Elodie Boccara, Aparicio, Honorbound.
So you might ask yourself, why is Bill Gates, the richest man in the world with an estimated net worth of 88.7 billion dollars, living in a 37,000 square foot mansion while there are families living on the streets off a single dollar a day?1 The simple and honest answer to that question is human capital. You may ask yourself, what is this and why is it causing this much inequality between groups of people in society?
According to Charles Wheelan, the author of Naked Economics, human capital is, “the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience…”2. When left on the side of the road with nothing to sustain you, your human capital, if it is strong enough should be able to keep you alive and get you out of the terrible situation you are in. This though, is the reason as to why there are so many people living on the streets without a home. With rare and unique talent comes demand from companies looking for skilled, intelligent and unique workers. These people with higher human capital are more likely, with their knowledge, to gain wealth for these companies.
Poverty is defined by the Merriam Webster dictionary as, “the state of one who lacks a usual or socially acceptable amount of money or material possessions”3. In his novel, Charles Wheelan states that, “the most insightful way to think about poverty, in this country or anywhere else in the world, is as a dearth of human capital”4. Human capital controls our economy and all other aspects of the world that come along with it. A successful economy stems from the productivity levels of a countries factories. The more productive we are, the richer we will become. As a whole, the productivity levels in the United States have drastically changed in the past years going from $4,800 to now $40,000+ a year.5
Although this improvement is significant, there is still a pressing issue in the United States: our poverty rates caused by the lack of human capital. Wheelan emphasizes in his novel that lack of human capital in societies is the cause of unemployment and poverty. To start from the top, the lack of human capital that leads to many of the subjects I have talked about is mainly caused by a lack of education among teenagers and young adults. In an article on the US News titled, Not as Smart as We Think by Nat Malkus, he states that, “U.S. schools are not helping the prospects for success for individual students or the nation as a whole. Their worry is about America’s human capital”6. Schools around the United States are not helping the children succeed enough and this therefore causes many high school drop outs that end up in tragic living situations with no human capital to help them live their life.
As important as having a well running economy is, maximizing our human capital in our nation is a key aspect we need to focus on together as a nation to better ourselves and the economy.
1Josie Cox. “Bill Gates defends Forbes title of world’s richest man with an estimated fortune of $86bn”. Independent. March 20, 2017. Accessed June 23, 2017. http://www.independent.co.uk/news/business/news/bill-gates-worlds-richest-person-forbes-list-wealthiest-donald-trump-falls-a7639706.html
2Charles Wheelan. “Naked Economics: Undressing the Dismal Science.” W.W. Norton & Company, 2010. 127.
3Merriam-Webster. Accessed June 24, 2017. https://www.merriam-webster.com/dictionary/poverty
4Charles Wheelan. “Naked Economics: Undressing the Dismal Science.” W.W. Norton & Company, 2010. 129.
5Charles Wheelan. “Naked Economics: Undressing the Dismal Science.” W.W. Norton & Company, 2010. 136.
6Nat Malkus. “Not as Smart as We Think”. US News. March 29, 2016. Accessed June 24, 2017. https://www.usnews.com/opinion/knowledge-bank/articles/2016-03-29/us-must-face-our-human-capital-deficit-compared-to-the-rest-of-the-world
7“What is Human Capital Management?” Digital Image. Human Resources Today. Accessed June 24, 2017. https://www.humanresourcestoday.com/human-capital-management/