Q+A about War on Poverty with Bicknell Lecturer Sheldon Danziger.

A generation ago, in a now-famous speech to Congress, President Ronald Reagan pronounced anti-poverty programs an abject failure.

“The government fought a War on Poverty, and poverty won,” he said.

Critics of the War on Poverty, including some presidential candidates, have echoed that view in recent months, as Census Bureau figures have shown the poverty rate remaining relatively stagnant over the last 30 years. The latest report put the poverty rate in 2014 at 14.8 percent, 2.3 percentage points higher than in 2007, the year before the most recent recession. Median household income in 2014 was reported as $53,657—statistically the same as it was in 2013.

But while some look at those numbers as signs that government safety-net programs have failed, Sheldon Danziger, president of the Russell Sage Foundation, offers a different narrative based on recent social science research. With the benefits of economic growth going to the elite, not the average worker, he says, government programs are the main reason why the poverty rate has not increased even more.

“The conventional wisdom is that a rising economic tide lifts all boats. But it no longer works that way,” Danziger says. “The last 40 years have been a period of very slow wage growth and rising inequality.”

Disparities in income lead to disparities in health—which is what brings Danziger, one of the country’s top experts on poverty and the social safety net, to the School of Public Health this week to deliver the annual William J. Bicknell Lectureship in Public Health. Danziger will give a talk titled “Poverty, Public Policy and Public Health,” followed by a panel discussion in which experts will debate the question: “Should the mission of public health be the eradication of poverty?” The event—free and open to the public—takes place on Wednesday, October 21, from 10 a.m. to 1 p.m.
 in Hiebert Lounge on the Medical Campus.

Danziger, formerly the Henry J. Meyer Distinguished University Professor of Public Policy at the Gerald R. Ford School of Public Policy and director of the National Poverty Center at the University of Michigan, has written and edited a number of books on economic conditions, social programs, and poverty. He views public health as one way to improve the lives of the poor, touting Obamacare as a meaningful anti-poverty program.

Here, he discusses his views on poverty and public health:

Q: The Census Bureau’s latest report shows that things haven’t improved much for American families in the past year. Despite a falling unemployment rate, the median income is not budging. What’s going wrong?

A: The main problem, which has been going on for several decades, is that when the economy does improve, as it has for the past few years, the gains from economic growth have been uneven, leading to rising inequality. In the past, when the economy improved, people got called back to work—there were benefits to the average worker. These days, wages don’t necessarily rise when the economy improves. In fact, people going back to work after the recession may earn less money than they did before. Many firms have not provided wage increases, and some are using technology to reduce hours and pay.

The best thing we can hope for is a rising economy and falling unemployment rate—say, down to 4 percent—that would put pressure on employers to raise wages to get the workers they want. The last really good period like this was in the late 1990s—the unemployment rate was low, and firms were offering higher wages to attract workers.

Q: You’ve spoken out about income inequality worsening—that prosperity is no longer widely shared when the economy grows. Can you explain why that is?

A: We’re in a period of very slow wage growth. At the bottom, wages have not kept up with productivity growth, especially for workers without a college degree. Meanwhile, at the top, the inequality has become so extreme that it will take major tax reform to begin to reduce the inequality.

At some point, incomes at the top began to explode. In 1965, the typical CEO of a major firm made 20 times the average worker at his or her company. That increased to 60 times in 1989—and it’s currently at 230.

So we have a situation where the increased productivity of the economy has been captured by the economic elite. This was not the environment that the War on Poverty era was launched in. In other words, poverty has remained high because of the failure of the economy to benefit the average worker—not because of the failure of government programs. Because the economy and poverty programs are now working in opposite directions, you end up with a roughly constant poverty rate.

Q: If inequality is the root problem, should we be doing more to bring up the people at the bottom?

A: Certainly, yes. For starters, you could raise the well-being of those at the bottom through higher wages. Workers with a high school degree or less have been left behind—their wages adjusted for inflation are lower than they were 40 years ago. Fewer have employer-provided health insurance and pensions than was the case in the 1970s.

We could make a significant dent in poverty through a number of public policies—raising the minimum wage, expanding subsidies for child care, increasing the earned income tax credit, launching a subsidized jobs program for those who want to work but can’t get an employer to hire them. All of these steps would help to bring up the bottom and have a modest affect on reducing inequality.

One of the newer policies that certainly has helped is the dramatic increase in insurance cover under Obamacare. We have good examples of government programs bringing up the bottom; what we don’t have are very good examples of government bringing down inequality at the top.

Q: You mentioned Obamacare. Would you consider that an ‘anti-poverty’ program?

A: Yes. People who were uninsured or paying for their health care now have more money for other goods and services—food, clothing, shelter. It’s less likely that they’re being forced into bankruptcy because of unpaid medical bills.

Having access to health care means people are able to work more. If we discover a disease at an early stage and do something about it, that person can stay in good health and remain productive. It’s clearly the case that there are other government programs, such as food stamps and Medicaid coverage for poor kids, that have led to long-term improvements in health outcomes.

Q: What about health disparities between the rich and poor or minorities and whites? Can government programs fix those?

A: They can certainly help. Consider what happened when Medicare was passed. There were millions of uninsured elderly people who were going to get covered by Medicare, and the Johnson administration made clear that no Medicare payments would go to segregated hospitals. This led to the eventual desegregation of hospitals throughout the South. There is now research documenting that because Medicare led to hospital desegregation, large numbers of black women gave birth in hospitals instead of at home, and black infant mortality declined.

Health disparities are tied to poverty rates. Those at the bottom have lower life expectancies, higher unemployment. And the causation goes both ways—people in poor health are less likely to work.

Even within the white population, there are growing disparities by social class. Those disparities are much greater now than they were 30 years ago. There’s a new report by the National Academy of Sciences that suggests a correlation between rising income inequality and the increasing inequality of life expectancy. For males, the estimated life expectancy for 50-year-olds born in 1930 who were in the bottom 20 percent of income was 26.6 years, compared to 31.7 years for those in the top 20 percent. That’s a five-year difference. Today, it’s 12 ½ years’ between the poorest and the richest 20 percent. Rising inequality is one of the reasons.

Q: Public health has been concerned with putting systems in place to protect vulnerable residents from known health risks, such as pollution or smoking. Most practitioners accept that some people always will be at higher risk because of income and other disparities. Is that a wrong assumption?

A: It’s certainly true that there will always be a bottom rung at elevated risk. But the question is, can you reduce that risk? That’s the domain of public health, and it’s important.

When EZ pass came in to the Northeast, for example, it reduced pollution around tollbooths because fewer people were idling in their vehicles. One study showed that there was an improvement in infant health problems within several miles of the toll plazas.

Lifestyle choices are another area for public health. Higher-income, higher-educated people stop smoking at higher rates than lower educated people. There are also differences in obesity by class—high-income people have the time and resources to exercise and eat healthier foods.

So it’s clearly the case that if you improve the health and nutrition and housing and air quality in areas where poor people live, you will, in the long run, improve health outcomes. But a lot of these things, we know, are driven by the underlying economic inequality. As long as that inequality persists, the poor will always have inferior outcomes to those of the affluent.

Panelists participating in the Bicknell Lecture are Charles E. Carter, chief strategy officer at the Center on the Developing Child at Harvard University; Molly Baldwin, founder and CEO of Roca Inc.; and Perri Klass, director of the Arthur L. Carter Institute of Journalism at New York University.

—Lisa Chedekel