Over the past few decades and especially since the onset of the “Great Recession,” city, county, and state governments around the country have had to cope with increasingly dire budget deficits. The go-to solution for many policy makers has been to make large funding cuts to programs that address poverty and inequality.
While this may help balance some budgets in the short term, recent reports find that not addressing poverty and inequality, especially child poverty, ends up costing billions more in the long term.
In 2007 the Center for American Progress released The Economic Costs of Poverty in the United States: Subsequent Effects of Children Growing Up Poor. In it they found:
Most arguments for reducing poverty in the U.S., especially among children, rest on a moral case for doing so—one that emphasizes the unfairness of child poverty, and how it runs counter to our national creed of equal opportunity for all.
But there is also an economic case for reducing child poverty. When children grow up in poverty, they are somewhat more likely than non-poor children to have low earnings as adults, which in turn reflects lower workforce productivity. They are also somewhat more likely to engage in crime (though that’s not the case for the vast majority) and to have poor health later in life. Their reduced productive activity generates a direct loss of goods and services to the U.S. economy.
What’s more, crime often imposes large monetary costs to the taxpayer, costs associated with administering our huge criminal justice system. And their poor health generates illness and early mortality which not only require large healthcare expenditures, but also will impede productivity and ultimately reduce their quality and quantity of life.
How much does childhood poverty end up costing the country?
The Center for American Progress’ report results suggest that the costs associated with childhood poverty to the U.S. total about $500B per year, or the equivalent of nearly 4 percent of GDP.
In 2008 the Human Services Policy Center at the University of Washington released The Cost of Child Poverty State by State which broke down those costs by state.
The annual cost of New York’s 888,000 children growing up in poverty?
$33.4 billion.
Thanks to the New York State Community Action Association’s recently released 2010 New York State Poverty Report we can break that down by county.
The annual cost of Erie County’s 39,528 children growing up in poverty?
$1.51 billion.
This begs the question:
When running government like a business, does it not make sense to invest in ending poverty?
