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Throwing the book at the problem of poverty

The concept of ‘spending money to make money’ seems to elude many people. When the stimulus came up in the United States (and to a lesser extent here in Canada), people were outraged. “Isn’t that just like a liberal to try and spend their way out of a problem? Spending is what got us in this problem to begin with!” Ignoring for a moment that the question of ‘spending on what‘ is rarely addressed (except by libertarians, to their credit), this complaint still suffers from a central flaw.

If you’re on a motorcycle 3/4 of the way down a ramp that faces a yawning chasm, you might be tempted to throw on the brakes. The problem with that strategy is that your momentum is likely to carry you over the edge of the precipice, where your lack of speed will kill you. Sometimes, paradoxically, you have to pick up speed to clear the gap. That’s when you can think about braking. It’s not a complicated concept, but it seems to elude many people.

What very rarely gets discussed, however, is the cost of not doing anything. To put a point on it – anyone reading my post this morning might have found the admonition to spend money on improving education and infrastructure to be nothing but bleeding heart liberal nonsense. “Where are you going to find the money?” say our ‘fiscal conservative’ friends. It’s a question that’s actually easier to answer than you think:

One year at Princeton University: $37,000. One year at a New Jersey state prison: $44,000. Prison and college “are the two most divergent paths one can take in life,” Joseph Staten, an info-graphic researcher with Public Administration, says. Whereas one is a positive experience that increases lifetime earning potential, the other is a near dead end, which is why Staten found it striking that the lion’s share of government funding goes toward incarceration.

The comparison between higher education spending and correction spending highlighted in the following chart is not perfect. Universities have means to fund themselves; prisons rely on the government. So it makes some sense that a disproportional amount of money flows to the correction centers.

Also, take note, comparing African Americans in college and African Americans in dorms is not completely fair. For one, college implies an 18-22 age range, and incarcerated adults can be of any age. Also, it doesn’t take into account African Americans who commute to school. Despite these shortcomings, this chart helps illustrate a large discrepancy in this country: America has the highest incarceration rate by population, but is only 6th in the world when it comes to college degrees. Our government’s spending reflects that fact accordingly.

Many people love to complain about how racist it is to offer scholarships based on ethnicity. They are much less likely to complain that these scholarships represent about 0.25% of the total scholarships available, but consistency is never a problem with this argument. The other thing that they’re not quite as likely to complain about is the fact that there are many other things that people of colour are particularly singled out for – prison being among them.

What never seems to factor into this debate is the financial damage that is done by propping up these racial inequalities. As the attached chart suggests, the cost of incarceration far outweighs the cost of post-secondary education. Since crime is directly related to poverty in one direction, and education is related in the other direction, it’s not too much of a mental stretch (even for the ‘not a racist but…’ crowd) to imagine that the more people in high-risk populations we educate, the fewer will end up in prison.

Now I am not suggesting that crime should be a ticket to Harvard. That would make absolutely no sense – scholarships should be available based on merit rather than as punishment for criminal activity. However, there are two useful policy directions that could come from the relationship between crime and education. First, it is to everyone’s benefit to provide people who live in high-crime populations with extra opportunities for success, if for no other reason than it will keep them out of jail and lower expenditure. Second, it behooves us to provide those who do commit crimes with some kind of training so that they can secure gainful employment once released.

There is a further, ‘knock-on’ effect to consider as well. Just like poverty has a ripple effect that affects entire communities, so too can success be. When you increase the number of educated parents, siblings, and other involved community members that are available to show young people the way forward, you end up reducing the amount of poverty in that community. Not only by increasing income (education and income are directly related), but by providing ready access to role models. When children grow up with the expectation that they will be incarcerated, then that informs their outlook on life. Conversely, when the expectation is college attendance and employment, they chart a new course in that direction. It’s similarly not a stretch to imagine that job training will reduce recidivism rates.

Education funding isn’t a magic wand that will fix all community woes instantaneously; there will always be screw-ups and people who try to game the system. Prisons cannot be made completely redundant  but any attempt to reduce poverty without increasing education is doomed to fail. Luckily, it seems that these kinds of investments pay for themselves.

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