Report on Child Poverty - Mexico & US Top Bottom

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Child poverty rising in rich countries

UNICEF
February 25, 2005

A new report published today by UNICEF finds that the proportion of children living in poverty has risen in 17 out of 24 industrialised nations of the OECD over the past decade. This amounts to some 40 -50 million children growing up below national poverty lines in the world’s richest countries.

At the top of the league tables are Denmark and Finland with child poverty rates of less than 3 per cent. At the bottom are the United States and Mexico, with child poverty rates of more than 20 per cent. The figures refer to relative poverty defined as households with income below 50 per cent of the national average (the median).

According to the report, the UK is one of only four countries, (with Australia, Norway, and the United States) where there has been a significant fall in child poverty rates over the latest 10 year period for which data are available. When relative poverty is measured at 40 per cent of the national median (as opposed to 50 or 60%), the UK rises higher up the league which suggests the UK is doing a better job than some others at protecting the very poorest children. The UK Government is singled out for its commitment to reducing child poverty and the report suggests it is on course for reaching its first target of a 25 per cent reduction by 2004/2005. But the UK still has one of the highest child poverty rates in the rich world – 15.4 per cent of the child population. Norway is the only country where child poverty can be described as “very low and continuing to fall”.

Drawing on original research, Child Poverty in Rich Countries 2005, produced by the UNICEF Innocenti Research Centre, compares data from different countries and asks what is driving child poverty rates upwards and why some OECD countries are doing a much better job than others in protecting children at risk.

Three forces - social trends, labour market conditions and government policies – are the key determinants of child poverty rates. The rise in the average age of parents, the educational age of mothers and the proportion of mothers in work, for example, tends to increase the economic resources available to children. Conversely the decline in earnings for fathers, particularly those at the bottom end of the income scale, as is the case in 7 of the 13 countries surveyed for this report, will significantly increase the risk of higher numbers of children growing up poor.

The report emphasises the capacity of governments to reduce child poverty rates and demonstrates that higher government spending on family and social benefits is clearly associated with lower child poverty rates. On average, government interventions reduce by 40 per cent the rates of child poverty that would theoretically result from market forces being left to themselves. In the UK, family and child-oriented taxes and benefits have played a very significant role in reducing ‘market’ child poverty, by 10 percentage points from 25.4 to 15.4 per cent. Governments in the countries with the world’s lowest levels of child poverty reduce ‘market poverty’ by 80 per cent or more.

There is considerable variation in poverty rates - from 3 per cent to 15 per cent – even in countries with broadly similar levels of overall government spending. This variation appears to suggest that it is how the money is spent, ie the extent to which children are afforded priority in the allocation of government resources, rather than the actual levels of spending overall, which makes the difference to the amount of resources available to children. Many countries appear to have the potential to reduce child poverty below 10 per cent without a significant increase in their spending overall.

The report explores the subject of resources for children by disaggregating social spending into different categories. More than half of the 28 OECD countries with data available increased the percentage of GDP devoted to social expenditures between 1990 and 2000. However most of the extra spending was allocated to pensions and health care and in many countries the overall social spending allocated to child and family expenditures actually declined over the decade.

The report acknowledges that children may benefit from government transfers in addition to those that can be labelled as child and family related benefits, such as income tax allowances and tax credits by which some governments seek to benefit low-income families. Intrinsic to this report is specially commissioned research which calculates the effects of government tax and benefit policies on children in relation to other age groups.

The contrast between the UK and France illustrates the choices and trade-offs that governments must make. The UK, with its target of eliminating child poverty by 2020, explicitly favours young children, especially those of low income families whereas the French tax and benefit system does not favour any particular age group. Despite this, the child poverty rate in the United Kingdom is double that of France, suggesting that that problem in the UK is not lack of governmental concern but the fact that low-income parents receive a very high proportion of their income from government and a very low proportion from paid employment. Benefits universally provided, though apparently more expensive, avoid this ‘poverty trap’.

The research highlights the challenges involved in defining and measuring child poverty but urges all OECD governments to establish credible targets and timetables for the progressive reduction of child poverty. For most countries a realistic target would be 10 per cent, or 5 per cent for those where this has already been achieved. While insisting that relative income should remain a leading indicator of poverty, the report acknowledges its limitations as a measure of actual material standards of living. It commends the UK Government for its leadership in establishing a range of indicators that measure actual material deprivation - including changes in health and nutrition, clothing and housing and participation in social activities – in addition to income poverty.

