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Why Philly's Anti-Poverty Plan Won't Work

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Last week, Philadelphia's Mayor Nutter announced his plan to fight poverty in the city called "Shared Prosperity Philadelphia." It's a broad plan with lofty goals: "strengthening economic security and asset-building; increase housing security and affordability; ensuring children enter school prepared to learn and expand opportunities for year-round learning; expanding access to public benefits and essential services, and, lastly, focusing job creation and workforce development efforts on adults with the greatest barriers to employment."

Sounds great. Reads well. Plays terrific to the media. But can we look in the mirror and have an honest discussion? This won't work. These plans never work. Yes I'm being negative. But I'm also being practical.

For starters, the plan wants to provide "entry level training" to help people get jobs. Except that's not where the jobs are. If your skill set is just "entry level" then you're in deep doo-doo. Entry level people are not needed like they were in the past. And if you don't believe me then take a look at all the self-service kiosks at your local Acme, gas station and bank. Automation and robotics are quickly taking over the tasks of the typical assembly line worker and service provider. Not only that, but most companies I know will happily spend the money to train their people to do more complex, specialized tasks if the companies themselves are growing and need the help. They don't need a government to do this for them. They just need to be in an environment where they are growing and it's worthwhile for them to make the investment (see below). A good school system is more important to companies than "training." That's because to attract good companies a community needs things like libraries, places of worship and, most importantly: great schools. For now, any executive proposing to move a company to Philadelphia would be laughed out of the room by his employees once they look at the state of our local school system. Who wants to send their kids there if they can avoid it? Unfortunately, the poverty plan doesn't address this.

The plan wants to "expanding access to public benefits and essential services." I know I'm sounding like a right winger here but... really? With more than 20 percent of our population now receiving food stamps we want to expand more benefits? With welfare levels at an historic high we want to offer more essential services? What exactly is the incentive for any able bodied person to go to work if they can sit back and enjoy more "public benefits and essential services" provided for free from the government. A safety net is always important for those people that truly can't fend for themselves because of illness or dire circumstances. But do we need to be spending even more money on people who can be making a more concerted effort to find a job? Are there not, instead, ways we can better target the money already available to those that need it the most? Because I'm sure the city's efficiently managing those funds, right?

The plan also highlighted the new Mayor's Office of Community Empowerment and Opportunity which was established in January. The CEO of this agency will "manage the Community Service Block Grant funds. It will also serve as a single point of contact and accountability for the City's anti-poverty efforts, while supporting City departments and lead agencies in meeting their yearly anti-poverty goals. The CEO will evaluate the effectiveness of anti-poverty pilots and programs and convene stakeholders to identify opportunities for collaboration." Awesome. Except, dig down a little and check out the people who are running this thing: the oversight board alone has 23 members! Wow... that's a lot of oversight. And of those 23 people (who I'm sure are very smart and well-meaning), I think that maybe two or three actually run a business. The rest of them earn their livelihoods from the city, non-profits, academia or the church. Please tell me if I'm wrong here. I want to be wrong here! C'mon Mr. Nutter - most of these people wouldn't have much to do if there was no poverty at all. What's their incentive here? This is not a solution. This is not a management team. It's just more bureaucracy. And it's still not addressing the core problem that creates poverty in the City of Philadelphia.

And what is the core problem? Our taxes are just too damn high. So high that since 1970 our city has lost 25 percent of its jobs while cities like Boston, New York and Washington DC grew. That was reported just a couple of months ago by Christopher Wink: "In that 40 year span, D.C. employment has jumped by a quarter, Boston by 18 percent and New York City by nearly 15 percent. In stark contrast, Philadelphia has seen a decline -- for every four jobs here in 1970, one has disappeared."

Our combined income, real estate and sales taxes are the highest among any city in the country. When combined with what we have to pay to the Feds and State authorities, our taxes are by far the biggest expenditure of any Philadelphia resident or employee who has the misfortune of working within the city limits. Who the heck would want to move a business here in this kind of environment? And please... don't talk about offering special "tax credits" or other favors as part of an anti-poverty plan. These things are gimmicks. They'll last for a short time, maybe a few years, before the real rates kick back in. Business people aren't stupid. They think beyond a few years. And no one's thrilled with putting down roots in a place where long term tax rates are so much higher than anywhere else. You can't grow a business in this environment. You can't attract good people. You can't create jobs. Period.

I've always been a fan of Mayor Nutter. I've always appreciated his business-like approach to running the city. He's a competent mayor. But I'm disappointed by his plan to eliminate poverty. It's the same old government-can-fix-any-problem approach administrated by bureaucrats. This is not a problem that can be fixed by the government. It has to be fixed by the business community. The government just has to give them the right environment to grow and profit so that they can hire more people.

A version of this blog previously appeared in The Philly Post.