Jobs combat poverty; over-regulation discourages businesses and jobs

Magatte Wade was born in the West African nation of Senegal, was educated in Germany and France, then came to the U.S. She is a frequent speaker at business conferences and college campuses, including Harvard, Yale, Columbia, Cornell, Brown, Dartmouth, MIT, and Wharton. She has started businesses and with her husband is working to create schools in Senegal.

Part of one of her addresses featured on YouTube dealt with how not to be poor. What she said to her audience is a good lesson for everyone.

“People are poor. Why are you poor?” She answered, “you're poor when you don't have enough money to meet your basic needs.” 

And then, the big question: “Where does a source of income come from for most of us?” The answer is, as former Vice President Joe Biden famously said: that three-letter word: ‘JOBS.’

This is not a bolt from the blue to most of us, but to her audiences in colleges and in her native Senegal, this solution may not be so obvious. In fact, some of her audiences responded that jobs actually come from government.

Yes, she responded, some jobs are provided by government. But where does government get the money to pay its employees?

“It comes from taxes. People who work, employees; people who hire them, the companies and employers, pay [taxes] so that we in turn pay these government people.”

So, “we're back to commerce … we're back to business.”

“So I say,” Wade continues, “okay, if ‘jobs’ is the solution to this massive, massive problem we have out there of poverty, then don't you think that maybe we should try to think about where jobs come from?”

If jobs are the answer, and jobs come from entrepreneurs, businesses, “then don't you think that we should really try and pay attention to what type of environment those businesses get to operate in,” Wade asked?

What a concept! Since businesses large and small provide the jobs people need to avoid poverty, and enable workers to pay taxes, and pay taxes themselves to support the government, let’s be careful about the environment that we create for businesses.

In America, it should be easy for someone with a new idea or just the drive to start a business that will provide goods or services, and hire some people to work in it, so long as it follows reasonable laws and regulations. The operative word is, “reasonable.”

Far too often, this is not easy, and sometimes impossible. 

Writing in Business Insider, Michael Snyder addresses this issue. “Small business in the United States is literally being suffocated by red tape. We like to think that we live in ‘the land of the free,’ but the truth is that our lives and our businesses are actually tightly constrained by millions of rules and regulations.” 

“Today there is a ‘license’ for just about every business activity,” Snyder adds. “In fact, in some areas of the country today you need a ‘degree’ and multiple ‘licenses’ before you can even submit an application for permission to start certain businesses.” It gets worse. “And if you want to actually hire some people for your business, the paperwork nightmare gets far worse. It is a wonder that anyone in America is still willing to start a business from scratch and hire employees.”

“The truth is that the business environment in the United States is now so incredibly toxic that millions of Americans have simply given up and don't even try to work within the system anymore.”

To put the regulatory issue into perspective, the Federal Register is where federal rules are catalogued. The number of pages in it was about 2,600 in 1936. That’s a lot of pages of rules, but it pales in comparison to the calendar year of 2016, when the number of Federal Register pages stood at 95,854.

Certain variables factor into this: Some rules take more pages than others, and page size is also important. However, most novels have 250 words per page, and a really long novel has 425 pages. At the end of 2016, the Federal Register had as many pages as 225 long novels, and 383 normal-sized ones.

President Donald Trump has implemented efforts to reduce regulations by signing an executive order on Jan. 31, 2017 for the agency requesting a new regulation to cut two older regulations.

A Daily Caller story said that the Trump administration “reported $23 billion in savings from 176 deregulatory actions in fiscal year 2018. Even more consequential, the administration has issued 65 percent fewer ‘significant’ rules — those with costs that exceed $100 million a year — than the Obama administration, and 51 percent fewer than the Bush administration, after 22 months in office.”

That’s a start, but a lot more needs to be done to give Americans the freedom and ability to start a business or get a job.

A final word from Magatte Wade: “Not living up to our potential is a failure for which the only person who can possibly be responsible is oneself.“

She’s right, of course, but things like over-regulation make that much more difficult for even those who are determined to succeed.

