The Inclusive Economy: How to Bring Wealth to America’s Poor



good afternoon thank you all for taking time out of this beautiful day to join us inside for Capitol Hill briefing titled the inclusive economy how to bring wealth to America's poor my name is Jeff Vanderslice and I am a director of government and external affairs at the Cato Institute a public policy research organization here in DC dedicated to the principles of limited government individual liberty free markets and peace today's discussion is named after a recently published book by the same title as today's event which is available to you on the registration table as you came in right outside these doors for those of you who did not receive a copy on your way in please feel free to grab one on your way out and of course if we run out or you otherwise decide that you would like a copy later feel free to contact us we'd be happy to drop one by your office with us today today to discuss this book are two of Cato's scholars Michael Tanner the author of today's book and Emily Eakins Cato's director of polling who will discuss her ongoing research on Americans attitudes toward welfare policy poverty and work tanner is a senior fellow at the institute where he heads research into a variety of domestic policies with an emphasis on social welfare health care and retirement he has written numerous books including going for broke deficits debt and the entitlement crisis healthy competition what's holding back health care and how to free it and the poverty of welfare helping others in civil society his writings have appeared in nearly every major an American newspaper including the New York Times The Wall Street Journal Los Angeles Times and USA Today he has been named by the Congressional quarterly as one of the nation's five most influential experts on Social Security Emily Ekans is a research fellow and director of polling at the Cato Institute where she focuses on public opinion American politics political psychology and social movements she has authored several in-depth survey reports including the state of free speech intolerance in America policing in America and five times and the five types of Trump her research has appeared in The Washington Post Politico The Wall Street Journal USA Today the Los Angeles Times and other publications she earned her PhD in political science from UCLA with that I'll turn things over to Michael well thank you very much and I appreciate you coming out it really is much too nice a day to be in here listening to me so I really appreciate the the suffering that's going to go with this as we talk about a subject that I think is not talked about enough in Washington and that is poverty and how we should get people out of poverty you know we spend a great deal of money actually in this country fighting poverty maybe not as much as some people like maybe more than others people would like but it's quite a bit if you look at all federally means-tested programs or programs that say in the definition of them this is an anti-poverty program we have about a hundred such anti-poverty programs at the federal level 70 some of odd of which provide benefits directly to individuals the others provide benefits to low-income communities and they spend about 700 billion dollars at the federal level every year on these programs and another 300 billion or so at the state local levels so we're spending nearly a trillion dollars every year fighting poverty and in fairness these programs have succeeded at some level they do reduce the poverty rate the poverty rate is lower today because of these programs than it would be in the absence of these programs or at least you can't prove the counterfactual but what we do know that they do reduce poverty rates but the question is whether or not simply reducing the poverty rate or making poverty less miserable should be the goal the ultimate goal of our anti-poverty problem policy you know because you could take a go to a community like sand town up in Baltimore where Freddie gray was killed or East Fresno California or Ollie Kentucky the poorest community in America and ask you know are these thriving communities are the people in these communities flourishing and that ultimately should be the goal public policy is human flourishing thriving human beings they're able to become all that they can be now if you look at sort of Maslow's hierarchy of needs we do a reasonable level at the very bottom the base of that pyramid of making sure that people have enough food and shelter and clothing and so on the sort of destitution that existed even in the 1960s when large numbers of the poor didn't have running water or electricity where you know real hunger in America was prevalent we do a reasonable job at dealing with those needs but we don't do very good getting people to rise up to the top of that pyramid where they are the masters of their own fate where they are self-sufficient where they are in charge of their own lives and able to control their own destinies and to become all that their individual talents will let them be so when I started looking at poverty for this book the inclusive economy I said let's go back to the beginning and strip it down let's get away from the sort of sterile debate that we have in Washington right now which is now we spend ninety eight billion dollars on food stamps and Democrats say oh no no we need to make that 99 and Republicans say oh no no let's cut it back to 97 and we assume that one of those changes is going to make a huge difference in people's lives I said let's strip it right down to the beginning so the first thing I wanted to do was look at why people are actually poor and what I found was there are two competing theories on poverty if you will in this country and both politically and academically you get a lot of butting of heads between these two theories on one side is the theory that says that poverty is the result of individual choices individual decisions by the poor themselves that there's a culture of poverty out there and that that leads the poor to make a series of poor decisions in their lives and those decisions are what actually trapped people in poverty and they look at what something was called the success sequence and this there is a strong correlation to suggest that this there's accuracy in this that if people will perform certain functions that if they will graduate high school for example and then get a job and then have children only after they're married they are unlikely to end up in poverty and if you look at the numbers of the you find there very few people who do those things are actually