(BusinessInsider) - Finland has an ambitious New Year's resolution in mind: learn how offering free money for two years helps the unemployed get back to work.
Starting January 1, 2017 and lasting until 2019, the federal social security institution Kela will distribute roughly $590 each month to 2,000 jobless Finns.
Regardless of whether they find work during that period, the money will keep coming in at the beginning of each month — a trial version of basic income, one of the past year's most popular theories of how to solve poverty.
Under universal basic income (UBI), people receive a standard amount of money just for being alive. By handing out the money to everyone, regardless of their income status, UBI advocates say the system prevents people from falling through the cracks.
Marjukka Turunen, head of Kela's legal benefits unit, says the experiment in Finland should provide insights on two fronts.
The first is whether basic income could help clean up Finland's messy system of social security. Depending on their specific needs, Turunen says residents could be on one of 40 different benefit systems. Each benefit — whether it's for someone who's sick, unemployed, a student, or so on— is calculated differently and must be changed when the person's status changes.
"That's really a burden for customers and Kela to do all those status changes," Turunen tells Business Insider. A form of basic income could mean people just need to apply for one status indefinitely, no changes required.
The experiment will also provide clues about how people behave when they're receiving free money. Skeptics say people will sit on their couch all day. Proponents claim they'll actually use the money to make their lives better. (Limited evidence from developing countries suggests it's more of the latter.)
Turunen suspects the experiment will compel at least a few wannabe entrepreneurs to make the leap into starting their own business — a risky proposition in Finland today since business owners who are forced to close shop don't receive unemployment benefits. It's not unlike the system in place in most US states.
"The system nowadays, it's pretty negative for people who try to do something — even little — in their lives and get something out of it," she says.
A basic income might turn a risky move into a much safer one.
Turunen doesn't expect the trial to lead to larger basic income studies in Finland. The current experiment is tax-free, and in a small country like Finland the cost would be too great.
But other long-term experiments are picking up the slack. Basic income is part of government conversations in Canada, India, and the Netherlands. A pilot project run by the Silicon Valley firm Y Combinator is soon launching in Oakland, California, and the charity GiveDirectly has launched a massive 12-year study in Kenya.
Turunen, for her part, expects basic income to continue gaining in popularity if the data from those experiments keeps coming back positive.
"Some people might stay on their couches, and some might go to work," she says. "We don't know yet."
Showing posts with label Poverty. Show all posts
Showing posts with label Poverty. Show all posts
Monday, January 2, 2017
Tuesday, September 13, 2016
Median incomes are up and poverty rate down, surprisingly strong census figures show
In its annual report on income and poverty, the Census Bureau said Tuesday that the share of people in the U.S. living in poverty dropped to 13.5% in 2015, marking one of the biggest annual declines in decades.
That was down from 14.7% in the prior year, but still considerably higher than the 12.3% poverty rate in 2006, the year before the Great Recession began, and the 40-year low of 11.3% in the year 2000.
The report also provided some encouraging news for a change on average American incomes. The median household income -- the point at which half make more and half less -- was $56,500 last year. That was up a substantial 5.2% from $53,700 in 2014, after adjusting for inflation.
American families still have some distance to go to recover fully from more than a decade of declining and stagnant earnings: The median household income was $57,900 in 1999.
“The good news is, maybe we’ve turned the corner,” said Sheldon Danziger, president of the Russell Sage Foundation, who like other experts following poverty and income issues had expected some improvement but nothing this large.
“I’m certainly more optimistic than I’ve been in a long time,” he said of the broad-based gains in income and poverty measures. “The prospects look good, at least for 2016 for being an improvement over 2015.”
The bureau also reported Tuesday that the number of people in the U.S. without health insurance fell further last year to 9.1% from 10.4% in 2014. The drop was expected, thanks mostly to the Affordable Care Act, also known as Obamacare, which saw its second full year of impact in 2015.
Friday, August 19, 2016
Satellite images of Earth help predict poverty better than ever
(TheVerge) - The newest way to accurately predict poverty comes from satellite images and machine learning. This imaging technique could make it easier for aid organizations to know where and how to spend their money; it may also help governments develop better policy.
We already know that the more lit up an area is at night, the richer and more developed it is. Researchers use this method to estimate poverty in places where we don’t have exact data. But “night light” estimates are rough and don’t tell us much about the wealth differences of the very poor. Scientists at Stanford University fed a computer three data sources — night light images, daytime images, and actual survey data — to build an algorithm that predicts how rich or poor any given area is. This method, described in a study published today in the journal Science, estimates poverty in more detail than we’ve had before.
It’s hard to measure poverty in the developing world. The best way is by looking at economic data — like household wealth and assets — collected through household surveys. Problem is, we don’t have these surveys for much of the world because they’re expensive, according to study co-author Neal Jean, a doctoral candidate studying machine learning at Stanford. “The idea is that if we train our models right, they help us predict poverty in areas where we don’t have the surveys,” he says, “which will help out aid orgs that are working on this issue.”
Using night lights to predict poverty provides important information about the economic growth of different countries, says Simon Franklin, an economics researcher at the London School of Economics who was not involved with the study. But they don’t show detailed levels of poverty within a country.
They don’t tell us whether a place is rural and densely populated, or wealthy and sparsely populated. A village near a lake and a village near a forest could both show up as having zero lights at night. But the two have access to different natural resources, and this affects how wealthy they are. “In Africa, a lot of these places that are the most poor are actually just uniformly dark at night,” says Jean. “So if you use nighttime lights only to try to find these people, since there’s no variation in nighttime lights you can’t predict any variation in poverty.” Daytime imagery creates a fuller picture.
We already know that the more lit up an area is at night, the richer and more developed it is. Researchers use this method to estimate poverty in places where we don’t have exact data. But “night light” estimates are rough and don’t tell us much about the wealth differences of the very poor. Scientists at Stanford University fed a computer three data sources — night light images, daytime images, and actual survey data — to build an algorithm that predicts how rich or poor any given area is. This method, described in a study published today in the journal Science, estimates poverty in more detail than we’ve had before.
It’s hard to measure poverty in the developing world. The best way is by looking at economic data — like household wealth and assets — collected through household surveys. Problem is, we don’t have these surveys for much of the world because they’re expensive, according to study co-author Neal Jean, a doctoral candidate studying machine learning at Stanford. “The idea is that if we train our models right, they help us predict poverty in areas where we don’t have the surveys,” he says, “which will help out aid orgs that are working on this issue.”
Using night lights to predict poverty provides important information about the economic growth of different countries, says Simon Franklin, an economics researcher at the London School of Economics who was not involved with the study. But they don’t show detailed levels of poverty within a country.
