Sunday, November 19, 2017

What is the Middle Class Movement?

According to the World Bank, the global poverty rate is 9.6% and the percentage of people who are considered to be working poor is 10%.  Many people think that these percentages are understated.  Regardless of what the real percentages are, the world clearly has a significant poverty problem.  The “Middle Class Movement” or “MCM” was founded to influence a reduction in poverty that would lead to an increase in the global middle class.  MCM is focused on utilizing social impact measurement to influence an economic revitalization of the world.

Definition of the Middle Class
The term “Middle Class” has historically had many different definitions because so called experts have attempted to assign an income threshold to the term.  The amount of money to be considered middle class differs significantly in different parts of the world.  We therefore define the middle class simply as “households that can pay their basic bills on time.”  If a household has sufficient income to pay their basic bills (i.e. housing, food, health care, child care, transportation, insurance, etc.) on time, they may still feel like they are struggling economically.  However, they do not feel the emotional, mental and financial stress of households that do not have enough money to pay basic bills on time.  These households are frequently forced to commit crimes to survive.  We therefore consider households that cannot pay their basic bills on time “Poor.”

Theoretical Framework
In writing my dissertation this year, I discovered the importance of having a theoretical framework that provides guidance on one’s research.  I believe that this is extremely important for successful social movements as well.  Dr. King relied on Mahatma Ghandi’s “Theory of Nonviolent Communication” (Bode, 1995).  His non-violent approach to the Movement was a key factor in its success.

In 2010, I was writing a book on leadership and looked up Webster’s definitions of the words “Leadership,” “Command,” and, “Authority.”  I was surprised to discover that the word “Influence” was used in each of these definitions.  This discovery convinced me to refocus my book on influence instead of leadership.  This research led me to develop “Intelligent Influence Theory” which states that people “do what they do, think the way they think, and accomplish what they accomplish because of influence.”   Intelligent Influence Theory suggests that the right publicly accepted social impact measures will influence leaders to adopt policies that grow the middle class and reduce poverty.   

Mission
The mission of the Middle Class Movement is “to increase the middle class by reducing financial, educational and emotional poverty.”  The extant literature suggests that previous efforts to reduce poverty have failed because they have focused on reducing financial poverty and largely ignored educational and emotional poverty (Caldwell, 2017).  If a household receives more income and they are illiterate, the income will likely not be sustainable.  If a household receives more income and is literate but they are dealing with emotional and behavioral issues, that income will likely not last.  It is therefore essential to ensure that people are financially, educationally and emotionally healthy for them to reach and remain in the middle class.

Strategy
MCM’s strategy to influence global change is to use social impact measures to influence leaders to adopt policies and programs that reduce, financial, educational and emotional poverty and grow the middle class.  Measures like the Living Wage Index (LWI) that we created based on the MIT Living Wage Calculator, clearly show the percentage of households that can pay their bills (the middle class).  By holding leaders accountable for increasing measures like the LWI, we can influence a growth in the middle class through job creation programs.

Funding
We do not believe that grant funding is sustainable so we are focused on generating our own income.  MCM is in the process of establishing a 15 city music tour making stars of previously unknown local artists that we call the People Up Music Tour.  This unique entertainment program, which is owned exclusively by MCM, will identify the next generation of music artists and provide significant funding for the operations of the Middle Class Movement.  Entertainment is the perfect vehicle to provide sustainable funding for MCM.

84% Solution
The roll of two or more dice hundreds of times results in what statisticians call a bell curve or normal probability distribution.  This type of distribution is surprisingly frequent in nature.  If household income data fell into a normal distribution, then it is likely that even with the most effective programs possible, 16% of the world's households will be extraordinarily wealthy and 16% of the households will extremely poor.  We therefore believe that a realistic global goal is for 84% of households to earn sufficient income to be classified as middle class or wealthy. 