poor fewer than 3% actually if people who do all three of those steps actually end up in poverty now there's correlation causation questions but you certainly can say that those choices matter in people's lives on the other side of this you firin the people on the liberal side of the spectrum say okay that's good as far as it goes but you can't ignore the fact that we have endemic racism in our society that gender-based discrimination is still prevalent and the very creative destruction of capitalism that's celebrated by conservatives and people like me leads to economic dislocation that can leave some people behind and some people out of the equation and that these things can also cause poverty I mean you can't ignore the fact for example that the legacy of slavery alone is that african-americans have been deprived of seven to ten trillion dollars in capital in the african-american community those sorts of things can't simply be left behind in the equation so who's right I think there's actually truth to both sides of this equation I don't think you can strip the poor of agency and pretend that they are nothing more than chaff blown by the winds of fate that nothing they do matters that they are entirely at the mercy of outside forces and that their choices have no consequence I think that's a very demeaning way to look at the poor but I also think you have to recognize that we all make our choices within certain constraints and the simple fact is that if you are a poor minority child in the inner-city let's say and you're growing up in an area that has very few jobs where the school system is lousy where the police hassle you every time you set foot outside your door you're gonna end up making various different set of choices and decisions than if you're a rich white kid growing up at Chevy Chase and we need to understand that it is a combination both of the individual choices people make and the context in which society sets those decisions that ultimately lead to poverty so looking at all of this I said okay there's some truth on this side there's some truth and that's but there's a third villain if you will in this equation that we need to look at and that is the government itself and where government policies get in the way of people actually rising out of poverty how often the government is actually messing up things on both sides of this cui equation either setting incentives for the wrong individual choices or it has actually enforced the societal discrimination that actually leads people to make the choices they do so I could identified in this book I identified basically five areas where I think that we should be looking to reform policy in order to help people get out of poverty the first of these is criminal justice and the need for criminal justice reform we know that our criminal justice system is biased against poor people and people of color at every step of the way from our over criminalization of virtually everything in America and I'm talking about the war on drugs the war on sex work look let us not forget that Eric garner up in New York was killed for the crime of selling an untaxed cigarette we look at need to look at the over criminalization of society but then we also need to look at the way the police interact with people on the street we need to look at the way we deal with arrests we know for example that if you are a minority person or live in the inner city that you are going to be treated arrested more likely for drug use than if you are white and yet blacks and whites use drugs at approximately the same rates once you're arrested we know you're going to be sentenced more harm ly hard harshly if you're a person of color we need to look at the way people are treated in prison and we need to look at the problem that stems from having a criminal record when you get out of prison in fact is if you commit a crime you make a mistake you do something you get a felony conviction when you're 20 years old when you're 40 years old you're still going to have to be carrying around that criminal record it's going to prevent you from getting a job because you have to check that little box that says you have a felony conviction when you apply for work but it can also prevent you from getting housing because landlords can ask about whether you have a criminal record it can prevent you from getting scholarship aid financial aid go to school it's a whole you kick it prevent you from getting a license to perform various occupations you know in Ohio they actually have a prison training program to teach people in prison to become barbers but it's illegal to get a barbers license if you have a felony conviction in the state of Ohio seems sort of a you know pointless exercise so we need to look at all of these things and you know I'll just show you just how this Center interacts one of the things that conservatives worry a great deal about is women who have children outside of marriage and they point to a host of problems that stems from high out of marriage birth rates well I know they say well you go to the inner city you see you know 67 68 percent of women having children outside of marriage and I say exactly who are these women supposed to marry it's not like you have this giant pool of inner-city computer programmers that are waiting around for them as William Julius Wilson from Harvard's pointed out our criminal justice system is stripped a million and a half young black men out of the marriage pool because they're tied up in the criminal justice system which makes it implicant for them to find a job that's gonna allow them to support a family to get the housing and education and all the things I've talked about unless you reform criminal justice you're not gonna be able to deal with things like too high out of marriage birthrate so that's number one we need to deal with the criminal justice reform system and scholars at Vanderbilt University suggests that that reform alone could reduce poverty rates by as much as 20 percent that's single reform second we need to look at the education system we know that education is one of the best routes out of poverty and we know that if you drop out of school you're about five times more likely to be poor than if you go on and finish high school or go on to college and yet we have a school system today that all too often fails people of color and low-income people we have a school system that today that all too often exists for the benefit of the teachers unions and the administrators and not for the parents and the children themselves that there's very little innovation very little competition within our school