Governmental policies and utilizing the state is the only way to solve inequality, poverty, and social collapse

At the same time, barriers to opportunity, including discrimination and disparities in access to employment, education, and health care, remain enormous and keep poverty rates much higher for some racial and ethnic groups than others. While government programs have done much to narrow these disparities in poverty, further progress will require stronger government efforts to reduce poverty and discrimination and build opportunity for all. Between 1970 and 2017 the poverty rate fell for all groups, but it fell even more for Black and Latino people: by 27 and 24 percentage points, respectively, compared to 8 percentage points for white non-Latino people, we calculate.[1] Even with this reduction, poverty rates for Black and Latino people remained far above the white poverty rate.[2] Our series begins in 1970, the first year that data on Latino ethnicity are available, and ends in 2017, the latest year that data on underreporting of key government benefits are available. (Rather than the official poverty measure, this report uses a variant of the Supplemental Poverty Measure, which among other advantages incorporates the value of non-cash and tax-based benefits, as we detail below.) Economic security programs have become more effective at reducing poverty and racial disparities over the last five decades. In 1970, families’ government benefits and the taxes they paid lowered the white poverty rate by 3 percentage points and the Black poverty rate by 2 percentage points, and left the Latino poverty rate unchanged. In contrast, in 2017, accounting for government benefits and taxes lowered the white poverty rate by 12 percentage points, Black poverty by 16 percentage points, and Latino poverty by 12 percentage points. (See Figure 1.) FIGURE 1 Economic Security Programs Increasingly Effective at Reducing Poverty, But Disparities Persist For children, government programs played an even larger role in lowering poverty and narrowing racial and ethnic disparities. Between 1970 and 2017, the Black child poverty rate fell by 35 percentage points, the Latino child poverty rate by 32 percentage points, and the white child poverty rate by 10 percentage points (but, again, poverty remains far lower among white children than Black and Latino children). More than half of these declines were driven by the increasing poverty-reducing effectiveness of government assistance at lifting families’ incomes above the poverty line. (See Figure 2.) FIGURE 2 Economic Security Programs Increasingly Effective at Reducing Child Poverty, But Disparities Persist Moreover, many studies have found that assistance programs like nutrition aid and health coverage improve children’s long-term trajectories; some of the poverty reduction stemming from, for example, improved educational attainment is due to investments in nutrition and health care years earlier when adults were children.[3] Despite this progress, past and present discrimination in both private markets and public policies left poverty rates in 2017 more than twice as high among Black (20.9 percent) and Latino (20.1 percent) people than among white people (9.8 percent). Child poverty reflected the same dynamic, with Black and Latino child poverty rates at 21.3 and 20.3 percent, respectively, compared to 8.3 percent among white children. Even in the relatively strong pre-pandemic economy, many households struggled to afford rent and other necessities.[4] In 2016, 1 in 3 Black (33 percent) and Latino (34 percent) workers earned below-poverty wages,[5] as did nearly 1 in 5 white workers (19 percent), according to the Economic Policy Institute.[6] These figures are not much lower than they were in 1973 (38 percent for Black, 37 percent for Latino, and 23 percent for white workers). What’s more, the economy of 2017 bears little resemblance to today’s, and early evidence suggests that the pandemic and downturn have worsened longstanding economic disparities by race and ethnicity. Jobs in low-paying industries — disproportionately held by people of color — were down more than twice as much between February and December 2020 as jobs in medium-wage industries and nearly four times as much as in high-wage industries.[7] Women of color have experienced especially sharp losses.[8] Policymakers could make substantial progress in reducing the gaping racial disparities in poverty and access to opportunity by expanding the scope and reach of effective policies, such as housing vouchers, tax credits, and food assistance. The Biden Administration’s emergency relief proposal could cut child poverty in half and cut Black and Latino poverty by a third.[9] Two policy packages that a National Academy of Sciences (NAS) panel recently evaluated would cut in half both the child poverty rate and the gap in poverty rates between white children and Black and Latino children.[10] A proposal to make housing vouchers available to all eligible families put forward by President Biden during his campaign would reduce the white-Black poverty gap by up to a third and the white-Latino poverty gap by up to half. That proposal, combined with two tax credit proposals that Vice President Kamala Harris endorsed during the campaign, would reduce racial and ethnic poverty gaps by even more.[11]