POVERTY FOR PROFIT

A startling study of how private companies—and their wealthy executives—exploit poor customers.

As Washington Monthly contributing editor Kim, author of Abandoned: America’s Lost Youth and the Crisis of Disconnection, demonstrates in this searing text, some of the nation’s most vulnerable populations are fertile ground for predatory private businesses that take advantage of them and send the bill to the federal government. This “vast ecosystem of industries” (which the author calls “Poverty Inc.”) costs the federal government—and consequently, taxpayers—a staggering $900 billion per year. This dizzying array of companies includes medical care, food provision, and prison services. Kim’s litany of well-documented stories are both sobering and infuriating: Tax preparation companies are able to prey on low-income households because “the tax code is complex, and taxpayers are fearful.” Consulting firms get rich off running states’ antipoverty programs. A network of “American Job Centers” often fails to adequately prepare participants for employment. “Health care profiteer” franchises such as Kool Smiles provide medically unnecessary, Medicaid-funded root canals and other procedures. Food service corporations like Aramark stock prison commissaries with low-nutrient junk food, at a markup. After chronicling the misdeeds of Poverty Inc., Kim shows how Congress could improve this morass of profiteering through sharper oversight and better data collection. The list of shoddy practices is exhaustive and devastating, and the great challenge is in shifting a system that makes too many people too much money. Not only are these industries exploitative and extremely expensive; they also contribute to persistent poverty through both passive means—incompetence and inefficiency—and active, via lobbying to block reforms that would help the poor but “endanger [corporations’] revenue streams.” Poverty, in other words, is big business.

A searing, rage-inducing look at how the misery of the poor lines the pockets of the rich.