They don’t tell us whether a place is rural and densely populated, or wealthy and sparsely populated. A village near a lake and a village near a forest could both show up as having zero lights at night. But the two have access to different natural resources, and this affects how wealthy they are. “In Africa, a lot of these places that are the most poor are actually just uniformly dark at night,” says Jean. “So if you use nighttime lights only to try to find these people, since there’s no variation in nighttime lights you can’t predict any variation in poverty.” Daytime imagery creates a fuller picture.
Sunday, July 3, 2016
What if every worker received minimum wage?
Here is the thought question for today:
Via marshallbrain.com - What if every worker in the United States got paid minimum wage for the work they do?
It doesn't matter who you are or what you do. Whether you are working in McDonald's mopping the floor or you are the CEO of McDonald's. Whether you deliver the mail for the President or you are the President of the United States. No matter who you are, you make $5.15 an hour for the work you do, and everyone's total income is capped at $11,000 per year. What would happen if we did that?
The reason why we might choose to do that is because the wages of most workers are headed in that direction anyway. Corporations all over the nation have been pushing worker wages down to the minimum wage level:
We all know about the burger places. They have created a burger assembly line where millions of restaurant workers now make minimum wage.
In the 1990s, HMOs started pushing the wages paid to physicians downward for the first time ever. Minimum wage can't be far away for doctors.
Southwest Airlines built a new discount travel model by paying pilots and flight attendants less than industry norms for the work they do. Now the whole industry is following Southwest's lead because they have no choice if they want to compete. Wages across the airline industry are falling. Once that becomes the norm, someone else will come along to beat Southwest and cut wages again. Many commuter airline pilots make near minimum wage already. It's just a matter of time before everyone in the airline industry is making minimum wage.
Wal-Mart took away business from the small town downtown and hired all those store owners for minimum wage.
Wages everywhere are under pressure and headed toward minimum wage anyway. Why don't we simply short circuit the process and take everyone down to minimum wage now, in one fell swoop? It would be a lot less painful that way. And let's include CEOs, executives and politicians in the process. If a major corporation cannot afford to pay a clerk more than minimum wage because of pressure from competitors, then there is certainly no way the same corporation can afford to pay the CEO and other executives $10 million a year. The practicalities and realities of our business environment should apply to every part of the business, not just to one segment of the workers. Everyone, from the CEO on down, should make minimum wage to maximize the corporation's competitiveness.
No one is spared: The president of the United States, all the politicians and bureaucrats, CEOs and executives, business owners, lawyers, doctors and dentists… everyone. If you get a paycheck, you get minimum wage. No exceptions.
What would happen if we did that?
Perhaps most importantly, it would save the economy a lot of money. According to the New York Times Almanac, businesses hire 105 million people per year and pay them just over $3 trillion per year (the figure does not include government employees), for an average wage of roughly $30,000 per year. At $5.15 an hour and 40 hours a week, all 105 million of these employees would start making a uniform $10,700 per year at minimum wage. By doing that, the $3 trillion figure would fall to $1 trillion. The economy would save $2 trillion every year. The drop in prices would be spectacular, because $2 trillion represents $20,000 per U.S. household. Something that costs $10 today might see its price drop to $4.00 or less. Even though we would all be making minimum wage, that wage would buy far more in the economy than it does today. Everyone in the country would be able to live a comfortable middle class lifestyle.
What would happen to highly paid people like TV/movie stars, corporate executives, sports stars, radio personalities and so on? Their salaries would go from millions of dollars a year to $10,700 a year. Would it be a catastrophe? No. In all likelihood, absolutely nothing would happen. Is Rush Limbaugh going to give up his soapbox if he got paid less? Probably not. I imagine he likes the fame and influence his show gives him. He is going nowhere. Are Peter Jennings, Dan Rather and Tom Brockaw going to quit? Probably not. They like the fame too. The stars of popular TV shows? No… they cannot get into the best restaurants, have adoring fans or get Emmy awards unless they appear on their shows.
But if they do quit, it is not a problem. Johnny Carson left the Tonight Show, and we got Jay Leno. It was not a catastrophe. If Dave Letterman leaves Late Night because he does not like the pay, we'd get another host. It would be OK. There are thousands and thousands of people who would love to have Dave's, Rush's or Jay's jobs.
Would CEOs leave? Maybe. But if they are good CEOs, they love what they are doing building companies and leading people. If they don't want to do it unless they get paid $15 million a year, that probably tells us something about them. We probably don't want them leading a company anyway if they are only in it for the money. If we replace them with people who actually care about the job and the company, we would all be better off. We could have completely avoided Enron, Worldcom, etc. and the resulting stock market collapse if we had had good, honest people filling the CEO roles in those companies.
As you start to think about this new minimum wage reality, you begin to realize something. Most people -- especially the ones who are highly paid today -- would stay in their current jobs. The perks of fame and power would keep them there. So here's the question: Why isn't supply and demand governing the pay of CEOs, TV celebrities, sports stars and supermodels, driving their wages down just like everyone else? (Full Text)
It doesn't matter who you are or what you do. Whether you are working in McDonald's mopping the floor or you are the CEO of McDonald's. Whether you deliver the mail for the President or you are the President of the United States. No matter who you are, you make $5.15 an hour for the work you do, and everyone's total income is capped at $11,000 per year. What would happen if we did that?
The reason why we might choose to do that is because the wages of most workers are headed in that direction anyway. Corporations all over the nation have been pushing worker wages down to the minimum wage level:
We all know about the burger places. They have created a burger assembly line where millions of restaurant workers now make minimum wage.
In the 1990s, HMOs started pushing the wages paid to physicians downward for the first time ever. Minimum wage can't be far away for doctors.
Southwest Airlines built a new discount travel model by paying pilots and flight attendants less than industry norms for the work they do. Now the whole industry is following Southwest's lead because they have no choice if they want to compete. Wages across the airline industry are falling. Once that becomes the norm, someone else will come along to beat Southwest and cut wages again. Many commuter airline pilots make near minimum wage already. It's just a matter of time before everyone in the airline industry is making minimum wage.
Wal-Mart took away business from the small town downtown and hired all those store owners for minimum wage.
Wages everywhere are under pressure and headed toward minimum wage anyway. Why don't we simply short circuit the process and take everyone down to minimum wage now, in one fell swoop? It would be a lot less painful that way. And let's include CEOs, executives and politicians in the process. If a major corporation cannot afford to pay a clerk more than minimum wage because of pressure from competitors, then there is certainly no way the same corporation can afford to pay the CEO and other executives $10 million a year. The practicalities and realities of our business environment should apply to every part of the business, not just to one segment of the workers. Everyone, from the CEO on down, should make minimum wage to maximize the corporation's competitiveness.
