Many politicians see government welfare as the best way to address the problem of poverty in society. President Barack Obama, for example, recently promised to halve poverty within ten years, and his Republican opponent, John McCain, similarly vowed to make poverty eradication a top priority of his Administration.

Others, however, say that even in the current economic situation, in developed countries, this kind of rhetoric about cutting "poverty" is misleadingly outmoded—because it implicitly suggests that government income transfers are the best vehicle for achieving substantial reductions in poverty.

 In a new Policy Studies Journal article,  Douglas J. Besharov J.D. and Douglas M. Call of the University of Maryland claim that government-issued cash transfers to families in need do little in the long-term to help lift people out of poverty. They argue that although government intervention is often required to reduce income inequality and provide social assistance, it cannot be accomplished through income transfers alone and real progress in raising incomes will require building the human capital of the economically disadvantaged. This means both increasing the earnings capacity of lower-income workers and reducing the number of female-headed families.

 In response to Besharov and Call,  Robert D. Plotnick analyzes the current economic and political trade-offs among different types of income support programs. Plotnick, says, "The current poverty measurement approach in the U.S. has shortcomings that give us a misleading view of the level and trend in poverty, but absolute poverty statistics still provide useful, relevant information." He focuses on the central theme to the debate: how best to reduce poverty among working age families with children.

 Plotnick points out that many people are concerned that needs-tested income support programs discourage work and that expanding them would make the problem worse. Even without major changes in the U.S. income support system, alternative and low-cost income support strategies, such as stronger enforcement of child support obligations and expanding eligibility for unemployment insurance, could assist families living in poverty.

Like Besharov and Call, Plotnick also supports efforts to increase skills and earnings among the working poor. Promising policy options include tougher enforcement of labor laws for firms that employ low skill workers, improving work incentives for low-wage workers without children (who will eventually become parents), and expanding programs that have helped prepare disadvantaged young men for college and parenthood.

Citation: Douglas J. Besharov, Douglas M. Call, 'Income Transfers Alone Won't Eradicate Poverty',  Policy Studies Journal Online, 2009, DOI: 10.1111/j.1541-0072.2009.00328.x

Robert D. Plotnick, 'Measuring Poverty and Assessing the Role of Income Transfers in Contemporary Antipoverty Policy: Comments on Besharov and Call', Policy Studies Journal Online, 2009, DOI: 10.1111/j.1541-0072.2009.00337.x