system very little improvement and it's not just a function of money we know that school systems like Baltimore or Washington DC or Chicago or LA actually spend more per pupil than school systems almost anywhere in the country and yet get poor results we need to look at our education system in ways that we can bring more innovation more competition and more control ultimately by parents and in operating for their children's sake than for the system itself the system is not the goal ultimately educating children is the goal third and this one actually surprised me a little bit as much as I dug into it just how important it is but that is we need to make reforms to housing and bring down the cost of housing for low-income people you know housing takes up a disproportionate amount of poor people's income about 40 percent on average of a poor person's income goes to pay the rent that's a huge amount when you have other needs as well but at the same time if you have high rents unaffordable rents it ghetto eise's the poor locks them into low-income communities they can't move to an area that has more jobs or that has better schools or that has a lower crime rate they're trapped in their area with all the social dysfunction that goes on in those areas and yet it's often government policy that drives up rents beyond the affordability of poor people to afford specifically I want to look at things like land use and zoning laws zoning alone can add as much as 50 percent to the cost of housing in communities like Manhattan in San Francisco nationwide it can add 25 to 30 percent or more to the cost of rent you know and often these zoning laws first of all we should note that the most is owning laws were in their history is explicitly racial the first zoning law in the nation was actually in LA I believe the second zoning law was in Baltimore and that zoning law actually prohibited as part of the zoning ordinances prohibited you from selling or renting to any family that was not of the majority race on your block Richmond copied that law within Richmond Virginia copied that law within a couple of years that then moved to Birmingham Alabama and it spread throughout the country and it still has the same segrada Kotori effect today of keeping basically people of color and low-income people out of upper income communities or middle-class communities and it's still what is used for today primarily is to prevent low income housing and uh in better communities we need to be looking at zoning laws land use laws and how they're used basically to bar poor people from middle-class communities fourth we need to look at savings we need to be looking at whether or not we encourage people to save I mean this would be common sense that you don't get out of poverty by spending you get out of poverty by saving money and yet on both sides of the equation we discourage savings in this country you know for one thing we make it hard for the poor simply to open a bank account we're so paranoid about the war on drugs and the war on terror that we set up all sorts of identification requirements to simply open a savings account and we worry a lot and you hear a lot of debate about ID laws for voting and so on but we often neglect the fact that poor people who not only do they lack ID for voting they'd like the proper identification to open a bank account about 20% of poor people don't have the proper ID to be able open a bank account and if you can't get a bank account it means when you have to check a cash a check or you can't borrow money or whatever you're driven to these alternatives that often have very high rates but you also have to walk around with wads of money in your pocket and think of the problems that causes you're more likely to be robbed please catch you with $500 in your pocket they think you must be a drug courier and they'll seize the money all those problems caused by savings on a din on the other end of it our welfare programs are uniquely designed to discourage savings and encourage consumption basically if you get a welfare check and you spend every penny of it hey that's fine with us put some of that money in a 529 account for your kids to go to school someday and will take away your check with many welfare programs if you have a car so that you can go try to get a job to get off of welfare will take away your check we need to be looking at our asset programs obviously you need some sort of asset testing we don't want you know last year's winner to be on welfare but we need to be looking at the asset test to see if they actually act to discourage people from making their lives better which in getting off a welfare which is ultimately should be the goal and lastly there's something which I call inclusive economic growth and it's basically the basis for the book the inclusive economy we know that nothing gets people off of poverty more so than economic growth a growing economy lists people out of poverty better than any government program ultimately can in the end I mean if you just simply look at history you go back in history and you find that for most a man's history man was desperately miserably poor and they were ruled over by a little elite that was slightly less desperately miserably poor but about three hundred years ago something happened and the world's wealth increased than the number of poor people declined substantially and it's been going on since then you know if you took back a hundred years ago the wealthy lived lifestyles that many cases aren't as good as many poor people live today I mean the you know the Carnegie's had a great big house that they couldn't heat things like that well that thing that happened about three hundred years ago was modern free-market capitalism and we need to encourage that today and we know what encourages that low taxes low regulations things like that but we should also recognize that economic growth is only gonna lift people out of poverty if everybody can participate if we block poor people from being part of that growing economy they're not going to see the benefits of that growing economy and that means we need to look at things that get in the way of poor people becoming part of the economy part of economic growth things like for example occupational licensing you know we get about 25 to 30 percent of all jobs in America today require you to get the government's permission to practice your profession and I'm not talking about being a doctor or a lawyer or something like that I'm talking about being a cosmetologist a beautician or braiding hair or being a florist or a funeral attendant I mean all these things require you to get