Federal welfare programs give freely and demand little

Americans, it is said, are the most generous people in the world. We give to our friends and neighbors and fellow countrymen when they need help, of course, but we also help those who live thousands of miles away in other countries.

We are quick to provide a “hand up” to Americans in need, to help them over rough spots and get them back on their feet so that they can then take care of themselves. There are those who for various reasons are unable to help themselves, and we don’t mind continuing to provide assistance for them.

The hand up is sometimes called a “safety net,” a device to save those truly in need from falling into despair. But for many the safety net has turned into a hammock, no longer a device to help out in an emergency or time of trouble, but an easy way of life for those who would rather let others provide for them than provide for themselves.

This is sometimes a matter of availing themselves of a good opportunity, while at other times it is a matter of culture: Far too many Americans have been taught through actual experience that it is not so difficult to live off the government and charitable interests.

A friend taught a class in the 80s in a junior high school whose student body had a not-so-good reputation for academic achievement. He told the story about his first six-week grading period, using a grading system that was designed to reward honest effort as much as a grasp of the subject matter to get a passing grade. Of the 37 students in his class, half failed; only a few earned decent grades.

When he asked them how they were going to survive after they grew up and were on their own, if they were unable to get a passing grade in a class designed to guarantee passing if you just made an honest effort, one of the students said: “Well, Mr. Smith, I’m going to do like my parents: be on welfare.” That career choice surprised him, and so did the agreement of many of the other students.

This situation, mirrored in towns and cities across the nation, is the result not of the “hand up” efforts of caring Americans, but of hammock-like government welfare programs, which give much but demand little.

President Lyndon Johnson declared a War on Poverty in the January 1964 State of the Union address. “This administration today, here and now, declares unconditional war on poverty in America,” Johnson stated.

His actual stated goal was not to prop up living standards artificially through an ever-expanding welfare state, but instead to strike “at the causes, not just the consequences of poverty.” Ultimately, he wanted “not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” A noble goal, as so many government initiatives are, at least at first.

Twenty years ago, another president pledged to “end welfare as we know it.” On August 22, 1996, President Bill Clinton filled a campaign promise by signing welfare reform, the Personal Responsibility and Work Opportunity Act, into law.

This time there were new wrinkles: after two years of receiving benefits, welfare recipients would be required to work, and incentives were removed that encouraged having children out of wedlock and breaking up families to get benefits. There was also a five-year lifetime limit on total time of receiving benefits without working.

How have these programs worked out? Familyfacts.org reported in 2012, “Total federal and state welfare spending has increased more than 16-fold since 1964. Even since the 1996 welfare reform replaced Aid to Families with Dependent Children (AFDC) with the Temporary Assistance for Needy Families (TANF) program, spending has increased by 76 percent and by more than 20 percent since 2008.”

President Obama, the Washington Examiner reports, “took the Great Recession as an opportunity to get as many households as possible into the food stamp program, an important part of his stimulus package. One result was that the number of able-bodied adults with no children who receive food assistance doubled.”

Because the value of food stamps and welfare payments are looked at as income, the overall poverty rate has not changed much since the War on Poverty began. However, both the number of Americans on welfare and total welfare spending have soared.

The goal should be to reduce both poverty and welfare spending. Two states, Kansas and Maine, have implemented a requirement for able-bodied childless adults to work for food-stamp benefits, and the results are impressive.

In Maine, 80 percent of those affected by the requirement left the food stamp program, and in Kansas, the total of those affected dropped 75 percent very quickly, and 60 percent had work within a year, according to the Examiner.

When it was easy to stay home and collect food benefits, many were happy to do so. But when required to work, these recipients quickly got out of the hammock and went to work, abandoning government support.

People are often content to do as little as possible, but will do what they must.

