If the US Government were to give every family living in poverty $100,000.00, how long do you think it would be before the vast majority of those families were right back in poverty? Six months. One year? Not all families living in poverty have the skills to manage money, let alone manage a large sum of it. Even if the government were to take the approach, say, to give the families $5K a month for 20 months, what would that accomplish? Providing financial assistance without a foundation of understanding of debt is like putting a band-aid on a gunshot wound. It does little to stop the bleeding and does absolutely nothing to fix the damage done and heal the wound. Providing money to people that don’t understand how to budget, how to save, and how to invest, is a complete waste of taxpayer dollars.
Now, I’m not here to tell you that $100,000.00 wouldn’t help a lot of families. There are certainly families that would use that money in responsible ways; ways that create long term independence and reliance on their own abilities. There certainly would be families that never find themselves in poverty again. Some families may even prosper far beyond their wildest expectations. But, would it be worth gambling two or three trillion dollars?
Growing up in the 1970s, I heard a lot about Equal Opportunity. Every other conversation in the 1980s was about Afirmitive Action. The dialogue has shifted and for a time, solving income inequality was going to change the lives of everyone living in poverty in America. Now, the conversation is about equity. I find it interesting that people still cling to the hope that some elected group of people is going to solve a problem they have promised to solve for decades, and have not. In fact, I would venture that the Federal Government has accomplished very little with regards to pulling families out of poverty. Why would they want to do that? Doing so would certainly dry up a significant talking point and a sword to swing at everyone with the view that it’s not the government’s place to redistribute income between people.
Take a look at minimum wage, for example. Minimum wage has been increased more than 20 times since it’s introduction, and yet we still have families living in poverty. We are constantly fed the “living wage” mantra. Interestingly enough, if you ask the political class what a living wage is, you’ll get a different answer from every single one of them. When you ask you get numbers thrown out with absolutely no meaning behind them, no research that shows the dollar amount will right the sinking ship. You will not hear a single piece of factual data that shows that any dollar amount will provide long term prosperity for a single person that benefits from the increased wage. It is all temporary, just like the band-aid I spoke of earlier. It does nothing to establish a foundation upon which a person can earn a decent living, support a family, buy a home, etc. Nothing at all.
We often hear about Universal Basic Income. This article is one of many that extolls the virtues of a UBI. I’m not going to sit here and pick this article apart, but what makes anyone think that giving a person any amount of money, even if it were $1,000.00 a month, is going to lead to any kind of long term prosperity. Have we learned absolutely nothing from the past 100 years? There are hundreds of charts and graphs that show the impact of inflation over the past 100 years. Why is $7.50 an hour not enough any more. Are politicians and economists unwilling to tell the truth? Why, when we hear about income inequality, do we not talk about the effects of inflation? Why aren’t we talking about increased consumption? Why aren’t we talking about population growth? Wages, and prices, are not independent. When wages rise, spending increases, and so does demand. When demand increases, prices increase. We have watched this happen since the beginning of the capitalism experiment, and yet everyone acts like it’s some kind of magic trick that you can’t see.
Now, there is one particular part of the article that I will attack.
“Hughes said automation and globalization have destroyed the employment market. They have created a lot of part-time, contract, and temporary jobs. But those positions aren’t enough to provide a decent standard of living.”
I’ll call BS on this. These jobs in automation, globalization, robotics, etc., have created tens of thousands of jobs. Who do you think writes the software that these robots run on. Who do you think does the research and development? Part time jobs? And, so what if some of them are part time. Part time jobs in high tech fields are paying far more than the $7.50 Federal Minimum Wage. For crying out loud, you can make $15.00 an hour at Amazon working in a warehouse. Home Depot here in Issaquah, WA starts you at $16.00 an hour or more. There are so many jobs available that companies can not even fill them. If there is one thing we learned from a government stipend, it’s that once a certain threshold is reached, people simply will not work. They would rather stay home and collect that government check because it is enough for them to live on. If your UBI becomes sufficient for someone to pay for their basic necessities, why would they work?
By the way, let’s say UBI came to pass, and Americans started receiving $1,000.00 a month from the government. That’s the equivalent of $6.25 an hour. Let’s say they now go out and work 40 hours a week at the federal minimum wage and now bring home $1,160.00. Add in the $1K from Uncle Sam and they are at $2,160.00 with no new skills or abilities. Where does this take them? If you’re going to tell me it pulls them out of poverty, I’m going to ask how, and for how long? Some of that money may go into savings, some may be invested, some may be used for education, but the truth of the matter is that if they are already living in poverty, they will need to spend some of that money on the basic necessities. That isn’t going to leave a lot left over for improving one’s life. Oh, and we haven’t even talked about what happens to their tax bracket when their income goes up.
There is only one thing that will help most people reach and maintain a high standard of living, and that is in-demand skills. There are very good jobs available all across the United States. There are websites that offer insight into the future demand of various skills, as well as the income outlook for many jobs. We need to be teaching our youth the skills that are going to lead to acquiring these in demand jobs or even work in jobs indirectly affected by in-demand fields. If you’re young, you need to be educating yourself beyond what the schools are teaching you. You need to talk to an investment advisor with fiduciary responsibilities. You need to learn about the many investment opportunities available. You have to be responsible. You should be bending the ear of people like me that went through the first several decades of their lives, making huge financial mistakes, and learn how we turned it around. Listening to politicians and other people complain and insist that income redistribution is a solution, isn’t going to do you any good at all. They have not solved the problem. They can not solve the problem. They have no interest in solving the problem.
If you have the opportunity to go to school, you should be researching in-demand fields and talking to people in those fields to learn about what they do. You should research as much as you can before settling on a career. If you have an opportunity to attend schools or training sessions, especially if they are offered free or at a significantly reduced rate, you might want to consider it. Often, adult continuing education classes are affordable. There are sometimes classes offered by religious institutions. There are online courses available for almost everything you can think of. There is so much opportunity out there. Don’t let the government and the school system hold you back.
With that said, computer programming and other fields within information technology are in very high demand. There is so much demand that we can’t even hire enough local people to fill the open positions. I work to try to change that. I have been a Software Quality Assurance Engineer for over 20 years and I can not begin to tell you what this career field has meant to me and my family. Software Quality Assurance Engineers don’t have to complete computer science classes. QA is a completely different field. Entry level positions often don’t require extensive computer programming skills. Having even the basic computer programming skills and knowledge of software test automation can set you apart from others entering the field. I offer a 10 week program that introduces students to basic computer programming concepts for $250.00 per person, when I have 10 students sign up for class. This is a $1,000.00 discount off my regular tuition proce. I also offer an 8 week course on Software Testing Automation for the same cost and under the same requirement. If you have any interest in software quality, or software engineering, and you want to find out if it is a field you would be interested in, or even excel in, you owe it to yourself to find out more.