a license from the state and in many cases it's very arduous and very expensive to get that license give you one example in Louisiana if you want to be a florist you're a single mom and you're trying to get off of welfare and you think you can get a job as a florist you're pretty good at it you've done some flower arranging your friends have told you you're good in order to get that you have to take this course that's gonna be months long you're gonna have to find a babysitter every night in order to be able to go take the course and you're gonna have to pay for the course in the books for it and then you're gonna have to take a test at the end of this course that test is only given twice a year and only in Monroe Louisiana so you're gonna have to find transportation to Monroe in a hospital and a hotel to stay overnight and someone to look after your kids and take this test to become a florist because God forbid where you get a bad floral display I mean can you imagine something worse look we need to be looking at whether or not licensing is reciprocal or whether or not it's necessary whether or not you're blocked from it simply because you have a criminal record in your past we need to be looking at all of these things at the same time you need to look at occupational zoning can you start a small business in your kitchen because you take that flaw that you know she gets that Flores degree because you come back and then start ranging flowers in her kitchen or she blocked because the zoning laws say you can't work in your in your house we need to look at barriers to affordable childcare they're getting away licensing requirements there or education requirements that simply make childcare so expensive to sit you know here in Washington DC they're working on a law that was going to make you have to get a bachelor's degree to be a childcare worker you don't have to have a bachelor's degree to be a parent all that's going to do is make childcare more expensive so that poor people can't afford to get childcare so they can't afford to get a job when you look at the minimum wage laws and other laws that prevent people from getting that first job and getting in on a chance to become employed or to start a business or to do things that are going to get them out of poverty look I don't pretend that this book will provide utopia who's gonna solve every problem of poverty in America but I do think it provides an agenda that we should all be able to agree on these are low-hanging fruit these are things that Democrats Republicans conservatives liberals libertarians should all be able to buy into and I think you know as you're going to hear some polling results soon I think the American public will buy into them we should as policy influencers or simply as good and decent people care about the people who are in poverty and we should want them to rise as far as they can I'm hoping that I provided an agenda that'll do that thank you all very much and look forward some questions later on thank you Michael now we kill here from Emily thank you it's such a pleasure to be with you this afternoon and be able to present to you brand-new results from the Cato 2019 welfare work and wealth survey so I conducted this survey independent of Michael I read his book and I was interested in taking a look at what Americans thought about some of the kind of the underlying ideas as well as the reforms and I'll be presenting the results to you today so this is a nationally representative survey of American adults we surveyed 2,000 people this was conducted just this last month by the reputable survey firm yuga they do a lot of the surveys for The Economist in The New York Times so first we took a look at attitudes towards the origins of wealth and poverty what makes a person wealthy what makes a person poor what are the causes of these things so among all Americans we ask people to give their top three reasons for wealth people said hard work and grit ambition and family connections what are the causes of poverty people said poor life choices drugs and alcohol and the lack of jobs well you'll notice here is that Americans tend to place more emphasis on factors that are just more or less within the purview of an individual person and their decisions but that they also factor in external forces that are not within an individual person's decision and are external to them there were some very interesting differences though by ideology between liberals and conservatives and I wanted to highlight those and discuss what that means for when we talk about welfare policy in general so among liberals what are the top three reasons according to liberals that people become wealthy the three things they gave were family connections inheritance and getting lucky what do these three things have in common they're all external forces that happen to a person conservatives on the other hand the top three reasons hard work and grit ambition and delayed gratification what do these three things have in common they emphasize factors that are within – more or less within the individual's purview of control within their agency they're free well what about the causes of poverty consistent with liberals views about the causes of wealth they focus on the reasons for poverty our lack of educational opportunities discrimination such as racism and sexism and an unfair economic system so again external forces that just happen upon a person and conservatives tops three reasons for poverty or poor life choices the breakdown of families drugs and alcohol and a lack of work ethic so consistent with what conservatives said about the causes of wealth similarly for poverty they focus on individual level decisions and I think these differences in assumptions really underlie almost every debate you see going on right now when it comes to social welfare policy and an economic policy in general is that liberals tend to emphasize the external forces that happen and conservatives that happen to a person and conservatives emphasize the individual level decisions the things within the control of a person now as Mike mentioned the truth is it's both right to some degree or another the question is what do you choose to emphasize but this debate often makes it difficult for us to reach agreement when it comes to social welfare policy and how to fight poverty what do Americans think about work my mom used to always say this to me before we would go weed the garden hard work is its own reward I didn't appreciate it at the time but I appreciate it more now most Americans agree with this sentiment that there is kind of an inherent value in work this