On Poverty

I’ve been here in Quito, Ecuador for 3 days now and it’s really made me think a lot about poverty. Growing up I had a much different perspective on this topic. I thought everyone could get straight A’s in school because I did and helping people through charity didn’t make sense because they should be helping themselves. My, have I changed over time.

When I think about the United States, I think about all the people I know who deride poor people as dumb and/or lazy. It’s their own problem — they should take the “personal responsibility” to solve their problems. But it’s not just their problem, it’s a problem that involves everyone. Increasingly I think there is a problem with the gap between the haves and have-nots in the US. Have you seen the resurgence in the Dow, but unemployment doesn’t budge?? Part of that is companies have learned to deal with less through the recession and with new “technology” it reduces the number of people you need to hire. But also, companies are stockpiling cash and returning it to the shareholders as opposed to some of the people who work on the front-line in the company. As a result, all the CXOs get paid more and more, while the blue-collar workers continue to struggle. Hence, more wealth gets concentrated in the top 5% of society.

For some of my more conservative friends this is no issue — the CXOs worked for their money. But I think the problem happens when society is too skewed and there are not realistic opportunities for those in poverty to move out of it. It reminds me of a Malcolm Gladwell book ( I think Outliers) that talks about the differences between kids from affluent families and those from low-income families. As it turns out, the differences in kids between these groups lies with the summer enrichment that they receive. Whereas kids from affluent families go to summer camps, have books to read at their disposal, etc — kids in low-income families don’t have such opportunities. Basically, poor kids forget more stuff than rich kids over the summer break. For me, that’s where the problem lies — if our rich are too rich and our poor are too poor, then I think society breaks down because people don’t have a realistic chance of making it up the economic ladder. Our country was built on the concept of the “self-made man” — anyone who works hard enough can move up in society. I’m afraid we’re headed the opposite direction.

Coming back full circle, what should we do about poverty? As I sit here in Ecuador, it’s obvious that the poverty here is much different than in the US. Kids in poverty in the Us have a better chance of moving up than kids here. Even so, poverty is prevalent everywhere because it is inevitable in a roughly capitalistic society. Poverty is simply defined as those who live in the bottom 5/10/15% of society. Therefore anyone with the specific goal of eliminating poverty will always fail. You can raise the standards and prospects of people, but there will always be people at the bottom. However, it’s not to say that even though people will always be in poverty that we shouldn’t help them. In fact, I think a lot of people in the US have the mentality that we shouldn’t give a lot of aid to foreign countries — why should we spend money on those who live outside our borders and don’t pay taxes? It’s not realistic to say that we should be helping everyone, but I think we should help more people because while everyone is not a US citizen, everyone is a human. In addition, I understand we need to make sure incentives are aligned so we aren’t the welfare state for the rest of the world. We must help people who want to be helped and make sure they don’t take advantage of our charity.