Eliminating
Poverty in the US
A
Suggestion[1]
Challenge:
If
a rich nation like the US cannot solve the problem of chronic poverty, no
nation on earth can solve it. Hence, the problem should be addressed here in
the US. The rest of the world may then follow that model to address the poverty
problem in their nations.
While
talking about grand challenges, mission statements, and vision, President
Kennedy is often quoted about the US Moon mission. A similar mission and vision
is required to eliminate poverty in the US. Contrary to the usual practice of
looking at poverty from the point of view of budgets and who pays what, it
should be viewed and addressed from the point of how people invest their time
from childhood through youth and during their professional careers.
Genesis of
Poverty:
Every
human being is endowed with 24 hours a day and they work around 40 hours a work
week. Some have the education, knowledge, skills, abilities, jobs, and
opportunities to earn millions of dollars working for those 40 hours while some
others make nothing during those forty hours. Of course, there is nothing
natural about the forty hour work week. This number is arrived at through
negotiations and discussions over several generations. The nation has
productive jobs with a demand for several billion person hours and people
offering billions of person hours of their knowledge, skills, and abilities. The
total number of hours of work of a particular type is shared by people capable
of doing that work in some proportion with the result that some people actually
work for 40 or more hours while others have work for less than forty hours. Owing
to the nature of the work they perform, some people get very little for their
hours of work. Yet others get no hours of work at all because their type and
quality of contributions do not match the demand or they miss out on
opportunities to get and keep a job. This is the genesis of poverty. No work
leads to no income and ultimately to poverty. This equation is complicated by
the introduction of machines, technology, and global trade into the workforce
as machines also compete with people specifically for jobs requiring low grade
skills and push such people into joblessness and poverty.
Poverty
Alleviation Programs in the Government Budgets:
Governments
try to address the poverty problem by collecting taxes from those earning and
providing grants to the poor. The grant amounts given to the poor people are
barely sufficient to satisfy their hunger while the tax payers feel such
expenditures as a severe burden. First we should ask what moral rights do the
poor have. The House report on War on Poverty (http://budget.house.gov/waronpoverty/) describes a
large number of programs with significant investments. But a reading of the
programs gives the impression that they are band-aids over band-aids without
actually addressing the root cause of the problem.
Sharing
Available Pool of Work:
In
a democracy, national resources are owned by all people and all people have a
responsibility to protect the nation and its resources. Going by this argument,
the nation’s available work hours should be shared by all those seeking the
opportunity to work. If there are more people willing to work than the hours of
work available per person, people may bid to get work for more than their share
of work hours. Winners pay and losers take money to forego their opportunity to
work and earn money.
For
the sake of this quick and simple analysis, let us assume that there is an
average of 36 hours of work available for every person. Hence people who want
to work for 40 hours per week would have to buy 4 hours out of someone else’s
opportunity to work. One who gives up his opportunity to work for 36 hours gets
only 32 hours of work as fulfillment of his opportunity and some cash for the
other 4 hours. Let us assume that we pool such surrendered opportunity hours
and compensated funds obtained in the buy-back process. We will discuss what we
will do with these hours and funds in a latter paragraph.
National Service
Responsibility of People:
It
is also incumbent up on everyone to give a number of their hours to protect,
preserve, and grow a democratic nation. As part of their responsibility, if we
said that people should contribute 4 (out of 40 hour week) to the nation. The
nation may use their time for national jobs. Instead of giving their time to
the nation, some people may opt to buy their time back and work the full 40
hours and earn money. They may pay funds equivalent to the 4 hours of their
time to the nation. This process adds more person hours and funds to the pool.
The Mission of
Eliminating Poverty:
If
we undertake the mission to eliminate poverty in the nation, one major program
is to create productive work. This is really not a government work-at-nothing
program. The pool buys time (person hours) from the unemployed at a certain
hourly rate. In turn, the pool auctions the available hours to the private
sector. By this method, the previously jobless people get paid work that is
productive. With paid jobs, they move out of poverty. If properly priced and managed,
the pool will be self-sufficient.
