PJ Media

"Poverty is less a matter of having few goods than having lots of problems"

So says a professor and author of a href=”http://www.amazon.com/gp/product/0300120907?ie=UTF8tag=wwwviolentkicomlinkCode=as2camp=1789creative=9325creativeASIN=0300120907″span style=”font-style:italic;”The Persistence of Poverty: Why the Economics of the Well-Off Can’t Help the Poor/span/aimg src=”http://www.assoc-amazon.com/e/ir?t=wwwviolentkicoml=as2o=1a=0300120907″ width=”1″ height=”1″ border=”0″ alt=”” style=”border:none !important; margin:0px !important;” / in this article from the span style=”font-style:italic;”a href=”http://www.boston.com/bostonglobe/ideas/articles/2008/03/30/the_sting_of_poverty/?page=1″The Boston Globe/a/span (thanks Mike): br /br /blockquoteKarelis, a professor at George Washington University, has a simpler but far more radical argument to make: traditional economics just doesn’t apply to the poor. When we’re poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated. This is where the bee stings come in: A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems…./blockquotebr /br /Naturally, the answer for this professor of goodwill is to give more tax payer money to the poor with fewer strings attached:br /br /blockquoteReducing the number of economic hardships that the poor have to deal with actually make them more, not less, likely to work, just as repairing most of the dents on a car makes the owner more likely to fix the last couple on his own. Simply giving the poor money with no strings attached, rather than using it, as federal and state governments do now, to try to encourage specific behaviors – food stamps to make sure money doesn’t get spent on drugs or non-necessities, education grants to encourage schooling, time limits on benefits to encourage recipients to look for work – would be just as effective, and with far less bureaucracy. (One federal measure Karelis particularly likes is the Earned Income Tax Credit, which, by subsidizing work, helps strengthen the “reliever” effect he identifies.)/blockquotebr /br /I really don’t buy this strategy for the most part. I do think that people who are poor have a worldview of problems that never end and therefore, feel that they can never tackle it all and feel defeatist. However, in my evaluations of thousands of disability clients, I found that a fair number of claimants (certainly not all, some were in very bad medical situations) tended to have a sense of entitlement, that is, they expected money for nothing and felt offended if they were asked to do anything for the money, even show up for their evaluation! br /br /Whole families would come in, having trained their kids and relatives that applying for benefits was a better alternative than working. Once people get Social Security disability benefits, they rarely a href=”http://econ-www.mit.edu/files/1766″get off the rolls/a and go back to work, and even if they can, there is little incentive. According to Karelis’s theory, the alleviation of some of the money problems–at least of the younger claimants–should create more work incentive, not less, but it seems to do just the opposite. Giving people something for nothing just creates more of the same.