NYT June 13, 2002  A Rise in Child Poverty Rates Is at Risk in U.S. By
JEFF MADRICK

THE sharp cut in welfare caseloads in recent years has forced many
skeptics to acknowledge that the controversial reforms of 1996 had some
merit. In addition to reducing the welfare rolls, one of the legislation's
objectives was to raise the standard of living of poor children. The
poverty rate of children has indeed dropped substantially as their parents
have found work.

But many, if not most, of these surprisingly good results were a
consequence of the economic boom of the late 1990's, which created so many
jobs. And now a rise in child poverty rates is again a risk. The
unemployment rate is up. The House has just passed a tougher welfare
reform proposal requiring still more hours of work for aid recipients,
even as the job market softens. The Senate also faces renewal of two
important family welfare programs and is not likely to expand benefits
significantly. In the meantime, states are likely to cut back on social
programs now that the recession has seriously strained their finances.

In truth, not enough progress was made during the boom years. Over all,
the official child poverty rate has fallen to 16 percent, but it is still
well above the lows of the late 1960's and 1970's of around 14 percent,
and the rate probably moved up in 2001. Child poverty for blacks and
Hispanics, also down, is still an unconscionable 30 percent and 28
percent, respectively.

But the financial state of America's children becomes a stark national
embarrassment when we compare it with that in other rich nations. Timothy
Smeeding of Syracuse University, based on work done in collaboration with
his Harvard colleague Lee Rainwater, has completed probably the most
comprehensive study to date on the subject.

Because poverty rates are measured differently across nations, they are
not typically comparable. To adjust for this, Mr. Smeeding draws a poverty
line at a specific percentage of a nation's median income (including
government cash and near-cash transfers, like America's food stamps). In
Europe, official poverty lines are typically about 50 percent of median
income, or even higher. In the United States, it is somewhat above 40
percent.

Based on a poverty line of 40 percent, Mr. Smeeding calculates that
America still has a child poverty rate of 14.8 percent, the highest among
the 19 rich members of the Organization for Economic Cooperation and
Development for which he has data. Only Italy comes close, at 14.6
percent. The next closest is Canada at 9.6 percent, then Britain at 8.4
percent. France's child poverty rate is only 2.9 percent, Taiwan's is 2
percent, and Sweden is at the bottom of the list, at 1.3 percent.

The American data is updated through 1997, but the fall in the poverty
rate since then does not alter the national relationships because the
differences are so large.

Mr. Smeeding also adjusts these income levels for what they can actually
buy in each nation, or "purchasing power parity." By doing this, he can
estimate the actual standard of living of children in different countries.

It turns out that America's poorest children -- say, those in the bottom
10 percent -- have a lower standard of living than those in the bottom 10
percent in any of the other nations measured except Britain.

Moreover, the gap from rich to poor is far higher in the United States
than anywhere else. In America, he finds, a child in the 90th percentile
-- one whose income is higher than 90 percent of all children -- has an
adjusted income five times that of one in the 10th percentile. In all
other nations, it is an average of three times.

The United States also has the greatest gap between the child in the
middle of the pack -- the median -- and the poor child in the 10th
percentile.

Guy Stevens, a senior economist at the Federal Reserve until his recent
retirement, supplements income data with an analysis of a couple of dozen
noneconomic indicators of childhood well-being. He finds that the state of
America's poor children is every bit as bad as the low incomes suggest.

Infant mortality rates in America are only slightly better than in Cuba,
Mr. Stevens notes, making it 33rd in the world. Eighteen percent of
American women have minimal or no prenatal care, higher than in any other
rich nation. Fourteen percent of children have no health insurance. Only
60 percent of 3- and 4-year-olds go to child care, well below the European
rate, and many of those go to centers that are inadequate.

What should be done? The welfare reform of 1996 is sending more people to
work, but they are often earning so little that a high proportion of these
households are either still officially poor or living close to the poverty
line -- leaving their children poor as well.

At the least, the 1996 reform package should be supplemented with
financing to provide quality child care to working parents. Mr. Stevens
would like to see a serious effort to provide universal health insurance
for all children.

But nothing is as important to child welfare as better jobs and higher
wages for parents. A handful of Democratic senators are urging an
expansion of programs that help many poor people overcome obstacles like
drug abuse and domestic violence to find work. The earned-income tax
credit should also be increased and the minimum wage raised.

Government assistance to the poor does not sit easily with Americans. We
assume anyone can make it if only he or she tries. But surely we cannot
impose this standard on children as well. "Too bad children can't vote,"
Mr. Stevens laments. Child poverty remains one of America's most stunning
failures.

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