What are some examples of Libertarian policies that would help reduce poverty in America?

Originally posted on Quora September 21, 2022

Poverty is not much of a problem in America. The actual problem is rent and debt burden on lower and middle income workers, including business owners, not poverty, especially when the rent burden in metro areas is growing faster than incomes in the bottom 50%. According to the 2020 census, the poverty rate in the US is 11.5% or 37 million people which is about half of what it is in the EU where its 96 million people and about 21% of the population. Of course, the income needed to reach this threshold in the US for a single person household is about $12,800 annually. This would be considered median income globally but because the general cost of living and rent in particular in the US are higher, on average, than they are globally a person making global median income is impoverished in the US. This is why low wages are not the problem and a wage floor is not the solution. The floor of wages is the margin of production; wages are only low in proportion to the rent that consumes them. In the US rents have outpaced renter wage growth for the past two decades. I’m not just talking about residential renters either. Commercial tenants are subject to even greater pressures of real estate speculation, especially small businesses who usually pay a premium for the same square footage leased to big box stores. After the pandemic a third of small businesses were unable to pay back rent due to lost revenue and the problem has only been compounded since their rents are sometimes tied to CPI but often raised more than that to reflect demand for prime locations. Now 40% of small businesses are unable to pay rent month to month and their rents are going up by 50%, 100%, 200% and sometimes as high as 400%. Imposing a higher wage floor on small businesses in such dire situations makes them more likely to close and lay off the intended recipients of the higher wage floor who now have no income to pay the rack rents their own landlords impose on them. The idiocy of an artificial wage floor is that it assumes the employer-employee relationship exists in a vacuum with no external costs imposed on the employer and no one with power over the employer who could hamper their ability to pay “living wages” by imposing higher overhead costs. The libertarian solution would not be to impose a myopic wage floor that never keeps up with rent or any other leftoid band aid policies. The libertarian solution is to recognize the root of the problem (real estate speculation) and the permanent solution (land value capture) by taxing the full location value capitalized in the rental price and charged as a premium on top of regular maintenance costs. The libertarian solution for the housing shortage would focus on repealing housing restrictions that make stable housing less obtainable for the homeless and lower income residents like R1 zoning, minimum unit size requirements of 1,000 square feet or more, minimum lot size requirements of tens of acres for multifamily housing and minimum parking space requirements that make tiny house villages for the homeless illegal along with other forms of non-subsidized low income housing such as trailer houses, SROs and ADUs.

In the commercial sector, the libertarian solution would focus on repealing legal barriers to careers and startups that don’t require a four year degree because not everyone is fit for college. Repealing or reducing the time and monetary costs of occupational licensing, repealing competitor veto laws and certificates of need, allowing small business owners to operate out of their home instead of getting squeezed by commercial landlords, and passing right to repair laws that allow the mechanically inclined and tech savvy to compete against monopolists like Tesla and John Deere.