Poverty costs businesses and society

Pasadena Star News

By: Cynthia Kurtz

Posted: 8/27/2014 

Being broke is an economic condition. Being poor is a disabling frame of mind and spirit. Fifty years after the signing of the War of Poverty Act by President Johnson on August 20, 1964, there are more Americans who are both broke and poor than ever before.

Over 48 million people in the United States live in poverty - almost 16 percent of the population.

"Putting Poverty in Southern California in Focus" was the theme of a recent forum convened by the Southern California Association of Governments (SCAG). Within the SCAG region - which includes the counties of Los Angeles, Imperial, Orange, Riverside, San Bernardino and Ventura - over 3.2 million people or 1 in 15 live in poverty. One in four children live in poverty.

The forum brought together government, non-profits, business and faith based organizations to talk about why poverty still plagues our society. Why haven't the safety nets worked? What needs to be done differently? Who needs to be involved?

It is clear that poverty concerns everyone. Take one example: poverty can lead to and exacerbate health issues. When people can't afford healthcare, the emergency wards become overwhelmed and the costs go up affecting us all financially.

Businesses rely on people who can buy goods and services. There is a reason that businesses in poor neighborhoods don't do well. The poor do not have enough disposable income.

Even though the organizers didn't call for the definitive answers from this single forum, there was much agreement about the causes of poverty and steps required to end it.

First, social safety nets do work at helping those in poverty. There are many effective programs on the front line feeding, clothing and sheltering those who need some extra assistance. These programs have helped millions of people have better lives.

What the programs have failed to do is move people from poverty to prosperity. That needs to be the new goal. Or, as Frank Talarico, Jr., President & CEO of Goodwill of Orange County put it, "A hand up not a hand out."

It starts with education. Former Governor Gray Davis stressed California must "double down on education." For every dollar spent on pre-K for poor children, an estimated $7 is saved on future government services.

People need jobs. The consequences of public policies that are detrimental to job growth are crippling. It is time to get serious about regulatory reform. You can't produce jobs quickly when it takes years for projects to go through approval processes and the accompanying lawsuits.

Keep families together. A two parent family is the best predictor of the social mobility of children. Changes in tax policy for married couples would help.

Raise the minimum wage. We all know that minimum wage can't stay the same forever. Today, there must be some number between no increase and $15 per hour that reasonable people can agree on.

Finally, everyone must become involved. Raising people out of poverty, raises us all.