Poverty around the world has a surefire cure. It is income from employment and business ownership. More specifically, it is a source of income capable of supporting a modern lifestyle and the opportunity to grow one’s income based on merit and hard work. Absent disability and personal dysfunction, opportunity deficits are the causes of poverty. In order to address poverty, as well as issues like weak economic growth, opportunity deficits have to be confronted. There are, however, three types of opportunity deficits that poor people and communities struggle to overcome.
First, there is an absolute lack of opportunities. In the aftermath of the Great Recession, for example, many more communities faced an economic “death sprawl” than normal, yet few communities actually face an absolute opportunity deficit. There are certainly concentrations of extreme poverty, but even most of these poor communities in the US survive with some form of economic life support. Just as there are communities that thrive due to military and other government spending, there are poor communities that endure solely due to social welfare spending.
For those living in communities, which lack a functional economy, public assistance helps residents survive, yet does nothing to help them rebuild their local economies, seize potential opportunities, or relocate to greener pastures. Whether from private or public industries, communities and individuals alike need opportunities that allow them to do more than just survive. Strong economies are built on economic activity fueled by robust consumer spending. When people only have an income large enough to, maybe, purchase bare essentials, they cannot contribute to an economy capable of growing.
With that in mind, it is not enough to simply create a handful of jobs or businesses. Healthy economies require robust economic activity, which is only possible when a critical mass of people can participate in an economy. When only a small number of people have jobs or disposable incomes, there are not enough consumers to fuel a healthy economy capable of providing for the needs of the community and community members. As such, social welfare spending, such as food stamps, can sustain individuals and communities, yet not revive dying economies.
Second, there is a lack of access to opportunities that the poor face. Whether living in a community where there is a absolute opportunity deficit or a thriving community where jobs are plentiful, the ability to get a job or raise the funds to start a business determines if people can capitalize on opportunities. A lack of education and other credentials, for example, can prevent people from being hired. Employers often struggle to properly assess the skills of potential hires and match them to their needs. Other times, job seekers and employers are unaware of each others’ needs or fear taking chances. Sometimes, potential hires lack essential things like transportation.
The world is lush with need, yet the human resources and intellectual capital needed to address the need exists. Opportunities turn into prosperity when there are needs to be fulfilled and when enterprising individuals, with ideas, skills, and ambition, have access to the proper resources. Communities, including businesses, foster a scarcity of opportunities, instead of cultivating the potential to achieve prosperity. Unfortunately, countless opportunities to solve problems and foster prosperity are lost, because those with the insights to solve these issues are blocked from seizing opportunities and harnessing their talents.
Third, there are often a great deal of opportunities available to most people, but these opportunities are not necessarily viable opportunities. If the benefit derived from an opportunity is not sufficient to justify the costs involved, the opportunity cannot be sustained long enough to derive a benefit, or the opportunities available to a person are not collectively enough to meet an individual’s needs, an opportunity is not viable. If an opportunity or set of opportunities cannot provide for the needs of an individual, that person still faces an opportunity deficit.
On average, Americans need to earn an income equivalent of nearly $15 per hour for a 40 hour work week to provide for a basic standard of living and shed their dependence on government. Absent this, an individual has a personal budget deficit. Those who living in deficit must find ways to share unmet costs with others, e.g. roommates and multiple incomes, displace costs onto those willing to subsidize their incomes, including family and government, forgo necessities, or fiance their deficit with debt. These unstable situations require them to rapidly increase their wages. Unfortunately, income growth tends to be realized over years and decades; whereas, the capacity to live at a deficit is usually exhausted within weeks and months.
Thanks to a widening income gap and a growing number of poor, an increasing amount of wealth is being concentrated into the hands of a shrinking minority. In geographical terms, this translates into pockets of extreme wealth surrounded by a growing number of impoverished communities where the scarcity of opportunity inhibits economic development and growth. Not only does the lack of economic development within impoverished communities undermine the growth of the overall economy, the growth of the overall economy does nothing to actually help those living in this growing number of impoverished communities.
Moreover, only by recognizing the role opportunity deficits play in poverty and economic develop can communities address the faults of their economies. Only by understanding what kind of opportunity deficit communities and face can solutions be formulated that actually solve the issues driving economic dysfunction. To address issues like poverty, income inequality, and lackluster economic growth, opportunity deficits must be addressed. Different kinds of opportunity deficits require different solutions, but the need to create opportunities for communities and individuals is ever-present.
Read old posts