January 17 2014

The Shriver Report: Right on the problem of poverty, but wrong on solutions

Red Alert Politics

Hadley Heath

Today, millions of Americans live near or below the poverty line. That’s the focus of The Shriver Report’s latest edition, named “A Woman’s Nation Pushes Back from the Brink,” which urges more government intervention to help low-income families. But that’s not the answer.

There’s no denying it: Government programs and regulations can give needy families a boost, pushing them just above the federal poverty line, but there — on the brink — the government-centric approach leaves them trapped. Government can treat the symptoms of poverty, but it cannot address the underlying issue: a lack of opportunity for self-advancement. Expanding opportunities, or social mobility, should be the focus of anti-poverty policies.

Many factors contribute to stagnant social mobility, some economic and some social. Wage regulations, taxes, high education and health care costs, and skills gaps restrict employment opportunities and make saving and wealth accumulation hard. But the deterioration of the family also contributes. Conservatives have policy proposals to address all of these factors.

The Shriver Report, a compilation of essays by left-leaning women, doubles down on the outcry for a “living wage,” or an increased minimum wage. Sadly, raising the mandated minimum wage would have adverse effects, reducing the number of entry-level jobs and spurring on price inflation. If the minimum wage is artificially raised higher and higher, these stepping-stone jobs will turn from launching pads to flypaper.

A better way to increase the take-home pay of low-wage workers would be to reduce their tax burden, by lowering income and payroll taxes. This not only benefits families through immediate tax relief, but it would also spur economic growth, job creation and real wage growth.

Conservatives in the House have passed dozens of job creation bills that the Senate will not take up. Among them is the SKILLS Act, which would reform federal jobs training programs for the unemployed. The philosophy behind this approach recognizes that skills — not checks in the mail — help job seekers find placement. Furthermore, this Act would reduce the size of government by eliminating 35 distinct jobs training programs and replacing them with one.

Bloated government itself is often the enemy of self-advancement. By offering too many subsidies to too many people, we expand an inefficient welfare state that loses its intended focus on the poorest of the poor. The unchecked growth of these programs also comes with a cost, not just to taxpayers and corporations, but to job seekers as increased taxation and debt take their toll on the economy, and further reduce opportunities. As conservatives have suggested, the reform of anti-poverty programs is vital to make them more efficient and more targeted.

While the Shiver Report purports to offer solutions for families ‘on the brink,’ it ignores two areas that are critical for these families: educational freedom and health care freedom. Consider ‘freedom’ a code word in this case for ‘competition.’ When consumers (students, parents, patients, etc.) are free to choose among a variety of schools, universities, health care providers or insurance plans, prices for these vital services are kept low. This benefits Americans of all income levels, but especially the poor, who struggle to access quality education and health care in today’s over-regulated and costly systems.

Furthermore, conservatives are realistic about the relationship between strong families and economic stability. Two are better than one. This is true when it comes to raising children, earning income, sharing living expenses, or stabilizing life when, inevitably, bad things happen. While the Shriver Report admits that strong marriages are key to reducing poverty, it offers little in the way of a solution (more contraception, that’s the ticket!). Conservatives want to reform the tax code and entitlements so that married families no longer face penalties for staying whole.

Poverty is much more complex than a simple lack of resources. It is a lack of opportunity, fueled by institutional barriers. With this understanding, most Americans support a limited role for government in meeting the dire needs of people in desperate situations, but recognize that only free enterprise and equal opportunity can actually lift people out of poverty.

The Shriver Report identifies many serious problems, but sadly offers tired, misguided solutions. A discussion of ‘pushing back from the brink’ of poverty should have included conservative ideas that attack barriers to self-advancement and focus on expanding opportunities and mobility.

By Hadley Heath /// January 17, 2014

 

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