Small Business, from Bloomberg BusinessWeek

Why 'Makers' vs. 'Takers' Is the Wrong Conversation

By John Tozzi on October 08, 2012

 

For Maurice Lim Miller, election season chatter about “makers vs. takers” misses the point. Miller, who was just awarded a MacArthur Foundation “genius” grant for studying how people in poverty improve their lives, says America’s poor are an entrepreneurial lot. They have to be.

“In Oakland, if you walk down International Boulevard, you see tons of entrepreneurs,” says Miller, who grew up in a poor immigrant family. “You see people selling CDs on the street, you see food carts, you see people repairing cars in their garages.”

The Family Independence Initiative, Miller’s Oakland-based nonprofit, has tracked 350 families with a median income of about $26,000 in San Francisco and Boston. His group doesn’t give them social services or tell them what to do. Instead, he asks them to report what they’re doing to get out of poverty and pays them a modest amount, about $160 per month, for documenting how they’ve met their goals. They could choose to focus on improving a child’s grades or paying down credit-card debt. Miller wants to find out what people do to help themselves when they’re not being steered in certain directions.

It turns out a lot of them start businesses. In the past three years, those 350 families have started 41 businesses that have created the equivalent of 74 full-time jobs. Miller says small, informal ventures, such as driving taxis or making floral arrangements, are one way families make up for lost income when they lose jobs or have their hours cut back. Some enterprises became more permanent, such as a storefront candy shop in Boston’s Dorchester neighborhood. “The way families were dealing with the recession was by becoming entrepreneurs,” says Miller.

About a third of the families Miller tracks receive some kind of government support, such as food stamps or living in public housing. Entrepreneurship is one way families reduce their dependence on government. Miller’s data show that, far from the caricature of welfare queens, families in poverty work hard and find creative ways to get off welfare. “Given alternatives, you see families really try to drop out of that system,” he says. “So how do they do that? They start creating their own jobs. They try to get their kids to go to college. There’s a lot of initiative.”

Tozzi is a reporter for Bloomberg Businessweek in New York.