No one is spared: The president of the United States, all the politicians and bureaucrats, CEOs and executives, business owners, lawyers, doctors and dentists… everyone. If you get a paycheck, you get minimum wage. No exceptions.
What would happen if we did that?
Perhaps most importantly, it would save the economy a lot of money. According to the New York Times Almanac, businesses hire 105 million people per year and pay them just over $3 trillion per year (the figure does not include government employees), for an average wage of roughly $30,000 per year. At $5.15 an hour and 40 hours a week, all 105 million of these employees would start making a uniform $10,700 per year at minimum wage. By doing that, the $3 trillion figure would fall to $1 trillion. The economy would save $2 trillion every year. The drop in prices would be spectacular, because $2 trillion represents $20,000 per U.S. household. Something that costs $10 today might see its price drop to $4.00 or less. Even though we would all be making minimum wage, that wage would buy far more in the economy than it does today. Everyone in the country would be able to live a comfortable middle class lifestyle.
What would happen to highly paid people like TV/movie stars, corporate executives, sports stars, radio personalities and so on? Their salaries would go from millions of dollars a year to $10,700 a year. Would it be a catastrophe? No. In all likelihood, absolutely nothing would happen. Is Rush Limbaugh going to give up his soapbox if he got paid less? Probably not. I imagine he likes the fame and influence his show gives him. He is going nowhere. Are Peter Jennings, Dan Rather and Tom Brockaw going to quit? Probably not. They like the fame too. The stars of popular TV shows? No… they cannot get into the best restaurants, have adoring fans or get Emmy awards unless they appear on their shows.
But if they do quit, it is not a problem. Johnny Carson left the Tonight Show, and we got Jay Leno. It was not a catastrophe. If Dave Letterman leaves Late Night because he does not like the pay, we'd get another host. It would be OK. There are thousands and thousands of people who would love to have Dave's, Rush's or Jay's jobs.
Would CEOs leave? Maybe. But if they are good CEOs, they love what they are doing building companies and leading people. If they don't want to do it unless they get paid $15 million a year, that probably tells us something about them. We probably don't want them leading a company anyway if they are only in it for the money. If we replace them with people who actually care about the job and the company, we would all be better off. We could have completely avoided Enron, Worldcom, etc. and the resulting stock market collapse if we had had good, honest people filling the CEO roles in those companies.
As you start to think about this new minimum wage reality, you begin to realize something. Most people -- especially the ones who are highly paid today -- would stay in their current jobs. The perks of fame and power would keep them there. So here's the question: Why isn't supply and demand governing the pay of CEOs, TV celebrities, sports stars and supermodels, driving their wages down just like everyone else? (Full Text)
Friday, June 10, 2016
76 million Americans are struggling financially or just getting by
[cnnmoney] - Wages are finally rising. Unemployment is the lowest it's been since 2007. Inflation remains muted.
But 31% of American adults, or 76 million people, say they are struggling to get by or just barely making it, according to the Federal Reserve Bank's latest survey on Americans' economic well-being, which looked at 2015.
And that's actually good news. Two years earlier, the Fed found that 38% of Americans were in weak financial shape.
Seven years after the end of the Great Recession, millions of Americans have yet to find firm financial footing. That's one reason why the economy remains a top concern in the 2016 presidential election.
"It's important to identify the reasons why so many families face continued financial struggles and to find ways to help them overcome them," said Federal Reserve Board Governor Lael Brainard.
The Fed survey highlights many of Americans' continuing economic worries. Some 46% of adults say they can't cover an unexpected $400 expense or would have borrow or sell something to do so.
While lower income Americans said they'd have the toughest time handling this emergency charge, some 38% of middle class Americans reported they'd have trouble too. Even 19% of those raking in over $100,000 a year said they couldn't pay the bill promptly.
About one-third of Americans also say that their income varies month-to-month, mainly because they have an irregular work schedule. Some 45% say their expenses shift each month. Some 42% of those with these volatile income streams or expenses say they struggled to pay the bills at least once in the past year.
Many Americans want to work more or are already holding down multiple jobs. Some 35% of those who are not self-employed said they'd prefer to work more hours (at their current wage). This was particularly true of lower-income respondents, non-Hispanic blacks, younger folks, Hispanics and and those with less education.
And though wage growth began picking up last year, only 23% of those surveyed felt their income would be higher in the coming year. That's down from 29% last year. [Full Story]
But 31% of American adults, or 76 million people, say they are struggling to get by or just barely making it, according to the Federal Reserve Bank's latest survey on Americans' economic well-being, which looked at 2015.
And that's actually good news. Two years earlier, the Fed found that 38% of Americans were in weak financial shape.
Seven years after the end of the Great Recession, millions of Americans have yet to find firm financial footing. That's one reason why the economy remains a top concern in the 2016 presidential election.
"It's important to identify the reasons why so many families face continued financial struggles and to find ways to help them overcome them," said Federal Reserve Board Governor Lael Brainard.
The Fed survey highlights many of Americans' continuing economic worries. Some 46% of adults say they can't cover an unexpected $400 expense or would have borrow or sell something to do so.
About one-third of Americans also say that their income varies month-to-month, mainly because they have an irregular work schedule. Some 45% say their expenses shift each month. Some 42% of those with these volatile income streams or expenses say they struggled to pay the bills at least once in the past year.
Many Americans want to work more or are already holding down multiple jobs. Some 35% of those who are not self-employed said they'd prefer to work more hours (at their current wage). This was particularly true of lower-income respondents, non-Hispanic blacks, younger folks, Hispanics and and those with less education.
And though wage growth began picking up last year, only 23% of those surveyed felt their income would be higher in the coming year. That's down from 29% last year. [Full Story]
Tuesday, May 10, 2016
China to relocate 2 million people this year in struggle to banish poverty
(Reuters)
The mass relocation of people is a strategy targeted at lifting 10 million citizens out of poverty by 2020, state news agency Xinhua has said.
Some of the villagers will move to areas with better social services, such as schools and hospitals, while others in remote areas will move to places with better roads and water supply, the official, Liu Yongfu, told a briefing.
The numbers would be stepped up gradually and may eventually hit 3 million, added Liu, who heads the cabinet's Leading Group Office of Poverty Alleviation and Development.
"We will talk it over with the localities and accumulate some experience, after that we will increase step-by-step," he said.
Despite two decades of rapid economic growth, poverty remains a huge issue in China, mainly in rural areas, where a lack of jobs drives out adults, leaving behind children and the elderly, often with limited access to schools and healthcare.
