Monday, September 12, 2016

Redefining Poverty to Reignite Big Government Expansion

“ALICE” is the new definition of poverty. So writes John Franklin, CEO of United Way of Northern New Jersey. ALICE stands for “Asset Limited, Income Constrained, Employed,” as United Way’s website defines it. Add ALICE to “those who meet the archaic definition of poverty,” and fully 40% of New Jersey residents live in poverty!

Well, Franklin defines ALICE as follows:

These folks are the backbone of our economy. People who are working every day, sometimes at more than one job, but still not making ends meet for basic necessities. It's our kid coming out of college, our parent living on social security, the person taking care of our parents in nursing homes, the one taking care of our toddlers.

"These folks," Franklin claims, deserve a claim on other people’s wealth. He lists 3 next steps to help combat poverty in N.J.:

The next steps are clear:
  • Recognize the current definition and perceptions of poverty are woefully outdated.
  • Help cut through red-tape and predatory practices denying ALICE access to existing supports like the Earned Income Tax Credit, the most effective pro-work, anti-poverty program.
  • Expand access to quality child care. ALICE needs this in order to work. Plus, it reduces employer turnover costs and has a proven return on investment for our future workforce.

Redefining poverty has broad ramifications. Basically, it is an open-ended opportunity for statists to expand government and shrink freedom and self-reliance—and the wallets of productive citizens. After all, who but the very wealthy can not be said to be asset limited, income constrained, and employed? It sounds like life, to me. Hell, what it boils down to is that, at any given time and as suits anyone’s “anti-poverty” agenda, “basic necessities” can mean “anything one person lacks that other people have.” Short of a fully equal, universally poor, fully communist society, when is it ever not the case that some people have less than others? To the anti-poverty warriors, redefining poverty is about restructuring the Middle Class into a Welfare Class.

The Earned Income Tax Credit is basically a handout. I’ll acknowledge that, as a welfare program, it’s one of the least bad, since it at least requires a person to work to qualify. That said, “access” to the E.I.T.C. means access to wealth seized from other people against their will. The same goes for other “existing supports” Franklin mentions. The same goes for “quality child care.” When the statist talks of “access,” he doesn’t mean the wide array of goods and services available on the free market that people can access if they are willing and able to pay for them.

True, it can be a struggle to pay for all of the stuff we desire, to the point of having to forego some stuff in order to have other stuff we need more. It requires hard choices and prioritization of purchase desires—and sometimes charitable help from organizations like United Way. But when the statist talks of “access,” he talks of forcing others to pay, with government as the hired gun. But one person’s need or misfortune can not be considered an automatic claim on other’s lives and property. If it is, we’re no different from jungle animals. As civilized human beings, we must consider such a premise as thoroughly immoral.

Notice also what is ignored—policies that can actually aid economically struggling people in helping themselves. One big step that can actually help the poor “meet basic necessities” is a chance to opt out of the 15.3% FICA payroll tax that funds Social Security and Medicare. That huge bite comes right off of the top of every earner's paycheck. While government is seizing the wealth of the 60% to give the redefined 40% poor “access” to stuff, that same government is seizing the very means the poor can use to take care of themselves! To the statist, “help” only means forcibly redistributing wealth, not giving people the opportunity (access) to more of their own earnings.

Franklin opens his article with this:

A democracy is at its best when its citizens and elected officials come together to listen and share some good ideas, to engage in a dialogue about making the world a better place for all residents.

I left these comments:

Very well. Let’s start with this: Instead of redefining poverty to fit a political agenda that glorifies “the poor” as “the backbone of the economy,” how about talking about prosperity and its causes?

The everyday worker has always been around, and through most of human history lived in grinding poverty. Then, in the past two hundred years, something changed dramatically—poverty was ended.

Yes, we have relative poverty. But, there is no real poverty in America today. Real poverty is life without running clean water and indoor plumbing, electricity, automobiles, cheap plentiful clothing and food, and all of the luxuries like telephones, stoves, refrigeration, and washing machines that today’s poor have. And this is to say nothing of the smart phones, cable television, internet, personal computers, and other wonders of the modern information age that most people have.

What hasn’t been around until very recently are the extraordinary individuals who brought all of these and much more within affordable reach of the general consumers—not to mention the jobs they create and the tools of the jobs that make higher pay possible. And from all of this productiveness come the tax revenues the government needs to fund all of the re-distributionist, allegedly anti-poverty programs the politicians like to vote for. Governments, too, have always been around. If governments could truly “fight” poverty, human history up until recent history wouldn’t have been marked with grinding mass poverty.

I spent most of my plumbing career working for a business I didn’t create, in a job I didn’t create, working with tools I didn’t create, installing products I didn’t invent, with learned knowledge I didn’t discover, spending the money I earn in a marketplace flooded with products that I couldn’t conceive of, let alone create. Where did all of that come from?

General prosperity is so new in human history that most still don’t understand what caused it. The real backbone of the modern industrial economy are the inventors/businessmen/entrepreneurs, who arose with the advent of individual liberty and free markets to transform the knowledge of the scientist into the life-enhancing mass-market products and services that ended real poverty.

Anyone who does an honest days work in support of his own live and goals contributes to this abstraction we call “the economy.” In his own way, every honest worker is a hero for the effort to support himself. But there is a hierarchy involved in economic progress. Let’s not kid ourselves. It’s simply wrong to call the so-called ALICE group “the backbone of our economy.” It’s ridiculous to think that the wonderful standard of living we enjoy came from toilers, who today work a lot less hard than pre-capitalist toilers, and for a lot better living standard than those past toilers.

It’s not degrading to acknowledge that the real backbone of the economy is the extraordinary visionary minority that steps out from the crowd of toilers to bring us progress. It’s only fair. Once we understand that, maybe then we’ll get a real anti-poverty program going, which means not another government program but reducing the taxes, regulations, and demonization that holds the real economic progressives—the inventors/businessmen/entrepreneurs—back.

After 50 years and untold $trillions of welfare state dollars later, poverty is a bigger problem than ever before, if you listen to those with a vested interest in poverty. Yet “the poor” today have luxuries that the middle class didn’t have in the middle of the 20th century. Redefining poverty looks to me like another gimmick to keep the anti-poverty political agenda going with yet more handouts, like “free” child care.


The United Way is a wonderful organization, when and as it relies on voluntary contributions of time and money. But when it turns to government’s guns to advance its anti-poverty crusade, it becomes a moral blight on a free and moral society.

Related Reading:

"Shared Prosperity" Another Name for Failed Policies

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