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From: wolda002@umn.edu
Date: Fri Jan 14 2011 - 02:59:24 EST
Compare and Contrast – What Works and What Does
Not<http://globalsociology.com/2011/01/11/compare-and-contrast-what-works-and-what-does-not/>
http://globalsociology.com/2011/01/11/compare-and-contrast-what-works-and-what-does-not/
January 11th, 2011 by SocProf
<http://globalsociology.com/author/socprof/>and tagged
Poverty <http://globalsociology.com/tag/poverty/>, Public
Policy<http://globalsociology.com/tag/public-policy/>,
Social Inequalities
<http://globalsociology.com/tag/social-inequalities/>, Social
Stratification <http://globalsociology.com/tag/social-stratification/>
[Update: David Kay Johnston corrects me in comments: "That $70 billion
estimate is for state and local subsidies only; the Shelf Project has shown
that federal subsidies run about $1 trillion a year, roughly the same amount
as is raised by the individual income tax."]
Here is an interesting idea that seems to work: pay the
poor<http://opinionator.blogs.nytimes.com/2011/01/03/to-beat-back-poverty-pay-the-poor/?hp>to
help them out of poverty…
“The program, called Bolsa Familia (Family Grant) in Brazil, goes by
different names in different places. In Mexico, where it first began on a
national scale and has been equally successful at reducing poverty, it is
Oportunidades. The generic term for the program is conditional cash
transfers. The idea is to give regular payments to poor families, in the
form of cash or electronic transfers into their bank accounts, if they meet
certain requirements. The requirements vary, but many countries employ those
used by Mexico: families must keep their children in school and go for
regular medical checkups, and mom must attend workshops on subjects like
nutrition or disease prevention. The payments almost always go to women, as
they are the most likely to spend the money on their families. The elegant
idea behind conditional cash transfers is to combat poverty today while
breaking the cycle of poverty for tomorrow.
(…)
Brazil is employing a version of an idea now in use in some 40 countries
around the globe, one already successful on a staggeringly enormous scale.
This is likely the most important government anti-poverty program the world
has ever seen. It is worth looking at how it works, and why it has been able
to help so many people.
In Mexico, Oportunidades today covers 5.8 million families, about 30 percent
of the population. An Oportunidades family with a child in primary school
and a child in middle school that meets all its responsibilities can get a
total of about $123 a month in grants. Students can also get money for
school supplies, and children who finish high school in a timely fashion get
a one-time payment of $330.
(…)
Bolsa Familia, which has similar requirements, is even bigger. Brazil’s
conditional cash transfer programs were begun before the government of
President Luiz Inacio Lula da Silva, but he consolidated various programs
and expanded it. It now covers about 50 million Brazilians, about a quarter
of the country. It pays a monthly stipend of about $13 to poor families
for each child 15 or younger who is attending school, up to three children.
Families can get additional payments of $19 a month for each child of 16 or
17 still in school, up to two children. Families that live in extreme
poverty get a basic benefit of about $40, with no conditions.
Do these sums seem heartbreakingly small? They are. But a family living in
extreme poverty in Brazil doubles its income when it gets the basic
benefit. It has long been clear that Bolsa Familia has reduced poverty in
Brazil. But research has only recently revealed its role in enabling Brazil
to reduce economic inequality.
(…)
The program fights poverty in two ways. One is straightforward: it gives
money to the poor. This works. And no, the money tends not to be stolen or
diverted to the better-off. Brazil and Mexico have been very successful at
including only the poor. In both countries it has reduced poverty,
especially extreme poverty, and has begun to close the inequality gap.
The idea’s other purpose — to give children more education and better health
— is longer term and harder to measure. But measured it is — Oportunidades
is probably the most-studied social program on the planet. The program has
an evaluation unit and publishes all data. There have also been hundreds of
studies by independent academics. The research indicates that conditional
cash transfer programs in Mexico and Brazil do keep people healthier, and
keep kids in school.”
These programs put to rest the idea that you cannot trust the poor with
money. Their lack of moral values (or some version of the “culture of
poverty” argument), lack of deferred gratification and all-around
irresponsibility means that they have to be infantilized through a variety
of punitive procedures and requirements (as opposed to long-term goals such
as education and health). Well, as these programs show, that is simply not
the case. The reality is more a variety of incarnations of the poverty trap,
which can be partially broken by cash payments.
What does not structurally help the poor?
Charity<http://www.guardian.co.uk/commentisfree/2010/dec/31/francis-maude-big-society-charity>,
which is not, have never been, and should never be a substitute for public
policy. For several reasons.
Reason 1: a lot of charitable donations are no such thing:
“As a proportion of GDP, the US gives most: 1.7% against Britain’s 0.7%. But
donations to religious organisations account for 60% of the difference and,
though some money reaches the poor, large sums fund preachers and church
premises. Other “charitable” beneficiaries include the universities
Americans attended in their youth, which are thus prompted to look with a
kindly eye on children of alumni when they apply for places. But we, too,
have our weaknesses, such as Eton, which notoriously counts as a charity.”
Reason 2: charitable donations have narrow and variable targets:
“Private charity doesn’t always have the same priorities as public policy.
In the UK, the most popular
<http://www.ncvo-vol.org.uk/research/giving>causes are children,
animals, cancer and lifeboats. Overseas causes, for
relief of famine, disease or effects of natural disasters, tend to do well,
helped by celebrity endorsements and fundraising concerts. Mental illness
and disability, ex-offenders and unqualified school leavers are less likely
to arouse our compassion. Again, volunteering tends to be most common in
areas that need it least.”
