Positive Economy Has Missed 1 in 3 Clackamas Kids

Approximately 29 percent of the poor in Clackamas County are under the age of 18. There are urban neighborhoods and rural communities where the poverty rate for children exceeds 50 percent.

The good news is that, at least based on SNAP data, there is a gradual decline in these numbers as the economy continues to improve. The trend line is for overall gradual reduction of children in poverty not only in Clackamas County but nationally as well since the disastrous 2008 economic crisis.

There are two pieces of bad news in this data. One is that employment growth per se appears not to be the prime driver for poverty reduction among children. The other is that the Trump administration is targeting some of the programs that are most effective in reducing child poverty. (Targeting in the sense he wants to cut them.)

As the chart below depicts and as one would expect, child poverty decreases as the economy expands. That is shown by the grey line. During periods when wealth is shared, that is when productivity gains result in increasing wages, then economic expansion tracks with falling child poverty rates.

But around 1995 on, a gap is developing between the rate of child poverty without government aid and with it. This gap appears to correspond to wage stagnation and the concentration of wealth in the overall economy. In 1972, government aid for families in poverty did not drastically reduce child poverty rates. Yet by 2016 there is almost a 10 percent difference between what child poverty would be without government assistance and what it is with government aid.

This raises a few interesting questions? Are poor families less productive then they were in the 1970s? Productivity data suggests not. Are poor families today employed less? Once again employment data suggests not. So if poor families are relatively unchanged, why are they no longer able to keep their children out of poverty when the economy is expanding?

If the problem is not with the poor themselves, it must reside with the structure of the economy, the labor market, and the distribution of wealth within society. This is precisely the point where Democrats and Republicans have major policy differences. Democrats recognize that children are not responsible for the situation into which they were born. They do not make choices that determine whether they are born into a rich or poor family.

We also increasingly recognize that individual choice and decisions are less and less responsible for whether one succeeds or fails in the economy. The economy itself lacks strict oversight by government, which then favors the rich over the poor.

Reducing regulations to let businesses grow could double the GNP but, at the same time, that growth would have no impact on child poverty rates. Worse yet, if deregulation includes tax cuts and defunding of social safety net programs, we could see increases in child poverty coupled with historically unprecedented economic growth.

Progressive Democrats recognize that the disconnect between economic growth and social well being is not accidental but the inevitable outcome of unregulated markets and an imbalance in both economic and political power. We learned this lesson in the 1930s during the Great Depression. We have relearned every generation since as economic royalists expand their control of our economy and our government.

As the Republican form of government expands business, lowers taxes on the rich and causes massive deficits, you’d think there would be some benefits in the restructuring for the poor. But no.

Because of the inherent structural barriers to equality and social well being in unregulated markets, FDR’s call for social justice through social action is as relevant today as it was when he first issued it. It is especially true for the 29 percent of our poor who are children.