The solution to the problem of poverty among those able and willing to work is a free labor market and a publicly funded income supplement, thus ensuring that those unable to earn a living wage in the market economy do not starve.
As I have discussed previously, the idea has a number of variants, for example, a negative income tax, tradable wage subsidies, etc., and it remains to be seen which offers the most efficient means of achieving the intended objective.
Such ideas are, naturally, derided by the dupes and shills of the billionaire libertarians, but they offer the only practical solution to the problem of poverty due to mass unemployment in non-competitive regions of the West such Greece and Spain, Detroit and Glasgow, etc. — other than waiting for the billionaire libertarians to solve the problem through their own generous (not) charitable activities.
|Western capitalists find it much cheaper to manufacture clothing for the home|
market in collapsible factories such as this one in Bangladesh, than pay Western
workers real wages to work in factories at home that are subject to workplace
health and safety regulations and where minimum wage laws apply.. (Image source)
Despite the venoumous ridicule of such ideas from the Libertarians intent on destroying the welfare state while intending to do nothing, other than bleat about morals and charity, to deal with the resultant social catastrophe, the British Government, at least, is taking steps precisely in accord with the policies we have advocated.
Thus, for example, the UK Government is now contemplating government subsidies to wages for low paid workers administered through the tax system. At the same time, the UK Government has instituted variable pay scales for public servants such that those in poorer regions, i.e., those regions with generally high unemployment, will get lower pay.
Although these are only feeble, baby steps in the direction we have advocated, they may lead ultimately to a general solution to the problems of mass unemployment and poverty that have been created as a consequence of forcing Western worker, through the process of globalization, into direct competition with billions of Third-Worlders working for pennies an hour.
|The cost of assembling an i-Phone at a Chinese sweatshop is said to be about|
US$4.00. Nobody even thinks of trying to compete with that at European or
American minimum wage rates. (Image source)
Naturally, we expect no credit for identifying the solution to the central economic problem of the times. But surely within a few years some Ivy League University economics professor will win a Nobel Prize for encapsulating these obvious ideas into a couple of mathematical equations that no one but a PhD economist can understand.
See also: How Globalization shrinks the economy