Call to Action: Ending U.S. Poverty
More than 50 years ago, President Lyndon B. Johnson declared a war on poverty. To call the results of that “War” a mixed bag is a generous assessment. According to the United States Census Bureau, more than 45 million Americans still live in poverty and the country’s most recent approach to fixing this problem has been to cut spending for social protections and allow the free market do the fighting on its own.
Bloomberg reports that last year, American startups collected more than $67 billion in venture capital funding; San Francisco alone captured almost $20 billion. Yet, the state of poverty and homelessness in the tech capital has caused a United Nations official to draw comparisons to the slums of Mumbai. In a city where innovation includes the creation of motorized scooters and high-end boat taxis, solving poverty is not a priority.
“The world over, private financial markets fail when it comes to the very poor,” former U.S. Treasury Secretary Lawrence Summer said back in 2002. “Mainstream banks do not seek out poor communities—because that’s not where the money is.”
Criminalizing poverty and outlawing grassroots support efforts is equivalent to burning your trash to save the environment. If encampments and food-sharing opportunities present public health and safety risks, it is in part because they lack government funding and support. Some say that reducing financing will drive economic growth, therefore reducing poverty, but the reality is that the economic growth will not go toward helping homelessness but rather to creating more motorized scooters and boat taxis instead.
Extreme or abject poverty in our back yards often goes unanswered—it becomes someone else’s problem. However, the underlying economic inequality is growing and affecting more citizens every year. The leaders of the nation’s top firms now make more than 300 times what their typical worker makes. According to the Central Intelligence Agency, the wealth gap in the U.S. is more extensive than it is in Russia and Iran. Data from the Federal Reserve suggests that the situation is worse than it has ever been.
The United States of America is a country that used to claim it never lost a war. While the War on Poverty is not yet lost, it may be the longest running war in American history. The U.S. Department of Defense alone is not well equipped for the fight. If the United States wants to win this War, it will need to look to its allies and follow in their steps.
How Other Countries Fight Poverty
Denmark
At 6 percent, Denmark has the second lowest poverty rate in the Organization for Economic Cooperation and Development (OECD) and less than half the rate of the United States. Correlated to that statistic is another: within the OECD—a grouping of wealthy nations that includes the United States—Denmark is runner-up in social protection spending for its citizens.
As part of a comprehensive and robust safety net, the government provides universal healthcare, subsidized childcare, and free college education. Despite a libertarian’s worst fears, Danes of prime working age are much more likely to be employed than their American counterparts. All of this plays into Denmark’s consistent ranking as one of the happiest countries in the world.
France
France spends more than any other country in the OECD on social protections. It is a more populous and diverse country than Denmark, thus providing a demographic landscape more comparable to the United States. To further bolster the comparison, France is reform-minded about its social programs, with the country’s president Emmanuel Macron heavily critiquing what he calls the government’s wasteful welfare spending.
The key takeaway is this: reforming social programs does not equate to disavowing them completely. According to Forbes, Macron, a former finance minister, envisions these reforms to reduce income stipend programs and remove bureaucratic overlaps to pivot the system towards free preventative healthcare measures, which, in his words, aim to help citizens avoid poverty—not merely survive it.
Netherlands
According to the United Nations, access to adequate housing is a social, cultural, and economic human right. No one in the OECD is meeting that standard better than the Netherlands, whose constitution states that promotion of adequate housing is the duty of public authorities.
Dutch social housing accounts for 75 percent of all rental stock, providing housing at below market price to disadvantaged groups. Independent public bodies guaranteed by the state own these properties, which are still capable of taking advantage of interest rates when financed through the open market. While critics have been calling social housing a bubble for decades, Bloomberg reports that the new government is committed to providing continued and increased help to low-income families in accessing affordable housing.
Australia
When it comes to social benefits, Australia spends smartly instead of extravagantly. By pouring in support instead of cash, Australia has crafted one of one of the most targeted social benefits programs in the developed world, according to Business Insider. Despite having one of the lowest tax rates among wealthy nations, they redistribute more to the poorest fifth of its population than any OECD country.
A lot of attention goes to Australia’s minimum wage, which is the highest in the world, and set to increase further, as politicians note that one in four people in poverty is employed full-time. More fiscally conservative nations may prefer to learn from Australia’s small-government approach to spending. As a percentage of GDP, even the United States pays more, and in the OECD, only Switzerland spends less.
What Policies the U.S. Should Adopt
Quoting Pulitzer Prize winner Pearl Buck, a nation’s greatness is measured by how it treats its weakest members. In that respect, the U.S. has room for improvement, but it also has the intelligence, wealth, and human capital to do so. Profit-seeking companies are not incentivized to cater to clients who lack the resources to pay them. Governments, however, should be incentivized to provide their citizens with the basic dignity of living through fundamental human services.
If those services are inefficient or lacking, it is the government’s responsibility to fix them. When the side effects of a free market have a negative impact—such as soaring rent and housing prices that grow faster than inflation or salaries—robust social policies can reign those side effects in and protect new segments of the population from slipping into poverty.
America’s War on Poverty began with the 1964 Economic Opportunity Act, which staked out principal initiatives towards providing education, healthcare, jobs, and a financial safety net for its citizens. In the resulting 54 years, Congress has waffled over whether that was a sound approach. Some of America’s staunchest allies, however, have not debated nearly as much, and the support systems they have built have resulted in dramatically less poverty and income equality.
Each country does it slightly differently, but the best share a preventative mindset:
- Granting universal healthcare means fewer expensive procedures later on
- Guaranteeing higher level education guarantees less unskilled labor
- Providing affordable housing means fewer people end up homeless
All of this sounds familiar to the Economic Opportunity Act, but the math and logic behind these concepts boil down to the simple fact that healthy, educated, and housed citizens can contribute more to their country.
The most striking difference between the U.S. and the countries above is that while America’s allies may squabble over cost and execution, they mostly agree that affordable housing, healthcare, and education are basic needs for their citizens. By making social protections a priority instead of a philosophical riddle, these countries achieve better results. It is that simple. To win a war, you have to fight in the war. To end poverty, you have to uphold a commitment to stopping it.
Ways to Help Combat U.S. Poverty
When Lyndon B. Johnson called for an unconditional War on Poverty, he declared that no single piece of legislation would suffice. It was to be fought in all corners of state, city, and federal policy. Even if the U.S. government continues to argue over the conditions of this war, there are still ways to put yourself on the front line. If you feel compelled to donate money or time to stopping poverty, the following organizations are committed to triaging the symptoms until elected officials decide to go after the cause:
- Habitat for Humanity: Volunteers spend a day outside, in the fresh air, working with their hands to help build houses for people to need it. No experience necessary.
- Feeding America: The biggest domestic hunger-relief organization in the United States oversees 200 food banks and 60,000 food pantries and meal programs, where volunteers can donate their time and extra food to those who need it more.
- Do Something: Young volunteers work in high-impact projects that connect them face-to-face with those in need. For each project, the organization supplies its volunteers with issue-specific data about the broader problem, and how they are trying to fix it.