kind of work ethic 80% of Americans agree that hard work is its own reward and this is something that's widely shared 85% of current welfare recipients those individuals receiving means-tested government assistance agree including 69 percent of liberals and 84 percent of conservatives so when it comes to an endorsement of the ideal of work there actually isn't that much disagreement about that but there are some differences we asked people if they would be willing if they were looking for a job if they'd be willing to go to and move to another state to find work now most Americans say yes 64% of majorities across income groups say yes but we do find that lower-income Americans are less willing than higher income Americans to be able to move to another state to find work now it's unclear to what extent government policy might influence this such as welfare programs making it difficult to move to one place or another or to what extent this is just differences in preferences what is more important in your life planning for the future and giving up things now if necessary or taking it one taking each day one day at a time and living it to the fullest so most Americans 59% say it's more important for them to plan for the future and if necessary give up things today for future consumption we do see an interesting difference though by income groups we find that people earning less than $20,000 a year instead tend to emphasize living each day to the fullest rather than planning for the future and giving up things now if necessary however once people start earning over $40,000 a year or more we tend to find that people emphasize basically delayed gratification planning for the future so there are and differences there that we thought were interesting do welfare recipients think differently about current welfare policies so we thought we would take a look at what people actually think about the current state of government social welfare programs and these again are means-tested government assistance programs 54% a majority of Americans believe that most people who receive welfare benefits would rather earn their own living forty five percent believe that welfare recipients would prefer to stay on welfare well why don't we ask welfare recipients themselves well here we see sixty-five percent say they would rather earn their own living and not receive welfare non-recipients the third category you can see they actually don't know they're split about half and half not really sure if welfare recipients would prefer to earn their own living or stay on welfare and there's a major ideological divide here where liberals believe that welfare recipients want to earn their own living conservatives believe that they would prefer to stay on welfare just welfare do more to help people get back up on their own feet or does it encourage dependency fifty four percent of Americans say that welfare benefits do more to help people stand on their own two feet than it does to encourage them to stay poor again welfare recipients 68 percent believes that these benefits help them to get back up on their feet rather than encourage poverty non-recipients are a little unsure again split 50-50 they're not really sure and then there's a considerable ideological divide here where liberals think that it helps people get back up again and conservatives think that it keeps people poor one thing to keep in mind with these types of survey questions you'll you'll notice this if you study a lot of public opinion is that people often ask to answer these questions according to whether they like or just like social welfare programs if they like them they'll just always give you the positive answer and if they dislike them they'll give you the negative answer kind of regardless of what they think is actually true so this I thought was an interesting question to kind of get beyond that a little bit what do you think a welfare programs actually do what do they actually accomplish sixty percent of Americans say that they simply provide for people's basic needs while they're poor thirty-nine percent believe that they help people climb out of poverty and this is a fairly non-controversial view majorities of welfare recipients previous recipients non recipients and as well as different demographic groups tend to believe that really these welfare programs are just providing for basic needs rather than actually helping lift people up it I think this raises a question do we want more from our anti-poverty programs is this is this actually what we want or do we want to actually try to lift people up it's an important conversation to have this might be why 77 percent of Americans when asked to evaluate how effective the government has been over the past 10 to 15 years of fighting poverty 77 percent say the government has been ineffective this is not a particularly controversial observation you've got nearly 2/3 of welfare recipients who feel like it's been ineffective as well as 72 percent of Democrats and 80% of Republicans I mean how often do you get people in that much agreement on an issue people agree what we're doing right now isn't that effective what if we were to spend unlimited amounts of money to eliminate poverty I mean every social welfare program anyone's ever thought up let's just what if we tried it and we implemented it would that be enough to eliminate poverty so we asked Americans we found 72% that even if the government were willing to spend an unlimited amount of money it doesn't know enough about how to actually solve the root causes of poverty to solve the problem it doesn't know how to accomplish that and you've got a majority 58% of welfare recipients who feel this way as well as majorities of Democrats and Republicans we clearly have a problem with how people perceive government's ability to spend money to solve this problem this might be why we found that 70 percent of Americans thought when asked to choose that it would be better to spend our resources on trying to eliminate the causes of poverty rather than to spend the money that we have on social welfare programs basically to give money to poor people so they can get back on their feet so people would rather focus on trying to eliminate the root causes and this is fairly non-controversial you got majorities of welfare recipients and partisans agreeing that it would be better to focus government resources and time and money on trying to eliminate the causes what will do more to help people get out of poverty seventy percent of Americans say more economic growth would actually be the best way to reduce poverty twenty nine percent felt like that more