Government is a poor mechanism for correcting societal problems

Most Americans think that helping truly needy people, whether they live here or in some other country, is a worthy objective. Looking at charitable contributions as a benchmark, Americans are the most generous people in the world, giving $316.23 billion to charitable organizations in 2012, about 2 percent of GDP, according to Charity Navigator, and preliminary figures for 2013 indicate a significant increase to $328 billion.

Double those numbers and it still would not be good enough for the federal government, which believes that if private sources don’t relieve every semblance of suffering for every single suffering American, the government must step in and do the job better.

Except that government can’t do it better, never has, and never will.

Government’s failure to achieve better results than normal people doing what normal people do has never been a deterrent to wasting billions of taxpayers dollars in a futile effort to try one more time to do so.

The most notorious failure was Lyndon Johnson’s “War on Poverty” which began 50 years ago in Mr. Johnson’s State of the Union message. From the beginning of the war on poverty until 2013, local, state, and federal spending on welfare programs totaled $16 trillion, according to data from the U.S. Census Bureau. Currently, the United States spends nearly $1 trillion every year to fight poverty.

When the War on Poverty began, 33 million Americans were in poverty and the poverty rate was 19 percent. Today, approximately 46.5 million live in poverty and the poverty rate is 15 percent. Even though the poverty rate is lower than 50 years ago, because our population is much larger now than then, more people are poor today than in 1964. We have fought a long and expensive fight, and lost. Yet we still fight on.

President Barack Obama’s cause du jour is income inequality, and it’s significant other, the minimum wage. And now that “reforming” the best healthcare system in the world is well underway, he wants to declare war against income inequality.

In no free or relatively free economic system can there be income equality, for two reasons. First, inequality is a fundamental part of life. Some people sing better than others. Some are better athletes than others. And some people make more money than others, and that’s because some people are better at their job than others and deserve higher pay, and some jobs require more skill and training than others, and pay better.

So, like poverty, another area that will always exist, we will always have income inequality.

Far more important, however, is whether there is the opportunity to move up from the lower income levels, and that is an area that has been fairly stable, according to The New York Times, which reported last month that “the odds of moving up — or down — the income ladder in the United States have not changed appreciably in the last 20 years….”

That means that people in the lowest quintile are not condemned to stay there, and people in the top quintile are not guaranteed to stay there, and there is substantial movement in and out of all quintiles.

It’s a favored piece of envy politics that the rich get richer and the poor get poorer. But the data tell a different story. From 1967 to 2009, the real mean household income increased for every quintile, which means the poor became richer, not poorer. Americans in poverty could afford more goods and services in 2009 than in 1967, according to U.S. Census Bureau data.

Other factors, like where people live, have an effect. Harvard University’s Raj Chetty reported “the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4 percent in Charlotte but 12.9 percent in San Jose,” and factors such as better primary schools and greater family stability also aid upward mobility, he wrote.

Larry Kaufmann, senior advisor at Pacific Economics Group, discussed findings of the Pew Charitable Trust, which showed that “Half of children born to parents with bottom-third income levels experience upward relative mobility when the parents remain continuously married; the figure falls to 26 percent when this is not the case,” he wrote.

The Pew study shows that the poverty rate among married couples is only 6 percent, and among married couples who both have full-time jobs the poverty rate is practically zero. The poverty rate among single dads and single moms, however, is much higher: 25 percent for single dads and 31percent for single moms.

Investor’s Business Daily Senior Writer John Merline notes that income inequality has increased faster since Mr. Obama took office than under any of the three previous presidents, and that inequality is now greater than at any time since the Census Bureau started recording it back in 1947.

The message from this is that to assist folks in moving up the income ladder, Mr. Obama should replace his administration’s policies that impede economic recovery, and seriously encourage the restoration of family values among Americans. That would accomplish far more than making people think they are victims, and fomenting division among Americans.

Progressivism transforms “welfare to work” to “welfare to not work”

Millions of Americans get some kind of financial support from the federal government. Some of them have earned it (Social Security and retirement recipients), some of them really need it (the poor and disabled), some need it temporarily (like those who can’t find a job in the non-recovering economy) and some don’t really need it, but get it anyway.

