"Fixing" Poverty

In Barbara Mulvey-Welsh's opinion piece, The Politics of Poverty, published recently in Plymouth's Old Colony Memorial newspaper, she does a credible job of reminding us how easy it is to slide into poverty and shows striking empathy for those who end up on the short end through no fault of their own.

We would take her to task, however, for her passivity towards those that cheat the system, willing to accept a measure of waste, or even fraud, to ensure benefits for the truly needy.  This is not an either/or choice. The cheats are not only stealing from the taxpayers, but are also jeopardizing the benefits of those in need. It’s not enough to throw large chunks of taxpayer money at a problem. Administrators must follow through with effective management and oversight to ensure that the funds are being spent for the stated purpose. If this isn't possible, then the program itself becomes subject to a loss of public support, and possibly funding. Supporters of these programs, like Barbrara should be demanding oversight and management to protect those truly needy recipients.

Government programs are seen by many as being the answer to all of society's problems. In addition to lax oversight, however, the frequency of unintended consequences often dogs even the most well-intentioned public initiative.

To wit, the call for a national minimum wage. Increasing the minimum wage is regularly proposed as the solution to all manner of perceived poverty.  But as the cost of minimum-wage labor increases, demand for that labor declines as employers adjust their budgets to the new cost structure.  This has the net effect of increasing the unemployment rate among the most vulnerable.

For a more in-depth treatment of the subject, read Heritage Foundations' James Sherk's recent post, especially the experience of American Samoa.  In the minds of many, big corporations are thought able to easily absorb the cost of an increase in the minimum wage, but this assertion ignores the reality of basic economic supply and demand. Or, as Sherk puts it , "Good Intentions do not repeal the laws of economics."
  

In spite of its flaws, our Free Market System consistently provides superior opportunity and higher incomes to the lower income brackets, than other world social systems.