Effectively fighting poverty in North Carolina
By Jon Sanders
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In a draft report released this week, the working group of
the University of North Carolina Board of Governors has completed its review of
the 240 research centers scattered among the system campuses. It recommends
further review of only 13 and closure of just three.
One of the three that didn't
pass muster is the UNC-Chapel Hill Center on Poverty, Work, and
Opportunity. Supporters of the center and its outspoken leader, Gene Nichol,
They are doing a disservice to fighting poverty in North Carolina by acting as
if the center is the state's leading effort in the fight -- or that its
existence is the only acceptable sign North Carolinians care about the poorest
among us. The reality is that the actual,
effective fight against poverty is and continues to be
waged by job
creators, entrepreneurs, innovators,
charities on the ground in communities.
The poverty center is, if anything, an object of distraction
from that fight. Its leaders have unfailingly promoted empirically unsound
public policies, demagoguery, and most of all, themselves.
It didn't have to be this way, of course, although from its founding the center
was geared to be little more than a resume enhancer.
A political vehicle
from the start
The Center on Poverty, Work, and Opportunity was hatched shortly after the 2004
presidential election. Former U.S. Senator John Edwards had just lost that election
as former Sen. John Kerry's running mate. Nichol, then dean of the UNC-CH Law
School, told the Durham Herald-Sun on December 3, 2004, that he had "started
discussions with Edwards several weeks ago" over "the possibility
of Edwards teaching in some capacity at the law school."
From the outset, it was clear that the "Edwards center" was a vehicle to
keep him politically viable till the 2008 presidential campaign. The
center's formation was announced with copious denials, of course, that Edwards
had any political motivations behind it. Then-UNC chancellor James Moeser
assured everyone that "We've tried to keep this on an academic footing,
and he will have his own political life off the campus."
The denials rang hollow
as soon as they were uttered. Edwards announced the center's formation that
night "at a Democratic Party dinner in Manchester, N.H., site of the first
primary of the 2008 campaign."
He then proceeded to do very little with the center, even as it enhanced his
own political life off campus. Prior to leaving to run for president, Edwards
reportedly made only 20 appearances in
two years with the center. That count was quite generous; it included his showing up to the
opening reception and his spending an
hour having coffee with students.
On October 25, 2006, The Daily Tar Heel ran an investigative report entitled
"Edwards on the Road: Travels Point to Political
Ambitions." The report showed that Edwards had spent most of his time not
on campus, but instead in the states
considered crucial to securing the Democratic nomination.
The center's online "Events" section was such a running joke
that it sported the same typographical error for over a year. Perhaps it would be unfair to pick on a typo, but this
particular one was "The [sic] are
no events posted at this time."
When Edwards left, the directorship was handed to Nichol. He had during
Edwards' brief time at the center spent 19 months as president of the College
of William & Mary, making such a hash of it that he alienated
the college's donors so greatly he had to resign. He had a fallback position in
public academe, however: the center he himself created.
poverty of promised 'innovative and practical ideas'
In announcing the center, UNC-CH had promised it would "examine innovative and
practical ideas for moving more Americans out of poverty and into the
middle class." For that reason, and from the very beginning, I and others
urged Edwards to investigate
freedom's effects in fighting poverty. We worried that Edwards and the
center confused being poor (a relative measure) with being
impoverished, that his focus kept drifting to the middle class, that he
tended toward bromides
and that he gravitated
toward government policies that are neither
innovative nor practical, let alone effective.
We strongly urged that Edwards and the center abandon its pursuit of a higher
minimum wage. Why? Because of the minimum wage's well-known
negative effects against the poorest and least skilled -- they being the very people the center was supposed to
be focused upon helping. Raising it would only make matters worse for
These negative effects -- "A minimum
wage increases unemployment among young and unskilled workers" -- are
one of the issues over which economists are in greatest agreement. An academic center in a major research
university promising innovative and practical ideas to fight poverty would not
reflexively advocate for a higher minimum wage. A politician would.
Incidentally, the early progressives behind the first minimum wage did so in
full knowledge and expectation of its effects on the poor. That's why they wanted it. They were steeped in the same odious
eugenics philosophy behind North Carolina's forced-sterilization
law to prevent
"undesirables" from reproducing.
Thomas C. Leonard exposed this sorry history in his Fall 2005 Journal of
Economic Perspectives article on "Eugenics
and Economics in the Progressive Era." He wrote:
Progressive economists, like their
neoclassical critics, believed that binding minimum wages would cause job
losses. However, the progressive
economists also believed that the job loss induced by minimum wages was a
social benefit, as it performed the eugenic service ridding the labor force of
the "unemployable." Sidney and Beatrice Webb (1897 , p. 785) put it
plainly: "With regard to certain sections of the population [the "unemployable"], this unemployment is not a mark of social disease, but actually
of social health." "[O]f all ways of dealing with these unfortunate parasites,"
Sidney Webb (1912, p. 992) opined in the Journal of Political Economy, "the
most ruinous to the community is to allow them to unrestrainedly compete as
wage earners." A minimum wage was seen
to operate eugenically through two channels: by deterring prospective
immigrants (Henderson, 1900) and also by removing from employment the "unemployable," who, thus identified, could be, for example, segregated in
rural communities or sterilized.
