Recently, as I was surfing through the TV channels, I
ran into a discussion on C-SPAN that caught my interest. The AFL-CIO
headquarters in Washington, D.C hosted the conference by the National Economic Association.
Darrick Hamilton, the CEO of the
association, facilitated the discussion.
Leading economists were the presenters. They shared
with the audience their research findings on a number of topics ranging from
incarceration to militarization of the police, to unemployment.
I came away intrigued by several proposals to solve
the problems under discussion. In particular, the call for a federal job
guarantee for everyone able to work, the elimination, in other words, of
involuntary unemployment, and the setting up of a baby trust account of $
20,000 to shield each child from poor decisions by parents.
Flashback to
Graduate School
I recall vividly two important lessons from graduate
school, lessons that shaped my own approach to organization consulting
throughout my working career.
Lesson one came in a statistics class. The instructor
told us that statistics are interesting by what they reveal, but they are
limited by what they hide, perhaps more vital. In other words, he encouraged us
to always look beyond the obvious and explore the other side.
Lesson two came during my dissertation defense. One of
the Ph.D. committee members asked me a question that had me stumped for a
minute. I had used a questionnaire to gather responses to a number of policy
questions I was researching. His
question was: “Tony, what question you
did not ask that perhaps was more important than those you asked?” After
colleting myself, I humbly replied that I did not know, and acknowledged a
limitation of my research.
I did not realize until recently why I have been
interested in hearing both sides of an argument, shunning the notion that one
ideology has all the answers and none of the downside. Some folks might label
me a skeptic, bordering on the pessimist; I defend myself by invoking realism.
I guess you, the reader, will be the one to judge.
Income
Inequality
This issue is a significant one in America. How can we
in the land of plenty permit economic inequality? The statistics are staggering!
The average income of the 99% in 1998 was $ 48,768. The average income of the
remaining 1% was $ 1.36 million or 22% of all income generated in the country.
These statistics depict a disproportionate, and I might add, gross example of
inequality.
I drilled down to a study by the University of
Michigan (UofM) regarding extreme poverty. This study concluded that the
average person in extreme poverty receives $ 2 per day cash assistance.
Shocking, to say the least!
C-SPAN came to my rescue once more. I tapped into a
discussion about the problems with the survey methodology used by the UofM
scholars.
The UofM researchers had apparently made the same
mistake I had made as a graduate student. They failed to ask the most important
question. In this case, how much does the person in extreme poverty spend
per day? The answer, they found, was $ 20 per day. How can this be possible?
The UofM study had focused on just one source of income and overlooked that
there are all together 80 programs that provide assistance to the poor. They
also found that those classified as extreme poor had a television set, a
computer, a mobile phone, and more square footage in their residence than
before. Obviously, you could not do all this on $ 2 per day.
By now you should be as confused as I was. What is the
real story? Who do we believe? Anyone?
Since the 1960’s America has spent trillions on its
war on poverty. Yet the number of poor people has not significantly diminished.
Although some folks have surely gained by this largesse.
Experts tell us that the problem is not going away any
time soon. In fact, it is probably going to get worse. Globalization is forcing
lower level workers to compete with 3 billion other people for jobs and wages.
College educated men will tend to marry college educated women. Single parent
families will surely become poorer.
A Question
of Self-Interest
I think it was Freud that taught us that all interest
is self-interest, and that all behavior is motivated. Obviously, the
researchers in the UofM study had an agenda, and so did those who basically
demolished their findings. In this Ping-Pong game of gotchas, the average
person is left bewildered and confused.
See, the average person wants to know what to believe. Politicians to promote their agenda will cherry pick research, which proves their point ignoring the research that disproves it.
We are all created equal, but no two people are alike. Some are more intelligent, others more motivated, others harder workers, and son. Hence, there is resistance to adopt socialistic or communist practices, long discredited. Income redistribution by taxation has long term unintended consequences because wealthy people are able to move money overseas and reach markets world-wide.
See, the average person wants to know what to believe. Politicians to promote their agenda will cherry pick research, which proves their point ignoring the research that disproves it.
We are all created equal, but no two people are alike. Some are more intelligent, others more motivated, others harder workers, and son. Hence, there is resistance to adopt socialistic or communist practices, long discredited. Income redistribution by taxation has long term unintended consequences because wealthy people are able to move money overseas and reach markets world-wide.
Where We Go
From Here?
We need to resolve this issue with a sense of urgency.
I am not sure that politicians left to their own devices will do it correctly.
They will pander to their constituencies currying favor and hopefully more
votes in the process. They will set one group against another; choosing winners
and losers, and seeding further division and distrusts. They will take the
short view and overlook the unintended consequences. They will kick the proverbial
can down the road.
We need to examine further the structural and systemic causes
that entrap people and families in poverty. We know what some of the causes
are: break-up of the family unit, lack of good education, disappearance of jobs
more efficiently performed by machines, shift of jobs to low cost areas, crime,
and drug abuse.
We need a bi-partisan approach. This is a “wicked” problem, meaning that there are
no technical answers or experts, that no one group alone can solve it, and that
there might not even be an immediate solution.
