Monday, March 31, 2008

Getting Poverty Wrong

By Steven Malanga
City Journal

Obama suggested that some black poverty today can be attributed to the “legalized discrimination” that existed in America prior to the civil rights laws of the 1960s, which, in his telling, prevented black families from accumulating “wealth to bequeath to future generations.” Obama seemed to suggest that families in America escape poverty by patiently accumulating wealth and passing it on to future generations—when in fact millions of Americans of all races leap out of poverty within a single lifetime through their own initiative, not their inheritances. We are long past the time when the legacy of Jim Crow laws and other forms of official discrimination can explain black poverty rates.
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Yet both candidates are largely missing the point. While they insist that strengthening labor unions or protecting homeowners from foreclosures will alleviate the hardships of the poor, the latest data from the U.S. Bureau of the Census remind us that the breakdown of the traditional two-parent, married family is a far greater contributor to poverty in America than many of the supposed shortcomings of our economy. It’s hard to imagine that America will make much more headway on reducing persistent poverty until it halts this long-term trend.
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The economic impact of this breakdown has been profound. Researchers estimate that the entire rise in poverty in America since the late 1970s can be attributed to “changes in family formation,” a euphemism for the decline of families headed by two married parents. The latest Census data illustrate the problem. Only one out of ten American kids living in two-married-parent families is in poverty—and about one-third of these families are recent immigrants whose poverty is temporary. By contrast, 37 percent of children living with single mothers are impoverished.

Marriage seems to be the defining characteristic of economically successful families. With out-of-wedlock birth rates in America soaring, so that many traditional families aren’t so much breaking up as never getting started, the percentage of children living with cohabiting parents is growing. Yet these kids are three times more likely to be in poverty than the children of married parents. The data actually demonstrate that poverty rates for families headed by two unmarried parents more closely resemble the poverty rates of single-parent families than those of two-married-parent ones.

Part of this shocking difference owes to what City Journal contributing editor Kay S. Hymowitz has called the “marriage gap” in America (“Marriage and Caste,” Winter 2006). Hymowitz describes how better-educated, higher-income men and women are now more likely to delay having children until they’re married, while lower-income, less-educated men and women are more likely to cohabit and have children out of wedlock.

But even these demographic facts don’t completely explain the widely varying poverty rate between married and cohabiting parents. Studies that adjust for parents’ educational levels still find that a family headed by two unmarried parents is twice as likely to wind up in poverty as one that married parents head. Something about the marriage certificate—a sense of long-term commitment, family stability, perhaps—makes an economic difference. Research shows that married workers exhibit more job stability and make greater wage gains than cohabiting parents, a sort of “marriage wage premium,” as some economists dub it.

Such factors also help to illuminate economic disparities along racial lines in America. As the latest Census statistics illustrate, family formation differs widely by race. Nearly nine in ten Asian children, for instance, live with two parents, as do 78 percent of white kids. By contrast, 68 percent of Hispanic children and only 38 percent of black children in America reside in two-parent families. A black child living with a single mother is nearly three times more likely to live in poverty than a black child living with two parents, the Census data show, yet 50 percent more black children are living with single mothers than in two-parent married families.

Given that a significant body of research now shows that children raised in two-parent, married families do better in school, are less likely to wind up in jail, and are less likely to end up on welfare, the startling racial divide in marriage tells us that a new generation of children, especially blacks, are growing up destined to struggle academically, in the job market, and in forming their own families. And policy prescriptions like a higher minimum wage or tax credits are unlikely to help many of these kids. What they mostly need is another parent—usually a father. (more)