Thursday, January 6, 2011

A simple solution

Astonishing idea: to beat back poverty, pay the poor.

Yes, it looks like the dreaded "wealth distribution" that every red-blooded American knows is just a bus stop on the way to full-fledged socialism and the loss of gun rights. And of course, the logical conclusion that giving money to poor people will make them less poor is difficult for many political idealogues to grasp.

However, there is a deeper effect to these programs: keeping kids healthy and in school. Once upon a time in America, this was called "investing in the future." We've stopped talking about that; I guess an educated populace doesn't produce a good quarterly return.

Here in Australia, the effect is even deeper. I took two nephews to a movie the other day ($61 for 3 tickets, 3 sodas, and a popcorn!) and while I was moaning about the price, I mentioned to the ticket girl that in America she would be making $7.50 an hour. She blanched and told me what she gets paid here: $18 an hour.

$18 an hour to sell tickets. By definition, unskilled labor. Now it's true everything here costs twice as much, so she isn't that much better off than a minimum-wage worker in America, save for health care, 4 weeks vacation, and guaranteed university access. But it's also true that people at my end of the pay scale make about the same as they do in the USA (or perhaps %20 more). What this means is that the economic disparity is less than in the USA.

And that's a good thing. Just lowering economic disparity is shown to relieve all sorts of social ills and pressures. Like crime. Amazing that these free-market mavens want to let the free market set prices for labor, and then are surprised that so many people choose to enter the self-employment market as burglars and smugglers.

I confess I had a moment of culture shock when I realized my skills were only worth 3x as much as an unskilled laborer's, instead of 6x as much. And there are many, many cracks in my socialist paradise: dental care is not free, every single one of my nieces and nephews go to private schools (as do 25% of this state's children), the housing tax policy makes no sense, gambling winnings are tax free (because the state owns all the gambling concessions!), and so on. It's no Socialist's paradise; the place is shot through with political compromise and free-market mechanisms. It's not like, say, Sweden.

But what it is, is working. The minimum wage here is $15 a hour, so that ticket seller is actually making more than minimum wage. So the government is no longer the absolute floor in the market for wages. People aren't getting paid by government fiat; rather, the government is creating a particular type of society by choosing a particular economic policy.

But there I go again, assuming that the goal of public policy is to produce effects, rather than to display loyalty to an ideology.

No comments:

Post a Comment