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    September 2013
    M T W T F S S
    « Aug   Oct »


    Do You Know What Poor Means?

    Don Shaughnessy

    I have previously written about how a well defined problem is half solved and about how bureaucracies survive.  Defining the problem carefully is  an advantage for most of us.  There is a simple assumption in this belief.  That when the problem is solved you will go away and leave it alone. Not so for bureaucracies.

    A bureaucracy, or a department in your business, likes and wants their problem.  It is, after all, their reason for being.  They adapt other means and intentions when they define “their” problem.  Their definition is such that the problem can never go away.

    There are examples:

    How do you define clean air?  I have noticed that the air today is much cleaner than it was 50 years ago.  If people still put their clothes out on the line to dry they could do so every day, not just the days the local factories were idle.  A modern car produces about 1% of the noxious exhaust elements that it did 30 years ago.  Where should it stop?  Not soon it appears.

    Over-solving problems is uselessly expensive.  Take poverty.  I think poverty is a condition that we can well do without.  But, if I am a bureaucrat tasked with curing poverty, rather than risk my unemployment I will prefer to change the definition so the problem is always there.  That is how you come to over solve the problem.

    What does poor mean?  To me, it means the inability to financially afford necessary things.  Food, clothing, shelter, medical care, education, safety, recreation and so on.  This is the consumption based definition.  By this standard there are few poor people in North America.  Not none, but few.

    Unfortunately this definition is not of much use to preserve a bureaucracy.  The definition in vogue now is the income definition.  You are poor if your income is lower than 60% of the median income of all persons.  It is not related in any way to the necessities of consumption and certainly not to any specific person.

    The income method is a comparison to others.  That method, as we all teach our children, fails.  It is a sweet deal for the poverty fixing crowd, however.  They will never run out of poor people.

    As the people whose tax money falls into this perpetual and growing maw begin to realize that poverty has mostly been cured, they come to resent it and fight back.  Finding the tennis courts at the local park tied up by folks on welfare, tends to irritate the tax paying crowd who want to use them.  The result is a fight against the monthly welfare amount.  “Make it smaller, let’s force these people to work.”

    My favorite resentful idea, “A safety net is not supposed to be a hammock.”

    Who loses when monthly payments shrink?  Not the bureaucrats.  Maybe some of the “defined poor.”  The “real poor” people lose big and there are not enough of them to mount a counter attack.  That seems misaligned.

    I can understand the pain of the buy food or pay the hydro bill decision intellectually but not viscerally.  Real poor people know.  Real poor people have sick children who do not receive the proper medical care.  Real poor people have limited to no recreation choices.  Real poor people are not living in safe communities.  Real poor people have no predictable security.  The essence is, “$20 is not much money until you need it, don’t have it, and can’t get it.”

    It is wasteful to spend on problems that have been mostly solved.  Use resources to solve real problems and we all win.  Defining poverty in terms of the ability to consume given the local cost of goods and services, would be a useful starting place.

    In the interim, if you know of “real poor” people, help them because the government is not.  A little to you can mean a great deal to them.  It is the human thing to do.

    If you came this far, you might find this useful.  Forbes

    Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

    The MONEY® Network