How do We Help the Less Fortunate?

I am always concerned about the right way to help those less fortunate. The conundrum centers around the old adage of giving fish verse teaching to fish. First of all, there is the perception of wealthy. A couple of interesting data points on that issue:

Wealth is not liquid. It is generally determined by the markets desire to own verses scarcity. I diamond has little intrinsic value outside of its ability as a tool. The real value is determined by the disposable income of the buyer and the scarcity of the object. The same is true of stocks and bonds, or art. You cannot redistribute this type of wealth because it loses its value once you eliminate the buyers ability to buy. The same might be true of a large ocean transport. They can cost tens to hundreds of millions to build. But if we assume no one has the cash to buy it (we are redistributing wealth and cash is wealth) then the wealth value drops to almost nothing. Wealth isn't so much redistributed as evaporated.

What is wealth (top 1%) and who are they? The top 1% includes anyone with net assets of $800,000 or more.(a) There are about 47 million people in the world who meet this classification. There are eighteen million in the United State. Switzerland has the highest density. There are a couple of things to take under consideration. First, it is assets, not income. Young professionals may have a household income of over $200,000 per year, but very few assets. Older people, especially those who have saved wisely for retirement, may have little income, but a lot of assets. For retirement planning it takes about two million dollars in assets to generate $80,000 a year in income. The second considerations is cost of living. A  millionaire in Cape town will live much better than a millionaire in Paris.... By the way, to classify in the top 10%, your assets only have to be greater than $77,000.

So we can conclude that redistribution of wealth would be both hard to identify and hard to implement.

Let's say we find a way to redistribute some wealth without demotivating innovation. We find that fine balance that takes cash from the rich who have excess, but not from the middle class that just needs it to assure their futures. Also, we can't take too much via businesses, because businesses don't print cash, they get it from their customers. Taking too much from businesses will only cause inflation of prices as the business passes it on. Once we have the money, what do we do with it?

Second there is the methodology for helping. Well the "give a man a fish" approach won't work. We all know that. We have seen it over and over. Our entitlement system is living proof. A small per cent will learn to fish while they eat their first fish, but most will procrastinate as long as there is another fish. I have thought and written about the impact of advanced technology on the lower class. It's a train wreck waiting to happen. Most technology advancements displace low level jobs because those jobs are simple and repetitive. They are the exact jobs that the lower class is prepared to work.

Here, I think, is the hard lesson. It is a not so quick an answer. We have to elevate the lower class to have both a positive attitude toward and training in technology jobs. How do you elevate someone's attitude? Our attitude is more positive toward something that we are more comfortable with and understand. By increasing our exposure to different aspects of technology at a very young age, it loses its mystic.   The UK has made it mandatory to teach children to code as early as age five. The idea is to get them comfortable with technology early enough to stimulate interest. They make a game out of it so it doesn't seem all techy and scientific. By the time they graduate it will be as common to them and reading and writing.I think the key is mandatory, because people will not do it of their own volition. I mean if they would, they would already be doing it, right.

Zack Simms is a Columbia School drop out that now teaches programming to over 26 million students at a time. Seriously, he really does. He found that most of his peers didn't have the fundamental computer skills to effectively work in industry, himself included. He first got a friend to help write a program to help him learn programming. This was so successful that other people wanted to use it. CodeAcademy  now has 26 million students from over 100 countries, learning six different program languages. CodeAcademy is only three years old.

At the Davos Conference they talked about 8.4 million jobs left unfilled in technology because of a lack of skills. Technology jobs run the gamut of aptitude. Some are creative like digital art. Some are more hands on like hardware maintenance. Others require planning, programming, installing. Maybe it requires only an high level of technology understanding as in customer service or sales. You don't have to be a geek or a nerd. You can be yourself.

The way to redistribute wealth is to find a way for the lower class to create their own wealth. We might have to give them fish for a while, but I would suggest that we simultaneously nurture them into fishing for themselves. Life is much more enjoyable when a person feels independent and self reliant. Waiting for the government to determine your fish allocation, knowing your life depends on it, is a form of slavery. But knowing you have the skills to catch fish in any pond is freedom.

As more and more simple jobs like lawn care, cleaning, ground transportation, Fast Food Restaurants give way to technology, the lower class has to find a new way of making a living. Building and maintaining the very machines that took these jobs is the best answer. Start them young and when the time is right they will forge their own path.

(a) Wealth report by the charity Oxfam

Moving Down that Slipery Slope

I wrote a short blog on how we as a nation, in an effort to help those less fortunate then ourselves have created an environment that will eventually enslave the lower class.  Hard truths are hard truths. It is not our nature to want to hear them. We prefer to gather information that supports our point of view, not challenge it. One of the roles of the Reticular Activating System within our brain is specifically designed to ferret out those sources of information that move us from internal conflict to peace.

Even agnostic George Holyoake's in his 1896 publication English Secularism defined secularism as: That it is good to do good. Whether there be other good or not, the good of the present life is good, and it is good to seek that good. So as Americans we strive to do what we feel is in the good.

