"The poor will always be with you," once said a very wise man. So why try to do anything about it? Well, that's the pessimist view, but I believe people have a responsibility to help those that are less fortunate than themselves. I used to just assume that anyone who worked hard would be able to get ahead in life, but after reading a book recently, I've questioned that presumption.
Nickle and Dimed: On (Not) Getting By in America came out 18 years ago, so I'm a little late to this particular party, but it is still relevant today. The author, a prominent writer with a PhD and no shortage of money, decides to see if she can live on an entry-level low wage job. She spends a month in three different areas of the country, waitressing, working as a maid at a cleaning service, and working at Wal-Mart. In each state, she finds a place to live and then pays her rent and feeds herself on around $7 an hour.
I'm not saying this book was the quintessential work of investigative journalism. I definitely have my reservations about the author, her attitude, her beliefs, and her agenda. But the fact remains that it is downright difficult, if not completely impossible, to support a family on these kinds of low wages without some kind of help or assistance. I think that there are three pillars of support - individual, faith-based, and government. This essay is regarding the government leg of the stool. We can argue all day about the proper size of this goal, or whether or not it should exist at all, but the fact of the matter is that it already does, so I'll save that debate for another day and focus on how we can do better with the money we already spend.
My main takeaway from the book centered around relocation. Since the author was only staying for a month in each location, she couldn't sign a full year lease. This caused her to stick with monthly rentals or weekly rentals (and sometimes nightly rentals at motel rooms). This solution cost her much more each month than a yearlong lease would have been, but they also had a few things in their favor. First, there was usually no security deposit. Second, no first and/or last month's rent due in advance. Third, utilities were often included.
All of this combined means that to move into a new apartment requires a significant amount of money up front. A lot of people might have trouble scraping together the kind of cash required for utility deposits, security deposits, and an extra month of two of rent, and this limits not only their mobility, but also their ability to keep costs down over time by moving into cheaper housing arrangements than a short term rental. These short term rentals also had the downside of being dirty, dangerous, and lacking any way to prepare food. That last point also meant that the author was constantly resorting to eating fast food, rather than cooking for herself.
Which bring me to my idea. I propose a new government program, perhaps replacing or consolidated into housing subsidies or TANF, that focuses on "jump starting" people who are ready to move to a new region and start over but who lack the means to do that. Let's call it the Bootstrap program. You would get one bootstrap every ten years, and you could also transfer your Bootstrap to a friend or family member. What is a Bootstrap? The idea would be that you would have to move to a new area with job opportunities to qualify. No heading just up the road either - there would be a mileage requirement, too. The program would work on a vendor reimbursement basis, where you had the company bill the government. Your bootstrap would include the following:
- one "you haul it" rental (up to $500)
- gasoline and tolls (up to $100)
- groceries (up to $200)
- clothing allowance (up to $100)
- first month's rent (up to local housing rates)
- security deposit (reimbursable to the government)
- utilities deposit (reimbursable to the government)
In practice, this would all work out something like this: an individual or a family would wake up one day and realize that their town had nothing left to offer economically. Jobs are gone, crime is high, and things are just not looking up. They decide to make a fresh start a few cities or states away. They activate their Bootstrap, and are able to rent a moving truck and get themselves a to new place. They are able to move into an apartment with no up front costs. They are able to fill their refrigerator with groceries. They are able to get some new clothes for interviews. They have a month to apply for jobs and start working without needing to worry about starting off in debt.
Now the magic questions are, how much would this cost, and who is going to pay for this?
Let's start with cost. This would be open to any between the ages of 18 and 62 (when you are eligible for Social Security). According to the Census Bureau, there are 191 million people in this age range right now. Based on my list above, I'd say each bootstrap would run approximately $3000 depending on location. That comes to a maximum cost of $573 billion. If you figure that you only get one of these every 10 years, that means an average of 10% of the eligible population might use it each year. So figure $58 billion annually. You could also kick out anyone who made over a certain amount of money any time in the past few years. Then you have to figure a number of people just wouldn't use the benefit because they don't need it (though transfers are allowed, so that mitigates this a bit). If the deposits go back to the government, you could recoup another significant chunk of money. I figure all in you're looking at around $40 billion or less a year.
That's still quite a bit of money. Not an easy pill for a conservative or a libertarian to swallow.
But let's look at the benefits. Right now, New Mexico has one of the highest unemployment rates in the USA (49th place). Many of these people would probably love to move to Colorado (10th place), if only they had the chance. A few hundred thousand newly employed people, and now you have a boom in Colorado bringing in more tax revenue. Not only that, but you have to figure that many of these people were on welfare back home to begin with. How much money could you save by moving people off these programs through new jobs in a new city? My guess: a significant amount.
Let's take housing, for example. In 2014, the federal government spent $18 billion on the Housing Choice Voucher program, $12 billion on Project-based rental assistance, $7 billion on the Low-Income Housing Tax Credit, and $7 billion on public housing. That's almost $50 billion right there. I imagine that quite a few of those recipients would love to move to a different part of the country with better opportunities, but they are stuck in place thanks to the very government programs that are designed to help them. If you had to choose between moving to a different state and losing your subsidized housing, or staying where you were with no prospects for work but at least a roof over your head, wouldn't you err on the side of inertia? My Bootstrap program would provide families like these with a mechanism to escape the prison of a dead-end city and strike out for someplace new.