China's poor, who make up about 5 percent of a population of nearly 1.4 billion, live mostly in the countryside, and earn less than 2,300 yuan ($362) a year, government and state media say.
In March Premier Li Keqiang promised a boost of 43 percent in funding for poverty relief programs. Last October, the cabinet said China aimed to lift all its 70 million poor above the poverty line by 2020.
In December, Li urged local authorities to provide housing, healthcare, schooling and employment for relocated citizens.
Since kicking off market reforms in 1978, China has lifted more than 800 million people out of poverty, but it remains a developing country and the reforms are incomplete, the World Bank says.
Saturday, March 19, 2016
Fast-food CEO says he's investing in machines because the government is making it difficult to afford employees
(BusinessInsider) The CEO of Carl's Jr. and Hardee's has visited the fully automated restaurant Eatsa — and it's given him some ideas on how to deal with rising minimum wages.
"I want to try it," CEO Andy Puzder told Business Insider of his automated restaurant plans. "We could have a restaurant that's focused on all-natural products and is much like an Eatsa, where you order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person."
Puzder's interest in an employee-free restaurant, which he says would be possible only if the company found time as Hardee's works on its northeastern expansion, has been driven by rising minimum wages across the US.
"With government driving up the cost of labor, it's driving down the number of jobs," he says. "You're going to see automation not just in airports and grocery stores, but in restaurants."
Puzder has been an outspoken advocate against raising the minimum wage, writing two op-eds for The Wall Street Journal on how a higher minimum wage would lead to reduced employment opportunities. (Full Story)
Added Reading:
Restaurant CEOs Make More Money in Half a Day Than Their Employees Make in a Year
* * * *
So Carl's Jr. can invest in robots but can't raise their worker wages or invest in their workers? What would happen if the CEO of Car's Jr was paid the minimum wage of $7.25? Let's make it happen.
Monday, November 23, 2015
Maine Wants To Ban Soda, Sweets From Food Stamp Sales
- Maine would like to stop poor people from using food stamps to buy candy and soda, the latest gambit in Republican Gov. Paul LePage's ongoing crusade to make safety net programs a little less giving.
States don't have the power to change rules for the Supplemental Nutrition Assistance Program, so Maine is asking the federal government for a waiver.
"If we’re going to spend millions on nutrition education for food stamp recipients, we should stop giving them money to buy candy and soda," Mary Mayhew, commissioner of the Maine Department of Health and Human Services, said in a press release. The waiver request essentially resurrects Republican legislation that failed to pass the Maine Legislature this year.
"Maine is facing an obesity epidemic, especially among its low-income population, and we should be solving that problem rather than enabling it," Mayhew said.
The U.S. Department of Agriculture, which oversees food stamps, did not immediately comment on Maine's request. The agency has rejected a handful of similar requests from other states over the past several years.
Mayhew's agency said in a statement that 88 percent of Maine's SNAP recipients also receive Medicaid benefits, and that Medicaid has spent more than $1.5 million on obesity-related medical claims in Maine over the past year.
Food stamp recipients do tend to be heavier than the general population, according to U.S. Department of Agriculture data, though their diets are hardly different from everyone else's. More than 45 million Americans receive monthly SNAP benefits, which can be redeemed at grocery stores for any type of food except hot prepared meals.
The USDA has pointed out that restricting benefits to "healthy" foods would be difficult because no clear standard exists for declaring which items count as healthy. Would a ban on soda, for example, encompass other sugar-sweetened beverages? Cranberry juice, for instance, has more sugar than Coca-Cola. And banning SNAP purchases of certain products wouldn't stop SNAP recipients from using their own money for those products.
Maine's request comes not long after the state imposed an asset test on some SNAP recipients, with LePage saying hardworking Mainers are tired of seeing jet skis in their welfare-abusing neighbors' hards. The state has also instituted drug screening for beneficiaries of the much smaller Temporary Assistance for Needy Families program. (Full Text)
States don't have the power to change rules for the Supplemental Nutrition Assistance Program, so Maine is asking the federal government for a waiver.
"If we’re going to spend millions on nutrition education for food stamp recipients, we should stop giving them money to buy candy and soda," Mary Mayhew, commissioner of the Maine Department of Health and Human Services, said in a press release. The waiver request essentially resurrects Republican legislation that failed to pass the Maine Legislature this year.
"Maine is facing an obesity epidemic, especially among its low-income population, and we should be solving that problem rather than enabling it," Mayhew said.
The U.S. Department of Agriculture, which oversees food stamps, did not immediately comment on Maine's request. The agency has rejected a handful of similar requests from other states over the past several years.
Mayhew's agency said in a statement that 88 percent of Maine's SNAP recipients also receive Medicaid benefits, and that Medicaid has spent more than $1.5 million on obesity-related medical claims in Maine over the past year.
Food stamp recipients do tend to be heavier than the general population, according to U.S. Department of Agriculture data, though their diets are hardly different from everyone else's. More than 45 million Americans receive monthly SNAP benefits, which can be redeemed at grocery stores for any type of food except hot prepared meals.
The USDA has pointed out that restricting benefits to "healthy" foods would be difficult because no clear standard exists for declaring which items count as healthy. Would a ban on soda, for example, encompass other sugar-sweetened beverages? Cranberry juice, for instance, has more sugar than Coca-Cola. And banning SNAP purchases of certain products wouldn't stop SNAP recipients from using their own money for those products.
Maine's request comes not long after the state imposed an asset test on some SNAP recipients, with LePage saying hardworking Mainers are tired of seeing jet skis in their welfare-abusing neighbors' hards. The state has also instituted drug screening for beneficiaries of the much smaller Temporary Assistance for Needy Families program. (Full Text)
Sunday, November 15, 2015
‘Poverty Pay’ Leads Wal-Mart Employees to Steal Lunches From Co-Workers
(Via truthdig.com) 11/14/2015 Wal-Mart’s workers are so poor they’re skipping lunch, sharing the food of others or stealing from co-workers, some of them said as they announced a 15-day fast aimed at raising the company’s wages.
On Friday, more than 100 Wal-Mart employees involved in the workers organization Our Walmart began a fast to draw attention to the company’s “poverty pay.” Roughly 1,000 of their supporters joined them, and some took their fast to the doorstep of company heiress Alice Walton’s New York City apartment.
Earlier this year, Wal-Mart announced it would raise wages for about half a million of its employees to $9 an hour, $1.75 above the federally mandated minimum wage. The company said it would further increase the workers’ pay to $10 an hour next year.
The protesters say that’s still not enough to support them and demand to be paid $15 an hour and be given full-time schedules. The fasters are calling their protest the Fast for 15.