I ran across an interesting whitepaper entitled "The Future of Employment: How Susceptible are Jobs to Computerization ", September 2013, Oxford University Engineering and Science Department. It's over seventy pages, but it boils down to the graphs below:

The population at the greatest risk of having their jobs replaced by automation are the low wage, low skill jobs represented by the lower class. If we add to this our propensity to compensate for low income by providing financial support through government programs, we are creating a class of people held in bondage. They just simply don't have the where with all to climb out of the dependance based inviroment they find themselves in. They have to find employment that catapults them from lower class to middle class in one fell swoop.

The problem is that they may find that the normal intermediary steps required to improve their financial life are punitive. They may actually have to decrease their standard of living, now at the bottom of the American dream, before they can move upward. They have to give up government subsidies, start paying taxes and still have enough income to maintain their lowly standard of living. Tough love...

Kerby Anderson talks about the ten stages in the decline of a nation. They are (with my interpretation):

1. Spiritual Faith (our founding fathers)

2. Great Courage (American Revolution)

3. Birth of Liberty (The Constitution)

4. Abundance (World leadership)

5. Selfishness (My specific wants and needs rule my decisions)

6. Complacency (sometimes under the guise of Tolerance)

7. Apathy

8. Moral Decay

9. Dependence

10. Bondage

I stopped notating after number six because I am not sure exactly where we are as a nation. We clearly have moved into, and perhaps beyond selfishness. Have we become complacent? It is hard to say. We seem to be broadening the definition of acceptable behavior. States now run the gambling concession through lotteries. States have also started to legalize drug use. Is this because we selfishly feel that we should not be stopped from doing what pleases us, or are we just too complacent to stop some fringe niche group from eroding our sensibilities. 

Twenty, thirty or fourty years from now, where will we be? Will we be a nation that has a substantial population that is dependent on the government to the point that they are incapable of taking care of themselves. Will those who actively contribute to the cofferes of the government be able to contribute enough? Will we be overtaken by Stage 3 or Stage 4 countries, some of which have population three and four times ours.

If this does happen.... will we all slip into bondage because we do not have the resources to maintain our independence? Will their economic engines run ours?

The enslavement of the lower class or the unintended consequences of social engineering.

Do government programs meant to help the lower income worker actually make it more difficult for them to rise above government subsidies, thus thwarting their drive?

Conservatives and liberals are at the vocal polar extremes of public opinion. Most of us are moderates and keep our opinions to ourselves. Mostly  because there is no party to stand behind. I do fear that in the governments quest to save the lower class they have unintentionally built an economic system that further enslaves them. I'm a moderate so I give the government the benefit of the doubt. Liberals will say it's not true and conservative will say it is intentional.

Here's the makeup of the story. There are several moves the government has made that individually look like a good thing for the poor, but taken together it creates a spiral down system for their future. 

The government is trying to raise the minimum wage from $7.25 to $9.80 (or $10.10 based on who you are). That's a minimum 35% increase. On the surface that seems like a good idea, the lower income worker would get a substantial increase in income and maybe climbs out of poverty. There are some problems with it. The CBO (Congressional Budget Office) predicts that only 19% of the recipients of this wage increase are actually below the poverty level. 29% of the benefit would go to families already making over three times the poverty level. The projection is that the increase will be a net 3% to those below the poverty level. Add to this the negative real income effect of -.4% for the rest of the wage earners, the projected 500,000 lost jobs and the real net earnings is negligible. But this isn't the real problem. We'll get to that in a moment.

The second great idea for the lower class was subsidized insurance. Again, I am not being facetious, it was a good idea. But it did not address the unintended consequences. Low income people thrive on hourly work that is typically at or less than 40 hours a week. Under the new ACA mandate that limit will lower to 35 hours. The ACA also mandates taxes for employees in place of benefits, further raising the cost of employees that exceed the threshold. There is a lot of evidence that businesses will try to work around the requirement by limiting employment. One way to accomplish that is to hire more full time workers that will work in excess of 50 hours per week (and get compensated for it) and fewer hourly employees that work 30 to 40 hours per week. So the lower middle class or middle class will get higher quality employment and the lower class will be squeezed out. 

The combination of higher wages and higher ACA cost makes automation more appealing. The breakeven to replace employees with systems becomes more appealing. The jobs that will be automated are not the complex jobs that require analytical thinking, they are the repetitive manual jobs mostly populated by the lower class. McDonalds is already testing self serve ordering in California. This automation, much like self server check out and ATM's, further reduces job opportunities for the lower class. 

So where does the lower class find themselves. Well first, the job market for semi-skilled or no skilled employees is shrinking. The 500,000 jobs lost is part of it and automation of repeatable manual tasks is the other part. Add to that the natural limit of hours to avoid taxes and fees and when they do get a job it doesn't pay much. Here is another problem. When they get a job they pay taxes and they lose food stamps, welfare, and insurance subsidies. How much will they have to make to cover all of the lost income to taxes and the loss of government subsidies? Probably a lot more than $350 per week they would make at minimum wage and 35 hours. 

