Three Kinds of Poverty

I’ve seen a number of nonsensical conflations of different poverty issues go by in various social media feeds today. I think a major problem is that people seem to think that poverty is just one issue — and they keep fighting over what that issue is. But it’s not one issue.

As I see it, there are three distinct issues with respect to “poverty”:

(1) There are still parts of the world with what the UN calls “extreme poverty”, which means people are literally on the verge of starving to death or dying from easily treatable diseases. This has to do with people’s basic physical needs being met.

(2) There is “first-world poverty” which is the waste of human potential that occurs when people who would otherwise live productive and meaningful lives are forced to live below the poverty line by poor labor policies, low wages, unemployment, and high costs of health care, housing, and other necessities. This has to do with what we as a society are comfortable with allowing as the minimum to show a decent respect for human beings.

(3) There is “inequality”, where wealth is so highly concentrated in the upper 0.01% of the population that something like half the population is barely getting by and thus a great deal of potential is wasted that could otherwise be developed, while those at the top essentially sit on the cash and do little with it of value. This has to do with the way that wealth is distributed, and the relative income and net-worth gaps between lower, middle, and upper classes.

Each has different kinds of urgency, different impact, and calls for different kinds of solutions. Conflating any of these with the others only muddles the issue, and is done to promote political agendas of denial and fatalism — particularly the do-nothing agenda that is based on the idea that these problems are unavoidable and should be blamed primarily on the people who are experiencing them.

Globally, #1 is the most critical, but it’s hardly an issue at all within the bounds of the USA, and thus within the area over which we have administrative control. Thus, for the most part, although it’s an important problem to address in foreign policy, it isn’t really our responsibility to solve it. In doing so, we would often be interfering with the principles of self-determination and national sovereignty in foreign countries. Therefore, there is not a lot we can do about it — and that is why the do-nothings want to dismiss the other kinds of poverty and focus on this.

Problem #2 is a serious problem for the well-being of citizens of the USA, and is the proper concern of domestic policy at federal, state, and local levels. It is a root cause of crime, drug abuse, domestic violence, and many other social ills that conservatives claim to be concerned about stopping — and yet they consistently avoid addressing this number one root cause of those problems, preferring instead to blame it on some vague and generalized “decline in moral fiber” of the poor themselves. Worst of all, many of the people in this situation are either already working full time, or are trying very hard to get work or retrain for new work — exactly what the critics claim they wish would happen.

Problem #3 is primarily an ECONOMIC issue, and represents an enormous inefficiency for our nation as a whole. It’s not primarily about basic human rights, because it’s not about some minimum that people need — it’s about the relative distribution of resources. But it IS about the ethic of maximizing the potential of individuals. And it is an issue of great concern if you think that a thriving, healthy economy is worthwhile. Because when people have more disposable income, they spend it on things, they become customers. And customers is what businesses need to make jobs. Most jobs don’t come from big multi-national corporations, they come from small local businesses serving the interests of customers in their community. And that only happens if those customers have some money to spend.

We need to recognize that these issues are distinct. It is not constructive to dismiss first-world poverty as unimportant, simply because more severe poverty exists in the world. The first duty of a government is to its own citizens.

Likewise, inequality is not something to be solved primarily out of concern for the poor, but rather for the health of the entire society. It’s about lost opportunity. Resolving issues of inequality is a way to make the economy as a whole more robust and ultimately more productive. Greater equality will not only make the pie more reasonably distributed, but it will also make the pie bigger.