The good news is that if this goal is achieved, the world’s Gross Domestic Product (GDP) will reach record highs and the quality of life throughout the world will be increased significantly.  If more people can pay their bills and become middle class, the existing middle class and the wealthy will earn more income so everyone will benefit.  There is absolutely no political or financial reason not to support the Middle Class Movement.  We are therefore looking for as many people as possible to help us use the MCM to push the world toward this “84% Solution.”  If you would like more information about MCM, please visit www.MiddleClassMovement.com.

Thursday, November 9, 2017

The Two Levels of Dating

As a divorced single dad, I have learned a lot from my varied dating experiences.  I love discussing relationships with anyone at any time so I have gained tremendous additional insights from my many male and female friends who have had very different experiences in dating.  The world of dating is scary, exciting, challenging, difficult and fun all at the same time.  Most people are dating because they are trying to find that “love connection” with the right person in the right way at the right time. However, for many people, it is a very challenging process. 

In my book “Intelligent Influence,” I explain why all people “do what they do, think the way they think and accomplish what they accomplish because of influence.”  This understanding of influence has taught me that every person has three “selves” and there are two levels of dating driven by influence.  The first “self” is their “Emotional Self” which controls how they feel. The second self is their “Rational Self” which controls how they think. Finally, the third self is the “Physical Self” which controls how they envision using or actually use their body.  Everything we do is influenced by one or more of these selves. The secret of successful dating is controlling the order in which you utilize these selves in the two levels of dating.

I call the first level of dating “Superficial Dating.”  Most people utilize our three selves in the same order in a healthy way in “Level One Superficial Dating”.  We typically start with the “Superficial Physical Self.”  We begin the superficial dating process by identifying someone in-person or online that we are attracted to physically.  This attraction is subconsciously based on whether or not we can see ourselves kissing or being intimate with that person.  It is important to remember that who we find attractive is largely based on our prior influences.  We then move to the “Superficial Rational Self” and determine whether that person is intelligent and interesting to talk to.  After that self is revealed we move to the “Superficial Emotional Self” and determine whether we feel good with them and enjoy spending time with them. This process is normal and healthy.

As daters, we begin to make mistakes when we move to Level Two of dating.  In the second or “Serious Dating” level, we should begin with our “Serious Rational Self.”  It is essential that we take significant time to think whether or not this person is someone whom we can develop a serious relationship with for a long time before we “fall” for them.  If they pass this test, then we should move to the “Serious Emotional Self” and open ourselves up to falling in love with this person.  If this happens, then we can open ourselves up to allow the “Serious Physical Self” to take control and develop a deep physical intimacy with them.  Couples that have followed this pattern are likely to have a more successful relationship than others who use the wrong order of “selves.”

Unfortunately, many of us make the mistake in Level Two dating of starting with our Serious Emotional or Physical Self before we use the Serious Rational Self.  We therefore fall in love with or have sex with someone who is wrong for us.  We then move to the Serious Physical or Emotional Self and fall deeper in love physically or emotionally with the wrong person.  When the relationship is not working out we begin to release our Serious Rational Self.  Unfortunately, it is often too late because we are deeply involved with the wrong person and it becomes painful and difficult to extract ourselves from the relationship.

The best way to successfully date is to utilize the Superficial Physical, Rational and Emotional selves in that order in Level One Superficial Dating.  We are the only ones who can determine when we are ready to move to Level Two Serious Dating.  Once we make that determination, we must resist the temptation to release our Serious Emotional or Physical Self and, instead, use our Serious Rational Self to assess whether there is a realistic future for this relationship. We need to honestly determine, regardless of how beautiful or handsome this person is, if they are too controlling, selfish, needy, inconsiderate, etc.  Once we determine that this relationship has a serious chance of succeeding we can move to the Emotional and Physical selves and enjoy the ride. 

I provide a simple summary below of healthy and unhealthy dating.  I hope that this is helpful as you embark on the dating journey.  Good luck finding the man or woman of your dreams.

