Poverty is again on the political agenda in America. And one of the most persistent myths surrounding this issue is that the best way to reduce poverty is to increase equal opportunity. Many liberals and conservatives believe, for instance, that if the poor had much better educational opportunities, the poverty rate would go down.
Unfortunately, it’s not true. Improving opportunity and reducing poverty are actually two separate issues. Even if we were to significantly increase economic opportunity in this country, this would do virtually nothing to reduce the number of poor people. At best, it would just create equal opportunity poverty.
Imagine that we have greatly reduced the obstacles to equal opportunity. There is no longer racial or gender discrimination in the workplace. All children go to high quality schools, and college is now low-cost or free. What effect would all this have on the poverty rate? None. It would only change who is likely to be poor. Fewer women, minorities and disadvantaged children would wind up poor. This would be good—but it would do nothing to reduce the overall number of people in poverty.
That is because poverty is not caused by unequal opportunity. Unequal opportunity helps explain who tends to end up poor, but it does not explain why we have poverty. The real causes of poverty are two-fold: lack of jobs and too many jobs paying poverty-level wages.
If you include long-term “discouraged workers” (people who have quit looking for work and are not counted in our official unemployment rate), then the actual number of jobless Americans is now over 20 percent. Obviously people who lack jobs are going to have a very high rate of poverty. The job market is like a game of musical chairs. There are fewer chairs (jobs) than there are players (job seekers). Even if we give all the players an equal chance to get into a chair, there will always be some losers. You could train some players to be better at the game, but this would only change who the winners are—the number of losers would remain the same.
The other cause of poverty is the growth of jobs that do not pay enough to get out of poverty. A quarter of all jobs now pay less than $23,000 a year, which is the official poverty line for a family of four. So for millions of Americans, having a job is not enough to avoid poverty.
Giving more people a fair chance to succeed will do nothing to create more jobs, or better-paying jobs. Even if everyone were to earn a college degree, that would only mean that we would have more highly educated people in unemployment lines and serving us at McDonald’s.
If we really want to reduce poverty, we need more government policies to encourage job creation—such as a massive investment to rebuild our infrastructure. And we could improve pay by raising the minimum wage and making it easier to unionize workplaces.
We don’t just need a fairer economic game; we need to change the game so more Americans come out winners.•
Douglas Amy, professor of politics at Mount Holyoke College, is the author of several books, including Government Is Good: An Unapologetic Defense of a Vital Institution, and creator of governmentisgood.com.