Success of Poverty Alleviation Programs- by adopting Social Security Measures

Abstract

Poverty is one of the major problems that is faced by a nation. Unemployment, low level of income and output, low investments increase the level of poverty. The number of people living below the poverty line has been rising. The federal government has come up with various measures to help people come out of poverty. It provides social security, jobs, food aid, housing assistance to help people overcome poverty. The poverty alleviation measures have been successful in sustaining this level. Millions of people reap benefit from these programs. The efforts made by the federal and state governments have helped people find a decent standard of living. Various sections of the population have benefitted from the measures adopted by the state. Old age benefits, child care policies, women’s health programs and tax credit policies have assisted people to overcome poverty.

Success of poverty alleviation programs- by adopting social security measures

I. Introduction

Poverty is the state when people are not able to earn enough that exposes them to higher risk of illness, disability and food deficiency ¹. People living in poverty have to lead a diminished quality of life, lower learning abilities and reduced household savings. Poverty also causes reduction in the productivity as people are not able to eat healthy nutritious foods ². Poverty is considered bad for the country because lower levels of productivity affect the growth rate of the country. There are a number of  measures adopted by the U.S government for the elimination of poverty  such as family pension schemes, social insurance programs, medical aid, housing assistance and provision of food. These programs run by the government are successful in the containing of poverty and decreasing its level. At present the level of poverty is 15.1 percent ³. This level is much better in comparison to many European economies ⁴.

II. Social Security Measures

Social security refers to the action taken by the government in order to improve the quality of life. As mentioned in Article 22 of The U.S constitution, it is an essential aspect of the state to improve the quality of life of its citizens by national effort and cooperation ⁵. Under this, the state initiates various schemes to uplift the condition of the poor people in the society. Social security measures can be defined as the state run schemes to improve and assist people in the alleviation of the poverty. Provision of nutritious food, child care, housing facilities, old age benefits, medical aid , employment opportunities are some such examples of social security ⁶. The measure to remove poverty are funded by the central and state governments and extensively covers the different  sections of the population.

III. Types of programs

The social security measures are divided into two categories. Means tested programs and social insurance schemes. The means tested program relates to providing benefits to those people, families or groups which qualify under norms. The state sets the eligibility for people to get entitled under this program. Some examples of this type of program are TANF (Temporary assistance for needy families), SSI (supplemental security income) and SNAP. Under the SNAP program food stamp assistance has been very helpful. The achievements are summarized in the table. Social insurance schemes are for the benefit of everyone. Here the level of benefit received by an individual depends on the history of past earnings ⁷. The eligibility criteria is not there. These programs provide insurance against unemployment, old age, disability. These programs greatly help the needy (see Table1, Status of Households).

IV. Impact on lower income groups

Lower income groups received the maximum benefits of the welfare programs run by the state. A total of 40 million people including men and women and 9 million children were benefitting from the poverty program in 2011⁸. People were provided with non cash benefits that are essential in nature like food stamps, housing provisions along with cash benefits like unemployment allowance, pension, refundable tax credits and fixed wages ⁹. There has been a marked change in poverty level in U.S states (See Table 2, Families Below 100% of Poverty). The SNAP program (Supplemental Nutrition Assistance Program) has benefitted the society. Under this food stamps are given to each person in a family. The monetary value changes along with the size of the family. For a family of 8 people, the benefit is of $1202 ¹⁰. This type of benefit has helped the poor and the needy to come out of the situation of poverty. Otherwise people are not able to come out of the situation. This program has benefited all the people including men, women and children (See Table 3,Annual Average Change in SNAP). Each and every member is to be provided food assistance so that the nutritional requirements get fulfilled.

V. Impact of Medicare on poverty

Medicare relates to the provision of medicines and health care facilities to the people. Federal agencies have increased their medical facilities by giving aid and donations to state run hospitals, improving medical facilities in existing hospitals, opening new health centers, developing organizations for the teaching and training of nurses and doctors ¹¹. The state has also provided with the health insurance facilities to its people. For people above 65 years of age the health care facility is provided free of cost and for the others the cost is minimal. In fact one of the major expenditure of the government includes spending on Medicare and health insurance to its people. Private partnerships are also encouraging in this regard. Federal spending in the year 2012 was 23% which was the highest among its spending budget ¹².The state run health departments impart health care facilities for all age groups. The child care facility, infant care and pregnant woman care facilities have been identified into separate departments. The number of fatalities during childbirth and infant mortality rates have come down substantially ¹³. Improvement in health facilities has enriched the population with improved abilities which in turn helps in earning good income. This brings down the level of poverty.

VI. Refundable tax credits help raise the income

The refundable tax credit program started under the EITC (Earned Income Tax Credit) program and CTC program. The main purpose of this program is to offset the payroll taxes. It works well for a family as it is the added benefit of a family living at the minimum wage level ¹⁴. The earnings of a minimum wage worker accounts for only 61 percent when he supports a family of four people. With the accounting of the  payroll taxes the earnings increase to 87 percent of the line of poverty ¹⁵. Here it shows that a family’s economic status rises with the provision of payroll taxes given by the EITC. Not only this , the earnings from the tax credits also rise with the rise in the income of the family. This improves the economic conditions of the people and help them to rise above the poverty line. The tax credits also work as an incentive to earn more as its accounting depends on the level of income earned. With the rise in income families can look forward to fulfilling the educational needs of their children.

