And what explains that decline?

So I think a couple of things. Economic growth is probably the first and foremost, the most important factor. The same forces that were pushing incomes up over this period, and then the safety net does come into play. In the 1960s, you see a dramatic drop in poverty among the elderly because of Social Security expansions. And then you see drops among families with kids over the years after that. That got a much bigger boost after welfare reform in 1996. A lot of people, including myself at the time, thought it was going to be a disaster, but it turned out to be really the most effective piece of poverty legislation for families with kids.

We’ve made fantastic progress in terms of reducing poverty. However, the story with the safety net is complicated, because it’s easy to push people below some arbitrary poverty line that you draw. If you just give people more cash, you’re going to have fewer people that live below the line. But at the same time, we can create perverse incentives for folks. That might mean incentives not to work, incentives not to get married, incentives not to save, or incentives not to invest in your own human capital. And so it may very well be that our safety net, which has expanded greatly over the last 50 years, has simultaneously reduced poverty but prevented upward mobility from increasing. And that’s really where I think the next frontier for people who care about the poor really is. In part, it’s about increasing upward mobility from the bottom on the one hand. But the other part of the American dream isn’t economic but social, and it revolves around all these indicators of community and family life and social capital.

Those indicators have all really taken a dive over the last 50 years, whether it’s family stability, or doing things with your neighbors, or going to church, or participating in voluntary organizations, or having trust in the government or in big business. Pretty much across the board, those have all gotten worse. And to my mind, that’s the real set of trends that are behind, say, the opioid crisis, which people mistakenly attribute to terrible wage growth over the last 30 years — which, as we’ve mentioned, didn’t actually happen.

So we ought to acknowledge the progress we have made but then shifting what our focus ought to be, which is in improving some of these lingering problems that could be byproducts of the way that we reduced poverty.

I’m going to wrap up with two questions. First, do you think policymakers care less about the importance of work than they did, say, 15 years ago? I tend to hear more about universal basic incomes and income as a human right these days from the left, for instance.

I think the left just doesn’t seriously consider the possibility that giving people cash without any strings attached to it could have negative repercussions. I’m not sure they ever did, or that enough of them ever did. But I think, regarding the popularity of things like UBI or expansions to the safety net generally, the left just tends to view those as an ambiguous good and that there could be no trade-offs to being more generous. And that, maybe, is the main line that divides conservatives from liberals these days on poverty policy.

Now, I wouldn’t say the right necessarily can point to an overwhelming body of research that shores their side up. However, you can look at welfare reform, where employment among single mothers increased dramatically — particularly among the single mothers with the least education — and never went back down to the levels that it was before. And poverty fell and never rose to the level that it was before welfare reform as well. So I think welfare reform gives us the best evidence that we’ve got in favor of some of the pre-reform assumptions of conservatives about how that welfare was creating a poverty trap. Those really proved to be real, and that was discovered through state experimentation before welfare reform and then through the 1996 law.

Do you think the destruction of social capital that we’ve seen is because of American capitalism being too cutthroat and dynamic, with too much automation and offshoring? Does too much churn, too much dynamism in the American economy ruin families, communities, and all these social capital networks that you value?

My view is that most of the declines in social capital that have happened over time relate very strongly to the increase in affluence that the United States has experienced. When we don’t need our neighbors as much, we tend to make purchases from the market for things like childcare, rather than relying on each other. As we get rich as a society, we can afford a more generous safety net. And that has ended up being damaging to family stability.

For instance, thankfully, women have a lot more economic opportunities than they did 60 years ago. But as more wives have entered the workforce, that has depleted not only the number of homemakers out there, but also our neighborhoods’ community-makers. It didn’t have to be the case that we lost all of them. Men could have worked less and invested more in communities. But we didn’t choose to do that, so the result was much weaker community life over time.

So I tend to think that these declines really reflect affluence, rather than the ravages of capitalism, for instance. These are trade-offs that we’ve chosen, and people don’t like to think that we’ve chosen some things and not chosen other things. Instead, they tend to want to blame evil villains such as American-style capitalism, whereas I think it’s the nature of types of problems that rich countries tend to have.

My guest today has been Scott Winship. Scott, thanks for coming on the podcast and adding to the stock of human knowledge.

Thank you, Jim. Always a pleasure.

---

This article first appeared on the AEIdeas blog, a publication of the American Enterprise Institute.

Image: Reuters.