Conclusion: win-win poverty reduction and prevention.

• Author: Nagel, Stuart
• Position: Abstract

Abstract

A five-part program is suggested for poverty reduction and prevention. First, in random order is the need to find jobs for displaced workers. This may involve: (1) commissioning employment agencies to do placement work with payment only after the workers are on the job or a few months, (2) wage-subsidy vouchers that enable employers to hire beginning employees and provide on-the-job training, (3) training vouchers especially to deal with new technologies, and (4) economic growth, especially via new technologies, education, competition, and fair trade. Second is the need for improved education of low-income people. This may mean: (1) federal financing of merit pay for inner-city teachers, (2)integrated schools by developing middle class and subsidized condominium communities near downtown employment, (3) contracting out and vouchers for attending secular schools, and (4) housing vouchers to enable low-income people to move up one concentric circle so their children can attend better schools. Third, merit treatment by having outreach programs for low-income students and potential employees to receive training that will enable them to pass high admissions and employment standards. Fourth, on-site registration and holiday voting to facilitate low-income people participating in elections. Fifth, drug medicalization to reduce drug-related crimes by providing for phase-out prescriptions for drugs to addicts in order to eliminate the incentive of drug dealers to create new addicts. Doing so will lessen the victimization of low-income people to addicts (who rob for drug money) and to exploitative drug dealers.

Introduction

Win-win or super-optimizing analysis of public policy problems tries to find feasible solutions which can enable conservatives, liberals, and other major viewpoints to all come out ahead of their best initial expectations simultaneously. The elements in the analysis include (1) conservative goals and alternatives, (2) liberal goals and alternatives, (3) relations between the major alternatives and goals, (4) the development of win-win solutions, and (5) feasibility hurdles to overcome. The feasibility hurdles to be overcome include economic, administrative, political, psychological, legal, international, and technological hurdles, and the disruption of displaced firms and individuals.

As applied to social policy, we are especially talking about improving the quality of life of people at the bottom of the social hierarchy but to the benefit of all. This means public policy that relates to (1) employment and job facilitators, (2) education, financing, and integration, (3) merit treatment, (4) voting and political participation, and (5) crime reduction. (1)

The Computer Revolution and contemporary globalization have the potential for generating great productivity and prosperity. They also have the potential for generating among so many people more unemployment and anger than the Industrial Revolution. This is so because so many poverty-generating displacement factors are operating simultaneously throughout the world. That includes productivity downsizing, free trade, defense conversion, and immigration. It also includes employing many groups of people who were not formerly competing so much for the available jobs, such as women, minorities, the disabled, and the elderly. A key object of an anti-poverty program should be to smooth the transition of displaced workers to other possibly better jobs, as well as to provide for the transition of the previously poor toward middle-class status.

Being poor in this context relates partly to individual income. It is, however, not possible to say that being poor means having less than a certain income or being below a certain income percentile in one's nation. One can live better at a low income in some places in the world than others. Being in the bottom 10 percentile in a wealthy nation may be better than being in the top 10 percentile in an impoverished nation. Poverty should be measured in terms of food, shelter, clothing, and medical care. A person or family is impoverished if they cannot afford (1) enough food to avoid all forms of malnutrition, (2) enough housing to not freeze in the winter time, (3) enough clothing to satisfy minimum cultural standards of dignity, and (4) enough medical care so that all members of the family have better than a 50% probability of living to age 60. The fourth point illustrates how our standards keep moving up since living to age 40 would have been considered good in medieval times, even by royalty.

Sometimes employment and education are included in the definition of poverty. Both employment and education are important for preventing poverty and for rising out of poverty, but they are not part of the definition. They are causes and to some extent effects of poverty. More important, they are policy variables subject to deliberate improvements through government decision-making.

Employment

Conservative and Liberal Alternatives

Constrained public aid refers to restrictions on eligibility, benefit levels, income retention, and due process partly designed to deter applications for public aid. Generous public aid refers to broadness on those matters partly designed to provide more dignity to the poor.

The key issues on those four matters have been (1) allowing an impoverished family that has a father and mother present to receive aid, (2) providing for minimum benefit levels on a nationwide basis, (3) allowing recipients to keep a certain number of earned dollars per month, and (4) providing hearings in welfare disputes, including right to counsel.

Win-Win Alternatives

The SOS emphasis is away from arguing over those legal matters, and putting more emphasis on upgrading skills and providing job opportunities. Doing so may do more for decreasing poverty than a punitive deterrence approach and more for the dignity of the poor than a generous welfare approach. See Table 1.

Deterring poverty means making even more unpleasant the status of being poor so people will have more of an incentive to avoid being poor. Decreasing poverty means removing people from poverty by providing them with jobs or other income.

Providing job opportunities may involve wage supplements to subsidize both potential employers into hiring welfare recipients and to subsidize recipients into accepting the jobs. The subsidy might also require employers to provide on-the-job training and recipients to pass the training course. On a higher level, it may be necessary for public policy to stimulate an expanding economy in order to create new jobs. Such stimulation might emphasize a pay roll tax that is refundable if the money is used for increasing productivity by way of new technologies, upgrading skills, or developing daycare centers.

As for employment of displaced workers or people in the culture of poverty, there are a number of job facilitators that have been shown to be reasonably effective, provided that the nation or community is willing to make a worthwhile investment. These job facilitators include:

1. Contracting out to employment services to find jobs for the unemployed on a commission basis. This means the job finder gets a substantial amount of money from the government after the worker has been on the job for six months. Such a commission arrangement provides the job finder with an incentive to determine the worker's aptitudes and interests so the worker will not quit or be fired before the commission is paid.

2. Wage vouchers that are given by the government to the unemployed to supplement what an employer can afford to pay. In return for being able to cash in the wage voucher, the employer must agree to hire unemployed people and provide them with on-the-job training. The worker must agree to perform the work and pass the training within six months when the vouchers end.

3. Vouchers can also be given for training that involves going to school, obtaining day care services, and moving to a new city. These voucher systems cost money. They may, however, soon more than pay for themselves if the workers get off some forms of public aid, pays taxes, and buys more goods and services with the multiplier effects that such buying has. Those employed workers may also refrain from anti-social activities and become better role models for their children and grandchildren.

4. The most important job facilitators are probably under the list of productivity causes such as national training, new technologies, competition, and free trade. They provide an expanding economy with more jobs widely available to displaced workers and the chronically unemployed, regardless of the reasons for being displaced or unemployed. (2)

   Education

   Financing

   The second item under poverty reduction and prevention is education. In this context, we are talking about elementary and secondary education, since adult training was already discussed. There are two big problems in providing better education for low-income children or children in families whose real incomes are falling contrary to general trends. The first problem is lack of money for the local schools. Low-income communities throughout the world are generally not able to raise sufficient local funds to provide adequate school buildings and teachers. There is a big need for more allocation of national or federal tax money to local education. It is not politically feasible to expect rich communities in a province to provide much support for the low-income communities. It is more politically feasible for the national government to do so.

   The funding as of 1998 could come from channeling defense expenditures into local education expenditures. Defense expenditures are still at near Cold War levels in most countries, but there is no longer actual or potential warlike conflict between capitalism and communism. The high of the Cold War may have been when Russia was sending missiles...