The widely reported number of Americans in poverty is 46.2 million, about 15 percent of the population. July’s Household Survey revealed that 11.5 million were unemployed; 2.4 million will work but aren’t actively looking; and 8.2 million wanted full-time work but could only a find part-time job. And the Civilian Labor Force Participation rate was a very low 63.4 percent.

Yet CBS News reported that a survey of 2,000 employers showed one-third of them said lots of jobs go unfilled for three months or more. Many of the roughly three million unfilled jobs are in skilled trades and pay good wages, making one wonder about the current “everybody needs a college education” mania that now grips the country.

Another reason that good jobs go unfilled is that the federal government’s assistance programs make it easy to not work, and frequently pay more than some jobs.

The Cato Institute’s Michael Tanner, writing in the Los Angeles Times (Online) notes that, “Contrary to stereotypes, there is no evidence that people on welfare are lazy. Indeed, surveys of welfare recipients consistently show their desire for a job.” Yet the “U.S. Department of Health and Human Services says less than 42 percent of adult welfare recipients participate in work activities nationwide,” he continued. “Why the contradiction?”

“Perhaps it’s because, while poor people are not lazy, they are not stupid either,” he writes. “If you pay people more not to work than they can earn at a job, many won’t work.”

In looking at federal assistance programs, Mr. Tanner noted that most reports on welfare focus on only a single program, the cash benefit program, Temporary Assistance for Needy Families. But he explained that “focusing on this single program leaves the impression that welfare benefits are quite low, providing a bare, subsistence-level income.” However, most get assistance from more than one of the federal government’s 126 separate programs for low-income people, 72 of which provide either cash or in-kind benefits to individuals.

In order to analyze how the federal assistance programs affect recipients, the Cato Institute created a hypothetical family consisting of a mother with two children, ages 1 and 4, and then calculated the combined total of seven of the most common benefits that the family could receive in all 50 states.
In Washington, D.C., and Hawaii, Vermont, Connecticut, Massachusetts, New York, New Jersey, Rhode Island, Maryland, New Hampshire and California, that group of seven programs provide benefits worth more than $35,000 a year. The value of the package in a medium-level welfare state is $28,500.

Since welfare benefits are not taxed, to put the benefits issue in perspective the Cato study calculated how much pretax income the family would need to earn in order to provide the same amount as a 40-hour-per-week job. This calculation took federal and state income taxes, earned income tax credits and the child tax credit into account.

The study found that welfare pays more than an $8-an-hour job in 33 states and the District of Columbia, and that in 12 states and the District of Columbia welfare pays more than a $15-an-hour job. And, in Hawaii, Massachusetts, Connecticut, New York, New Jersey, Rhode Island, Vermont and Washington, D.C., welfare pays more than a $20-an-hour job.

Comparing the results with specific jobs, the Cato study found that in California and 38 other states, it pays more than the starting wage for a secretary and in the three most generous states, welfare benefits exceed the entry-level salary for a computer programmer.

While not every welfare recipient gets these seven benefits, many do, and some receive even more than the package used by the Cato study. “Still,” Mr. Tanner concludes, “what is undeniable is that for many recipients in the most generous states — particularly those classified as long-term recipients — welfare pays substantially more than an entry-level job.”

Welfare is supposed to be a temporary thing for most recipients, not a career. Yet in many cases able-bodied men and women do not look for work because they can do better on welfare.
Such a system discourages people from taking responsibility for themselves and their families. It creates a large faction of government dependents; a status that deprives people of self-respect and the pride of accomplishment that results when one succeeds in life because of their own efforts.

Even a low wage job is better than welfare, as it often is only a first step to better jobs. U.S. Census figures show that only 2.6 percent of full-time workers are poor, while 23.9 percent of adults who do not work are poor.

