Summary of the Real Wicked Problems of Poverty

A Systems-Thinking Analysis

If we look at the poverty management industry through a systems-thinking lens, a clear pattern emerges: This is how a trillion-dollar industry has been built on maintaining poverty rather than solving it, with every level of the system - from contractors to academics to government officials - complicit in perpetuating human suffering. The $2.5 billion of $3 billion in workforce training funds that never reaches training hasn't "disappeared"—it's been successfully captured by those who've learned that managing poverty pays better than ending it.

The Four Mechanisms of Profitable Failure

1. Payment Without Performance

The numbers are staggering:

• New Jersey's JOBS Re-Entry Program spent $187,500 for each formerly incarcerated person trained and placed into a job
• Governor Murphy's LiLA program: $257,143 per enrolled participant ($9 million ÷ 35 participants), $2.25 million per active participant if counting only those in training

New Jersey admits they have no accountability: "Neither the State or any local [Workforce Development Board] area is using pay-for-performance strategies."

2. Contractor Cartels

Just four corporations control 85% of Job Corps funding—over $1.4 billion annually: Equus Workforce Solutions (~30% share, $500 million), Career Systems Development Corporation (~20% share, $400 million), Adams and Associates, Inc. (~20% share, $300 million), MINACT, Inc. (~10% share, $200 million)

The system actively prevents competition through requirements like:

• "Must employ one full-time Project Director/Manager at 100% FTE" - requiring companies to pay someone full-time to manage a contract they haven't won yet

3. No Citizen Customer Feedback

The scope of opacity is breathtaking:

• Over 7,100 training providers qualified for federal dollars, A staggering 75,442 distinct programs scattered across more than 700 occupational fields

Even worse, "In its first release, the database lacked information on completions, employment rates, median earnings, and credentials for over 75 percent of programs."

Harvard found that "for earnings metrics in particular, the share missing was over 95 percent."

4. Academic Laundering of failure

The most insidious mechanism involves prestigious institutions legitimizing failure. When whistleblower John Pallasch, the former Assistant Secretary of Labor who once ran America's workforce system, revealed that some states set their "negotiated performance level for the adult program under WIOA is $5,400.00 a quarter. So that's $20,000.00 a year... That is just not enough," Georgetown's Harry Holzer responded by defending these poverty wages as "success" if they represent a "10 or 20 percent bump up."

The Human Cost

In Newark's South Ward:

• Children: 76% under 5 in poverty
• Youth: 50% of teens unemployed. Only 5% college-ready. 25% in juvenile justice system
• Adults: 31% unemployed—triple state average. 45% earn under $20,000

Nationally: 5 million youth are jobless and not in school.

The Truth

$25+ trillion spent since 1964 (~ More than World War I & II combined)

$1+ trillion annually (~ U.S spending on Defense)

40 million still in poverty

This isn't incompetence. It's a system performing exactly as designed - Converting poverty into profit and praise without performance, desperation into dividends without delivery, hope into contracts without outcomes.