Poverty and the Economy

23 August 2007

I have been thinking lately about the U.S. economy, and how it is related to poverty. Here are some thoughts:

  • Many people in this country are living in poverty (see my previous article on homelessness for more detailed analysis). Some of these people are unable to work, due to physical disability, mental illness, or other factors. But many of them are working in jobs which do not earn them enough to meet the basic needs of housing, food, and health care for themselves and their families.
  • Many people are living and working in this country illegally. The ones I am most aware of come here, mainly from Mexico, because they have very few opportunities for employment at home, and hope they will have a better life here. And although their life here seems very difficult by my standards, they generally say that it is much better than it would be back home.
  • People in both of these categories (the working poor and the illegally employed) are staffing our fast food restaurants and grocery stores, picking our fruits and vegetables, cleaning our office buildings and hotels, and working in low-skilled manufacturing jobs. Presumably, if the illegally employed were sent home, and the working poor earned enough to live on, prices would be higher. Though perhaps that would be offset by lower taxes, as we would presumably have less need for Medicaid, Food Stamps, Welfare, Section 8, and other programs where government agencies take care of some of the basic needs of the working poor.
  • Overseas, the inexpensive goods we import are being produced in ways that would not be legal here: with child labor, long workdays and work weeks, low wages, and large environmental impact. These practices also keep our prices down.

To me, it is clear that the social and environmental cost of our low prices is too high. What I am less clear about is how to reduce the social and environmental costs, and what effect it would have on our economy. I think I need to do some reading...