VII. Benefits to the elderly

The elderly people above the age of 65 years are worth mentioning for the numerous welfare schemes run by the state to uplift their condition. The calculation of their benefits also depends on notch cohorts which excludes those born between 1917-1921. The calculation of benefits to the elderly is free from the effects of the recession as it is not counted on the present earnings ¹⁶. The state basically funds the elderly so that they may be able to stay without any dependency or support from others.The expenditures on their social security has been very instrumental in bringing down the poverty rate. In the year 2000 the per capita expenditure on elderly went to $4000 with a steep reduction of 0.3% in their poverty line ¹⁷. With the rise in expenses on social security measures for the elderly the level of poverty has reduced.

VIII. Conclusion

Eradication of poverty by bringing down the level of poverty is an important duty of the state. This is the reason why the government at all levels of governance has initiated a number of social security measures to safeguard the interest of the poor people. The state provides provisions of food, child care, health, education and sustenance for the elderly in various ways. These measures not only support the needy but also help them to come out of the state of being poor. The state run programs have brought positive changes to the U.S society and economy. The Federal spending has increased over the years. Higher spending is on health care with accounts for 26% and providing pensions for the elderly which is 24% in the future plan of 2014 ¹⁸. The federal and state initiatives have greatly helped the people in coming out of poverty. The programs have been successful in raising the living standards of the people.

Table 1

Program Participation Status of Household

All races	Household received means tested assistance in percent	Household received food stamps in percent	Household received Medicaid in percent	Household received housing assistance in percent
Total	74.7	50.6	61.8	14.9
Under 6 years	91.7	69.0	82.1	19.4
6-17 years	91.0	64.0	77.5	18.0
Under 18 years	90.8	64.7	79.0	18.0
18 to 24 years	64.0	41.2	51.8	13.3
25 to 34 years	73.2	49.4	61.1	12.7
35 to 44 years	76.2	50.2	61.8	12.9
45 to 54 years	70.4	47.3	53.8	12.2
55 to 59 years	62.0	40.9	47.1	15.9
60 to 64 years	54.9	33.9	41.0	12.5
65 years and over	48.3	28.0	35.9	14.2
65 to 74 years	53.7	32.0	41.9	12.9
75 years and over	42.9	24.1	29.8	15.4

Source- U.S. Census Bureau, Current population survey 2013, Annual and Social Economic Supplement, Number in thousands

POV26: Program Participation Status of Household – Poverty Status of people 2012

Table 2

Weighted Person Count, Families Below 100% of poverty

States	Below 100% of poverty	Standard error
United States	11.8	0.2
Alabama	13.1	1.9
Alaska	8.9	1.1
Arizona	13.8	1.4
Arkansas	17.2	2.2
California	13.0	0.5
Colorado	9.1	1.4
Connecticut	7.7	0.8
Delaware	12.1	1.4
Columbia	17.1	1.9
Florida	11.3	0.6
Georgia	13.5	1.3
Hawaii	10.8	1.4
Idaho	10.9	1.2
Illinois	9.7	0.7
Indiana	12.0	1.2
Iowa	7.0	0.8
Kansas	9.9	1.1
Kentucky	15.5	1.9
Louisiana	17.7	2.3
Maine	10.0	1.0
Maryland	7.9	0.8
Massachusetts	9.3	1.2
Michigan	10.0	1.0
Minnesota	7.5	0.8
Mississippi	19.2	2.0
Missouri	11.8	1.4
Montana	9.2	2.0
Nebraska	9.4	1.3
Nevada	12.0	1.3
Hampshire	5.0	0.7
New Jersey	7.5	0.9
New Mexico	16.1	2.0
New York	13.9	0.8
N.Carolina	13.6	1.2
North Dakota	7.9	0.6
Ohio	11.8	1.1
Oklahoma	14.7	1.3
Oregon	9.0	0.9
Pennsylvania	9.8	0.8
Rhode Island	10.1	1.1
S Carolina	13.9	1.4
South Dakota	8.5	1.3
Tennessee	13.3	1.5
Texas	14.5	0.8
Utah	9.7	1.4
Vermont	8.7	1.1
Virginia	7.4	0.9
Washington	9.0	0.9
West Virginia	12.9	2.1
Wisconsin	9.6	0.8
Wyoming	6.5	1.2

Source: U.S. Census Bureau, Current Population Survey 2013, Annual Social and Economic Supplement. Number in thousands, standard errors calculated using replicate weights, www.census.gov/prod/techdoc/cps/cpsmar13.pdf