Leonard goes on to show how progressives found a
"race-suicide" theory to support pricing out "the colored
races" from wage competition with white workers with higher living
For these progressives, race
determined the standard of living, and the standard of living determined the
wage. Thus were immigration restriction and labor legislation, especially minimum wages, justified for
their eugenic effects.
Today's progressives favor the same policy -- under the
mistaken belief that it would make things better for the poor. The economics,
however, remains the same.
(Readers can learn more about the hideous, racist origins of the minimum wage
from Jeffrey A. Tucker's Feb. 10 feature in The Freeman, "The
Eugenics Plot Behind the Minimum Wage"; Carrie Sheffield's April 2014
column in Forbes, "On
the Historically Racist Motivations Behind the Minimum Wage"; and Ryan
to the Mises Institute's blog; among others.)
A 'moral failing'
Nichol continued to push for increasing the minimum wage and other stale,
impractical government tools. He did, however, take a public position on an
innovative policy tool: the Opportunity Scholarship Program, passed by the
General Assembly in July 2013.
Opportunity Scholarships are school scholarships tailored specifically for
children from lower-income families, providing as much as $4,200 in
scholarships to offset the cost of attending private schools. Eligible voucher
recipients in the first year must be children enrolled in a public school the
previous year and qualified for free- or reduced-price lunches
Now in his "Message from the
Director" on the center's home page, Nichol had deplored "the
scourge of debilitating poverty [which] is the largest problem faced by the
people of North Carolina -- even if our political leaders ignore it, or declare,
with a breathtaking stupidity, that it doesn't exist. Editing 1.7 million Tar
Heels out of the family portrait." Among his examples was the plight of
Ignoring school kids who can't get
access to decent meals, much less quality teachers, or safe classrooms, or the
internet -- but who we say enjoy a steely equality with the well-tutored and
heavily-financed children of Chapel Hill and Myers Park. Though when we say
this, we know we lie.
Not addressing these would be, in Nichol's words, a
Regardless, Nichol publicly
opposed the Opportunity Scholarships. In so doing, he was careful to
present the issue as being over private schools being able to take tax dollars
from public schools -- not poor
families being able to use taxpayer money to choose the schools that best meet
To be clear, Nichol chose to edit
poor families out of the discussion over Opportunity
Scholarships, even though they are at the very heart of the issue.
Only once did his column mention "underprivileged children in
low-performing schools." There Nichol was directly quoting Sen. Phil
Berger and then-House Speaker Thom Tillis. He introduced the quotation with
beneficiaries of capitalism are those at the bottom of the income ladder'
Regardless of the center's fate, waging an effective fight against poverty
would involve a healthy dose of the overlooked portion of the center's name: Opportunity. As has been shown
throughout history, what best provides opportunity is freedom. More freedom
means more opportunities for the effective poverty fighters: job creators,
entrepreneurs, innovators, and private charities working individually.
Policymakers' role is safeguarding and expanding freedom and opportunities.
Knowing this, the John Locke Foundation has since its inception 25 years ago
advocated policies expanding freedom and opportunity for all North Carolinians.
Its Founding Principles recognize that "the individual
pursuit of economic opportunity benefits all." It underlies our
commitment to restoring North Carolina's heritage as "First in Freedom."
Ahead of JLF's silver anniversary, then-president John Hood surveyed 25 years'
worth of peer-reviewed scholarly research on the relationship between public
policies and economic growth, 681 studies with 1,389 separate findings. The
survey found "strong empirical
support" for our policy preferences. That is, most peer-reviewed
find that lower levels of taxes and
spending, less-intrusive regulation, and lower energy prices (which often
reflect fiscal and regulatory policies) correlate with stronger economic
As Vice President for Research Dr. Roy
Cordato wrote in introducing our most recent Agenda candidate's guides on key policy issues,
The unifying principles of Agenda
2014 are the same as they have always been. All of our analysis and policy proposals
seek to advance individual liberty, personal responsibility, and a free market
economy. Whether we are discussing school choice, economic growth, or health
care reform, these are the concepts that have animated the John Locke
Foundation's analysis since its founding in 1989. We firmly believe that
policies that advance these goals are, happily, policies that will create
employment opportunities, lower health care costs and improve access, reduce
the costs of energy, and better educate our children. Both in the United States
and internationally, it has been proven time and time again that liberty and
prosperity go hand in hand.
On our Locker Room blog I posted a quotation from Nobel
laureate economist Gary Becker:
The greatest beneficiaries of capitalism are those at the bottom of the
income ladder. That's why I favor capitalism. Were that not the case, I
would not be in favor of capitalism. Milton Friedman feels the same way.
In posting that, I wrote that "This
core conviction animates my work and the work of my colleagues at John Locke."
I offered copious examples and concluded with a "Case in point." That
case? Our urging John Edwards and his new center to investigate freedom's
effects in fighting poverty.
When Becker passed away last May, I revisited his observation and discussed its
wisdom in greater detail, contrasting government's costly but ineffective fight
against poverty with free
enterprise's far greater results.
I took encouragement that state leaders took steps in the right direction of
proven ways to expand
economic liberty and create more room for entrepreneurs and job creators."
Again, these are not ends in and of themselves; they are the most effective antipoverty tools known to
Fellow North Carolinians concerned about poverty and worried about what
possibly losing the poverty center portends can take encouragement from this:
We will continue to strive to expand individual liberty and economic
opportunity for all. The goal to be First in Freedom necessarily includes a
vision of being first in effectively fighting poverty.
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