How America abandoned its “undeserving” poor

With poverty on the rise in the late 1970s, Reagan conservatives waged war on the needy — and won 

Michael B. Katz

After the mid-1970s progress against poverty stalled. The 1973 oil crisis ushered in an era of growing inequality interrupted only briefly by the years of prosperity during the 1990s. Productivity increased, but, for the first time in American history, its gains were not shared by ordinary workers, whose real incomes declined even as the wealth of the rich soared. Poverty concentrated as never before in inner city districts scarred by chronic joblessness and racial segregation. America led western democracies in the proportion of its children living in poverty. It led the world in rates of incarceration. Trade union membership plummeted under an assault by big business abetted by the federal government. Policy responded by allowing the real value of the minimum wage, welfare benefits, and other social protections to erode. The dominant interpretation of America’s troubles blamed the War on Poverty and Great Society and constructed a rationale for responding to misery by retrenching on social spending. A bipartisan consensus emerged for solving the nation’s social and economic problems through a war on dependence, the devolution of authority, and the redesign of public policy along market models.