Thursday, December 28, 2006


Poverty: Caused By Not Having Money

The last couple of years or so, I’ve been on the board of directors for a local non-profit agency dedicated to getting rid of poverty. We’re not making much progress, but we do give jobs to professional social-service-agency wonks who then do research on what could be done to eliminate poverty, and instigate programs to do just that. Most of the programs have to do with educating poor people, teaching them good work habits, turning them into “responsible” workers.

Nobody has suggested redistributing income as a way of relieving poverty. That would be a political solution. As a non-profit agency, we’re not allowed to advocate political action. Besides, it might bring up reminders of the struggle between the wealthy owners and the poor non-owners—we used to call it the “class struggle.” No more, though. Besides...oh, what the hell…

Here’s a good Paul Krugman column about Britain’s anti-poverty work:

Helping the Poor, the British Way
By Paul Krugman
The New York Times
Monday 25 December 2006

It's the season for charitable giving. And far too many Americans, particularly children, need that charity.

Scenes of a devastated New Orleans reminded us that many of our fellow citizens remain poor, four decades after L.B.J. declared war on poverty. But I'm not sure whether people understand how little progress we've made. In 1969, fewer than one in every seven American children lived below the poverty line. Last year, although the country was far wealthier, more than one in every six American children were poor.

And there's no excuse for our lack of progress. Just look at what the British government has accomplished over the last decade.

Although Tony Blair has been President Bush's obedient manservant when it comes to Iraq, Mr. Blair's domestic policies are nothing like Mr. Bush's. Where Mr. Bush has sought to privatize the social safety net, Mr. Blair's Labor government has defended and strengthened it. Where Mr. Bush and his allies accuse anyone who mentions income distribution of "class warfare," the Blair government has made a major effort to reverse the surge in inequality and poverty that took place during the Thatcher years.

And Britain's poverty rate, if measured American-style - that is, in terms of a fixed poverty line, not a moving target that rises as the nation grows richer - has been cut in half since Labor came to power in 1997.

Britain's war on poverty has been led by Gordon Brown, the chancellor of the exchequer and Mr. Blair's heir apparent. There's nothing exotic about his policies, many of which are inspired by American models. But in Britain, these policies are carried out with much more determination.

For example, Britain didn't have a minimum wage until 1999 - but at current exchange rates Britain's minimum wage rate is now about twice as high as ours. Britain's child benefit is more generous than America's child tax credit, and it's available to everyone, even those too poor to pay income taxes. Britain's tax credit for low-wage workers is similar to the U.S. earned-income tax credit, but substantially larger.

And don't forget that Britain's universal health care system ensures that no one has to fear going without medical care or being bankrupted by doctors' bills.

The Blair government hasn't achieved all its domestic goals. Income inequality has been stabilized but not substantially reduced: as in America, the richest 1 percent have pulled away from everyone else, though not to the same extent. The decline in child poverty, though impressive, has fallen short of the government's ambitious goals. And the government's policies don't seem to have helped a persistent underclass of the very poor.

But there's no denying that the Blair government has done a lot for Britain's have-nots. Modern Britain isn't paradise on earth, but the Blair government has ensured that substantially fewer people are living in economic hell. Providing a strong social safety net requires a higher overall rate of taxation than Americans are accustomed to, but Britain's tax burden hasn't undermined the economy's growth.

What are the lessons to be learned from across the pond?

First, government truly can be a force for good. Decades of propaganda have conditioned many Americans to assume that government is always incompetent - and the current administration has done its best to turn that into a self-fulfilling prophecy. But the Blair years have shown that a government that seriously tries to reduce poverty can achieve a lot.

Second, it really helps to have politicians who are serious about governing, rather than devoting themselves entirely to amassing power and rewarding cronies.

While researching this article, I was startled by the sheer rationality of British policy discussion, as compared with the cynical posturing that passes for policy discourse in George Bush's America. Instead of making grandiose promises that are quickly forgotten - like Mr. Bush's promise of "bold action" to confront poverty after Hurricane Katrina - British Labor politicians propose specific policies with well-defined goals. And when actual results fall short of those goals, they face the facts rather than trying to suppress them and sliming the critics.

The moral of my Christmas story is that fighting poverty isn't easy, but it can be done. Giving in to cynicism and accepting the persistence of widespread poverty even as the rich get ever richer is a choice that our politicians have made. And we should be ashamed of that choice.

