Public Assets Institute > Policy Areas > Family Economic Security > That’s right: Some anti-poverty programs aren’t working

That’s right: Some anti-poverty programs aren’t working

Human Services Secretary Doug Racine has offered a discouraging assessment of what Vermont can do to address poverty, especially among young children. In an interview published last weekend, Racine described what he called “an evolution in my thinking.” He seems to have given up on reducing childhood poverty, and now says the best the state can do is to try to mitigate the effects.

The distinction Racine makes is an important one. Mitigating some of the hardships for people already in poverty is not the same as addressing the conditions that push people into poverty.

Despite Racine’s surrender, we need to do both. As a society, we have an obligation to care for those who are vulnerable and less fortunate. But our ultimate goal should be to keep people from falling into poverty in the first place. If we can do that, we can reduce the cost—in money and human misery—of having to mitigate poverty’s effects with food stamps, heating assistance, Medicaid, and other programs.

We should start by examining how we’re using resources now and to what ends. Which policies are aimed at keeping people out of poverty by addressing the underlying causes, which are mitigating its effects by addressing the symptoms, and which approaches are effective?

In the last five or six years, Vermont has seen a rise in the number of families qualifying for programs primarily designed for poverty-mitigation, such as Medicaid, 3SquaresVT, the Earned Income Tax Credit (EITC), and the Low-Income Heat Energy Assistance Program (LIHEAP). Enrollment has increased largely because the recession put people out of work. So these programs are doing what they were intended to do, which is help people who aren’t earning enough to provide the basics for themselves and their families. These programs were never intended as a cure for poverty. But they are working.

On the other hand, we’ve adopted other policies that were supposed to provide a cure for poverty—namely, by creating good jobs. We’ve reduced taxes for employers on the promise they would invest the money to put people to work. In 2011 alone, the 5 percent of Vermonters with the highest incomes received nearly $200 million from the extension of federal tax cuts. But in spite of the massive Bush tax cuts, the so-called “job creators” have not delivered. Vermont has about the same number of private sector jobs as it had 13 years ago. The tax cuts were in effect before the start of the recession, but even then Vermont’s private sector job growth was minuscule: just 0.7 percent from January 2001 to its last peak in July 2007.

Last session, we heard from the governor and Agency of Human Services officials that Vermont’s efforts to reduce poverty weren’t working. They’re wrong if they’re talking about programs that help people weather periods of poverty. Those are working.

But they’re right if they’re talking about the failure of tax cuts to encourage job creation. It’s time to acknowledge that the anti-poverty efforts that haven’t worked are the tax incentives intended to create jobs that pay enough to keep people out of poverty altogether.

Posted by Jack Hoffman on November 6, 2013 at 4:35 pm

5 Responses to “That’s right: Some anti-poverty programs aren’t working”

  1. Lisa Daigle-Farney says:

    One of the issues is that we are not requiring anything of those receiving benefits. It would be great if we could create a volunteer program where people get to clean up their neighborhood for example and get acknowledged for their good work. I sincerely believe that we have to set up situations where people feel involved and see small levels of success. We also need more education around pregnancy prevention. I see young people having one child after another, with no high school diploma and no incentive to do so. There needs to be more counseling around family planning. We are just in a viscious cycle.

  2. Robert Oeser says:

    Two points, in my opinion:
    Anti poverty programs work when adequately funded, adequately staffed and do what they say they will do. (Providing food for example is a goal, not necessarily furthered by encouraging tax exemptions for donation of non-food items that are not selling anyway.)
    Tax incentives to create jobs is too indirect a mechanism to be effective. Money would be better spent on improving infrastructure, especially in the areas of broadband and energy distribution.

  3. Barbara M says:

    I like acknowledging which programs help during times of deep economic stress, and that they work. Alas, there is not a program for everything, and we have led people to believe otherwise. As well, we have not addressed some policies that just keep people down: over sentencing on felony convictions, lack of drug courts, some banking policies, lack of socialized health care, an educational system with a strait gate, and a minimum wage that by apparent design is unlivable.

  4. Barbara M says:

    I appreciate the distinction between programs designed to help populations over economic rough times, and those that are failing to resolve poverty as a core issue. Frankly, it’s true that there isn’t a program for everything, and we’ve misled people into thinking there is. On the other hand, many polices contribute to poverty – minimum wages that do not even approach livability levels, tax policies, overuse of felony sentencing, lack of drug courts, some employment laws that allow background checks for credit, lack of socialized medicine, on and on.

  5. […] Concerns have risen that Vermont Gov. Shumlin may renew his plan to increase funding for early childhood education by cutting back on the state’s EITC. Vermont‘s Public Assets Institute examined which anti-poverty efforts have been successful in the state over the past few years, concluding that programs like Vermont’s EITC have helped struggling working families get back on their feet, while tax incentives aimed to encourage job creation have had far less of an impact on preventing poverty. (The Times Argus, Public Assets Institute) […]