welfare spending would be the right way to go so you we're seeing a consistent pattern here where people obviously want there to be a social safety net to some degree to be able to help people when they need it but at the same time there is a desire to try to reduce the need for it to begin with because people want to earn their own living so for this reason we decided to investigate how inclusive is the economy the government can't control our individual decisions nor should it we wouldn't want it to but what government can control are certain systems like housing policy occupational licensing education these are things that the government explicitly has policy for these are things that we can take a look at and that's what's gonna guide the next few slides that I'm gonna show you so we asked Americans about where they live could they rate the conditions for each of the following based on their own neighborhood and this is the percentage of people who rate the conditions as bad in their neighborhood now predictably welfare recipients were more likely the non recipients to say that finding affordable housing finding good jobs finding a decent education and moving it financially was not good in their particular neighborhood these are things that in many ways the government can directly affect and in some cases is making it worse like affordable housing for instance the government can directly affect how much housing can be built in a particular community I mean look at San Francisco look at the exorbitant housing prices they are not meeting the demands of the people who live there because they are refusing to build enough housing occupational licensing so my talked about this earlier we asked people has the lack of a credential or license ever prevented you or someone you know from doing a job you were capable of doing now we're talking about things like being a tour guide do you need an occupational license to be a tour guide to arrange flowers to braid hair and we see that 45 percent and 46 percent of unev welfare recipients and unemployed Americans respectively say that this has prevented them or someone they know from work that's a pretty large share taking a look at occupational licensing would have to at least chip away a little bit at these numbers here so it's worth us taking a look at has a criminal record ever been a barrier for finding a job for you nearly a quarter of current welfare recipients and people who are unemployed say that a criminal record has prevented them from finding work as you know I mean a lot of well-paying good jobs won't hire you if you have a criminal conviction on your record so how are you supposed to provide for yourself provide for your family for your children if this kind of follows you everywhere you everywhere you go so for this reason I think that this prompts us to ask some questions what it's prompts us to ask some questions about criminal justice reform and that's gonna be it that could be a whole nother discussion and lecture but let's just take a look at one thing that we asked about on the survey um a considerable percentage of the increase in mass incarceration over the past several decades has been due to drug offenses drug felonies what if we were to recategorize drug offenses from being felonies which are very serious crimes and follow you for the rest of your life on your record to civil offenses meaning that they would be treated like minor traffic violations rather than crimes so if you get caught speeding by the police it doesn't follow you every time you get a new every time you're applying for a new job for housing etc but if you have a drug conviction on your record that does follow you around well what did we find 55% a majority of Americans favor REE categorizing drug offenses from felonies to civil offenses I think that's pretty interesting finding there what about housing have expensive housing costs ever prevented you from moving to a better location and here you can see it's pretty highly correlated with income but notice once you get to about $60,000 a year and that's about the median income the median income in America is about 56,000 dollars a year so basically once you're at the median median or above people feel like they're able to get to a decent neighborhood now think about if you're a parent of a child in K through 12 education you are assigned a school and you have to go there and if you live in a bad neighborhood that has a poor school with bad education where do you go how do you get out of that now one way would be to move to a better location but sometimes it's too expensive to do that so we see here that 78% of welfare recipients feel that expensive housing costs have prevented them from moving to a better location now to some extent we can't always we can't all live in the Hamptons right but we can we should be able to expect that people should be able to live in a decent neighborhood with good schools that are safe and decent to some extent government does have a role to play here which is the government controls the supply of housing the government can tell you whether you can build or not build more apartment buildings condos houses townhomes etc so we asked Americans what did they think and I was actually very surprised by this finding we asked would you favor opposed building more houses condos and apartment buildings in your community 59% favor this and I was a little surprised because I thought it might be the well not in my backyard but in other people's backyards that would be fine but no 59% said that they would favor building more housing we followed up with a second question after the first where we asked would you favor opposed building more housing if it meant it would be easier for people to afford housing in your neighborhood 71 favor so again by not everyone makes that connection people don't really understand the laws of supply and demand that when you increase the supply of housing that lowers the cost of housing but by making that explicit people are on board with it and you kind of have to ask yourself especially in really expensive cities like San Francisco and New York where it's really difficult for just regular people working regular jobs and regular salaries to afford decent housing why art why is housing just becoming exorbitantly expensive it's because we're not building more housing well you might think well maybe that's because that's what the voters want it doesn't seem like it it seems like most likely a small minority of special interest groups prevents cities from following the will of the American voters to build the housing that is necessary to