The
most important point about this idea is not to keep doing this for ever. This
program is not a new form of the current taxpayer funded poverty alleviation
programs. We will explain that feature in the following paragraphs.
Categories of
People:
There
are generally five categories of people who are likely to fall into poverty by
not actively participating in the productive economy.
1.
Children
2.
Unemployed with low grade skills
3.
Old people
4.
Chronically sick and disabled people
5.
Those with attitude problems
The
poverty of children can be addressed by getting them to devote their 40 hours
at school gaining education, knowledge, and employable skills when they grow
up. Such a scheme will eliminate the flow of people into poverty in the future.
The Pool pays for the 40 or so hours given by children so that those financial
resources support the children for food and schooling. In a couple of decades,
the pool of children in poverty should decrease and become infinitesimally
small.
Likewise,
the poverty of unemployed people with low grade skills can be addressed by
getting them to devote some hours to work they can do with their current low
grade skills and some hours to upgrade their skills for better jobs in the near
future. This creates a work force that is reasonably well educated, aptly
skilled, and able and willing to work in the near future. The funding for the
program comes from the Pool. Again, in over a decade, the number of unemployed
should come down to zero thus eliminating the need for the continuation of the
program. By locating the skill enablement centers in low cost areas of the
country, costs as well as distractions can be minimized.
Old
people who have not saved sufficient funds for their old age are the next
category. The pool may pay them to work in jobs that are appropriate for old
people especially in the auxiliary tasks related to educating children and
training the currently unemployable workers.
Chronically
sick and disabled people who have not provided for such circumstances become
the nation’s responsibility. The issues with this group of people should be
addressed by the general budget and by motivating future workers to save for
their old age. This is really a matter of personal budgets, savings, and
insurance to cover risks.
Finally,
there may remain a small group of people that have an attitude problem that may
persist in claiming their rights rather than taking advantage of the
opportunities provided by this or any program. They are a burden and will
become a nuisance if the nation does not persevere in getting them to
rehabilitate. If they are not given an opportunity to become good and
productive citizens, it is the fault of the nation and it has to pay for their
condition. On the other hand, if these people do not take the opportunities
given to them by the nation to gain skills and to work gainfully, it is their
fault and they have no further rights than the charity of the good natured
people.
Program
Duration:
With
the proposed method, the program does not go on forever. The poor are not
supported forever. They are trained and moved into active and productive
workforce. The indolent are given opportunities and failing which they are left
to charities.
By
ensuring that through monitoring the progress of children and youth, their
upward economic mobility is guaranteed. Old people and sick people are also
protected.
The
program scales down as the national average productive work available reaches
the national average worker hours available with due considerations for skill
match.
As
we mentioned earlier, technology and global trade can adversely affect the jobs
of people with various types of stagnant skill sets. By tuning the program,
people’s skills can be constantly monitored and improved and the possibility of
people falling into poverty can be prevented.
Plan Based
Payments:
Just
as businesses are asked to submit a plan when they ask for investment or a
loan, the recipients of funds in this program are asked to develop and submit a
plan of how they expect to get out of poverty. The implementation of the plan
is monitored and reported by the participants, their employer sponsors, and
program managers. The aim of the program
and process is to create confidence in and commitment by the participants to
get out of poverty for good. This planning process should inculcate in people, starting
from their childhood that time is money. One has to invest time in activities
that equip them with skills that get them good jobs and good pay. People have
to prioritize their activities with purpose at every stage of their life.
People have to develop a budget that takes into account what they can earn and
the standard of living they can afford. People well above the poverty line have
a good sense of priorities with respect to their investment of time as they
choose activities. They also pay attention to budget their finances. On the
other hand, the poor need a helping hand in these two aspects.
Conclusion and
Recommendation:
It
is time for the US to set up a national program to eliminate poverty in the
foreseeable future. Congress is requested to consider the suggestion made here
and launch a program in place of the hundreds of disconnected programs in the
current budgets.
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