Table 3

Annual Average Change in SNAP for women, infants and children’s participation

Period	Total participants (in thousands)	Women and infants	Children	Births
1976-1979	285	136	149	88
Percent	44.8	45.7	44.1	2.7
1980-1983	264	143	121	36
Percent	14.7	16.4	13.2	1.0
1984-1989	264	157	107	67
Percent	8.6	9.8	7.4	1.8
1990-1992	428	233	196	8
Percent	9.5	9.6	9.4	0.2
1993-1996	224	91	132	-1
Percent	3.7	2.9	4.7	0.0
1997-2000	-7.2	23	-94	59
Percent	-1.0	0.6	-2.5	1.5
2001-2003	146	55	92	10
Percent	2.0	1.5	2.5	0.3
2004-2007	164	113	50	57
Percent	2.1	2.9	1.3	1.4
2008-2009	418	74	344	-93
Percent	4.9	1.7	8.2	-2.2
2010	53	-94	147	-124
Percent	0.6	-2.1	3.1	-3.0

Source : http://www.ers.usda.gov/media/914042/eib100.pdf

Notes

1)      See World Health Organization: Health Topics- Poverty its definition, http://www.who.int/topics/poverty/en/

2)      See World Health Organization: Health and development - Poverty and health, http://www.who.int/hdp/poverty/en/

3)      See Thomas B. Edsall, ‘Who is poor?’, Opinionator- The Opinion pages, Journal The New York Times, March 13, 2013

4)      See Tim Worstall, Astonishing Numbers: America’s poor still live better than most of the rest of humanity, Forbes Magazine, Jan 6, 2013, http://goo.gl/G8yx8I

5)      See Peter Townsend and David Gordon, World Poverty: New Policies to Defeat an old enemy, 2002, The Policy Press, p 150 

6)      See Milton Friedman, Capitalism and Freedom, Chapter-11: Social Welfare Measures

7)      See Peter Townsend and David Gordon, World Poverty: New Policies to Defeat an old enemy, 2002, The Policy Press, p 65

8)      See Arloc Sherman, Danilo Trisi and Sharon Parrott, Various supports for low income families reduce poverty: Center on Budget and Policy Priorities

9)      See Analysis of New Census Poverty Data , Sept 2011, National Women’s Law Center, http://www.nwlc.org/analysis-new-2010-census-poverty-data-%E2%80%93-september-2011

10)  See U.S Family benefit schemes, U.S gov census

11)  See Paul Polak, Out of Poverty: What Works When Traditional Approaches fail, Berett- Koehler Publishers, p 137

12)  See William H. Stewart, M.D, The positive impact of Medicare on the Nation’s Health Care Systems, p 3

13)  See William H. Stewart, M.D, The positive impact of Medicare on the Nation’s Health Care Systems, p 11

14)  See website Tax credit and benefits , Ministry of Finance, http://www.fin.gov.on.ca/en/taxcredits/

15)  See Arloc Sherman, Danilo Trisi and Sharon Parrott, EITC (Earned Income Tax Credit) and Child Tax Credit: Center on Budget and Policy Priorities

16)  See Hartley Dean, Understanding Human Need, The Policy Press Series, p – 122

17)  See Social Security and Elderly Poverty, website- The National Bureau of Economic Research, http://www.nber.org/bah/summer04/w10466.html 

18)  See website USgovernmentspending.com, http://www.usgovernmentspending.com/year_budget_2014USbf_15bs1n#usgs302

                                                                        Bibliography

A.    Articles

Arloc Sherman, Danilo Trisi and Sharon Parrott, EITC (Earned Income Tax Credit) and Child Tax Credit: Center on Budget and Policy Priorities

Poverty: Growth or safety net, The Economist, Sept 21, 2013

Thomas B. Edsall, ‘Who is poor?’, Opinionator- The Opinion pages, Journal The New York Times, March 13, 2013 

Tim Worstall, Astonishing Numbers: America’s poor still live better than most of the rest of humanity, Forbes Magazine, Jan 6, 2013, http://goo.gl/G8yx8I

B.    Books

Peter Townsend and David Gordon, World Poverty: New Policies to Defeat an old enemy, 2002, The Policy Press, p 150

       Paul Polak, Out of Poverty: What Works When Traditional Approaches fail, p 137

Milton Friedman, Capitalism and Freedom, Chapter-11: Social Welfare Measures

William H. Stewart, M.D, The positive impact of Medicare on the Nation’s Health             Care Systems, p 13

     Hartley Dean, Understanding Human Need, The Policy Press Series, p – 122

C.    Websites

Social Security and Elderly Poverty, website- The National Bureau of Economic Research, http://www.nber.org/bah/summer04/w10466.html

 USgovernmentspending.com, http://www.usgovernmentspending.com/year_budget_2014USbf_15bs1n#usgs302

 Tax credit and benefits , Ministry of Finance, http://www.fin.gov.on.ca/en/taxcredits/

Analysis of New Census Poverty Data , Sept 2011, National Women’s Law Center, http://www.nwlc.org/analysis-new-2010-census-poverty-data-%E2%80%93-september-2011

World Health Organization: Health Topics- Poverty its definition, http://www.who.int/topics/poverty/en/

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