Poverty does not create crime. Unemployment does not create crime. In the past, rather than generating social disintegration, times of economic hardship often strengthened the bonds of family, neighborhood, and community.
We must look to find what it is about our response to poverty today that is different from the way we addressed poverty in the past. What is it that has formed a link between poverty, crime, and social deviance? How was it that, in other times, having no money didnot equate with being in a state of “poverty”? Why do some people recall childhood memories of families pulling together in tightly-knit neighborhoods and then remark, “It wasn’t until years later that I realized we were poor”?
In the past, where indigenous community support structures were intact, economic hardship was considered to be more of a temporary challenge than an inter-generational condition. Established community associations and church-affiliated organizations have historically functioned to give relief to the needy on one-to-one basis. It is only within the last thirty years that an institutionalized bureaucracy has developed to administer programs for the poor, complete with a massive standing base of “dependents.”
Throughout the history of the black community, for example, grassroots associations such as mutual-aid societies provided relief for those who were in need. The first of these organizations was the Free African Society founded in Philadelphia in 1787, the members of which contributed one shilling a month for distribution to the needy, with the stipulation that “this necessity is not brought on them by their own imprudence.” Throughout the 1800s, mutual-aid societies multiplied throughout the North, and by the 1830s, one hundred such organizations were functioning in the city of Philadelphia alone, with an average membership roll of seventy-five. Mutual-aid societies were also a main source of support for blacks in the South, in spite of obstacles of laws that prohibited blacks from assembling. At the end of the eighteenth century, in addition to providing relief for the needy, these mutual-benefit societies and black churches maintained their own schools. As early as 1790, the Brown Fellowship Society provided educational facilities as part of its mutual-welfare program.
Material Poverty vs. Behavioral Poverty
As the federal welfare system took on the roles that had formerly been fulfilled by indigenous community associations and churches, a major shift occurred. Whereas nearly all previous aid to the poor involved reciprocity, a contribution of work on behalf of any able recipients and a balance of rights and responsibilities, many of the regulations within the federal welfare system actually functioned as disincentives regarding work, savings, and movement toward self sufficiency.
For example, because rates of rent for public housing are calculated as 30 percent of the household income, as residents make economic progress they are, in effect, penalized for any increase in income. Without a cap on rents, in some cases payment demanded for public housing units rose above market rates. In addition, regulations stipulated that welfare recipients could have no more than $1,000 in savings. In one recent case that made headlines, this meant that the mother of a young girl who had taken a part-time job to save for college was fined three times the amount that her daughter had managed to save, and the family was threatened with the termination of all welfare benefits.
Whether or not such regulations were consciously intended to limit the upward mobility of those in the system, they have, in effect, produced a steady “client base” for what has become a literal “poverty industry.” To date, of the more than $5 trillion that has been poured into anti-poverty programs and agencies, only thirty cents of each dollar has made it to the hands of the poor. Seventy cents of each dollar has been absorbed by those who “serve” the poor. It is not surprising, therefore, that the system itself has been reluctant to embrace reform.
The thirty-year rein of the Poverty Pentagon has taken its toll on a deeper level than financial stagnation. The system has usurped and weakened the natural indigenous support structures that had existed within low-income communities, such as the family and neighborhood associations. What began as material poverty has evolved now to include, also, a spiritual poverty: a sense of hopelessness and rootlessness.
As a steadily growing barrage of programs was generated from “needs analyses” of low-income neighborhoods, a “welfare class” came to be identified with its deficiencies and was viewed as an isolated, dependent population. Tragically, this “ethos of dependency” penetrated the mindset of many of the welfare recipients themselves, and, surrendering to the regulations of the system, many households found themselves in a cycle of inter-generational dependency.
Who Benefits from Programs for the Poor?
There is a danger in trusting the labels of programs or agencies that purport to serve the “disadvantaged” or poor children. Statistical “portraits” of the poor and minorities have been continually used to justify trillions of dollars in funding. Yet, as I noted earlier, the lion’s share of such funds has been absorbed by a massive bureaucracy of administrators and service providers.
At the same time, under the false assumption that all members of minorities are equally “disadvantaged,” programs and policies have proliferated which have benefited, primarily, blacks in the upper and middle income brackets.
