An Improved Approach to Establishing Universal Quality of Life

We will always have people living below the median income. The true measure of economic success is a high quality of life for those with the least financial resources, free of government dependence.

The Basic Premise

California's economy is an example of how the financially disadvantaged struggle to maintain basic, humane living arrangements, even with government subsidies.

Exhibit 1 -- California Income Distribution

Exhibit 1 shows the breakdown of support for the impoverished 50% of Californians:

• There will always be a large percent of the population struggling economically -- financial aid is not an effective solution. 
• 13% receive assistance from the federal and state governments, living below the federal poverty line, and obtain some quality of life services;
• 7% receive some assistance living above the federal poverty line but below the relative state poverty level to obtain government entitlements that equate to the quality of life as those living below the federal poverty line; and,
• 30% are in the doughnut where there is virtually no assistance.

Those receiving federal and/or state government entitlements don't live a glamorous life, but they have access to basic living requirements. 

Those living in the doughnut between government subsidized living expenses and being self-sufficient are in worse shape than those living with entitlements -- not being able to purchase the same housing, healthcare, food, and other basic quality of life amenities. They have two choices:

• Struggle until they obtain a living wage; or
• Reduce their income and assets to maintain government entitlements.   

Some believe the struggle to avoid the doughnut creates generational poverty because of the endless dependence on government assistance.

The Search for an Improved Approach

After years of government programs failing to produce a high quality of life for citizens in the lower half of the economy, it is time to rethink the approach. 

Perhaps poverty should not be measured in financial income terms but instead create a quality of life index, which includes: adequate housing, fitness and healthcare, clean water, food security, safe neighborhoods, high quality education, and some cultural enrichment.

An improved approach would begin with the following four guiding principles:

1. Locally customized solutions are more effect than one-size-fits-all, centralized state and federal programs.  Not only are the centralized programs not effective, but in many cases they become special interest pork or inflate the cost of basic services without providing the advertised benefit, like the programs to end homelessness and affordable healthcare act.
2. Programs are not focused at artificially improving people's incomes, such as raising the minimum wage. Although improving people's ability to make a living wage is important, minimum wage laws are ineffective. Effective programs would be aimed at growing ownership of economic assets (e.g., home and small business ownership) and growing individual wealth; buoying the community's quality of life..
3. Programs are not inflationary. Simply injecting cash assistance into the economy without a corresponding increase in productivity and goods and services is inflationary. It is naive to believe this form of assistance positively impacts the quality of life, as injecting cash into the system primarily benefits the higher income groups (e.g., landlords, large healthcare systems, and low-end financial services) more than the impoverished — leaving the impoverished increasingly dependent on the higher income groups. 
4. Focus is to free people from government dependence, not creating a government sponsored utopia. They are created and supported by the local business community, nonprofits, and private philanthropy; freeing citizens from control and submission to the state government.

The Expected Impacts of the Improved Approach

By enabling local communities several beneficial impacts are possible:

• Perhaps the biggest benefit of all: citizens, currently distressed, would enjoy a higher quality of life.
• Communities would enjoy reduced crime rates, lower community health care costs, improved housing and food security, clean water, and high quality K-12 educational choices.
• Implementing these local programs, streamlining state agencies and government, and reducing state HHS budgets -- would permit states, over time, to reduce personal and corporate income tax and leave more monies for wealth creation and local programs and services via community investments.
• The percentage of citizens owning their homes would be increased.
• It would result in a favorable economy encouraging the formation and supporting small businesses.

Summary

We will always have people living below the median income. The true measure of economic success is a high quality of life for those with the least financial resources, free of government dependence.

Perhaps poverty should not be measured in financial income terms but instead create a quality of life index, which includes: adequate housing, fitness and healthcare, clean water, food security, safe neighborhoods, high quality education, and some cultural enrichment.

Simply supplementing people's income does not solve the problem of poverty -- many may choose to stay at home and not contribute to the community. But, improving individuals' ownership of economic assets such their home and businesses would motivate contributions and improve the quality of life in communities.