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Are we creating more poor people? | Brunell
There's an ancient Chinese proverb that says, "If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime."
In other words, it is better to teach someone to take care of themselves than keep them dependent on others.
In our country today, the growing tendency is to let government provide for us. Almost lost is the notion that, if people are willing to take risks, work hard and pick themselves up when they fall, they will eventually succeed.
As government grows ever larger in an attempt to provide more benefits to more people, it saps trillions of dollars from the private economy and ultimately deters job creation. When investors and entrepreneurs become targets of derision and are wracked with uncertainty about what the government will do next, they hesitate to risk everything to start a business.
Think about it: Would you mortgage your home and family's future if you feared that a higher tax, new regulation or government-subsidized competitor would wipe you out? Starting or expanding a business is risky in the best of times; trying to do it in an environment of total uncertainty is foolhardy.
Consequently, private-sector growth — and job creation — remains anemic. In the fourth quarter of 2012, our nation's GDP grew at an annual rate of 0.4 percent. It should be eight times that much.
Ironically, the government's campaign to help poor people is creating more poor people.
"About 46 million Americans are poor. That means for a family of four, they're living on less than $23,000 a year," writes Professor Kristin Seefeldt of the University of Michigan's School of Social Work.
Seefeldt found charitable donations for programs that serve the poor declined sharply during the recession and have not yet recovered. Making matters worse, fiscal pressures on government may lead to cutbacks in programs that assist the poor.
"Low-income Americans may prove to be more vulnerable during the slow recovery from the Great Recession than they were at lowest point of the downturn," Seefeldt concluded.
Some 23 million Americans are unemployed, underemployed, or have stopped looking for work because there are no jobs. There are now 4.7 million long-term unemployed in the United States, the largest number since records were first kept in 1948. A record 47.8 million people — 15 percent of the entire U.S. population — use food stamps, a 70 percent increase since 2008.
Even those with jobs are struggling. The median family income has dropped to 1995 levels — so we're going backward. Millions of new college graduates, many of them deeply in debt, can't find jobs in their fields. And our economy is growing too slowly to make a difference.
The Occupy Wall Street folks have it backward. Rather than bring rich people down, we should give poor people a way up. The best way to do that is with good private-sector jobs. Without good jobs, people stay poor. While that may make them a solid voting block for some politicians, it doesn't help them grow stronger and more independent.
Instead of making scapegoats and pitting people against each other, we should nurture success, empower it, reward it, celebrate it — and expand it. We need to create a culture where job providers have a reason to risk everything on new businesses, where people have opportunities to find work and advance in their careers, and everyone can reap the rewards of their efforts.
America has always been a beacon for people seeking a better life. We need to remember what they knew — that with hard work and economic freedom, everything is possible.
Don Brunell is the president of the Association of Washington Business (www.awb.org).