Poverty in America manifests in a way that is related to hidden un-employment in most developing and least developing nations. Majority of the people living in America both in the urban and rural areas find it hard to accumulate savings because their disposable incomes are far much below the cost of living index.
The solution(s) to this Economic problem can best solved through various Economic tools of analysis which must incorporate various Economic assumptions concerning the poor people and the Economy in general holding other factors constant. Assuming that majority of the poor in America are unskilled and incompetent in the present day market demands, the only available solution would be to offer hands on apprenticeship education which must be tailored to meet the current market demands on the ground. Bearing in mind that the use of Information, Communications and Technology is becoming inevitable in Americans Economy, its inclusion in such a programme would ensure production of a relevant labor force.
An intervention in the labor markets minimum wage would offer lasting solutions to the biting problem of inequalities in income distributions. Since income disparities in America are rising between the poor and the rich, a minimum wage would ensure that the poor are able to have a stronger purchasing power which is relevant in the current market. In essence, income distribution should be fair and commensurate with skill, experience and expertise. This would go along way in narrowing income disparities and ensuring equal opportunities to all.
It is worth noting that it would be of no value to regulate the labor market and leave prices of goods and services unattended. The price theory states that holding other factors constant, the prices of goods and services should follow a self adjusting mechanism based on demand and supply so as to attain equilibrium. The American Economy however does not give room for the self adjusting mechanism, the net effect is that the prices of goods and services are skyrocketing-a situation comparable to creeping inflation. The consumers, majority who happens to be poor are thus unable to afford essential commodities and facilities for survival like food and housing. Containing such a crisis would involve a price regulatory mechanism demanding the fixation of a price ceiling below the equilibrium market price to make sure that essential commodities are affordable to all including the poor.
A major concern to those in America concerns the socio-economic welfare of majority who happens to be poor and living below the cost of living index. They are not able to afford, leave alone accessing, socio-economic amenities like recreational facilities, Specialized health and other social amenities essential for life. Welfare reform thus would offer lasting solutions to avert poverty in America. Social amenities should be made affordable to all by subsiding their costs and decentralizing them to even the remotest areas in the country.
The welfare of the working laborers should also be improved. This is only achievable by allowing workers to join labor organizations that would bargain and haggle their pays according to the prevailing Economic demands. Employers on the other hand, both private and public, should be encouraged to cater for the social welfare of their employees through giving welfare allowances and encouraging them to form welfare organizations where they can be pool their contributions together for their common good.
Presently, as Economists are pointing out the Economy of America is going through recession, the government should institute fiscal and monetary policies to curb the possible inflation that may plague the country. Fiscal policies would involve increasing government expenditure in community projects and involving the local people in the work. This would ensure the ploughing back of incomes back in the Economy and in totality increasing the disposable income of the poor. Coupled with reduction of taxes, the consumers would have enough to consume and to save. This would strengthen the financial base of the majority while checking the spiraling of commodity prices. Monetary policies, on the other hand, would require the government to encourage the public to invest in the capital markets enabling the government to acquire funds to provide the basic amenities to the populace affordably to all.
In conclusion, the problem of Poverty in America can be best solve via intervention strategies both from the government, employers not forgetting the role of the Economic tools of analysis.
Work Cited
John Iceland. Poverty in America: A Handbook, California: University of California Press, 2006.