Colin Camerer, Robert Kirby Professor of Behavioral Economics at the California Institute of Technology, has been named one of the MacArthur Foundation’s 2013 Fellows. Camerer is a founding member of the Russell Sage Foundation's Behavioral Economics Roundtable as well as a former RSF Visiting Scholar.

The Roundtable is one of the major activities of the Russell Sage Foundation’s Behavioral Economics research program. Made up of 28 prominent behavioral economists, including Camerer, the Roundtable currently sponsors three main activities: a small grants program for younger scholars undertaking behaviorally oriented research; a two-week summer workshop taught by Roundtable members for graduate students and junior faculty interested in entering this new interdisciplinary field; and a book series in a behavioral economics, of which Camerer is co-editor. Camerer is the author of Behavioral Game Theory and the co-editor of Advances in Behavioral Economics, both co-published with Princeton University Press.

Yesterday the U.S. Census Bureau released the annual official poverty rate, which measured 15.0% in 2012 and represented 46.5 million people living at or below the poverty line­­. According to the Census report, real median household income and the poverty rate has remained static since 2011.

This year, the annual report coincides with an ongoing political battle in Congress over the Supplemental Nutrition Assistance Program (SNAP), or food stamps. A bill introduced by the House GOP seeks to cut the program by more than $40 billion over a span of ten years. The food stamps program, which served approximately 48 million low-income Americans last year, dates back to the Johnson administration's War on Poverty, a sweeping set of federal initiatives that laid the groundwork for much of the current aid available to low-income individuals and families.

Given the persistently high poverty rate in the U.S., is it accurate to say that the nation has lost the War on Poverty? In an op-ed in today’s New York Times, RSF President Sheldon Danziger, co-editor of the recent book Legacies of the War on Poverty, explains why looking at the official number alone may be misleading. Contrary to the claims of Congress members like Representative Paul Ryan, Danziger notes, the antipoverty programs established during the 1960s have in fact delivered significant and effective relief to low-income populations. The official poverty rate measures only cash income. But if non-cash benefits such as food stamps and earned-income tax credits are taken into account when assessing federal efforts to help the poor, the poverty rate drops significantly—down to about 11%. According to Danziger, “Lowering poverty means both recognizing the successes of safety net programs we now have and devising new policies that can spread the gains generated by economic growth.”

The Annual Census Bureau report released today (September 17, 2013) shows no meaningful changes in poverty, earnings, or median household income. This is because between 2011 and 2012 the unemployment rate fell only slightly and there was no significant growth in weekly earnings (as reported by the Bureau of Labor Statistics).
 

Poverty is higher today than it was in 2000 and household incomes are lower. The “lost decade” is likely to turn into “two lost decades,” because poverty will fall substantially in the next 5 years only if two factors are at work. First, the economy must continue to expand and the unemployment rate must fall to 5 percent. Second, government policies must do more to help those among the poor and near-poor who have been left behind by economic growth in recent decades.

If safety net programs are targeted to balance the budget, as House Republicans have proposed, poverty will increase. Even if the safety net is not cut back, the prospects for reducing poverty are dim. The only bright spot is that private sector employment has been increasing, but it is not that bright since many of the new jobs pay low wages.

In addition, government has contributed to increased poverty. The federal sequestration, the end of extended unemployment insurance benefits and the failure to expand spending on early education programs or infrastructure projects has reduced demand. And, state and local governments have increased poverty by laying off teachers, police and other workers.

Even if poverty should start falling in the coming year as the economy grows, it is likely to take more than 5 years just to reach the rate achieved in the late 1990s. Given the status quo in the economy and in public policy, we will continue to get disappointing news about the poverty rate from the Census Bureau each September.

This month the Foundation welcomes nineteen new scholars into our building to spend the academic year. During their time in residence, these scholars will pursue research and writing projects that reflect the Foundation’s commitment to strengthening the social sciences and applying research more effectively to important social problems.

This year’s class of scholars, who have arrived from institutions across the globe, includes a working group on economic inequality that will analyze differences in school achievement among children of different socioeconomic status in Australia, Canada, the United Kingdom, and the United States. Other researchers will undertake projects ranging from investigations into restrictions on immigrants’ access to social welfare, to psychology research on self-control, to analyses of community violence across three different countries. Working within one of the Foundation’s core programs on Social Inequality, Immigration, and Cultural Contact—or performing independent research—our 2013-2014 scholars will investigate diverse sections of the social sciences in ways that promise to impact policy decisions and social life in the US.