Thread: Importing poverty

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Importing poverty

Noah Peters, Cavalier Daily Opinion Columnist

PERHAPS no problem in our time has proved as intractable as the issue of poverty. The poverty issue has an uncanny way of generating vague and abstract rhetoric as opposed to concrete policy solutions. With the disappointment generated by the efforts of the Great Society and Welfare Rights Movement to end poverty, the debate still has not gotten very far beyond Karl Marx's utopian call for a "social revolution" which will somehow eliminate the "root" of poverty.

Last Tuesday's community forum on poverty, "The Face of Poverty," which styled itself as the first of four "conversations" on "the persistence of poverty," provided its fair share of utopianism, including one speaker, a United Church of Christ minister who wants to "abolish" poverty in the same way that earlier generations abolished slavery. But unlike many forums of these types, the forum also put many issues in context and pointed to specific solutions. The forum highlighted that poverty, in Charlottesville and the nation, is getting worse. It also suggested some concrete steps can be taken, such as ensuring that minimum wage laws are not circumvented, to alleviate poverty.

Poverty today has been exacerbated by the fact that the United States is increasingly losing its character as an egalitarian nation. In the past, American equality was the inevitable consequence of settling a lightly populated continent: The United States enjoyed a seemingly unlimited supply of cheap land, alongside a limited supply of labor. This meant that labor could bargain with employers for high wages, and could afford the essential element of a middle-class life: land. Under these conditions, the market economy flourished and brought wealth to ordinary Americans.

Fast-forward to 2006 and the picture is very different. Labor is abundant and wages are being driven down by the exploitation of illegal aliens, who are often paid below the minimum wage. Census Bureau statistics show that poverty rose in 2004 for the fourth year in a row, driven by increasing poverty among whites. Land, by contrast, is out of the question for workers in many parts of the country. This is especially true in the Charlottesville area, where property values are soaring.

The problem of exploitation of immigrant labor was touched on by legal aid lawyer and University Law lecturer Alex Gulotta, who noted that many Charlottesville area businesses covertly employ illegal aliens for salaries below minimum wage. This trend, combined with rising land values, threatens to make Charlottesville a two-tiered society, with rich landlords pitted against a poor laboring class. The laboring class, unable to bargain for wages due to a surplus of labor supply, finds itself in a state of perpetual poverty. Attempting to survive on the minimum wage in today's society, especially with a family, is almost impossible given the high cost of commodities like rent, utilities and transportation.

One obvious solution to the problem posed by Gulotta is stricter enforcement of immigration laws, as well as penalties against large businesses that circumvent these laws by exploiting immigrant labor. This strategy is suggested by Maryland's recently passed "Wal-Mart Law," which seeks to ensure that workers' inability to bargain does not leave labor effectively destitute. State reform efforts can only go so far, however: Washington needs to do its part to enforce immigration laws more strictly, an item on the congressional agenda for February.

It is often argued that these types of reform efforts run counter to the free market model of the economy. But the free market model assumes that workers are able to bargain for wages individually, as well as a situation where natural barriers to entry are not prohibitive. This is not the case in present-day Charlottesville, where high property values prohibit entry into the market while labor surplus prohibits workers from bargaining. And while it is true that immigration increases overall GDP, it does so by transferring wealth from native-born workers to large corporations while nurturing a permanent underclass of poorly-paid new arrivals, and thus exacerbating inequality.

The solution to the problem of poverty does not lie in new welfare-state government programs that perversely tend to depress opportunity and entrench the status quo by encouraging monied interests to extort resources from the government. The limits of government intervention to alleviate poverty by means of direct transfer payments have been evident since the disappointment of the Great Society. Rather than dream of vast structural reform, we can make the situation faced by employees in the labor market more favorable. We may not be able to recreate the equalitarian nature of early America, but we can ensure a society where workers can at least live in relative comfort.

Noah Peters' column appears Mondays in The Cavalier Daily. He can be reached at npeters@cavalierdaily.com.

"while it is true that immigration increases overall GDP, it does so by transferring wealth from native-born workers to large corporations while nurturing a permanent underclass of poorly-paid new arrivals, and thus exacerbating inequality"


Precisely the reason why, pandering to the interests of the economic elite, Bush and many in Congress favor a vast guest-worker/amnesty program and have refuted current law. And this is why it will be such an uphill battle to pass border security legislation without that guest-worker program in the Senate (Millionair's Club).

ooooo...I see a revolution just over the hill..getting closer every day as Washington sneers at our values, our lives, our laws, our constitution...assumes powers that are not theirs...steals our livlihoods and redistributes our money....Americans are more outraged every single day.

We MUST vote all of these people out of office according to their deeds...or there will be bloodshed in this nation.

RR