issue of education and global leadership: JAPAN
One of the wealthiest G7 nations and the third-largest economy after the US and China, Japan’s child poverty rate equates to the US at 16%. Deregulated labor and competition with China have created an economy of low-pay, temporary employment and few benefits. The social taboo of poverty means many are unwilling to reveal their financial situation. In 2014, the Law on Measures to Counter Child Poverty ratified a set of principles by which all new laws affecting children are measured. Surveys by Japan’s Health, Labor and Welfare Ministry on the experience of children in poverty revealed previously unspoken truths. Because education costs are extremely high relative to other advanced nations, this and reduced labor market opportunities will affect the lifetime income of children. Solutions, or “counter-measures” are interpreted through the lens of global competition and the strong relationship between educational achievement and career earnings.
On making children’s voices heard in the policymaking process: SCOTLAND
Following the United Kingdom’s ratification of the United Nations Convention on the Rights of the Child, Scotland’s first Commissioner for Children and Young People took office in 2004. Over 16,000 children and young people weighed in on a national consultation to establish their priorities for the work of the office, a democratic process that has been repeated by each subsequent Commissioner to date. Results included the development of the Office’s internationally recognized Children’s Rights Impact Assessment tool, assembling youth advisory groups to the National Health Service, and centering children’s rights in Scottish anti-poverty legislation and proposals for the future.
On making cash transfers count for children:
Cash transfers are one of the most important pieces of any country’s family supports system. Recent years have seen the emergence of “cash plus” programs that combine cash transfers with additional supports, making links to children’s health and nutrition programs, family asset-building, and more. The UNICEF Innocenti Research Center has evaluated a set of these programs in place across a range of countries to identify best practice elements for successful policy transfer to Cities, States, and Regions.
CANADA: In 2016, Canada re-designed its existing cash transfers for children with the introduction of the Canada Child Benefit. Paid out monthly, the tax-free benefit provides a significant level of support to families with eligible children. This is roughly $4,300 per year per child aged 6-17yrs and a higher rate of $5,100 per year per child aged 0-6 to provide more support during early childhood. Within just one year of implementation, it was projected to reduce child poverty in Canada by half and deep poverty by two-thirds.
AUSTRALIA: The 2019 National Academies of Sciences, Engineering and Medicine report points to the success of Australia’s universal social insurance programs. Commentators note, reviewing research on the system, that “a dollar spent in the Australian social security system does more to reduce inequality than a dollar spent in any other welfare system in the world.” Benefits are means-tested and targeted to those most in need, however these thresholds are more generous than in many OECD countries, payments are not based on individual contributions, and vulnerable groups are able to access benefits without onerous restrictions – all of which ensures coverage regardless of the economic situation of the adults in the household, a key element for children’s supports.
BRAZIL: The Bolsa Familia (Family Allowance), admired internationally, is the world’s largest “conditional cash transfer” program covering 14 million poor households or roughly one third of the population. The grant requires certain conditions to be met, that children attend school 85% of school days in a month, and that they are properly vaccinated, for cash benefits to be paid or funds are suspended. The goal is to both reduce short-term poverty by direct cash transfers and to fight long-term poverty by increasing human capital. Research by the World Bank shows reduced poverty rates and measurable results in the consumption of food, in the quality of the diet and in the growth of children, among other positive outcomes.
COMMITTING TO OUR CHILDREN
There is creative thinking beyond US borders worth investigating. Policies that direct the wealth of the nation into high-return investments in the young increase both the life chances of children and young people and national strength. As the wealthiest nation in the world, the United States can afford to commit to a national target and a modern, comprehensive policy plan to reduce child poverty. As a global leader, we can’t afford not to.
 The Global Recession as defined by the International Monetary Fund equates to a global annual real GDP growth rate of 3.0% or lower.
ABOUT THE AUTHORS:
Natalie Branosky is an independent consultant in the areas of economic and social inclusion. This includes welfare systems, workforce development, economic development, labor markets, skills planning, and the fields of social innovation, philanthropy and democracy. She has worked extensively on Capitol Hill, at Westminster and the Hague, and promotes international knowledge exchange as essential to building inclusive economies. She is based in Washington, DC.
Megan Curran has worked inside and outside government as a researcher and policy analyst in the field of anti-poverty and child and family advocacy in the US, UK, and Ireland. She is currently an Irish Research Council Postgraduate Scholar, and PhD candidate in social policy, at the University College Dublin Geary Institute for Public Policy, lecturer in comparative social policy, and an independent social policy consultant currently based in Dublin, Ireland.
Jane Mansour is an independent policy consultant based in the UK. She has a rich combination of operational and policy experience having previously worked in frontline delivery of employment programmes as well as for think tanks and research organisations in the UK, Australia and the US. Current areas of work include career-related learning for elementary school children; ‘good help’ creating agency in public services and evaluations of labor market programs in Wales and Northern Ireland.