Has America lost the “War on Poverty?” Since 1964, the federal government has spent over $19 trillion on welfare programs, and all that money has barely made a dent in the poverty rate (from 17 percent in 1965 to 14.5 percent in 2014). One industrious entrepreneur has a platform to turn that all around however.
America must “move from a country that encourages dependence to a country that encourages work,” Peter Cove, founder of America Works and author of Poor No More: Rethinking Dependency and the War on Poverty, told PJ Media in an interview. “We will solve poverty with work—a job for all who are able.”
Cove started working against poverty in the late 1960s, inspired by President Lyndon Johnson’s welfare initiatives. But he personally experienced the painful subversion of poverty programs by political activists, who turned Johnson’s programs into a “Welfare-Industrial Complex,” not unlike the much-maligned “Military-Industrial Complex.”
“The Civil Rights movement had pretty much run its course by the mid-60s,” Cove told PJ Media. “It had won and achieved remarkable success. And the organizations which had run civil disobedience in the communities were sitting there without anything to do. At the same time, money was flowing out of Washington toward the ‘War on Poverty.'”
It was a match made in heaven — or more accurately, in the Democratic party. The Civil Rights activists began to run the anti-poverty programs, and that subverted the entire enterprise, the America Works founder explained. “They really weren’t there honestly to fight poverty and they didn’t really know how to fight poverty — but they were there to run organizations. They got in bed with politicians, who send them more money.”
Cove recalled a harrowing story about a woman who served in the New York State Assembly. After seeing Cove’s organization — America Works — in action, the assemblywoman admitted, “It’s the best welfare-to-work program I’ve seen.” But when the founder asked if she’d support it, she said no.
“There’s a welfare-to-work program down the street from my campaign office,” the assemblywoman frankly admitted. “They’re not as big as you and they’re not as good as you, but on Election Day, they bring out the votes.”
Perhaps not surprisingly, this collusion between government and ineffective anti-poverty programs infests the Democratic Party and the Left, the America Works founder said. “It keeps bureaucrats in place, it keeps poverty workers in place.” Cove admitted that Democrats “won’t say that, and they probably don’t even believe that, but that’s how they behave — you get a continuation of programs that don’t work.”
Cove presented a radical but inspiring plan to undercut this Welfare-Industrial Complex and put America back to work. “Simply, I propose that we eliminate all welfare programs except those geared toward people who truly cannot work due to physical or mental programs,” he said. “Second, we scuttle all poverty programs, including everything from Head Start to Food Stamps.”
Wasn’t there some political candidate who mentioned something about “draining the swamp?” Here’s a concrete way to do that, and start over from scratch.
This is where America Works comes in. Cove argued that his organization values results in a way that is truly unique in the welfare-to-work industry. “I felt strongly that it was important the government gets what it paid for,” he explained. “Pay us each time we get someone off of welfare and you save money. That began to change the game.”
While the America Works founder admitted it wasn’t easy to convince government to switch to this results-based model, he argued that it unleashed true innovation in the welfare industry. “Where they do it, like in New York, the ones that are good rise to the top and the others go out of business, because of good old-fashioned capitalism and competition.”
“Once you’ve changed the calculus so that only programs that are delivering stay in business, it gets rid of that whole issue of politicians supporting programs that are ineffective,” Cove explained. America works has always pushed this model — “We only get paid by the government if we place people in jobs and they stay in jobs.”
America Works has always valued testing and accountability when it comes to their programs. Cove explained how the company discovered that education and training were not the way out of poverty, despite popular belief. “While that seemed like a logical supposition, it didn’t work,” he said. “We ran education and training programs and we ran work-first programs which quickly put people into jobs,” and the work-first model consistently achieved better results.
Over the decades, America Works has grown, and it serves many more communities than just welfare recipients. Cove noted a recent article in the New York Post, which reported the company’s expanding efforts to serve children who are aging out of the foster system. The article reports that “America Works has placed a half-million people in jobs with an average starting wage of $10 per hour plus benefits. In New York City, more than half of these workers were still employed after six months.”
Cove explained that America Works has found jobs for “single parents, drug and alcohol abusers, the mentally handicapped, the homeless military veterans with post-traumatic stress disorder.” He told PJ Media that his company’s work is “pretty broad in terms of people who would normally be excluded from the workforce.”
Since the people range, the jobs range. Cove explained that “someone who’s been in jail for seven to ten years and has a ninth-grade education” may seem unskilled, but these people are “very good at BS-ing. They are able to get on the telephone and really handle selling things and criticism.” These ex-cons are a natural fit for customer service.
He recalled placing people in entry-level jobs, food service jobs, and even technical jobs.
While Cove presented work as a solution to poverty, he also noted its spiritual impact. Citing Pope John Paul II’s 1981 encyclical “Laborem Exercens,” Cove noted that “when you deny people work, you take away part of their spirituality.” Indeed, Pope John Paul II said that through work humans share “in the activity of the Creator” who made the heavens and the earth.
“To deny people that, to not give them that opportunity, is, to me, a crime,” Cove declared.
In Cove’s master plan for poverty, he would take all the money saved from the dismantling of welfare programs — “an awful lot of money — and divert it into jobs, in the private sector first, then the public sector.”
One of the best ways to do this is wage supplementation, the America Works founder said. This involves giving money to companies which are having trouble paying for new employees, encouraging them to hire a new worker and then supplementing that worker’s wages for a limited time. Cove suggested the government would pay half of the worker’s salary for three months, and then cut that to 25 percent for a few more months, and then dropping the subsidy entirely.
“We’ve done that in New York and it’s worked very successfully,” he recalled. It works because the new worker provides value and enables the company to make more money, thus shoring up the cost of hiring one more employee. This happens over time, so it makes sense to slowly withdraw the subsidy. Since the subsidy is withdrawn, Cove argued that this does not involve government propping up businesses that should be allowed to fail in a free market.
With or without wage subsidies, Cove’s anti-poverty master plan involves trading dependency for work. “Where we have found ourselves in the 21st century is increased dependency on the government and less work,” he explained. The goal is to reverse that trend.
To be clear, Cove does not oppose charity and helping the less fortunate. Indeed, he suggested a very conservative way to preserve a kind of safety net while transforming government programs from dependency to work. Pointing to churches and civic organizations, he noted that the French writer Alexis de Tocqueville praised these organizations as “the backbone” of America, because they fostered civic virtue and provided charity for the less fortunate.
Tragically, “as the government has taken over so much of that responsibility, we find that the civil society institutions have drifted away from that — the usurpation of that role by the federal government left those organizations without the need to do that,” Cove argued. “I think that if the government would do what I’m suggesting” — getting rid of poverty programs in their entirety and only providing aid to those physically incapable of working — “I think the civil society would pick up a lot of the slack.”
While Cove lamented the usurpation of poverty programs by the “Welfare-Industrial Complex,” his overall outlook is hopeful — Americans can win the “War on Poverty.” To learn more, buy his book.
Here’s a promotional video for his company.
And … an awkward rip-off of “America Works” by the Netflix show House of Cards.