A Conservative Vision for Better Economic Opportunity

Black and white illustration of figure picking leaves with dollar symbols on them
Black and white illustration of figure picking leaves with dollar symbols on them

There is too much poverty in America. Among prime-age adults (18-to-64 year-olds), poverty rates hovered between 9 and 11 percent for much of the period from 1950 to 2007. With the advent of the Great Recession, poverty peaked at 13.8 percent in 2010 and has fallen only to 13.5 percent in 2014.

While the recent rise in poverty may be attributed to poor economic growth policies during the Obama Administration, the sustained high rates of poverty over the past 50 years are striking evidence that it is time for new approaches to support economic success.

One reason that the Great Society programs have failed to eliminate poverty is that they framed the problem as poverty. Poverty is the scarcity of material resources--money--and the Great Society approach was to "solve" the problem by providing just that: money. That approach has not worked and will not work.

The real problem is ability and opportunity to work; i.e. the capacity to be self-sufficient. So it is refreshing to see the proposals of the Poverty, Opportunity, and Upward Mobility task force in the House of Representatives. These proposals are built on four principles:

  1. Expect work-capable adults to work or prepare for work in exchange for welfare benefits;
  2. Get incentives right so everyone benefits when someone moves from welfare to work;
  3. Measure the results; and
  4. Focus support on the people who need it most.

Building on success in Temporary Assistance for Needy Families (TANF), recipients of government assistance in unemployment insurance, food stamps, supplemental security income, housing and child-support programs would be connected to work (and quickly) or preparation for work.

These sweeping pro-work initiatives stand in sharp contrast to the approach on the other side. Consider recent proposals to sharply raise the minimum wage to $15. There is little doubt that such a sharp rise would dampen employment growth, especially in the sectors most reliant on low-skilled, low-wage workers. The only question at issue is just how much employment growth would be dampened. This amounts to a perverse, redistributive policy that takes money away from someone who would get a job (and does not) toward someone who has a job. In part for this reason, it is unsurprising that only 7 percent of the benefits of raising the minimum wage to $15 would accrue to those in poverty.

The initiative also stands in contrast to simply spending more money. Importantly, there are also no proposed cuts. Instead, the proposal is to move to an evidence-based system in which outcomes are measure (i.e., how many recipients move out of poverty) and only effective programs are funded.

The focus on outcomes - success or failure - leads directly to what amounts to a program evaluation. Why did a program fail? Why is another successful? And, in doing business this way, the task force envisions programs that have the appropriate incentives for social safety net recipients to work, businesses to hire, and states to experience budgetary relief.

Incentives matter enormously and too many social safety net programs - think of the Affordable Care Act's negative incentives on work, full-time work, and hiring in general - are at odds with incentives of this sort. It is important to have a successful pro-work safety net infused with effective incentives.

Conservatives and Republicans have much to offer in the debate over prolonged, elevated rates of poverty in the United States. The task force proposals are an important step toward moving past merely (but correctly) critiquing the 50-year War on Poverty and the empty progressive strategy of pouring more taxpayer dollars into the same failed programs. Instead, they offer a proactive agenda, an agenda that starts by solving the right problem - making more Americans self-sufficient. The resulting policies will be pro-work, will enhance skills through reforms that ensure that taxpayer dollars are portable and are always conditioned on accountability for outcomes.