Are the poor in the United States better off than the impecunious in India or South Africa? This has been an important question in the discourse of income inequality. Some say it’s irrelevant, while others posit it shows how great the poor have it a first-world, capitalist country.
Darrell Issa, a California Republican Congressman, who is worth nearly half-a-billion-dollars, spoke with CNN Money, and was asked if he felt responsible to address the matter of income inequality in the U.S. Issa responded in the affirmative, but resorted to this contentious statement:
“If you go to India or you go to any number of other Third World countries, you have two problems: You have greater inequality of income and wealth. You also have less opportunity for people to rise from the have not to the have,” Issa told the news outlet.
He also alluded to greater abundance and access to government education and social services.
The richest man in Congress may have a point when considering not only the opportunities that the poor may have but all of the various safety nets that have been instituted in the U.S., such as food stamps, government education, unemployment insurance, welfare, housing subsidies and the list goes on.
But is this a fair argument to have? It really depends on whom you ask. Should a developed country really compare itself to a developing nation? First, it’s difficult to assess because statistics are compiled and analyzed differently in various countries. Second, countries have different needs so what may be right for Britons may not be right for Americans. Third, who can even define rich, middle class or poor?
In either case, we should be asking why people are poor in the first place. The answer usually lies in government policy and intervention.
Unskilled and uneducated blacks may not move upward in the economy because of the minimum wage, while small business employees may not be garnering a higher wage or higher positions because of government regulations that hinder the growth of the company. A senior may be poorer because of record-low interest rates and high taxes, while a young person may not succeed because of government schools (or indoctrination centers) and the rising cost of living.
If the government gets out of the way and the central bank provides sound money then people can climb the ladder, as long as they work for it and not expect the government to hold their hand.
What do you think about Issa’s statement? Let us know in the comment section!
The poorer half of the U.S. (62 million families) owned a modest 3.6% of family wealth back in 1995. Today they are down to 1%. There is a crisis of family formation, including marriage and child birth. Tax credits and food stamps are the only thing keeping the income inequality and poverty rates from being as bad as they might be.
It would be less expensive to replace the job killing payroll taxes to encourage near full employment and to give a job to the rest with charities. Unfortunately, most congressmen don’t want full employment. They want to write about how good it is to be poor in the U.S. – even if you can’t afford the live birth of your baby.