Now this isn't opposition to subsidies. You notice I didn't call them entitlements. In a prosperous civilized society there is a natural need to help other less fortunate.  I do see one of the unintended side effect of all of these programs is that the lower income group does not see a way off of subsidies through work. The inflection point it above their ability to achieve. So they are now locked in the lower class. The divide between a life on government subsidies and the life of the lower middle class is too great.  Society will eventually leave them behind.

Everyone needs a miracle from time to time.

Jeremiah 29:11 “For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.”

We all face times of desperate need. All of us at one time or another in our lives “need” a miracle. It might be saving our job/business depends on closing a business deal. It might be that we have a loved one with a medical emergency. But at some point we recognize that we can’t do it alone and “need” intervention. Most of us look for a “parting-the-Red Sea” type of miracle. We’re looking for that big, immediate, in-your-face solution to our problem. I know some of us can point to big “parting-the-Red Sea” miracles and I believe they exist, but for the most part I think if we critically looked at even those they would follow this process. It is just that we obeyed so naturally that we don’t see our involvement. What is the real pragmatic expectation to answered prayer? There are six points I’d like to make:

1. God knew the need before we asked for help 
2. God could have solved the problem immediately without the help of other
3. God expects us to do what we can, he expects obedience 
4. God uses resource that we have 
5.  God does what we can’t
6.  Here is the hard part, the final solution always takes longer then we want, requires obedience even when we don’t understand the required task and is more painful than we would like.

I have listed five Biblical miracles at the end to use as examples. They are just five of many, but they demonstrate the principles well. They all share the six points above. 

God knew the need before we asked for help

We are not going to surprise God with our need. Psalms 139:4 “Even before the words are on my tongue, you know it all together.” We are not bringing Him a perplexing problem that He needs to contemplate. Our problems are unique and immediate to us. Because we do not see the future, our need is for a quick solution. When we don’t get it we believe either God doesn’t know, doesn’t care or can’t help. The timing is a well thought out decision by God based on his plans for us.

God could have solved the problem immediately without the help of others

In Genesis 1 we learned that God created the heavens and the earth. There is nothing He cannot do without our intervention. Genesis 22:18 says "And through your descendants all the nations of the earth will be blessed—all because you have obeyed me." He wants to bless us by getting us involved. The first part of the blessing is that He wants us to work together. He wants a relationship with us. He wants us to trust and obey. He could have simply made the five thousand full. Or made the bridal party happy with what they had, or wiped out the debt of the widow. He wants us to experience the joy of working with him.

God expects us to do what we can, he expects obedience

You can’t steer a stationary ship, it requires movement. Obedience is movement. Many times we pray for a solution and wait for the answer. God will send us “nudges” as a call to action. He will not always show us an immediate result when we obey. The size of the blessing can be determined by our actions. In both the Water to Wine miracle and the Widow’s Olive Jar miracle, the size of the blessing was determined by the number of vessels the people gathered. Peter could have never walked on water if he hadn’t first gotten out of the boat. The cripple went to great effort to have his friends carry him to Jesus, lift him to the roof and dig a hole into which they could lower him. The first step is obedience. Obedience requires movement.

God uses resource that we have

This is the first miracle, we have everything we need. Generally we expect that the solution of the problem centers on the fact that we can’t get what we need, which presupposes that we don’t already have it. The cripple had friends that were willing to help. The widow had olive oil, the wedding guests had water jugs, and the 5,000 had five fish. It seldom seems like we have enough, so we overlook what we have. Whether it is money, friends, intelligence, energy, or experience, we have resources that God will use. We need to take the time to understand the resources available to us and we need to be willing to apply them even when they seem lacking.

God does what we can’t

He is where the magic happens. As the servants ladled out the water it turned to wine. As the widow poured out olive oil from her jar it kept filling jars until she was out of jars. As the five thousand took pieces of fish and bread, there kept being more fish and bread. The cripple picked up his mat and walked. You don’t really think Peter could walk on water without God’s help. This is the part of the miracle we see and expect. The blessing is a result of our obedience; we kind of forget that part. 

The Hard Part

The final solution always takes longer then we want, requires obedience even when we don’t understand the required task and is more painful than we would like. Sorry I wish I could say more, but this is it. We have expectations that if we do what God wants, he will do what we want. Sorry, it’s not a trade. He knows so much more than we do. He knows what we want and need. He can see the future implications to all actions. We have a vision of our future based on limited knowledge. He has perfect knowledge. 

“For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.”

Test this theory by reading about these five miracles in the bible:

1. Walking on Water (Mathew 14: 22 – 33)
2. Water to Wine (John 2: 1 – 11)
3. Widow trying to save her children from indenture (2 Kings 4:1 – 7) 
4.   Feeding the five thousand (Matthew 14: 13 – 21)
5. Cripple who is passed through the roof (Luke 5: 17 – 21) “get your hands dirty digging through the roof kind of faith”