You hit that one on the head.
---"Most of the programs have to do with educatintg poor people, teaching them good work habits, turning them into "responsible" workers."---
In short, if you teach people how to work, they won't be poor. Amazing concept!
Amazing concept, but not necessarily realistic. All it means is that employers will have a better quality work-force. It says nothing about pay. Our economy depends on a lot of cheap labor; this has been true for years. Scut-work is low paid work. The job drain over the last decade or so means there are low-paid jobs and outrageously-high-paid jobs and not too much in between. People can work full-time at minimum-wage jobs and still be dreadfully poor.
Pete, that concept is absolutely realistic. I don't know what koolaid you've been drinking, or for what jerk you work for, but the employers I've been dealing with for the last 30 yrs. are nothing like that. Yes, the crap work gets crap pay. But in my experience, about 99% of the folks that stay in that level of work, have the motivation of a slug. If you're stuck in an entry level job, making entry level pay, that's probably about what your worth. Those that bust their humps, and show a little initiative, get promoted, and get raises. I see it all the time. The only people that I know that are STUCK on the bottom end of the pay scale, are mostly lazy. And their level of education often has nothing to do with it. If I'm an employer, and have someone only capable of doing lousy work, they're only going to get what they deserve, lousy pay. The company I'm with now has more mid-level wage job holders than min. wage job holders. I know people there who are in management with only a high school edu. and lots of work ethic and gumption. And from what I've seen, those making "outrageously-high" pay, almost always deserve it. All of the CEO's, CFO's, and upper management types I know of, deserve every bit of what they get paid. They're highly educated, and motivated. The often work 80 hours a week and up. And they have a huge amount of responsibility. Their 'outrageous' pay scale, is almost always tied directly to job, and company performance. Look at Phil Wick. I don't think he made it past 12th grade, but I'll guaranty he works his ass off. I have a buddy that became a Marine so that he could afford college. While at college (full-time) he worked two jobs and lived in a crap hole. He maintained a 4.00 gpa. He now has a fantastic job, and is living the dream. The only help he got from anyone was a student loan. I don't know of anyone in any 'scut-work' job that has that type of motivation. They often have a sense of entitlement, but that's about it.
Well, it's always nice to see Horatio Alger's hoary ghost rising from the ground.

I love anecdotal evidence; but you can't win an argument with it. The truth is, in today's economy, the less spent on wages, the higher the stock goes—we've seen that for years when corporations have major lay-offs and up go the values on Wall Street. Those, like in the automobile industry, were good-paying jobs—the kinds of jobs that enabled people to have their own homes, a new car every few years, a kid in collar jobs, manufacturing. Lots of white collar jobs, too, that have been sliced away by automation and "off shore" crap. Wages, especially at the bottom end, have been eroding away, in terms of purchasing power. About the only wages/salaries that go up are the wealthy. You know that as well as I do.

Yes, there are people with only high-school degrees in management. Probably not at Boeing: maybe managing a 7-11, and what that pays is...? More and more high-school-only grads go into the military. Or "corrections," one way or the other: guards or inmates.

Incidentally, do you really think Ken Lay "earned" those outrageous sums he pocketed? Even if someone like Lay or Jobs or Allen works 80 hours a week (a bachelor, I trust), they're earning a very very high hourly wage.

I know this won't go down well over martinis at the country club, but that's the way it is. I guess Krugman won't get invited for a round of golf at the club, eh?
You're so correct. If you can pay less in wages (it's called cutting expenses) the profitability and hence the value of a company goes up.

Unless, as in the auto industry, you have unions involved. Yes, unions at one point played a very important role in protecting workers from unscrupulous business practices. At one point. Now they're just as political, unethical, deceitful, and dishonest as the Ken Lays of the world; and yes, Ken Lay was an asshole.How can the auto, or any other industry (airline) do business with those vultures sitting on their backs.

Oh, and let's not forget the small burden that health care places on companies trying to do business in the U.S. How do you suggest dealing with that little nugget?

You sound like you have a problem with stock values rising and companies striving for profitability. According to you, this is all done at the expense of the poor working class guy, and for the benefit of the rich. But do you sit back and really think about who owns that stock? Just the rich guys? Not hardly. The majority is owned by the foundations of grade and high schools, hospitals, universities, churches, and countless other NON-PROFIT organizations. And thousands of retirement plans around the country, from mega-corporations right on down to the little guys, hold stock such as Ford, R.J. Reynolds, and yes, even the dastardly Wal Mart, in their portfolios. (And just a quick side-bar about Wal Mart. I've never seen anyone hold a gun to someones head to fill out a job app. at Wal Mart. And for the folks that do work there, for those rediculously low wages, and have a problem with it---QUIT!)

You also are 100% correct to call my evidence, "anecdotal." For reasons of brevity, that's about all that I can offer. But I will, based on what I've seen first hand in my own little slice of the world, argue 'til I'm blue in the face, hard work in most areas of the U.S. workforce, pays off.

I know a Mexican couple with little command of the English language. She cleans houses, and he cooks in a Mexican restaurant. They have a nice home. They have 3 children in public school, doing quite well thank you. They have a nice, newer, pick-up and nice, newer, SUV. They dress well, and dress their children well. They eat well, and his job provides health and dental insurance. And you know what? They work hard. Real hard. And they don't feel a sense of entitlement to anything that they have. In short, they "Get it". And nobody is either taking advantage of them, or trying to unionize them. If the woman feels that she's not being treated well at one clients home, she simply quits and finds another client. Now why can't anyone that either you or I know do the same thing? Clean a toilet, or stir a pot of beans? Huh?
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