All around the world, there are people living in poverty. This has been a major problem that many countries have been trying to battle all throughout history. Here in the United States, “americans are relatively unconcerned about the wide income gap between rich and poor” (DeSilver). With such a major problem, why is there no major positive result after all these years? A major reason for this is the weak incentives concerning the levels of poverty and homelessness.
People who are more privileged tend to not take action on certain topics because they feel as if it is not connected with them. With weak incentives concerning poverty levels, this problem is only going to continue to rise rapidly throughout the years to come. From the book Naked Economics, we see the example of the poachings of black rhinos leading the rhino population to dwindle like a rapid fire. This was a major problem concerning the endangered the black rhinos; However, although there were proposed ways to solve the problem, no one had the incentive to prevent the endangered black rhino from becoming extinct (Wheelan). This is the idea of rational self interest because since people feel as if the problem is not related to them, they do not take action because they think it would not be purposeful or beneficial to them. This situation described is very much like the problem we face with poverty today. No one really has the incentive to take action on this problem because they feel as if it has nothing to do with them because they are not the ones suffering. Because the majority of the people are not the ones suffering, they are unable to relate as to why they should be helping out. From this we can see that poverty is a major problem faced by society today that is too difficult to solve because it is hard to get the incentives right.
The government does have the power to change these incentives and therefore turn the situation around. For example, there are many homeless shelters all throughout California designated for hardworking families who are indeed in need of help. There are also jobs that are specially created for these people designed to give them the opportunity to support themselves. However, we see a trade off in this situation because if we create more jobs for the homeless, we are also taking away jobs that could have been given to the unemployed people who are not homeless. This could create more people who end up homeless because they will be unable to find a job. With that being said, the government also needs to consider the marginal costs from creating the homeless shelters and the other programs, making the whole process very tedious.
Like any other country, the government here in the United States does not have unlimited resources. There are many “free riders” who are not working like they should be, and taking advantage of the support that the government gives, such as welfare. This is connected to the idea of scarcity because the government wants to help all of these people, however there is just a limited amount of resources that it can give in this situation. Therefore it is very difficult to completely solve this problem with all positive results. Clearly, through analyzing these situations, we can see why poverty is a problem faced by our society today that is so difficult to solve.
Works Cited
DeSilver, Drew. “5 Facts about Economic Inequality.” Pew Research Center, 7 Jan.
2014,www.pewresearch.org/fact-tank/2014/01/07/5-facts-about-economic-inequality/.
Wheelan, Charles J., and Burton G. Malkiel. Naked economics: Undressing the Dismal
Science. New York, W.W. Norton & Company, 2012.Wheelan, Charles J., and
Burton G. Malkiel.
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