The Guardian reports:
Tyfani Faulkner, a former Walmart customer service manager from Sacramento, California, who worked for company for about five years, will be one of those fasting in protest.
“Every day there are associates who go to work with no lunch, or an unhealthy lunch, because that’s all they can afford. I have seen instances where some would eat another associate’s lunch from the refrigerator because they have nothing to eat,” said Faulkner.
“One of the things I remember most from working at Walmart was my friends and I emptying our pockets to scrape together one meal we all could share for lunch. One of my coworkers put in a dollar, another two dollars, and with my two, we could together buy chicken from Walmart’s deli to split between us. That was lunch; I don’t know if they had dinner.”
Read more here.
Thursday, October 1, 2015
Hunger in Missouri, Ozarks among highest in the Union
(kspr.com) - Struggling to find that next meal is a feeling all too familiar with many here in the Ozarks.
Now a new U.S. Department of Agriculture study ranks Missouri in the bottom 10 of places with food insecurities in the United States.
The major issue is there's just not enough money.
The director at Crosslines, Mark Struckhoff, says many in the state of Missouri don't make enough to buy food for their families on top of all their other expenses.
Making the problem even worse is the fact that many people hide their hunger.That makes it more difficult for people in the community to find those who need help.
Many who go to Crosslines are working parents who say it's hard making it on a limited income.
“This is actually my first time coming here they have things like that where i am from but it's...they run out of things fast because it's a lot worse there but it's nice to have an organization to help you like this,” says Katie Conway who recently moved to Springfield for more opportunities from Flint, Mich.
Conway is looking for a full time job and she says if Missouri raises its minimum wage it would make a big difference for people who are struggling.
Struckhoff says many of the people who come here also have other issues that affect their ability to buy food. That includes disabilities, unexpected circumstances and family illness.
Crosslines says it's already served 34,000 people this year at its food bank and the director says poverty has doubled in Greene County in the last ten years.
However, Struckhoff says city leaders in Springfield seem to be trying to make changes to address the need for food and we should start seeing some changes in the near future.
Sign-ups for Crosslines holiday food baskets will start later this month.
That will be October 19th, Crosslines says it's looking for volunteers and money to assist those families needing a little more help during the holidays.
Sunday, July 12, 2015
Lack Of Education May Shorten Your Lifespan Study Reveals
(themarketbusiness.com) - A latest study found that lack of education affects the lifespan of individuals in the U.S. The researchers from the University of Colorado Denver, New York University, and the University of North Carolina at Chapel Hill mentioned that a 10-year reduction in lifespan, comparable to the effects of smoking, may also be true for those whose educational attainments are rather low.
In the U.S. and many other nations, premature mortality rates have been associated with lack of education and more improved survival rates with higher educational achievement in recent birth cohorts. However, the exact numbers or mortality rates due to low education in the U.S. are not precisely recorded.
The researchers collated data from the National Health Interview Survey from 1986-2004, particularly related to anticipated deaths through 2006, and specific-time survival models in relation to projected education and mortality rates among the different cohort groups. This information was studied alongside the American Community Survey data on the 2010 U.S. population to measure the attributable death estimates in a year.
Using the differences of educational attainment from the 1925, 1935, and 1945 cohorts, the researchers determined three main groups and predicted the deaths, which may be derived from those whose education is less than the high school level versus those who finished high school, those who have some college education versus those who have a baccalaureate degree and finally, those who have any education less than a baccalaureate degree versus those who have a baccalaureate degree.
The findings of the study, published in the open access journal Public Library of Science (PLOS) One, show that if the 2010 study population would have the same educational inequalities in mortality with the 1945 cohort group, 145,243 deaths could be connected to those with less than a high school degree versus those who finished high school; 110,068 deaths could be linked to those with some baccalaureate education versus those who graduated college; and 554,525 deaths could be associated with those who have any education less than a college degree versus those who finished a baccalaureate degree. The attributable mortality was doubled with the expanded educational disparities between the 1925 and 1945 cohort groups.
“In public health policy, we often focus on changing health behaviors such as diet, smoking and drinking,” says Virginia Chang, co-author and associate professor of public health at New York University’s School of Culture, Education and Human Development and College of Global Public Health. “Education – which is a more fundamental, upstream driver of health behaviors and disparities – should also be a key element of U.S. health policy.” Full Story
Tuesday, May 5, 2015
Wisconsin Republicans Don’t Want Food Stamp Recipients Buying Beans, Potatoes, Pasta Sauce
(thinkprogress) 05/01/15- Low-income Wisconsin families won’t be able to buy shellfish with food stamps, and will have a much harder time getting basics like dried beans, pasta sauce, and cooking spices into their kitchens, under the latest state-level Republican proposal to tighten the government’s grip on the poor.
A bill proposed by state Rep. Robert Brooks (R) would ban stores from accepting Supplemental Nutrition Assistance Program (SNAP) cards for lobster, shrimp, and any other form of shellfish, and set a long list of additional rules for the first two-thirds of a recipient’s monthly spending. Lawmakers held a committee hearing Thursday on the bill, which would require a federal waiver to implement.
An average of 420,000 households received SNAP each month in Wisconsin in 2014. The average recipient household got $220 per month from the program last year. Brooks’ restrictions would apply to all but $72.60 per month for the average household affected. And even that amount could not be spent on any form of shellfish.
Next to other recent state-level SNAP restrictions, Brooks’ bill looks like an attempt at compromise. It mandates that at least two-thirds of a recipients food stamps be spent on designated categories of food, and leaves the last third unrestricted. Republicans in other states have sought outright prohibitions rather than Brooks’ partial, ratio-based ban. Brooks says he has resisted calls from colleagues to add steak to the list of banned foods. The ban on shellfish is more moderate than a ban on all seafood proposed by one Missouri lawmaker earlier this year, meaning that cheap sources of protein like canned tuna would still be unrestricted for Wisconsin’s poorest families.
But the fact that Brooks doesn’t want to go quite as far as the worst ideas of his colleagues doesn’t mean his proposal would benefit society or make it easier to get out of poverty. Adding more rules to the ones that already constrain food stamps families makes their shopping experiences more stressful and removes their already-limited control over what they put on the dinner table.
The law would restrict access to a whole range of commonplace ingredients. Some of the things that would be harder to buy for poor families who cook include “herbs, spices, or seasonings,” all nuts, red and yellow potatoes, smoothies, spaghetti sauce, “soups, salsas, ketchup,” sauerkraut, pickles, dried beans sold in bulk, and white or albacore tuna. (Cans of “light tuna” are allowed under the rules.) Full Story
A bill proposed by state Rep. Robert Brooks (R) would ban stores from accepting Supplemental Nutrition Assistance Program (SNAP) cards for lobster, shrimp, and any other form of shellfish, and set a long list of additional rules for the first two-thirds of a recipient’s monthly spending. Lawmakers held a committee hearing Thursday on the bill, which would require a federal waiver to implement.
