Structural Impoverishment Weakens Our Communities

      Structural impoverishment is the process by which people become poorer because of forces that they cannot control. This happens, for example, when people lose their jobs because manufacturing is shipped overseas. Structural impoverishment weakens communities because it creates conflicts of interest among a community’s members and sharpens the conflicts of interest that have always existed.

      The institutions of a community – schools, parks, police departments and so forth – are maintained through the taxes that the community’s residents pay, but as they become poorer, the burden of the taxes becomes heavier, and they look for ways to reduce it.  So, a clamor grows to reduce taxes. At the same time, the community’s businesses see an opportunity to reduce their taxes. They claim that if taxes were lower, they would be able to create more jobs, and in a time when jobs are scarce, that is a persuasive argument.

       Businesses also find that they are able to play communities off against each other by encouraging them to compete for the business expansions that create jobs. In the competition, communities issue bonds in order to be able to give incentives to the businesses, and thus, the communities increase their indebtedness. My community competes with your community, and we both lose revenue and add debts. Over time, the resources available to support our community institutions like schools or police departments are reduced, and the reduction creates conflicts of interest among the various institutions because no institution wants to lay off its employees or see its budget cut.

       Thus, structural impoverishment creates conflicts within communities, and the bonds of community become frayed. People say things like, “I have no children in school. Why should I pay taxes to support the schools?”  They forget that the long-term benefit of the schools accrues to everyone in the community because the schools create a better work force and a better educated citizenry. Moreover, as the burden of taxes is increased because the taxpayers have become poorer, that burden comes to seem unfair, and different groups of taxpayers find themselves in conflict with each other over the way that it should be apportioned. Businesses feel that they pay too much, and individuals feel the same. This conflict, too, frays the bonds of community.

       If we allow the bonds of community to be frayed, we will gradually lose the sense of community that has allowed places like the Fox Cities become the wonderful places to live that they are. We have always supported our community institutions generously because we could afford to, but impoverishment makes it harder and harder for us to maintain those institutions, and if we allow the process of structural impoverishment to continue unabated, we will lose the communities that we love. Fortunately, we do not have to allow the process to continue. We can adopt policies that are designed to combat structural impoverishment.