For years, there’s been a divide in public opinion in the US about what precisely caused the reduction in poverty in America in the 20th century. Even looking at a lot of data on the matter, it is still difficult to determine what is the responsibility of the government, and what is down to the actions of innovators and employers in the private sector.
Supporters of government intervention like to point to the fact that the poverty rate fell after the 1950s with the introduction of a slew of welfare reforms that boosted the real incomes of the poorest people in society. These programs, they say, were responsible for the near-halving of the poverty rate over the course of just twenty years.
Unfortunately, however, the story is never as simple as it appears on the surface. During the 1950s and 1960s, the American economy underwent an economic miracle. Output grew at a faster average rate and more consistently than at any time in the past. The economy entered a decades-long boom, increasing average incomes and leading to the emergence of the greatest middle class the world has ever seen.
While it is true that poverty reduction programs would appear to have beneficial effects on the poverty rate superficially, how much they contributed to the real decline that we see today still remains something of a mystery.
If you’d like to know more about the fall in poverty rates in the US, and how much is the responsibility of the government, take a look at the following fascinating infographic.
Infographic by Norwich University