Enclaves, Providing Low Cost Living in America

by Stan Lass

Last revised 1-21-08. It was called havens earlier.

Introduction

The premise is that given the right conditions, an individual, or family, could live comfortably and well on an income 50% below the U.S. poverty line.

Enclaves would be areas within America with a low cost of living and somewhat lower wages. (Wages can be low if the cost of living is low.) In America we have an abundance of food and land is relatively plentiful. Americans could live cheaply.

In many foreign countries, people can live comfortably on an income that is well below the poverty line in the United States. If one looks around, it's hard to live much below the poverty line (about $21000 for a family of four and about $10000 for a single person). The economy is mostly geared such that it takes at least two low wage jobs to support a family. Of course, being homeless is quite cheap, but it is not a reasonable option.

Some time ago, the author of an article on slashdot.org lamented about how his job was being outsourced to a foreign country. He thought about following his job to the foreign country, but decided that it really wasn't practical. With a lower cost of living, he could work for less in the U.S. and compete more effectively with overseas workers.

Enclaves could function much like a military base, having a sensible set of laws and regulations, even having it's own judicial and legislative systems.

Worldwide Income

The worldwide average income is about $1250 per person. At this average income, clearly, most people survive fairly well. If one tries to live on this average income here in the U.S., it is almost impossible. You'd end up living on the streets.

An Example Enclave

Initially, an enclave could be setup on a surplus military base and/or on the edge of cities.

Large apartment buildings are a cost effective way of housing people. With the freedom to put up the apartment buildings in quantity and freedom from building regulations that drive up the cost unnecessarily, individual apartments could rent quite cheaply, perhaps significantly less than 50% of the going rate.

A cafeteria could purchase food in bulk. Enclave dwellers could help out in the cafeteria at times in exchange for a credit on their food bill. This could provide nutritious food at a reasonable cost.

Businesses, including factories, could setup within the enclaves, providing jobs to enclave residents. These jobs wouldn't require much of a commute.

Telecommute jobs could go to enclaves instead of off shore.

There is talk of cars whose usage would be limited to streets with a 35 mph (or lower) speed limit. These cars could be used for travel within a enclave and for many, meet their day to day transportation needs. Car sharing plans could be used when a faster car is needed.

National Implications

If indeed the U.S. is (or will be) spending it's wealth faster than it is creating wealth, then the current way of life is not sustainable. Also, baby boomers retiring will stress the Social Security and Medicare systems. Taxpayers could eventually rebel against the high taxes needed to pay for all of the entitlements and benefits. Out of the resulting chaos, a dictator could emerge, leading to a loss of freedom in America. In contrast, enclaves could provide a transition to a sustainable way of life, a soft landing instead of a hard landing.

The huge trade imbalance of nearly about $800 billion a year is probably not sustainable. Enclaves would make U.S. manufacturers more competitive.

In the long term, automation will eliminate many jobs. As a result, there'll be high unemployment unless we get back to (mostly) one job per household. Enclaves would help in this regard in that one job would be enough.

Technology has changed a great deal in recent decades. The proposed exemption from current laws and regulations would allow a rethinking of how to provide health care, housing, transportation, education, etc. Enclaves would provide a place to try out new approaches.

My sense is that if there would be an organized effort to change the current laws and regulations, then that the effort would lose heart before there was much to show for it. In contrast, enclaves would circumvent the current laws and regulations, and allow a fresh start. An amnesty law was defeated by a public outcry. Perhaps an outcry could get an enclaves law.

Social and Community Aspects

In a sense, taxes, regulations, special interests and the nature of the economy, have removed some of the lower rungs from the economic ladder. Enclaves would enable putting some of those rungs back in place.

I would almost argue that any kid that has both parents working is enduring "cruel and unusual punishment". Kids need time with their parents and someone to be there when they get home. I surmise that some obesity in children results from children coming home to an empty house, then filling an emotional emptiness with food.

Fifty years ago, when I looked around, most young men with a high school education could get a job that paid enough to support a wife and a child. Today, few young men can do that. I've wondered why. A big part is due to the government. See Wasting a Trillion Dollars a Year. By eliminating the waste, taxes could be significantly lower.

Consider that out of one's healthcare dollar, something like 25-40% goes to the government in taxes. High taxes hurt even if you don't pay them directly to the IRS.

Building codes and costly building permits can drive up the cost of an apartment, increasing the minimum rent that is needed to break even.

Many of the middle income class are working very hard to pile up a big retirement nest egg. If they could look down the road and see that only a more modest nest egg is needed, they wouldn't need to work as hard.

There's a certain dignity in being able to make your way in life without help, either as the breadwinner or in support of the breadwinner. Enclaves would make it easier to do.

Trade Aspects

With lower labor costs and freedom from burdensome regulations, U.S. goods could be more competitive in the world market. (There are sensible regulations, e.g. anti-littering laws, and then there are regulations that cost more than the benefit received.)

Aside from keeping more manufacturing jobs here, there's also the prospect of importing terrorism supplies through the ports. If adequate screening of imports proves to be expensive, it shifts the tradeoffs between importing manufactured goods and manufacturing here. With the possible prospect for more manufactured products to be made in America, it's important for America to retain manufacturing expertise and infrastructure. (Automation is steadily reducing the labor content in manufacturing.)

Health Care Aspects

Health Care Cost and Quality

With the father being the breadwinner, family life and work life could be less stressful. This could result in less overeating and less substance abuse to relieve stress, resulting in fewer health problems.

Conclusion

If you lower the cost of living enough, even a low wage job would provide a living wage for a small family. Currently, there aren't many options for living below the poverty line. We'd need to fill in some of the options between living on the street and at about the poverty line.

A lower standard of living doesn't necessarily mean a lower quality of life. With more time, life can be better, even without as many material goods.

Even if you don't want to live in an enclave, enclaves would help stabilize Social Security, reduce crime and make America more competitive in the world market.

Enclaves can be a place to try out new ideas, e.g. in health care.

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