An average of 420,000 households received SNAP each month in Wisconsin in 2014. The average recipient household got $220 per month from the program last year. Brooks’ restrictions would apply to all but $72.60 per month for the average household affected. And even that amount could not be spent on any form of shellfish.
Next to other recent state-level SNAP restrictions, Brooks’ bill looks like an attempt at compromise. It mandates that at least two-thirds of a recipients food stamps be spent on designated categories of food, and leaves the last third unrestricted. Republicans in other states have sought outright prohibitions rather than Brooks’ partial, ratio-based ban. Brooks says he has resisted calls from colleagues to add steak to the list of banned foods. The ban on shellfish is more moderate than a ban on all seafood proposed by one Missouri lawmaker earlier this year, meaning that cheap sources of protein like canned tuna would still be unrestricted for Wisconsin’s poorest families.
But the fact that Brooks doesn’t want to go quite as far as the worst ideas of his colleagues doesn’t mean his proposal would benefit society or make it easier to get out of poverty. Adding more rules to the ones that already constrain food stamps families makes their shopping experiences more stressful and removes their already-limited control over what they put on the dinner table.
The law would restrict access to a whole range of commonplace ingredients. Some of the things that would be harder to buy for poor families who cook include “herbs, spices, or seasonings,” all nuts, red and yellow potatoes, smoothies, spaghetti sauce, “soups, salsas, ketchup,” sauerkraut, pickles, dried beans sold in bulk, and white or albacore tuna. (Cans of “light tuna” are allowed under the rules.) Full Story
Tuesday, January 20, 2015
Americans: One Small Emergency Away From the Street
(thetrumpet) - Most Americans are only one paycheck away from the street, according to a new survey by personal finance website Bankrate.com.
The survey of 1,000 adults found that approximately 62 percent of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair.
A U.S. Federal Reserve survey conducted on more than 4,000 adults in 2014 had remarkably similar discoveries. “Savings are depleted for many households after the recession,” it found, with 57 percent having used up some or all of their savings during and after the recession. Only 39 percent said they had enough money in a “rainy day” fund to cover three months of expenses. Furthermore, more than half of the respondents said they could not finance a hypothetical emergency expense costing $400 unless they sold something or borrowed the money.
Andrew Meadows, the producer of Broken Eggs, a documentary about retirement, found that one of the biggest reasons people aren’t saving is because they’re in debt from the 2007 recession. “People are still feeling the heat from the Great Recession,” he said.
Pew Research Center released a report in December 2014 that calculated the net worth of American families—that is, their total assets minus their liabilities—since the recession began. In 2007 it was $135,700, but in 2013 it plummeted to $81,400—a 40 percent decrease in wealth!
Most Americans still keep a household budget though. The Bankrate survey showed that in 2012, 60 percent of Americans had a budget. Now that figure has jumped to 82 percent. Claes Bell, a banking analyst at Bankrate, said this is good, but he also pointed out that “too few have the ability to cover expenses outside their budget without going into debt or turning to family and friends for help.” This means a critical element of their budget is missing—an emergency fund. Full Story
The survey of 1,000 adults found that approximately 62 percent of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair.
A U.S. Federal Reserve survey conducted on more than 4,000 adults in 2014 had remarkably similar discoveries. “Savings are depleted for many households after the recession,” it found, with 57 percent having used up some or all of their savings during and after the recession. Only 39 percent said they had enough money in a “rainy day” fund to cover three months of expenses. Furthermore, more than half of the respondents said they could not finance a hypothetical emergency expense costing $400 unless they sold something or borrowed the money.
Andrew Meadows, the producer of Broken Eggs, a documentary about retirement, found that one of the biggest reasons people aren’t saving is because they’re in debt from the 2007 recession. “People are still feeling the heat from the Great Recession,” he said.
Pew Research Center released a report in December 2014 that calculated the net worth of American families—that is, their total assets minus their liabilities—since the recession began. In 2007 it was $135,700, but in 2013 it plummeted to $81,400—a 40 percent decrease in wealth!
Most Americans still keep a household budget though. The Bankrate survey showed that in 2012, 60 percent of Americans had a budget. Now that figure has jumped to 82 percent. Claes Bell, a banking analyst at Bankrate, said this is good, but he also pointed out that “too few have the ability to cover expenses outside their budget without going into debt or turning to family and friends for help.” This means a critical element of their budget is missing—an emergency fund. Full Story
Thursday, January 8, 2015
Missouri: Estimates show 3 counties Over 30% impoverished
(01/08/2015) JEFFERSON CITY, MO (KFVS) - New poverty statistics released by the federal census bureau shows three Missouri counties with poverty rates exceeding 30 percent, according to one group.
According to Missouri Association for Community Action, Pemiscot County rose to 31.4%, Shannon County went up to 31.5% and the highest poverty rate of the state came in at 36.3% in Mississippi County.
The group says the only area with that high a rate of poverty last year was Pemiscot County in the Bootheel.
MACA says research in recent years has shown a strong correlation between childhood poverty and chronic developmental, educational, and health problems.
"One of the key issues here is that over the long term, poverty impacts more than just an individual." said Heather Lockard, executive director of the Missouri Association for Community Action. "Poverty creates toxic stress for children, which in turn impacts their developmental abilities and creates cycles of poverty which are difficult to break. Entire communities are affected by our society's failure to look at poverty as critical issue we need to face."
The Missouri Association for Community Action and its network of 19 non-profit Community Action Agencies throughout the state have worked to find solutions and provide assistance to low income individuals and families in every county and the City of St. Louis. Full Story
According to Missouri Association for Community Action, Pemiscot County rose to 31.4%, Shannon County went up to 31.5% and the highest poverty rate of the state came in at 36.3% in Mississippi County.
The group says the only area with that high a rate of poverty last year was Pemiscot County in the Bootheel.
MACA says research in recent years has shown a strong correlation between childhood poverty and chronic developmental, educational, and health problems.
"One of the key issues here is that over the long term, poverty impacts more than just an individual." said Heather Lockard, executive director of the Missouri Association for Community Action. "Poverty creates toxic stress for children, which in turn impacts their developmental abilities and creates cycles of poverty which are difficult to break. Entire communities are affected by our society's failure to look at poverty as critical issue we need to face."
