Solutions to Poverty

by Vins

Poverty is often seen as an issue that affects other countries but not the United States. However, as Dean Paton reports for YES! Magazine, in 2012, over 46 million Americans —including over 21% of the nation’s children—live below the standard U.S. poverty line of $23,492 per year for a family of four. Summarizing figures from Hedrick Smith’s Who Stole the American Dream?, Paton writes that, between 1945 and 1973, “U.S. workers’ productivity grew by 96 percent, and they were rewarded with a 94 percent increase in their wages.” By contrast, between 1973 and 2011, “U.S. workers’ productivity grew by 80 percent, yet those evermore-productive employees saw only a 10 percent increase in their wages.” In brief, “capitalism grows wealth faster than wages,” resulting in increasing inequality between the wealthy and everyone else. Yet, as Paton, also stresses, poverty is not inevitable. His article in YES! outlines a series of systemic solutions to addressing poverty.

One very obvious thing to do is tax the rich more, a solution advocated by French economist Thomas Piketty in his surprise bestseller, Capital in the Twenty-First Century. Piketty has advocated taxing salaries over $500,000 at 80 percent, and taxing wealth at 15 percent, for example.

Another solution is to offer jobs to everyone. As Patton reports, analysts like Hedrick Smith advocate a “domestic Marshall Plan,” in the form of a public-private partnership to generate five million new jobs that would focus on rebuilding aging infrastructure, including the nation’s bridges, highways, and rail corridors.

A third solution, the most simple, is to raise the minimum wage. In a related article, the YES! editors report on the city of Seattle’s passage of a $15 per hour minimum wage, the highest in the nation, and the anticipated benefits of this new ordinance.

Paton’s article also cites “bottom-up” solutions emphasized by figures like Gar Alperovitz, professor of political economy at the University of Maryland, and author of What Then Must We Do? Bottom-up solutions include: worker ownership in the form of profit-sharing programs, traditional co-ops, land trusts, and the potential of transforming private banks into public utilities.

Although corporations presently control a great deal of power, Paton observes that “ideas for democratizing wealth exist now, all of which can start small and scale up to large, even national enterprises that provide well paying jobs” and, ultimately, building political power.

Source: Dean Paton, “Why Poverty Is Not Inevitable,” YES! Magazine, August 21, 2014, http://www.yesmagazine.org/issues/the-end-of-poverty/why-poverty-is-not-inevitable.

Student Researcher: Deysy Rojas (Sonoma State University)

Faculty Evaluator: Peter Phillips (Sonoma State University)