Monday, February 18, 2013

Poverty and Income Redistribution

The United States is considered to be the wealthiest nation on earth, yet, a look at the number of people who are poor or homeless reveal startling figures. In almost every state of the U.S., the number of people who are considered poor or living below the poverty line creates apprehension and worry for the caring philanthropist, concerned economist, and the politically dedicated state or federal representative. According to Hyman (2011), the distribution of income is considered a public good. People who stand up for the rights of the poor especially those who are in support of government redistribution of resources believe that they will also benefit from the redistribution of income since poverty will be reduced with the implementation of such measures.
Compassion for the poor who may not cater for themselves due to impecuniousness is one factor that gives satisfaction and esteem to the section of society driven by human care and devotion. Elevating the living condition of a citizen also allows the other capable, self-sufficient citizen to overcome social instability and radical commotion. People tend to prefer government distribution of public goods over private charities because of the fear of voluntary donations running dry or resulting in under-supply in income redistribution. Poverty, no matter how affluent is, is hard to eradicate. Poverty is a natural phenomenon that is visible in every nation in the world, including the wealthiest of all nations such as the U.S. and Western European nations.
The Clinton Global Initiative (CGI) was founded in 2005 by Bill Clinton, the former President of the United States, with the soul aim of eradicating poverty globally-an initiative that has not achieved the goals and expectations it was formed to accomplish. CGI convenes annually often attracting over 150 world leaders, Nobel laureates, stars and celebrities, and selected personalities known to have passion for eradicating poverty from the face of the earth (CGI, 2013). However, the commitments of CGI and other global initiatives for the eradication of hunger have been beset by natural disasters and other calamities including global economic meltdowns, tsunamis, climate changes, deliberate environmental degradation  dictatorship and poor governance, drought and locust invasions, cyclones and hurricanes, and other natural and man-made and disasters that wreck havoc on human progress.

In the United States, programs usually undergo cost-benefit analysis to analyze their effectiveness. By clumping together various programs, in what is known as intermix, it becomes easier to save revenue and create efficiency. This helps alleviate mismanagement and loss of revenue. Many people believe that assisting the poor is a moral and religious obligation and that the giver has always remained “Samaritan” since time immemorial. According to Weiner, Osborne, and Rudolph (2010), poverty has been given various classifications and so are its perceived causes. From individualistic perspective, the causes of poverty is attributed to poor money management, alcoholism and drug abuse, physical handicap and maladies, laziness and failure to secure employment, the absence of self-improvement, and living idle life. On the social causes of poverty, the researchers attribute poverty to elevated taxation, society’s failure to deliver goods and services, lack of employment opportunities, discrimination and prejudice, and low wages (Weiner, Osborne, and Rudolph, 2010). On the side of fate, they attribute causes of poverty to bad luck.

Besides the classifications given above, Weiner, Osborne, and Rudolph (2010) claim that the elderly may be susceptible to poverty due to their advanced ages that deny them immunity from disease; immigrants often plunge into poverty due to lack of communication skills; while recipients of welfare benefits judgmentally are perceived as lazy and inactive. The number of people who are classified as being poor was estimated at 39.8 million in 2008 which corresponds to 13.2% of the entire U.S. population (Hyman, 2008).

It is mindboggling that a nation such as the United States that is endowed with enormous economic benefits should have such a startling figure. Government encouragement of the poor to seek employment has never produced significant results other than “welfare traps” where people become dependent on government assistance for prolonged periods. 

According to Hyman (2011) previous studies have discovered that after welfare recipients return to work and relinquish their reliance on government assistance, their total disposable incomes diminish drastically leading to a drop in their leisurely activities and sustenance. When the income of a household dwindles such that they fail to secure “nutritionally adequate diet”, they are classified as poor.
According Guetzkow (2010), policy makers are to blame for the rising poverty in the United States. Prior to 1996, the current Temporary Assistance to Needy Families had a different name altogether. It was known by the acronym PRWORA which implied Personal Responsibility and Work Opportunity Reconciliation Act. Because policy makers did not explicitly claim that recipients were unworthy of receiving help, instead, they maintained that the safety net system that was in place was overly generous to welfare recipients. Researchers give various reasons for the causes of poverty. For Weiner, Osborne, and Rudolph (2010), political ideology has a hand in the proliferation and acceleration of poverty in the United States. The authors contend that some of the underlying factors related to poverty in the U.S. include poor education and biased government policies.

There is the belief among scholars that poverty is correlated with race. Without even looking into the African continent that constitutes fifty-three independent states where there are big disparities in income distribution and where poverty is the hallmark of every nation, a glimpse at American demographic income distribution is enough to draw the racial dividing line. According to Mankiw (2009), U.S. demographic statistics reveal that people classified as Hispanics and African-American are three times more likely to show signs of poverty than Whites. On the other hand, poverty is associated with the size or composition of households. Married couples have a better chance of evading poverty than the single adult female with children. According to Mankiw (2009), poverty among the elderly is not overblown because of the subsidies and social security that safeguard their lives during their lifetimes. In the U.S., there has been decreased income mobility in recent years due to economic decline leading to transitory variations in income. Climbing the ladder of success, according to Mankiw (2009) depends on how hard someone works.

The issue of income inequality has been significantly debated in various political discourses by people having dissimilar political philosophies notably utilitarianism, libertarianism, and liberalism. Despite the heated debates and ideological dispensations geared towards the eradication of poverty, in a nutshell, humanity has exhausted all available resources to usher in universal affluence that will benefit humanity for posterity. Regardless of thousands of graduates leaving colleges and universities of high reputations, the prospects of securing decent employment seems to be unattainable and beyond grasp in a global economy suffering from political disasters and economic strangulation.

While liberalism calls for policies that give the government greater command in the selection of policies and evaluation and act as an impartial observer behind a veil, on the other hand, utilitarianism begs for policies that allow governments to maximize the total utility of each and everyone in broader society. Libertarianism, a philosophy that calls for the government to take punitive actions against law breakers and enforce voluntary agreements, is based on the belief that there is no such thing as central distribution. Thus, with differing views on economics and resource distribution, poverty will remain the most difficult issue for policy planners to undertake. Because policy planners hold differing views, eradicating poverty will not materialize for the foreseeable future.


CGI (2013). About us: Clinton Global Initiative. Retrieved from

Guetzkow, J. (2010). Beyond deservingness: Congressional discourse on poverty, 1964−−1996. The ANNALS of the American Academy of Political and Social Science, 629: 173-197. doi: 10.1177/0002716209357404

Hyman, D.N. (2011). Public finance: A contemporary application of theory to policy (10th ed.). Mason, OH: South-Western, Cenage Learning.

Mankiw, N.G. (2009). Principles of microeconomics (5th ed.). Mason, OH: South-Western, Cengage Learning.

Weiner, B., Osborne, D. & Rudolph, U. (2010). An attributional analysis of reactions to poverty: The political ideology of the giver and the perceived morality of the receiver. Personality and Social Psychology Review, 15(2), 199–213. doi: 10.1177/1088868310387615.







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