Reason 3: charitable donations are a form of control of the donors over the
recipients. Donors can attach strings to their donations that have nothing
to do with reducing poverty. This is a demeaning and humiliating form of
servitude that general welfare programs were designed to eliminate:
“The point of post-1945 European welfare states was to free the needy from
dependence on private generosity, which tends to miss out the socially
marginal, and to be least available when times are hardest. Welfare gave a
sense of security and dignity that the less fortunate had never previously
enjoyed. It was particularly important to continental societies that had
seen how insecurity bred fascism. *Those who volunteer time to hospitals and
homeless centres or who take out direct debits for guide dogs and cancer
research are admirable, but no more or less admirable than those who pay
taxes without vociferous complaint. Nor is a society with a “culture of
giving” more admirable than one where workers receive living wages, decent
pensions and reasonable employment protection*; executives exercise
restraint in remunerating themselves; and everyone has sufficient support to
look after their ailing grannies.”
No charitable programs will ever create large-scale infrastructures, mass
education systems, and universal health care. Only public policies can do
this. The reliance on charity is simply the political abandonment of the
least fortunate and the disintegration of social solidarity.
What is interesting is that, if one looks at US corporate subsidies ($70
billion a year is a conservative estimate), the picture is entirely
different, as David Cay Johnston
demonstrates<http://tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8CSNLH?OpenDocument>
:
“One of the biggest new drains of tax money is government giveaways for
server farms, those giant air-conditioned complexes that store data for
Google, Microsoft, Yahoo, Dell, and other digital enterprises. Companies
need duplicate sites around the country to manage traffic flow and protect
against flood, fire, the loss of electric power, or some other catastrophe.
This fall Yahoo made a deal in Lockport, N.Y., for a new server farm. Yahoo
gets $200 million in state and local tax breaks (including no property
taxes), plus $58 million of cut-rate electricity from Niagara Falls and a
$10 million stimulus grant. That’s $268 million to create 125 jobs, or $2.1
million per job.
Even if we just count the federal stimulus money, the subsidy works out to
$80,000 per job.
Even richer was a deal Verizon made this fall for a server farm in Somerset,
another Niagara County town. Over 15 years Verizon is getting $614 million
in tax breaks and cut-rate electricity, which works out to an eye-popping
$3.1 million for each of the 200 estimated jobs.
Server farms are an especially pernicious area of tax giveaways for several
reasons. First, those job estimates are misleading. Server farms need very
few workers. Oh, there’s some programming work, but it can be done as far
off-site as India. However, there will be jobs for air conditioning
mechanics and security guards who must be on site to keep intruders and
summer air at bay.
A few technicians also will be needed to keep the servers running. But the
$882 million in subsidies for the two western New York server farms may buy
no more than a few dozen of these jobs, which pay merely better than average
wages.
(…)
It is curious how the government collects and discloses finely detailed data
on how much tax money goes to the disabled, the poor, and the elderly, and
to educate the young, but when it comes to welfare for big business, it just
cannot seem to find the resources to gather and analyze the costs.
Strange, too, that many of these obscured, but gigantic gifts come through
the good offices of politicians who pose as champions of the taxpayer and
enemies of welfare, or at least of welfare for those who actually need it.
(…)
Thomas tells how Dell moved a factory from Ireland to Poland in 2009 and
then months later closed a four-year-old factory built in large part with
North Carolina tax dollars. The Irish taxpayers gave €53.5 million to Dell,
while North Carolina gave as much as $242 million. But when the Poles
offered €54 million more, it was enough to get Dell to move about 1,900 jobs
to Lodz.”
Funny how that works.
Oh, and this is “funny <http://www.bbc.co.uk/news/business-12131092>” too:
“The government is resigned to UK banks paying out billions of pounds in
bonuses this year, despite its calls to curb the payments, the BBC has
learnt.
(…)
But even if bonuses are cut, salaries have risen significantly to
compensate, by up to 40% in some cases.”
Then follow the social darwinist argument that if we do not let the
financial class get obscenely wealthy while the larger economy is still in
depression, they will go work somewhere else. In this view, the poor are a
drag on society while the wealthy are the engine, the creative forces of it.
We wish the former would go away, we fear the latter might, at the slightest
hint of taxation or regulation, no matter how mild and limited.
As a result of all this, as is obvious from the above, wealth is redirected
upward and to corporations without transparency or accountability, with
little to show for it. After all, transparency and accountability are only
demanded from the poor, as punitive measures in exchange for dwindling
benefits or narrowly-triggered charitable donations.
It is clear which approaches are the most successful in terms of poverty
reduction and social justice: cash payments to the poor and social
democratic measures. And yet, these ideas are not allowed to even enter
common discourse on public policy.
posted in Poverty <http://globalsociology.com/category/poverty/>, Public
Policy <http://globalsociology.com/category/public-policy/>, Social
Inequalities <http://globalsociology.com/category/social-inequalities/>, Social
Stratification <http://globalsociology.com/category/social-stratification/>
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One Response to “Compare and Contrast – What Works and What Does Not”
1. David Cay Johnston <http://www.tax.com/> Says:
January 12th, 2011 at 4:18
am<https://mail.google.com/a/umn.edu/html/compose/static_files/blank_quirks.html#comment-2600>
That $70 billion estimate is for state and local subsidies only; the
Shelf Project has shown that federal subsidies run about $1 trillion a year,
roughly the same amount as is raised by the individual income tax
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