Leadership for Change: The Business Case for Fighting Child Poverty

If you could get a seven-to-one return on an investment, would you take it? Put in one dollar and get seven back? Heck, yeah, I would. I’m sure all of you would, too.

So, here’s my question: why don’t we? That kind of investment exists and is?waiting for us to take it.

The easy answer, of course, is that I’m not talking about a personal financial investment that would return seven-to-one into our bank accounts. No one would argue with that. Rather, I’m referring to collective investments by countries that would benefit everyone, beginning with the most vulnerable children.

Those collective investments are efforts to reduce child poverty — that is, strategies that reduce the number of children living below the poverty line who disproportionally lack access to the basic necessities to survive and thrive. Solid data by economists tell us that one dollar invested to reduce child poverty returns seven dollars in economic gain due to things like decreased government spending on child welfare programs, increased economic activity from working parents who can more easily access childcare, future productivity of children who are not growing up in poverty and more.

To make this less abstract, I want to paint a broader picture of the impact of child poverty:

• Children who experience poverty have a lower likelihood of completing school and earn lower wages as adults.
• Children who experience persistent poverty are more than twice as likely to have emotional and behavioral difficulties.
• Poverty robs children of what they need for healthy development; for instance, millions of children go without adequate heat at home or proteins in their diet and some don’t have access to important social activities like birthday parties or afterschool activities — material and cultural deprivations that can also have lasting consequences.

Unfortunately, child poverty remains a stubborn problem in the U.S. Last week, a report from 联合国儿童基金会 ranked the U.S. near the bottom among 40 of the world’s wealthiest countries on key indicators of child poverty, including:

• 35th out of 40 in the overall child poverty rate
• 32nd out of 39 in the current rate of poverty and success in combatting poverty since 2012
• 37th out of 38 in social protection spending per child as a percent of GDP

Frankly, as one of the largest economic powers in the world, this is embarrassing. Other UNICEF leaders who saw their countries ranked just above or below the U.S. agreed — our nations are not doing enough for children.

The report is the latest from UNICEF Innocenti , the Global Office of Research and Foresight. It takes a look at the well-being of children in high-and upper-middle-income countries. This year’s report — titled “Child Poverty in the Midst of Wealth” — provides a detailed analysis of policy responses to child poverty in 40 countries and makes recommendations for action. You can find the report here .

Two of the strengths of the report are that it (1) compares how children fare across a diverse set of countries and (2) identifies innovative solutions that might be shared from one country to the next. One weakness might be that it paints a broad picture of poverty across a very large, complex and diverse country like our own. Averages, we know, can mask the good news and the bad and bury innovative solutions hidden among our many states and municipalities. That’s why my team at UNICEF USA compiled a supplemental report to probe deeper into the problems and to find creative solutions for our country. You can read this report here .

The clear message within the combined reports is exactly what fellow humanitarian leaders and I agreed on above: our countries need to do better overall to address child poverty — and those solutions do exist.

In the U.S., one such solution was the expanded Child Tax Credit implemented during the pandemic. Data shows it significantly lowered child poverty rates and then, when it expired, those rates shot back up. This tax credit was the kind of low-barrier, nearly universal poverty reduction tool that our report identifies as most effective.

It's important to say that combatting child poverty is not just the responsibility of governments; business leaders have a role as well. They push back against the inequitable impacts of child poverty when they ensure decent work and implement family-friendly policies; when they invest in social policy solutions that improve access to essential services for children and families; and when they involve youth perspective in their decision-making.

Working together, our supplemental report concludes we have the power to end child poverty in the U.S. Imagine that. Seems like it would be worth the investment.