meet the needs of people shifting to education 85% of Americans who currently have children in K through 12 education send them to public school a coordinate so this is a Gallup survey but according to our survey we found that only 44% of Americans would prefer to send their kids to a public school instead a majority 55% would prefer to send their children to private school but that's often prohibitively expensive especially since the property taxes that we pay either in mortgages or through higher costs of rent go towards that local school so it's hard for people to pay that and on top of that pay for private school tuition is there anything that can be done for the people the majority of people that would prefer to have more options yes oh I should also mention that this is broadly this view of preferring to go to private school is broadly shared across most demographics we see that majorities of welfare recipients white black Latino Americans all would prefer to send their kids to private schools Democrats were the only group that preferred public school but that was kind of unique okay an opportunity to send children to private school using vouchers fifty eight percent of Americans would support a proposal that would give families the choice to enroll their children in private schools instead with government helping to pay the tuition and this is broadly favored 67% of welfare recipients favor this as well as 68% of Republicans Democrats are split about half and half probably because they're more supportive of setting their kids to public schools but again you've got more stem more Democrats supporting vouchers than those who just want to send their own kids to public school and then what about a tax credit this is a proposal that Michael Tanner discusses in his book a proposal has been made to offer a tax credit for people and businesses who donate towards scholarships to help parents send their children to private school if they choose this is also broadly popular with 61% favoring this tax credit including the same share of welfare recipients a majority of Democrats and 69% of Republicans so what I'm hoping to demonstrate with a lot of these reforms and obviously there's much more research to be done there's actually a lot of broad-based support for a lot of these different types of reform ideas to try to address the net or the the root causes of poverty and I think that while there still is plenty of more research to do I think that these data indicate that Americans are very receptive to the idea of an anti-poverty agenda that focuses on inclusive economic growth that wants to reduce the need for government means-tested financial assistance to begin with because people want to earn their own living and one way to address this is to look at reforms to housing to make it less expensive reforming education to allow people wider choices to be able to send their kids to the school with the best educational opportunities to reform criminal justice so that people when they make mistakes aren't forever prevented from being able to provide for themselves and their family as well as looking again at occupational licensing and seeing is there is this truly proportionate to the need for the the reason of having the license and putting this all together the goal here is to enhance human flourishing to allow people to reach their own potential to go as far as their own talents and dreams and hard work can take them that is the goal behind this and we see that Americans are generally supportive of this kind of conversation moving forward thank you Thank You Emily we have about ten minutes left to open the floor up to discussion I suspect there will be lots of questions we have a microphone somewhere in the room yet back there so if you would please just wait when you're called for the microphone so that our online viewers can hear the questions and we'll go ahead and start second row up here this young lady thank you um so my question is really for Miss Emily so first off as someone who does research I absolutely loved your work that was a fantastic presentation my question is so you mentioned like having the government offer a tax credit to businesses and folks who would donate to scholarships do you think that that might somehow go the same way as health insurance where private schools would just jack up the tuition if they felt they can depend on government assistance for that there we go so what I'm doing is the research on what people think about the proposals as to whether or not the proposals are good ideas the best person to answer that would be Mike tanner sure and I would actually defer in fact to neal mccluskey who does work at education for cato who's done a lot more depth research on this but the general idea is though if this is done correctly and the individuals can roll over a keep a portion of the scholarship beyond what they spend on the tuition and use it for other educational purposes that provides a downward pressure on the schools that you have competition among a number of schools who are competing if one of them is you know consumes 100 percent of your tax credit of your scholarship and another assumes 90 percent but you can use some of that money for textbooks and things of that nature you're more like you know that provides downward pressure on the on the pricing okay I will add one more thing to I I think another thing is that it's not just a tax credit towards education that were you talking about the second proposal yeah for the scholarships what that would do is it would allow private individuals like I could do this you could do this or a business it says I want to contribute to us to a fund to allow you to send your child to a private school if you want and that there would be some sort of like tax advantage to the person freely giving of their money and then it goes into a little account so you can imagine employers offering this as a benefit to their employees saying we want you to be able to have the choice about where you send your kids to school and if you want to send them to a private school we'll put this amount of money in this fund for you that the only you have access to that you can use for your children so I think that was the idea behind this as opposed to the more there's a kind of another category of policies where there's just a tax credit and that's not what this says right and as I say it's a broad-based educational purposes so it doesn't you don't to take a hundred percent of it and put it towards tuition you can use it for a variety of educational purposes and supplies the question other questions yes also in the front