It’s one thing to have a lot of money or know a lot of people, but it’s a much more important thing to know how to use the money you have or to give and receive support from friends. If you have plenty of money but can’t use it to achieve your goals then you have much less wealth than someone with no money but plenty of supporters who are willing to provide everything he needs. I bring this up to show problems I see with some welfare programs and to inspire readers to find better ways to support those around them.

Two Views on Welfare

I recently came across an article discussing two books that see welfare from two completely different viewpoints.

In the book, Nickel and Dimed, the plight of poor workers is discussed and analyzed. The author Barbara Ehrenreich argues that workers at minimum wage jobs are stuck in an endless cycle where they never have enough money or energy (after manual labor jobs all day) to improve their livelihood through better education and networking. She suggests welfare is needed to get people out of this endless cycle.

In Scratch Beginnings, Adam Shepard performs a personal experiment to prove wrong the concept in Nickel and Dimed. He moves to a foreign town and starts off with only $25. After starting with no job or connections and living in a homeless shelter, he is able to amass $2,500, a job and a car in a year. Apparently, anyone can get out of a financial pit if they just have the right mindset.

The Key Concept

Although the books look at welfare from different lenses, both have a good point – People can get stuck in poverty. Where they differ is where a solution can be found.

When Adam Shepard found a way out of poverty he admitted that the life and financial lessons he had learned from accomplished family and friends while growing up made a big difference (the only difference from my perspective). Most people stuck in poverty don’t grow up hearing what they need to know to get out of tough situations. This is evident in stories of poor people just completely wasting handouts designed to help them. Welfare does not help them because they don’t know how to use it. Concepts that wealthy people consider common sense are lost among people spiraling through poverty.

How to Fix Welfare

If the lack of knowledge is why people get stuck in poverty, then educating them is the best way to help them out. Whether you are a hard core capitalist, tired of paying taxes, or just someone who cares, investing in the education of simple life and financial lessons has benefits for everyone. Welfare can be removed (or shrunk) if we simply remove the need for it. Here’s how.

• Capitalism assumes everyone knows what’s best for them. To help pursue this ideal, companies should invest in programs that teach basic financial principles and skills to people who did not learn them growing up.
• Individuals, take the time to develop relationships with people lacking the basic understanding of finances and business skills and gradually teach them what you know as trust is developed. This can be done by putting some of your time towards mentoring to and volunteering for those in need.

Great examples of these investments paying off can be found everywhere. One I recommend is the book Same Kind of Different as Me. It’s a true story about a couple who invests in one homeless man with the goal of learning his story as he learns about their own.

What ideas do you have on improving the lives of those in poverty or ceasing the need for welfare? How have you invested in the lives of others so that they can learn from your experiences? It may be idealistic to say welfare will end soon, but educating those without simple financial knowledge can go a long way to helping us all.

(photo credit jimfischer)