This country became what it once was not by millions depending upon government to feed and clothe them, but by Americans making themselves successful through determination and hard work. That is the goal our welfare system must have.

My country tis of thee; land of dependency; what’s happening?

CNN Money reported in April that “more than one in three Americans lived in households that received Medicaid, food stamps or other means-based government assistance in mid-2010,” citing a study by the Mercatus Center at George Mason University.

“Some 26 percent of Americans lived in households where someone received Medicaid, while the figure was 15 percent for food stamps,” the report continued. “Those programs were by far the largest of the safety net.”

And, when Social Security, Medicare and unemployment benefits are included, nearly half of the nation -- more than 148 million Americans – lived in a household that received a government check, the CNN Money report continued.

It is shocking enough that so many of us get some form of government support – although Social Security and Medicare recipients are receiving money they paid into the system – but most stunning is that the price tag for all of that support hit the $2 trillion mark for fiscal 2010 and that the 2010 figure is nearly 75 percent higher than ten years ago.

Government Gone Wild reports that 41 percent of all births and 60 percent of all elderly long-term care is paid for by government, and that one out of three Americans lives in a household that receives food stamps, subsidized housing, cash welfare or Medicaid.

The food stamp program has been given the stigma-free title “SNAP” (Supplemental Nutrition Assistance Program) and the government now spends our tax money advertising food stamps to attract even more takers.

And, according to Judicial Watch, as part of the administrations’ campaign to eradicate “food insecure households,” the U.S. Department of Agriculture (USDA) awarded what the Oregon Department of Human Services (DHS) called a $5 million “performance bonus” for ensuring that Oregonians eligible for food benefits receive them and for its “swift processing of applications.”

It is the fifth consecutive year that Oregon has been recognized by the federal government for “exceptional administration” of the entitlement program, according to the DHS new release. One of every five Oregon residents receives food stamps, 780,000 in all, and that is 60 percent higher than in 2008.

And then there are unemployment benefits, at one point lasting up to 99 weeks – nearly two years. Even in times of high unemployment there are jobs available, but generous benefits provided for an extended period dulls the incentive for people to look for work, or even to start up their own business to earn a living.

The owner of a temporary staffing agency told a Florida newspaper that some prospects just aren't interested in working; they'd rather pick up unemployment checks. Other sources say many of those out of work feel it would be silly to take a job that pays less than the unemployment benefit, while some are comfortable waiting until the “right” job comes along to go back to work or wait until benefits have almost run out to look for work.

Programs that are supposed to provide temporary assistance for people in poverty or out of work have turned into long-term welfare programs that are so generous that they remove the incentive to earn one’s own way from those they are intended to help and turn them into dependents.

President Barack Obama reminded a campaign audience recently, “We’re the country that built the Intercontinental Railroad [yes, that’s what he said], the Interstate Highway System. We built the Hoover Dam. We built the Grand Central Station.” He’s correct about that. Well, not about the Intercontinental Railroad. But America accomplished those great things through self-reliance and positive ambition; it wasn’t done with only about half of us paying taxes to support the federal government while one-third received support from the federal government.

Tax payers are the ones who fund these federal support programs, but Government Gone Wild reports that while the number receiving these benefits is on the rise, the number of tax payers is falling. During Ronald Reagan’s administration only 19 percent of households didn’t pay any federal income tax, under Bill Clinton it jumped to 25 percent, it rose to 30 percent under George W. Bush, and under Barack Obama it has jumped to 47 percent.

A warning about what results from providing too much help to people is making the rounds on the social medium Facebook. It appears in the form of a photo of a newspaper clipping that reads: “The Food Stamp Program, administered by the U.S. Department of Agriculture, is proud be distributing the greatest amount of free meals and food stamps ever. Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us to ‘Please Do Not Feed the Animals.’ Their stated reason is because the animals will grow dependent on handouts and will not learn to take care of themselves.”

