- - Friday, July 25, 2014


Poverty is as endemic today as it was when President Lyndon Johnson
inaugurated the War on Poverty, and Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, is offering sensible proposals to change things for the better.

He would offer states block grants to create programs that both
directly aid the poor and remove disincentives to work and create
jobs. This would reduce dependence on federal handouts and launch a
frontal assault on the declining work ethic and unemployment in

During the Great Recession, unemployment peaked at 10 percent and has
since fallen to 6.1 but virtually all that progress has been
accomplished by encouraging more people to quit looking for a job, and
hence not be counted in the jobless data.

The burden of a depressed labor market and stagnant wages has fallen
most heavily on workers at the bottom—those earning the minimum wage
or a bit more.

Long ago liberals gave up on creating an economy that puts less
skilled Americans into decent paying jobs. Instead, they view poverty
and the alleged exploitation of the working poor as an endemic
condition of capitalism that must be corrected by government
intervention. For example, by requiring businesses to pay minimum
wages higher than worker productivity justifies, and ladling on all
kinds of means-tested social programs.

Food stamps, cash-welfare, rent and mortgage assistance, and the rest
generally phase down as family incomes rise, and together impose an
effective marginal tax rate up to 40 to 50 percent as the working poor
pull themselves up and earn more money. And many programs encourage
single mothers and one partner in two adult households not to work, or
work only part-time, rather than lose benefits.

Ilegal immigrants have much more difficulty qualifying for the
full range of benefits and have more incentive to take lower paying
jobs and work long hours.

Since President Bill Clinton left office, the U.S. economy has created only
6 million jobs—less than one-sixth the pace of the prior two
decades—and according to a June study published by the Center for
Immigration Studies, immigrants—legal and illegal—have captured
virtually all of those jobs.

Many native-born Americans are working only part-time or opting out of
work altogether to cash in on the plethora of payments the federal
government offers for being poor. And Democrats have been all too
happy to encourage illegal immigration, through lax border
enforcement, to fill the jobs their “anti-poverty” programs pay
constituents not to take.

Those tactics curry favor with Hispanic voters who want amnesty for
illegal immigrants or at least federal non-enforcement of
immigration laws. Once those immigrants have children, they are here
to stay, and the children will eventually become reliable Democratic
voters too.

Mr. Ryan’s proposals would offer states the opportunity to
create anti-poverty programs that include new work requirements and
reduce regulatory barriers faced by low income Americans who wish to
establish small businesses. That makes great sense, because for many
without formal education, more-valuable marketable skills are acquired
directly on the job or by starting a modest enterprise.

The legions of once minimum wage workers who are now managers at
Wal-Mart and Target, and even franchise owners in organizations like
McDonalds, bare strong witness to two fundamentals that should guide
efforts to alleviate poverty: the best social program is a job and the
best way to get a good job is to be employed in the first place.

Mr. Ryan’s proposals will face ridicule from liberal politicians and the
media, because if implemented his reforms would violate two of their
most strongly held beliefs: the poor are the victims of capitalist
greed and free market madness and the best way to buy a vote is with a
social program.

Sorry liberals, it is time to take your toys away.

Peter Morici is an economist and professor at the Smith School of
Business, University of Maryland, and a national columnist.

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