With a massive funding stream at stake, various power centers have struggled to maintain “ownership” of poverty-related problems. A virtual poverty industry has now been built on the backs of the poor in which process alone—without regard to product—has been rewarded. Programs and agencies have received funds in proportion to the numbers of clients they hold as dependents rather than the number they have successfully boosted to self-sufficiency.
But our nation’s thirty-year $5 trillion anti-poverty campaign should be evaluated primarily in terms of its outcome—the extent to which it has facilitated the efforts of low-income people to achieve independence. An outcome-based analyses of the facts show that our current approach to poverty has been a dismal failure. Although welfare spending (in constant, inflation-adjusted dollars) has skyrocketed by nearly 800 percent from 1965 to 1992, there has been no significant reduction in our nation’s poverty rate since the War on Poverty was launched.
Restoring A Natural Support Structure
A true program for reform must go beyond tinkering with various regulations within the system and must look to restoring the functions of the indigenous supporting institutions that exist within low-income communities. Throughout the past three decades, these institutions have been severely weakened. The task of revitalizing the “natural immune systems” of low-income neighborhoods is one that will involve effort, investment, and support rather than benign non-interference.
In addressing the problems of poverty, there are a number of reasons why indigenous activism can succeed where government intervention has failed. First of all, residents of an afflicted community have a firsthand knowledge of the problems, an understanding of the indigenous resources that can be implemented in their solution, and a personal stake in the success of efforts to solve those problems. Second—and most important—community leaders have proven that they are able to address the problems at their root, rather than simply practice damage control.
The majority of the problems that confront us today—high rates of crime, teen pregnancy, school drop outs and drug abuse—are matters of behavior, the results of choices made in the absence of a clear set of guiding values. As a former health commissioner of Washington, D.C. once said, “Thousands of black and Hispanic youths die each year because of the choices they make and the chances they take.” Throughout the nation, grassroots leaders have provided living examples of the values they espouse, and they are proof that it is possible to lead a life of moral integrity, regardless of economic hardships. Through their consistent example, community activists have had the unique capacity to change not only the behavior of youths in their neighborhood but to catalyze an internal change of heart, which results in not merely rehabilitation but conversion among those they serve.
Applying Market Principles to the Social Economy
Currently, America is a nation of two economies. The larger society functions under basic market principles under which innovation thrives and rewards are allocated with regard to outcomes and efficiency. Yet, isolated from this world, another portion of the American population has been trapped on the treadmill of a command economy, held hostage to the poverty industry that has been immune from outcome-based evaluation. This dualism must be ended, and market principles must be applied as we address the problems that confront low-income Americans.
In many cases, simply allowing competition and breaking down the barriers of government regulations will be enough to open realms of opportunity that were previously not accessible to the poor. The Davis Bacon Act, established in 1931, for example, has effectively taken lesser-skilled workers out of competition for construction jobs that are federally subsidized, ruling that all workers be paid “prevailing,” i.e., union wages. When construction companies that are contracted for this work are forced to pay top-dollar wages, they naturally opt to hire highly skilled union workers. This bill, which was unabashedly discriminatory at its inception, continues to this day to block many minority workers and young laborers from desperately needed job opportunities.
Many states are now blazing trails to tap the skills and talents of residents of their low-income communities. Through creative initiatives they are beginning a counter attack on dependency—producing policies by applying strategies of empowerment and devolving authority and resources directly to the people. In Virginia, for example, Governor George Allen has proposed initiatives which would allow the poor to build assets while reducing government expenditures. In one initiative, multi-layered subsidies that had been awarded to developers and syndicates were eliminated, and the state was able to free 84,000 households of the working poor. One mother of two children, working on a poultry farm on Virginia’s eastern shore, used this tax savings in conjunction with Virginia’s Homestart benefits to pay the down payment so that she could become, for the first time, a homeowner.
Governor Allen has also sought ways to tap the energy and skills of low-income citizens to perform building rehabilitation and plumbing installation in their communities that had previously been given to contractors. This move not only provides newfound employment opportunities for the poor, but also saves taxpayers’ money. In the small Appalachian town of Ivanhoe, for example, residents have bid to perform basic plumbing jobs for costs of $6,000 to $8,000. Comparable jobs by union professionals had previously cost the state.
These and similar initiatives that look toward low-income communities in terms of their capacities rather than their deficiencies hold the key to productive budget cuts and a win-win situation for all citizens. Indigenous to every neighborhood in this nation are individuals with the talent, energy, and will to do more with less. It should be the government’s role to support and facilitate their efforts.
