Our communities are organized to manage growing poverty. They are not organized to reduce
poverty.
Every community spends a lot of money to help people manage crises . A mayor in a Utah
community once told me that 90% of the 911 calls came from a relatively small but heavily
concentrated area of people in poverty. Rather than investing in understanding the problems of
poverty and solutions, we often just keep investing as much money as we can in reacting to it.
State and federal agencies spend billions on programs aimed to stabilize people in poverty:
SNAP, HUD, TANF, Medicaid, childcare assistance, to name a few of the big ones. These
programs are not organized to help people out of poverty. If they were, there would not be the
problem known as the cliff effect in which people lose more assistance than the increase in pay
that comes from getting a new job, taking more hours, and/or getting a raise. According to
Ballotpedia.org, more than 40% of the residents in my home state of New Mexico receive
Medicaid. Government spending is $18.2 billion in our state. Medicaid expenses are 30.3% of
total government spending.
WOW. More than $5.5 billion for Medicaid in our relatively small population of just less than
2.1 million. How much would be saved by fixing the cliff effect? See our website for the most recent report regarding the cliff effect problem and what is being done about it. www.circlesusa.org
Employers in New Mexico and numerous other communities served by Circles USA are
complaining they cannot find enough qualified workers to fill jobs and expand their businesses.
The economy depends on having people who can consistently show up for work and get their
jobs done.
Poverty reduction requires that teams of organizations work together to support a targeted number of households through the entire process of economic mobility noted in these five stages:● Crisis intervention
● Stabilization
● Readiness for the workforce
● Placement into jobs
● Advancement to a good-paying job
Poverty reduction requires that federal, state, and local funders recognize they are rewarding
poverty management when they pay for units of services that do not connect the dots between
these stages of the process. They inadvertently contribute to increasing poverty and reducing
economic vitality. Managing poverty generates that “phantom workforce”—people who should
work, want to work, could work, but won’t or can’t because of the cliff effect and the lack of
comprehensive programs that support people through the entire process.
Poverty reduction systems will change our nation. We currently tolerate far too much poverty,
given the immense resources, talent, and innovation we possess. The old model of paying for
random units of services to manage poverty will one day give way to a more powerful
approach.
In the meantime, Circles USA is cultivating a national community of transformational
leaders who are building the new model that will truly address poverty. You can learn more
about the poverty reduction labs in my book, Transformational Leadership, a Framework for
Ending Poverty.
From the book: Enough Money, Meaning & Friends ~ By Scott C. Miller