The Missouri Association for Community Action and its network of 19 non-profit Community Action Agencies throughout the state have worked to find solutions and provide assistance to low income individuals and families in every county and the City of St. Louis. Full Story
Thursday, November 20, 2014
Walmart workers strike as report says wages so low many can't feed families
CLEVELAND, Ohio - Many Walmart workers serve as poster children for food insecurity because their low pay doesn't allow them to adequately feed their families, according to a new report.
Food insecurity isn't unending hunger, but it may cause a family to spend at least a few days a month staring in anguish at bare cupboards and an empty refrigerator.
"Walmart's Hunger Games: How America's Largest Employer and Richest Family Worsen the Hunger Crisis," was released Thursday as some Walmart workers in Cincinnati and Dayton are scheduled to go on a one-day strike. The workers are calling on the company to increase the pay of sales clerks, cashiers and other lower-level employees to $15 an hour. The action serves as a prelude to nationwide strikes scheduled for next week on Black Friday.
Walmart pays most of these workers under $9 an hour, said the report's author, Michele Simon, a public health lawyer, who says she specializes "in legal strategies to counter corporate tactics that harm the public's health."
"All the factors that are contributing to poverty in America exist among Walmart workers," she said. "Walmart is America's largest poverty incubator."
Simon said 49 million people suffer from hunger in this country, not because of unemployment, but because of low-wage work. She said as the nation's largest employer, Walmart bears much of the blame for putting business practices into place that have ultimately led to fewer working Americans being able to feed their families. Full Story
Thursday, April 18, 2013
India Has One Third Of World's Poorest, Says World Bank.
One in three of the world's poorest people are living in India, the world's second-fastest growing economy, according to a new study by the World Bank.
(Telegraph) - While new figures show that the number of those in extreme poverty around the world - surviving on 82 pence per day or less - has declined significantly, India now has a greater share of the world's poorest than it did thirty years ago. Then it was home to one fifth of the world's poorest people, but today it accounts for one-third - 400 million.
The study, The State of the Poor: Where are the Poor and Where are the Poorest?, found the number of extremely poor people had declined from half the world's population in 1981 to one fifth in 2010, but voiced concern at its increase in Sub-Saharan Africa and continuing high level in India.
World Bank president Jim Yong Kim said while the overall decline was "remarkable progress", the remaining 1.2 billion people living in extreme poverty was "a stain on our collective conscience." His colleague, World Bank chief economist Kaushik Basu, who until last year was economic advisor to Indian prime minister Dr Manmohan Singh, said the figures called for the world's wealthier countries to do more.
The study, The State of the Poor: Where are the Poor and Where are the Poorest?, found the number of extremely poor people had declined from half the world's population in 1981 to one fifth in 2010, but voiced concern at its increase in Sub-Saharan Africa and continuing high level in India.
World Bank president Jim Yong Kim said while the overall decline was "remarkable progress", the remaining 1.2 billion people living in extreme poverty was "a stain on our collective conscience." His colleague, World Bank chief economist Kaushik Basu, who until last year was economic advisor to Indian prime minister Dr Manmohan Singh, said the figures called for the world's wealthier countries to do more.
Monday, November 12, 2012
The War On Poverty: US$15 Trillion & Nothing To Show For It.
Fifteen trillion dollars: That’s how much American taxpayers have forked over in the name of helping the poor since 1964. And what do we have to show for it? A poverty rate that has barely budged, an entrenched bureaucracy, and a population like that of Greece and Portugal, two welfare-state basket cases increasingly dependent on government handouts.
These are the conclusions of a recent Cato Institute report on the American welfare state by Michael Tanner, Cato’s director of health and welfare studies and author of The Poverty of Welfare: Helping Others in Civil Society. It is hardly an encouraging read, to say the least.
When President Johnson declared war on poverty nearly half a century ago, writes Tanner, “the poverty rate in America was around 19 percent and falling rapidly.” Increasing prosperity brought about by the free market, coupled with strong civil institutions such as churches, charities, and fraternal organizations, was already accomplishing the unthinkable: making poverty, the general condition of mankind throughout most of history, a rarity in the United States. A rising tide, as Johnson’s predecessor observed, does indeed lift all boats.
The man at the helm of the ’64 ship of state, however, decided the tide wasn’t rising quickly enough and so he would help it along by filling buckets with water from the port side of the ship and emptying them on the starboard side. Not surprisingly, this strategy failed to increase the water level. Thus, despite $12 trillion in federal welfare spending and $3 trillion in state and local government welfare spending over the past 48 years, says Tanner, “the poverty rate never fell below 10.5 percent and is now at the highest level in nearly a decade” 15.1 percent and climbing. “Clearly,” he adds, “we have been doing something wrong.”
Of course, that all depends on how one defines success in the war on poverty. For those on the receiving end of government handouts not just the poor but also those paid to provide services to them, such as doctors and landlords success is getting more taxpayer dollars every year; and by that standard, the war has been a remarkable achievement. “Government spends $20,610 for every poor person in America, or $61,830 per poor family of three,” Tanner reports. “Given that the poverty line for that family is just $18,530, we should have theoretically wiped out poverty in America many times over.”
The war on poverty has also been a rousing success for the bureaucracy. At the federal level alone there are now 126 separate anti-poverty programs administered by seven different cabinet agencies and six independent agencies. Then there are the hordes of social workers and government employees who administer the various programs. All of these people have a vested interest in the programs’ continuation and expansion. As a result, “anti-poverty programs are usually more concerned with protecting the prerogatives of the bureaucracy than with actually fighting poverty,” Tanner avers.
Needless to say, taxpayers have been the big losers in the war. Federal welfare spending has risen 375 percent (in constant 2011 dollars) since 1965. Total welfare spending has climbed almost as much: Governments are now disbursing $908 billion a year to alleviate poverty, up from $256 billion (also in constant dollars) in 1965. Moreover, notes Tanner:
Over the last decade the increase has been even more rapid. Federal welfare spending increased significantly under the Bush administration, but President Obama has thrown money at anti-poverty programs at an unprecedented rate. Since taking office, the Obama administration has increased spending on welfare programs by more than $193 billion.
While some of the spending hikes under Obama can be attributed to the recession, Tanner writes, “part of the program’s growth is due to conscious policy choices by this administration to ease eligibility rules and expand caseloads.” This, he points out, “undid many of the incentives contained in the 1996 Clinton welfare reform, which helped states to reduce welfare rolls.” As a result, the administration projects that “combined federal and state welfare spending will not drop significantly once the economy fully recovers,” with the annual tab reaching $1 trillion in 2014 and the 10-year total hitting $10.3 trillion — an amount that, Tanner calculates, comes to “$250,000 for every American currently living in poverty, or $1 million for every poor family of four.”