Welcoming the research, David Bull, Director of UNICEF UK says: “The most serious problems facing our societies in the industrialised world have their roots in child poverty. Allowing the kind of poverty that denies a child the opportunities that most children consider normal, is a breach of the United Nations Convention on the Rights of the Child, an instrument to which almost all OECD members are committed. Making child poverty history is not just a mantra for the developing world. Reducing the upward trend in child poverty rates must be a priority for all governments.”



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Center for Economic and Social Rights on the U.S.


Despite the fact that the United States is the world’s richest country in aggregate terms, it lags behind many other nations in fulfilling the needs of all of its citizens: 20% of children under the age of five live in poverty - the highest child poverty rate of any fully industrialized nation; 44 million people lack health insurance; between 40 and 44 million people are functionally illiterate; and 28 million people face food insecurity.

The United States stands virtually alone in the world as an opponent of economic and social rights. The Second Bill of Rights proposed by President Franklin Roosevelt’s in 1944 focused on guarantees of work, adequate housing and income, medical care and education, protection from economic fears of old age, sickness, injuries, and unemployment, and a market free from unfair competition and domination of monopolies was to serve as basis of economic security. While FDR’s vision was never integrated into American domestic policy it did serve to inspire inspire the drafting and adoption of the Universal Declaration under the leadership of Mrs. Eleanor Roosevelt.

American administrations — regardless of the broad global consensus to the contrary — regularly take the position that economic and social rights are merely “aspirational,” unenforceable and best approached as a policy matter leaving broad latitude to governments to provide or deny such rights depending on the political context of the moment. On the domestic level, the United States provides no federal constitutional guarantees for economic and social rights, and has yet to ratify the International Covenant on Economic, Social and Cultural Rights. Instead, American governments over the last two decades have steadily eroded domestic legislative protections and international legal standards for economic and social rights, which are particularly vulnerable to regression in the current political and economic environment.

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Facing Child Poverty in Rural America

by William P. O'Hare and Kenneth M. Johnson

(January 2004) At the end of the 1990s, one of the most prosperous decades in our country's history, one of every five rural children was living in a family with income below the official poverty line. In raw numbers, that amounts to more than 2.6 million rural children. Millions more live just above the poverty line in families struggling to make ends meet.

In recent decades, rural poverty has been overshadowed by the plight of impoverished families living in disadvantaged urban neighborhoods. Though little public attention has focused on the plight of the rural poor, statistics indicate that rural poverty is very serious. Census 2000 provides a stark picture of child poverty in rural America, showing that of the 50 counties with the highest child poverty rates, 48 are located in rural America.

One of the challenges in reducing child poverty in rural areas is the diversity of the rural poor. For many people, the term "urban poverty" conjures up a mental image of minority families living in disadvantaged inner city neighborhoods. In contrast, rural poverty has many faces. The following descriptions of high-poverty rural counties illustrate their racial and ethnic variety and their residents' widely different circumstances.

Owsley County, Kentucky
2000 Population: 4,858
Population Change 1990 to 2000: -3.5 percent

Owsley is a core county of the eastern Kentucky hill country, but it was historically a small-scale farming area, not a coal-mining county. The population today is only half as large as it was in 1940. Without adequate sources of work, it has evolved into the poorest non-Hispanic white county in the country, with a child poverty rate of 56 percent and a total poverty rate of 45 percent. The median household income of $15,800 in 1999 was less than half of the U.S. nonmetro median of $33,700. There is very low labor force participation — just 39 percent compared with 60 percent for all nonmetro counties nationally. More than a third (36 percent) of children in Owsley County have no working parent in the household; this is the fourth-highest rate of all the counties in the country. There is a very high incidence of disability among people ages 21 to 64 (42 percent compared with 21 percent nationally), and educational attainment is low, with 34 percent of adults having completed less than one year of high school, compared with 9 percent nationally.