Let's look at another program, Temporary Assistance for Needy Families (TANF). This goes to over 2 million families a year, and in 2013 cost the government $17 billion. This could also fall if those families had more flexibility to pack up and move to a place with better support, better opportunities, or a lower cost of living. Then there are the billions more spent on Medicaid, food stamps, and supplemental security income that could be chipped away at if more people simply had the means to move to a region of the country with actual opportunities.
Another way to drive down the cost is through private partnerships. Just like some housing developments can apply to be Section 8 eligible, I envision a program where companies partner with the federal government as Bootstrap participants. In exchange for accepting lower rates, they would benefit from increased business, tax deductions, good publicity, and a bigger stake in growing and improving their community. You could even provide employers with incentives to provide application options and interviews to remote applicants, ensuring that people already have irons in the fire when they show up in town. In the book I read, the author had to spend several days searching and waiting for a job before she could finally start one, even in tight labor markets.
Business friendly Republicans should love the idea of a steady supply of new workers arriving in tight labor markets. Freedom minded Libertarians can hopefully appreciate the liberation that would come to so many families who would love to move, but can't afford that large step. They should both get excited at the potential to reduce other welfare costs, thus actually reducing overall spending with this program. Sometimes all that someone needs to get off the welfare wheel is a steady job, but when there are no jobs in town and you can't afford to move to a different one, what then? Continue on welfare. My program could free countless people from their current poverty traps while improving their lives and even saving the government money in the process.
The poor are indeed with us, and always will be. I agree that something should be done to help the poor and the impoverished, but I hate the idea of never-ending streams of money designed to keep people stagnant and in one place. This seems like a decent idea to me. What do you think?
Let's start with cost. This would be open to any between the ages of 18 and 62 (when you are eligible for Social Security). According to the Census Bureau, there are 191 million people in this age range right now. Based on my list above, I'd say each bootstrap would run approximately $3000 depending on location. That comes to a maximum cost of $573 billion. If you figure that you only get one of these every 10 years, that means an average of 10% of the eligible population might use it each year. So figure $58 billion annually. You could also kick out anyone who made over a certain amount of money any time in the past few years. Then you have to figure a number of people just wouldn't use the benefit because they don't need it (though transfers are allowed, so that mitigates this a bit). If the deposits go back to the government, you could recoup another significant chunk of money. I figure all in you're looking at around $40 billion or less a year.
That's still quite a bit of money. Not an easy pill for a conservative or a libertarian to swallow.
But let's look at the benefits. Right now, New Mexico has one of the highest unemployment rates in the USA (49th place). Many of these people would probably love to move to Colorado (10th place), if only they had the chance. A few hundred thousand newly employed people, and now you have a boom in Colorado bringing in more tax revenue. Not only that, but you have to figure that many of these people were on welfare back home to begin with. How much money could you save by moving people off these programs through new jobs in a new city? My guess: a significant amount.
Let's take housing, for example. In 2014, the federal government spent $18 billion on the Housing Choice Voucher program, $12 billion on Project-based rental assistance, $7 billion on the Low-Income Housing Tax Credit, and $7 billion on public housing. That's almost $50 billion right there. I imagine that quite a few of those recipients would love to move to a different part of the country with better opportunities, but they are stuck in place thanks to the very government programs that are designed to help them. If you had to choose between moving to a different state and losing your subsidized housing, or staying where you were with no prospects for work but at least a roof over your head, wouldn't you err on the side of inertia? My Bootstrap program would provide families like these with a mechanism to escape the prison of a dead-end city and strike out for someplace new.
Let's look at another program, Temporary Assistance for Needy Families (TANF). This goes to over 2 million families a year, and in 2013 cost the government $17 billion. This could also fall if those families had more flexibility to pack up and move to a place with better support, better opportunities, or a lower cost of living. Then there are the billions more spent on Medicaid, food stamps, and supplemental security income that could be chipped away at if more people simply had the means to move to a region of the country with actual opportunities.
Another way to drive down the cost is through private partnerships. Just like some housing developments can apply to be Section 8 eligible, I envision a program where companies partner with the federal government as Bootstrap participants. In exchange for accepting lower rates, they would benefit from increased business, tax deductions, good publicity, and a bigger stake in growing and improving their community. You could even provide employers with incentives to provide application options and interviews to remote applicants, ensuring that people already have irons in the fire when they show up in town. In the book I read, the author had to spend several days searching and waiting for a job before she could finally start one, even in tight labor markets.
Business friendly Republicans should love the idea of a steady supply of new workers arriving in tight labor markets. Freedom minded Libertarians can hopefully appreciate the liberation that would come to so many families who would love to move, but can't afford that large step. They should both get excited at the potential to reduce other welfare costs, thus actually reducing overall spending with this program. Sometimes all that someone needs to get off the welfare wheel is a steady job, but when there are no jobs in town and you can't afford to move to a different one, what then? Continue on welfare. My program could free countless people from their current poverty traps while improving their lives and even saving the government money in the process.
The poor are indeed with us, and always will be. I agree that something should be done to help the poor and the impoverished, but I hate the idea of never-ending streams of money designed to keep people stagnant and in one place. This seems like a decent idea to me. What do you think?
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