MBA Professor Speaks Out: Poverty Diminishes Our Value System

Editor’s Note: Dr. Massood Omrani teaches in the MBA Program at the College of Business and Information Technology at Lawrence Technological University in Southfield. He is a senior fellow at The PuLSE Institute, where he’s focusing on business solutions to poverty. This is his first column since he recently joined the Institute. For submission inquiries contact Bankole Thompson, the Editor-Chief of The PuLSE Institute at info@thepulseinstitute.org

By Massood Omrani

Poverty is a social and economic disease that has a long lasting effect through the destruction of cities and towns in any state or country. It occurs when a person can no longer provide the necessities of life for his or her family. It is when a person for economic reasons has to live in a substandard situation, compared to the norms and standards of that society.  It is not an absolute condition and it strongly depends on the living standards of each society.

In a rich society where the majority of people have enough food to eat, enjoy having healthcare, and live in decent dwellings, lack of these necessities for any percentage of people in that society is called poverty. In the United States, poverty exists when people go to bed hungry; it is when they don’t have running water and electricity in the place they live; it is when they have to choose between their medications and their food since they cannot afford both; it is when a person has to look for food in other people’s garbage cans and when one ends up sleeping on the street.

Poverty affects the morality of the people who are stricken by it. It forces and compels people who live in poverty to resort to unlawful activities- any activity- to survive. People who live in poverty will do anything to eat, find a shelter, afford medications, and feed their loved ones, etc. Can anyone in their right mind blame the people who steal from others to feed their starving children or parents? Can anyone with a right conscience blame the women who resort to prostitution for feeding their babies? There is an old proverb which states, “when poverty enters a house from the front door the morality leaves from the backdoor”. 

I would like to emphasize that the poverty not only destroys the morality among those who live in it, but it also diminishes the value system of the ones who observe poverty and either cannot help or choose not to care enough to help.  In either case that society is losing its value system as a whole. And, a society with diminished value system is doomed to vanish.

Poverty could result from many reasons, such as lack of jobs during a bad economy, discrimination in the distribution of the good economic opportunities, lack of the right skills and education due to the advancement of technology, lack of accessibility to jobs and to where the jobs are offered, mental or physical inability to do what pays a decent salary, loss of financial assets due unforeseen conditions such as a long lasting illness while having no health insurance, etc. It is very important for societies and their elected officials to find the root cause of the poverty. I strongly believe that if one can correctly identify the root cause of any problem, that problem is already 50% less challenging and it is on its way to being solved.

Here I would like to address the disease of poverty from a business aspect. Let me first offer some facts: Unemployment rate is not a true measurement of the people who can’t find jobs. As the readers might be aware, our employment rate is conducted by the Bureau of Labor Statistics and is based on sampling 60,000 households. In the calculation of the unemployment rate, among those being sampled only those who are employed or actively looking for jobs are considered and those who gave up looking for jobs, for any reason, are ignored. The people who have given up looking for jobs are the ones who can’t easily reach the job market, where the jobs are offered, or have no education or skills which are in demand, in the job market. Or, they can’t afford the means and the conditions required to travel to where the work is performed.  This is a serious issue since in many cities in America there are no mass transit systems. So, many cannot work where the jobs are because they cannot get there- as simple as that.

One the other side, the U.S. economy is based on consumptions. The more people buy the goods that are produced by manufacturers, the more companies will invest, will grow, and will hire employees (i.e. producing more jobs).  This is a simple math. Those percentage of people who live in poverty can’t afford to buy the goods being offered in the market and they only look for the basic stuff to survive. Henry Ford gave high wages to his autoworkers so they can afford buying Ford’s vehicles.

Fighting poverty and enabling everyone to be a healthy consumer is a virtuous circle (opposite of the vicious circle that is caused by poverty) and it makes business sense to make it a circle of prosperity. The challenge to all of us, for resolving the disease of poverty in Detroit, from any angle, being morality or just sustaining the business prosperity, is how to do so. And, as it was mentioned earlier, first we have to identify what causes the poverty in our city. The PuLSE Institute’s charter is exactly for facilitating healthy discussions among our politician and business leaders in Detroit to address this unfortunate disease.

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