Looking to Britain in fighting child poverty

The Century Foundation recently released an important report on how we can provide more support for American children by adopting a universal child allowance.  With nearly twenty percent of American children living in poverty, a regular cash benefit for all families would provide effective and efficient protection against hardship.

One of the lead authors on the TCF report is Jane Waldfogel, a sociologist who has studied Britain’s remarkably successful fight against child poverty. Over the last fifteen years, Britain has cut child poverty in half with a combination of child benefits, early childhood investments, and family-friendly work policies. In 2012, Waldfogel gave a lecture at Cornell University on “What the U.S. Can Learn From Britain’s War on Poverty,” detailing exactly how Britain halved its child poverty rate and drawing lessons for the United States.

During the 1980s and 1990s, Britain saw its child poverty rate rise rapidly. In 1999, Prime Minister Tony Blair committed Britain to ending child poverty in twenty years. To do so, he aimed to “reform the welfare state and build it around the needs of families and children.”

This ultimately became a three-pronged strategy: (1) Promoting work and making work pay, by incentivizing work and boosting take-home pay; (2) Raising incomes for families with children by subsidizing child-rearing costs; and (3) Investing in children via early childhood services and workplace reforms.

Britain modeled its efforts to promote and incentivize work off of American welfare reform under President Clinton, with some key departures. Like the U.S., Britain adopted welfare-to-work programs and a working families tax credit similar to the U.S. Earned Income Tax Credit.

But Britain’s reform did not initially require single mothers to work. Under welfare reform in the U.S., single mothers must work 30 hours each week or risk losing benefits, and are only eligible for traditional welfare benefits for five years. Britain, on the other hand, only recently required single mothers to work once their oldest child turns twelve (a requirement that has since been lowered to seven under David Cameron).

Britain’s second front against child poverty was to raise incomes for families with children. Britain provides a universal child benefit to all families with children. Families receive about $30 per week for their first child, and $20 per week for each additional child. Britain provides an additional benefit to families with children less than ten years old, determining that it’s a good investment to provide extra support for children in their earliest years.

Britain also boosted family incomes by adopting a child tax credit, which is fully refundable for low-income families and has no work requirement. Low-income families with new children also received an additional tax credit. And all newborn British children received a child trust fund — a baby bond savings device where the government matched all family contributions.

Third, Britain invested in children by funding early childhood services and enacting family-friendly workplace reforms. New mothers are entitled to nine months of paid maternity leave. The first six weeks are paid at 90 percent of their average weekly earnings, and the remaining thirty-three weeks at a maximum of $207 per week. Fathers receive two weeks of paid paternity leave at a set flat amount (which Prime Minister Blair took while in office). Britain also provides maternity grants to low-income families.

Britain also enacted a so-called “right to request” law, which gives employees the right to request part-time or flexible working hours from their employers. Employers must consider the request seriously and may only decline it for a legitimate business reason. This policy has been highly successful, as 91 percent of requests are ultimately approved. The right to request was originally available for workers with young children, but has since been expanded first to cover workers with any children or elderly parents, and then to cover all workers.

Britain also provides universal pre-K for all three- and four-year-olds based on a voucher system that provides funds for parents to place their children in the school of their choice. This program also covers two-year-olds from disadvantaged families.

To navigate these programs, Britons rely on a series of community children’s centers. Though these centers were originally placed only in low-income areas, they proved to be incredibly popular and were expanded throughout the country. The centers coordinate child services for families and are tasked with locating sufficient childcare for working families, which is provided by the market, not directly from the government.

All told, the cost of these programs to combat child poverty amounted to 1 percent of Britain’s GDP annually. This was pitched to the public as “one percent for the kids.”

Waldfogel points out that, contrary to the claims of skeptics, there’s no evidence that this public expense was squandered. Studies show that families with young children used their income boost to spend more on their kids and less on alcohol and tobacco.

Some of Britain’s reforms were pared back during Prime Minister David Cameron’s austerity response to the Great Recession, but the vast majority of the anti-poverty effort carried forward. During austerity, Britain eliminated the new child trust funds and new baby tax credit. It capped the child tax credit for middle-income families and froze the value of the child benefit for three years. But it compensated for these cuts by increasing the value of the child tax credit for low-income families to prevent a subsequent rise in child poverty.

Waldfogel sees framing lessons from Britain’s experience for the U.S. Unlike in the United States, there is little racialization to the perception of poverty in Britain. Being poor is not necessarily associated with any one ethnic group in the public’s mind, so the mission to fight child poverty wasn’t seen as disproportionately helping any one group. Not so in the U.S. Because of the divisive politics of race and poverty in the United States, Waldfogel suggests that an analogous American effort might be best framed in terms of “child hunger,” “child housing,” “child opportunity,” or “child investment.”

However it’s framed, the U.S. would be wise to take note of Britain’s success combating child poverty. Britain’s reforms are broadly consistent with American policy traditions of supporting working families. But Britain went further to provide paid family leave, child allowances, the right to flexible work scheduling, and universal pre-K. Britain is also more generous to low-income households by providing more refundable tax credits, and to non-working parents like single mothers by maintaining their benefit eligibility.

Some of these reforms are already being contemplated in the United States, and the others should be, too.   With more than one out of six American children living in poverty, we should look across the Atlantic for proven ways to end this national moral crisis.

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