Poverty for Profit: How Corporations Get Rich off America’s Poor (with Anne Kim)
Feb 25, 2025
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Anne Kim, a writer and public policy expert, delves into the disturbing reality of how major corporations exploit anti-poverty programs to boost profits rather than alleviate suffering. She highlights the role of tax prep companies and Medicaid contractors in this scheme. The discussion unveils the unethical practices behind privatization, revealing how these systems prioritize shareholder profits over essential services for the impoverished. Kim also shares potential reforms to increase transparency and enhance support for low-income individuals, advocating for a government focused on public welfare.
The podcast reveals how the so-called poverty industrial complex allows corporations to profit from anti-poverty programs, undermining the true beneficiaries.
It advocates for middle-out economics and reforms in the tax code to eliminate exploitative corporate practices and promote equitable economic growth.
Deep dives
The Ineffectiveness of Trickle-Down Economics
Trickle-down economics has failed to alleviate poverty and has instead contributed to rising inequality and political instability. This economic theory assumes that benefits for the wealthy will eventually trickle down to the middle and lower classes, but evidence suggests the opposite occurs. Middle-out economics, which supports the growth of the middle class as a primary driver of economic prosperity, is presented as a viable alternative. By centralizing support around the middle class, this approach seeks to create a more equitable economy for everyone.
Poverty Industrial Complex
The concept of the 'poverty industrial complex' highlights how large corporations profit from anti-poverty programs while failing to adequately serve those in need. Corporations create intermediaries that exploit these programs, enriching themselves instead of directly aiding low-income individuals. For example, paid tax preparers often charge high fees to help working poor families access the Earned Income Tax Credit, thus skimming significant amounts from programs designed to support them. This systemic exploitation points to a larger issue where poverty becomes a lucrative business rather than a social concern.
Categories of Corporate Benefactors
The discussion categorizes corporate profiteers into three main groups: skimmers, monopolistic contractors, and opportunists. Skimmers, like paid tax preparers, extract money from low-income individuals by charging for services that should be accessible to them without cost. Monopolistic contractors, such as companies managing Medicaid programs, leverage government contracts to reap financial rewards while potentially denying benefits based on profit motives. Opportunists in various industries, such as dialysis providers, create business models that thrive on persistent poverty and market vulnerabilities, perpetuating cycles of dependency rather than fostering empowerment.
The Call for Systemic Change
To combat these issues, a dual approach of ceasing privatization and increasing government transparency is proposed. Expanding the federal workforce may enhance oversight and accountability when administering anti-poverty programs, preventing the exploitation by for-profit companies. Implementing reforms to the tax code could allow for direct filing for low-income individuals, eliminating the need for profit-driven tax preparation services. Addressing underlying health disparities and improving management of chronic conditions will further reduce reliance on exploitative practices, fostering a more equitable healthcare environment.
The U.S. spends billions on programs designed to fight poverty, but it appears that much of that money is actually making corporations richer instead of helping people. This week, Nick and Goldy sit down with Anne Kim, author of Poverty for Profit: How Corporations Get Rich off America's Poor, to talk about the vast industry that siphons public dollars from anti-poverty programs.. From tax prep companies skimming off the Earned Income Tax Credit to private Medicaid contractors denying care to boost their bottom line, Kim exposes the hidden ways corporations profit off economic hardship. How did we end up with an anti-poverty system that enriches shareholders instead of helping people? More importantly—how do we fix it?
Anne Kim is a writer, lawyer, public policy expert, and contributing editor at Washington Monthly. She’s also the author of Poverty for Profit: How Corporations Get Rich off America’s Poor and Abandoned: America’s Lost Youth and the Crisis of Disconnection.