Why the government should pay every American child an allowance

Good news, America: Child poverty is declining! A Census Bureau report last week showed that 1.2 million fewer children were in poverty last year than the year before, a reduction that more than accounts for the entire drop in the overall poverty rate last year.

So why does it feel so bittersweet?

The decline in child poverty is definitely very good news, but it is merely a drop in the bucket of the larger child poverty problem. Even with last year's progress, the United States is poised to maintain the shameful distinction of having one of the highest child poverty rates in the developed world. It doesn't have to be this way.

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While the United States was celebrating its serendipitous child poverty progress last week, the Canadian press was reporting on Conservative Party plans to attack child poverty head on. According to the reports, Canada's governing Conservative Party intends to expand the nation's universal child benefit program to cover all children, not just those under 6.

If the expansion goes through, all Canadian families will receive a $100 (Canadian dollars) monthly check for each child they are taking care of. This new benefit would be in addition to Canada's existing means-tested child benefits, which provide up to $300/month per child for the poorest families. The United States' child poverty rate is consistently 50 percent higher than Canada's in no small part because Canada has these kinds of benefits and the United States does not.

Canada is not alone in discovering the wonders child benefits can do for a country. Austria, Belgium, Finland, Norway, Denmark, Sweden, France, Iceland, Germany, Israel, and the United Kingdom have robust child benefits as well. In many of these countries, the programs have been around for a surprisingly long time. In the United Kingdom, for instance, families have been receiving helpful checks for nearly 70 years.

In theory, universal child benefits should attract support from the great majority of the political spectrum. Those on the left can get behind them because they reduce poverty and inequality, provide economic security, and tend to the welfare needs of the least among us. Those on the right can get behind them because they are pro-natalist and provide nonintrusive support for the family institution. For these and other reasons, leftist and conservative parties throughout much of the developed world have been able to agree on at least this issue.

But the United States is different. Neither the Democratic or Republican Party has any particular interest in a monthly child benefit program. It is not on the mainstream political radar. Even when small movements outside the mainstream get going, and even when those movements explicitly organize around providing income support for parents, they reject monthly child benefits in favor of annual tax credits that cruelly exclude low-income parents. The United States' unique obsession with low taxes and low benefits so clobbers any other faint interest its political parties might have in families and child welfare that child benefit proponents find themselves on the fringe.

Of course, just because an idea is fringe doesn't mean it isn't good. I've calculated that a universal child benefit program that paid parents $300 per month per child would have dramatic effects. If such a program were enacted, nearly every family in the country would feel a boost, the poorest families especially. All else equal, child poverty would be cut in half and overall poverty would be cut by one-quarter. In total, 11 million people would be pulled out of poverty (6 million children and 5 million parents). It would be affordable as well, with the annual fiscal cost being a mere 1 percent of GDP.

The news that child poverty has fallen a bit is thus bittersweet. Any decline in poverty is an occasion to celebrate, but it can be hard to avoid the depression that comes with knowing that we could do much better. While our more civilized neighbor to the north is preparing to expand its child benefit program, we continue to needlessly deprive tens of millions of our children of a basic standard of living.