America is fast becoming a nation of dependents, and that is dangerous for two reasons. First, we simply can’t afford the cost of supporting so many people. But perhaps more important, continuing to rob people of the incentive to provide for themselves through over-generous government benefits is weakening the strong spirit of individualism that made this nation great. We need more, not less, of that.

AP believes nearly half of Americans are now poor or close to poverty

Last month a story by the Associated Press told the nation that nearly half of the country is living in poverty, or on the edge of it: “Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.”

Can’t you just hear the astonishment expressed over this horrible development? “Things are so bad in America that nearly half of us are poor or almost poor.”

Poverty: the word conjures up images of people living on the streets or under bridges, with ragged clothes, begging for food. Or a family of ten crowded into a 3-room apartment or a dilapidated trailer. That is the picture of poverty. But for the vast majority of those that are the subject of the AP story, conditions are much, much better than that. Nevertheless, some folks accept this awful scenario without question, because it fits into their view of America as a deeply flawed country that ignores the needy and must be fundamentally transformed.

True, the protracted and anemic Obama recovery has had terrible effects, as anti-business policies create uncertainty about the future, which keeps people unemployed, causes some businesses to impose cut backs while others are forced to shut down completely. However, even in the throes of the ghastly Obama economy, half of us are not in or near poverty. At least not true poverty.

In order to get close to the shocking 50 percent threshold, the AP had to double-down on the poverty levels by adding in those earning up to twice the poverty level, then describe these people as “scraping by” as low income earners. There are 49.1 million people whose earnings level classifies them as in poverty. That’s a lot of people, but it is a long way from 50 percent, only about a third of that number.

To truly shock people, a 16 percent poverty rate just won’t do; the number must be much higher. So, by adding in the 97.3 million classified as “low income,” which is the group at 100 to 199 percent of the poverty level, that adds another 31 percent to the total, and gets pretty close to one out of two Americans.

The purpose here is not to diminish the dire existence of truly poor Americans, but to bring honesty into the discussion.

I have written before about how “normal” the lives of many of those in the “poor” half of the population are, using government data that show that the typical poor household has a car, air conditioning, cable or satellite TV service, not one but two color TVs, a VCR and a DVD player, and kitchens equipped with a refrigerator, a range and a microwave.  Half of them have a home computer and a third have a widescreen TV, and one in four has a digital recorder.

It is a positive aspect of the capitalist system that the price of products becomes more affordable over time, enabling more and more of us to acquire things we want. However, it is a truism that truly poor people cannot afford to purchase such unnecessary items at any price.

The anti-capitalism folks on the Left want you to believe that despite having these modern conveniences, poor families still are deprived of basic needs, like food and housing. If this is true, doesn’t that beg the question of why these families spend scarce dollars on non-necessities instead of on food and better housing?

But, as the Heritage Foundation explains, the truth is that half of the people addressed in the AP story live in single-family homes and 40 percent live in apartments. Their residences are not overcrowded and for the most part are in good repair. “Poor Americans, on average, live in larger houses or apartments than does the average, non-poor individual living in Sweden, France, Germany or the United Kingdom,” Heritage’s Robert Rector and Rachel Sheffield wrote in September.

But what about the children, the one in four who go to bed hungry every night? Well, as it turns out, that, too, is untrue. Heritage reports from Department of Agriculture data that “96 percent of poor parents stated that their children were never hungry at any time during 2009, despite the severity of the recession.”

It is nothing short of despicable, and maybe it ought to be illegal, to attempt to convince the American people that half of us are in poverty or in dire financial circumstances when that is provably untrue. We can only guess at the motivation of the Associated Press in perpetrating this fraudulent picture of life in the United States. Playing such games – exaggerating the conditions and the numbers of poor – benefits some, but it does not benefit the poor.

It’s an attempt to soften us up and make us more willing to support starting new government programs or expand existing programs to help the poor, and it shifts the focus away from other serious cultural problems, like the collapse of marriage and the family, and the erosion of the work ethic.

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