If all that money could really eradicate poverty, perhaps it would be worth it (constitutional and moral issues aside). Unfortunately, as we have seen, the massive amount of money already spent on that objective has failed to make a dent in the poverty rate. “In fact,” observes Tanner, “the only appreciable decline [in the poverty rate] occurred in the 1990s, a time of state experimentation with tightening welfare eligibility, culminating in the passage of national welfare reform.” The poor, despite the unprecedented redistribution of wealth in their favor, have been losers, too.
“The vast majority of current programs are focused on making poverty more comfortable giving poor people more food, better shelter, health care, and so forth rather than giving people the tools that will help them escape poverty,” Tanner remarks. “The best way to create wealth,” he explains, “is not through government action, but through the power of the free market.”
That means that if we wish to fight poverty, we should end those government policies high taxes and regulatory excess that inhibit growth and job creation. We should protect capital investment and give people the opportunity to start new businesses. We should reform our failed government school system to encourage competition and choice. We should encourage the poor to save and invest.
We should also set about shrinking all government transfer payments, not just those directed specifically at the poor. One of the ways politicians have bought off middle-class voters who oppose welfare for the poor is to offer those voters their own form of welfare such as Social Security and Medicare. Because of this, “government payouts, including middle-class entitlements, now account for more than a third of all wages and salaries in the United States,” according to Tanner. “Worse, if one includes salaries from government employment, more than half of Americans receive a substantial portion of their income from the government.”
“Any way that you look at it, we are rapidly becoming a society where more and more people rely on the government for their support.”
This is why our government is already nearly $16 trillion in debt with many more trillions of dollars in unfunded liabilities as far as the eye can see. It is also why European welfare states are in their current precarious positions.
The grip of government dependence must be broken not just for the poor but for everyone. It is the only way to save both our dignity and our country’s financial future.
When President Johnson declared war on poverty nearly half a century ago, writes Tanner, “the poverty rate in America was around 19 percent and falling rapidly.” Increasing prosperity brought about by the free market, coupled with strong civil institutions such as churches, charities, and fraternal organizations, was already accomplishing the unthinkable: making poverty, the general condition of mankind throughout most of history, a rarity in the United States. A rising tide, as Johnson’s predecessor observed, does indeed lift all boats.
The man at the helm of the ’64 ship of state, however, decided the tide wasn’t rising quickly enough and so he would help it along by filling buckets with water from the port side of the ship and emptying them on the starboard side. Not surprisingly, this strategy failed to increase the water level. Thus, despite $12 trillion in federal welfare spending and $3 trillion in state and local government welfare spending over the past 48 years, says Tanner, “the poverty rate never fell below 10.5 percent and is now at the highest level in nearly a decade” 15.1 percent and climbing. “Clearly,” he adds, “we have been doing something wrong.”
Of course, that all depends on how one defines success in the war on poverty. For those on the receiving end of government handouts not just the poor but also those paid to provide services to them, such as doctors and landlords success is getting more taxpayer dollars every year; and by that standard, the war has been a remarkable achievement. “Government spends $20,610 for every poor person in America, or $61,830 per poor family of three,” Tanner reports. “Given that the poverty line for that family is just $18,530, we should have theoretically wiped out poverty in America many times over.”
The war on poverty has also been a rousing success for the bureaucracy. At the federal level alone there are now 126 separate anti-poverty programs administered by seven different cabinet agencies and six independent agencies. Then there are the hordes of social workers and government employees who administer the various programs. All of these people have a vested interest in the programs’ continuation and expansion. As a result, “anti-poverty programs are usually more concerned with protecting the prerogatives of the bureaucracy than with actually fighting poverty,” Tanner avers.
Needless to say, taxpayers have been the big losers in the war. Federal welfare spending has risen 375 percent (in constant 2011 dollars) since 1965. Total welfare spending has climbed almost as much: Governments are now disbursing $908 billion a year to alleviate poverty, up from $256 billion (also in constant dollars) in 1965. Moreover, notes Tanner:
Over the last decade the increase has been even more rapid. Federal welfare spending increased significantly under the Bush administration, but President Obama has thrown money at anti-poverty programs at an unprecedented rate. Since taking office, the Obama administration has increased spending on welfare programs by more than $193 billion.
While some of the spending hikes under Obama can be attributed to the recession, Tanner writes, “part of the program’s growth is due to conscious policy choices by this administration to ease eligibility rules and expand caseloads.” This, he points out, “undid many of the incentives contained in the 1996 Clinton welfare reform, which helped states to reduce welfare rolls.” As a result, the administration projects that “combined federal and state welfare spending will not drop significantly once the economy fully recovers,” with the annual tab reaching $1 trillion in 2014 and the 10-year total hitting $10.3 trillion — an amount that, Tanner calculates, comes to “$250,000 for every American currently living in poverty, or $1 million for every poor family of four.”
If all that money could really eradicate poverty, perhaps it would be worth it (constitutional and moral issues aside). Unfortunately, as we have seen, the massive amount of money already spent on that objective has failed to make a dent in the poverty rate. “In fact,” observes Tanner, “the only appreciable decline [in the poverty rate] occurred in the 1990s, a time of state experimentation with tightening welfare eligibility, culminating in the passage of national welfare reform.” The poor, despite the unprecedented redistribution of wealth in their favor, have been losers, too.
“The vast majority of current programs are focused on making poverty more comfortable giving poor people more food, better shelter, health care, and so forth rather than giving people the tools that will help them escape poverty,” Tanner remarks. “The best way to create wealth,” he explains, “is not through government action, but through the power of the free market.”
That means that if we wish to fight poverty, we should end those government policies high taxes and regulatory excess that inhibit growth and job creation. We should protect capital investment and give people the opportunity to start new businesses. We should reform our failed government school system to encourage competition and choice. We should encourage the poor to save and invest.
We should also set about shrinking all government transfer payments, not just those directed specifically at the poor. One of the ways politicians have bought off middle-class voters who oppose welfare for the poor is to offer those voters their own form of welfare such as Social Security and Medicare. Because of this, “government payouts, including middle-class entitlements, now account for more than a third of all wages and salaries in the United States,” according to Tanner. “Worse, if one includes salaries from government employment, more than half of Americans receive a substantial portion of their income from the government.”
“Any way that you look at it, we are rapidly becoming a society where more and more people rely on the government for their support.”
This is why our government is already nearly $16 trillion in debt with many more trillions of dollars in unfunded liabilities as far as the eye can see. It is also why European welfare states are in their current precarious positions.
The grip of government dependence must be broken not just for the poor but for everyone. It is the only way to save both our dignity and our country’s financial future.
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