Libertarian Perspective
The 500-Pound Government Monkey
by Ron Getty
Mon, 3 Mar 2008

The "war on poverty," through its unintended consequences, is the enemy of the poor and, in fact, is a 500-pound government monkey sitting on the backs of the poor.

Fighting poverty is a multi-billion-dollar government boondoggle for bureaucrats using forced philanthropy from taxpayers. For example, a recent audit by the San Francisco budget analyst reported $70 million of taxpayer funds spent by city departments to help 3,000 unemployed workers find low-wage employment. In the course of helping these unemployed folks find jobs, city employment bureaucrats earned average annual pay and benefits of $85,000.

Poverty administrators suck in taxpayer dollars, and, unlike Oliver Twist, demand more; they do not ask for more and they never say please. The government minions' misguided attempt to stop poverty ignores the fact that progressive politicians' policies and regulations help create the poor and poverty.

The poor include blacks, Asians, Hispanics, white "trailer trash," immigrants (both legal and illegal), the disabled, drug addicts, the mentally unfit, the elderly, illiterates, and the unskilled. They live in areas of classic poverty: the slums, the "wrong side of the tracks," the projects, the ghetto, the 'hood, the red light district, etc.

The poor are ghettoized by government policies from land-use, zoning, and building codes that restrict low-cost housing to poverty "reservations." The poor could take over abandoned buildings through squatters' rights and make them habitable. Instead, progressive politicians using eminent domain seize abandoned properties and hold them for connected developers to build premium-priced housing with some throw-a-bone-to-the-dog affordable units.

Politically induced regulations for licenses, permits, and labor codes anti-competitively hamper opening a business or getting employed. Government laws further criminalize the entrepreneurial poor by declaring street corner pharmacists, penny ante gamblers, and adult consensual sex workers as criminals.

Government treats small businesses that mainly hire low-wage workers as if they were ATMs. Because of legislated employer taxes and employee wage and benefit mandates, the amount of capital available to hire low-wage or unskilled workers is severely constricted. San Francisco small businesses pay $120 million in payroll taxes to the city coffers, which mean 6,000 minimum-wage workers aren't hired.

Income and sales taxes penalize low-wage workers, taking a higher net percentage of their income than better-paid workers. Little is left over for the basic necessities of food, shelter, and clothing.

Wal-Mart and similar stores offer low-priced goods that allow the poor to stretch those dollars and provide hundreds of minimum-wage jobs at each store. Progressive politicians fight retailers like Wal-Mart and characterize them as the devil incarnate. Yet these same progressive politicians offer no other low-cost shopping or job opportunity alternatives for low-wage workers.

We need to deregulate restrictive administrative and regulatory codes enacted by progressive politicians. These codes weren't designed to help the poor but rather to control the poor, ensnaring them in de facto poverty reservations.

Let's look at some things that could be done to free the poor from poverty by getting jobs for them and letting them keep what they earn:

• Repeal income and payroll taxes for workers earning below the Federal Poverty Income Guidelines. To increase hiring of the poor, repeal employer payroll taxes for hiring anyone earning below the guidelines.
  
  
• Repeal minimum-wage laws to remove wage floors that block the unskilled from employment.
  
  
• Put a minimum $100 floor on regressive sales taxes that burden low-wage workers. Repeal laws on drug sales and consensual adult sex workers so those entrepreneurs won't be criminalized and imprisoned at the taxpayers' expense.
  
  
• Allow unrelated families to join together to rent apartments or homes so the impact of high rents can be spread out.
  
  
• Permit the poor with cars to offer neighborhood cab services without mandated taxi medallions. Let skilled women do hairdressing in their homes without the costly cosmetologist's license and training. Allow people to make sandwiches, salads, and stews in their home and sell the food from sidewalk tables or at work sites without having a licensed kitchen.