third row back second row back thank you I'm sure you know Arizona just signed into law some legislation about my patient licensing and allowing that to be like transferred from other states and be you know eligible in Arizona for employment is that a good first step is that like is that fine yeah that definitely deeds there's a reciprocal licensing that Arizona's doing where if you're licensed to be a florist in Oklahoma you can move to Arizona and keep and don't have to get a license again to do that so thing also Florida's working some legislation right now which would sort of force the licensing boards to decide whether or not a criminal conviction really should bar you from from ever having a license in the in that field and things like that so there's a there is a number of pieces moving forward in various states to do this primarily going to be a state function to do this but it's also something that you know should be looked at in terms of you know when money's coming from federal government what strings are going to be attached I think I saw a hand yes in the back of the room I thank you for your time today I have a question regarding the research behind the Liberals versus conservatives point of view on the cause of poverty so you mentioned that liberals tend to talk about the outside forces and then conservatives tend to say it's individual characteristics have you ever done more granular research on looking at conservatives of people of color versus conservatives not people color and then the same on the other side to see if there was any differences there yeah we have that data and this will all be publicly available very soon when we publish it what I recall looking at those because there's a lot of data here there's so much here what I recall is that there actually were less differences across racial groups gender racial race gender those types of demographic group it was really ideological where you really saw clear difference if I recall directly correctly it was more that it was a combination of individual and external factors when you look at white african-american latino men women etc but when you look at the ideological groups you really it's very clear it makes it easier to describe it's like external versus internal forces between the two any other questions I'll ask the last question I suppose is there anything that the federal government can do in in particular Congress to incentivize States to reform their occupational licensing laws that you would find acceptable well again I think that these are state laws I would not like to see a federal licensing Bureau out there determining what the florist's should do in every state in the Union I think they don't think we should go there many of the reforms that I talked about in the book criminal justice is heavily state oriented education is a state responsibility the licensing laws and occupational zoning are state responsibilities or locals responsibilities in many cases zoning laws the same way I would not like to see the federal government necessarily push back on this but a lot of what the federal government does is contingent or it can be made contingent on states taking certain actions for example on zoning laws we know that under secretary Carson HUD has been looking at the idea that subsidies would only go to states that reform their zoning laws that the idea of chasing your tail where the state you know where community can jack up the price of housing through through unreasonable zoning and then say give us a bigger subsidy to help lower-income people move into the into the unreasonably Renta priced rents that sort of thing it can be done and you can do some things that the occupation levels well I know the Obama administration published a report on occupational licensing that was terrific and and they had some suggestions as well one thing else I would also just add to kind of conclude is that I think that you definitely see this as a public opinion research is that there's a tendency for people to judge public policy when it comes to anti-poverty programs by the perceived intentions of the people talking about it rather than the efficacy or the outcomes of the policies themselves so a lot of times what we see is that if you care about poverty as an issue and you want and you truly have empathy and compassion then oftentimes people feel like they're supposed to say increased spending on the program and that for people who don't find that to be as a priority for them then they might feel like they should say decrease spending for the program then people in the middle just say no change I think that we should move away from that frame I don't think it's the bright frame that we should be thinking about what we're talking about now is a compassionate approach truly I think if you demonstrate that you truly care about the issue and that you are committed to trying to reduce poverty from kind of this moral this kind of this deep moral motivation then when you talk about growth policies and focusing on these other reforms I think people will be more willing to listen and think oh you're not just I don't know someone that's not compassionate doesn't care about this issue you just want to move on to the other to another subject but I think that's the hard thing and if we could just shift the frame away from increase/decrease spending on X program – can we focus on a probe and an inclusive pro-growth agenda and here are the pillars of that agenda I think that that's going to be a more effective strategy going forward we've set up a sort of their loggerheads dichotomy here wherever social justice is on one side and limited governments on the other side and they're not exclusive you can before you could pursue a limited government agenda that actually achieves social justice and that's essentially what I try to do in this book thank you both very much let's give them a round of applause [Applause]




Comments
  1. Excellent video as always, CATO!

    Summary:

    5 key areas of policy reform for poverty:

    1. Criminal justice
    2. Housing (zoning)
    3. Education
    4. Occupational licensing
    5. Economic growth

    Bipartisan support exists for policies that focus on addressing the root causes of poverty, especially when Americans understand the economic impact of the reforms.

    Few alternatives that I would have like to have seen addressed:

    Educational voucher system
    Expanded/easier felony pardons for all non-violent crime
    Medicare/Medicaid reform (spending bubble) – general discussion on unfunded liabilities

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