Washington County, Maine
2000 Population: 43,926
Population Change 1990 to 2000: 2 percent

Bordering Canada and the Atlantic Ocean and known as the "Sunrise Coast," Washington County contains the easternmost point of land in the United States. The county is 94 percent white. Washington County has the highest poverty rate of all nonmetro counties in the Northeast. The child poverty rate was 22 percent, and the total poverty rate was 19 percent in 1999. Median household income is $25,869. Over many years, jobs in the county's fishing, farming, and wood industries have declined considerably. The population level is smaller now than it was 100 years ago. Tourism brings revenue to the area in the summer — 25 percent of housing stock is second homes — but many families have to piece together income from different seasonal jobs, and few retirees come so far up the Maine coast. More than half (54 percent) of the children in Washington County receive subsidized school lunches, compared with only 31 percent statewide.

East Carroll Parish, Louisiana
2000 Population: 9,421
Population Change 1990 to 2000: -3.0 percent

East Carroll Parish, in the northeastern corner of Louisiana, is in the heart of Mississippi River Delta plantation country. The county is still highly dependent on the production of soybeans, cotton, and rice. Blacks make up 70 percent of the population. Forty-four percent of households with children under age 18 are headed by women with no husbands present, compared with 20 percent nationally. The lack of two potential breadwinners is one reason East Carroll Parish has the sixth-highest child poverty rate in the country. The labor force participation rate for males (42 percent) is not just very low, but lower than that for women — a very unusual circumstance. The child poverty rate was 59 percent, compared with an overall poverty rate of 40 percent. Median household income was just $20,700. The incidence of overall poverty in the black population is nearly four times that of the white population — 54 percent compared with 14 percent.

Starr County, Texas
2000 Population: 53,597
Population Change 1990 to 2000: 32 percent

Starr County is in the Lower Rio Grande Valley, bordering Mexico. The county contains many colonias, where homes are often built from used or dilapidated materials and typically do not meet building codes. The population is very young, with a median age of 26 years compared with a U.S. nonmetro average of 37 years. This age structure stems both from large families (with many children) and continued immigration. Ninety-eight percent of the population is Hispanic, with Spanish the common household language. Half of the residents report that they do not speak English very well. Formal education is low, with 46 percent of adults having finished no more than the 8th grade. The proportion of children in two-parent families is higher than normal, a condition conducive to low poverty. However, earnings are very low. Even men with full-time, year-round jobs earned an average of only $17,500 in 1999 in the county's low-wage, agriculturally dominated economy, compared with the national average of $30,900. Among children, 59 percent were living in households with poverty-level income. The overall poverty rate is 51 percent.

Liberty County, Montana
2000 Population: 2,158
Population Change 1990 to 2000: -6.0 percent

Liberty County is similar to a number of other counties in the northern Great Plains states in that it is very thinly settled, has no urban area, and is almost fully dependent on agriculture. The population is non-Hispanic white, with educational levels at the U.S. average, both for high school completion and college degrees. There is a high proportion of two-parent families. But the dependence on agriculture in an area of marginal rainfall means that incomes fluctuate from one period to another based on harvest yields and on grain and cattle prices. After several years of drought, income received in the year preceding the 2000 Census was low enough to characterize 20.3 percent of the population as poor, with the rate for children at 28.9 percent. Here and in some other counties of the northern Plains, the poverty rate is somewhat elevated in times of stress by high levels in Hutterite communities. The Hutterites, a religious group practicing communal farming, have very large families with a much higher percentage of children than in the general population, resulting in lower per capita incomes.

Shannon County, South Dakota
2000 Population: 12,466
Population Change 1990 to 2000: 26 percent

Shannon County is the largest area of the Pine Ridge Reservation, and 95 percent of the people in the county are American Indian. Conditions are not suitable for productive agriculture, and the location is too remote for the kind of highly profitable casino business that some tribal governments have developed. In 2000, fully 60 percent of employed people worked in providing public services — education, health, social services, or government — whereas only 25 percent do so in the nonmetro United States. Nearly 18 percent of the labor force is unemployed. The median age of the population (20.8 years) is extraordinarily young, similar to that of the United States in 1880, because of high birth rates and below-average life expectancy. With an unusually high proportion of children and few earning opportunities for adults, 61 percent of all children are in families with poverty-level income. Shannon County has the fourth-highest child poverty rate in the country. Children account for fully half of all people in poverty, a rare situation; the overall poverty rate is 52 percent.



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