Dr. Caldwell’s Secret of Successful Dating

What Most People Do
They Experience Healthy Level One Superficial Dating
They release their Superficial Physical; Superficial Rational; and, Superficial Emotional Selves in that order and move to Level Two or Serious Dating.

However, they Follow Unhealthy Level Two Serious Dating
Once they have completed Level One Superficial Dating they mistakenly release their Serious Emotional and/or Serious Physical Selves (in either order); and then Serious Intellectual Selves (once things are not working) and find themselves in the wrong relationship at the wrong time.

What People Should Do
Healthy Level One Superficial Dating
They should release their Superficial Physical; Superficial Rational; and, Superficial Emotional Selves in that order and move to Level Two or Serious Dating.

Healthy Level Two Serious Dating
Once they have completed Level One Superficial Dating they should release their Serious Rational; Serious Emotional; and, Serious Physical Selves in that order.  This will increase the likelihood of finding the right relationship at the right time.


Saturday, July 26, 2014

Intelligent Influence

I have been amazed by the many positive comments about the TEDx speech I gave several years ago in Princeton called “Intelligent Influence.” This talk focused on one of the most important words in the world that, amazingly, is “hidden in plain sight.” The word “Influence” is used in conversations virtually every day by millions of people around the world who have not taken the time to understand the meaning and potential of this very powerful concept.

I believe that positive strategic influence is the secret to leadership and organizational success in today’s complicated business environment. My research on influence led me to develop a concept called Intelligent Influence® that is tailor-made for the business (and human interaction) realities of the 21st century. This unique leadership and strategy framework, which consists of four components, has the potential to change how people interact (especially in the business world). This approach has been so well received that I founded an international management consulting firm named Strategic Influence, LLC that has successfully helped executives, corporations, government agencies and nonprofits effectively utilize Intelligent Influence to achieve extraordinary success.

This concept is extremely useful when you apply it to your career goals and objectives. The first component, “Influence AwarenessTM”, is understanding how an individual or group is influenced. Think about the person, events or things that influenced you to pursue your current career or develop a passion for a particular hobby or even sports team. We all do what we do, like what we like and accomplish what we accomplish because of influence.

The second component, “Influence ImpactTM”, is understanding how an individual or group currently influences others. Take a minute or two to think about the influence that you have on others at home, at work and in your community? Ask yourself the question “How am I currently influencing my boss, co-workers, subordinates, family and friends?” My research indicated that there are six distinct types of Intelligent Influence. These are: Authority InfluenceTM, Belief InfluenceTM, Inspiration InfluenceTM, Reputation InfluenceTM, Resource InfluenceTM and Thought InfluenceTM. It is essential that you explore the extent to which you have each of these types of influence at home and work.

The third component, “Influence ManagementTM”, is proactively managing how you are influenced based on your analysis of your current influence (or lack thereof). Every person should identify their developmental goals and write down a plan to get the Internal InfluenceTM (training, mentoring, etc.) they need to accomplish their External InfluenceTM (personal and professional) goals. Make sure that you have Influence Integration and spend time being influenced by people who think very differently than you do. This means that HR executives should spend time with engineers, sales persons should spend time with finance executives and CEOs should spend time with front line workers.

The fourth and final component “Influence MaximizationTM,” is maximizing influence by connecting the three Caldwell Spheres of InfluenceTM that in combination are the secret behind the success of all influential individuals and organizations. The first sphere, “Credibility,” represents the influence that motivates people to take a person or organization seriously. The second sphere, “Creativity,” represents the influence that makes people respect an individual or organization because of their innovative approach and ideas. The third and final sphere, “Connection,” represents the influence generated when a person or organization makes an emotional connection with a person in a significant enough way to get them to follow the person or buy a product.

When a leader or organization can demonstrate each of these three types of influence in combination they can accomplish extraordinary things. The Intelligent Influence framework anchored by Influence Maximization occurs in every sector of society with both individuals and organizations. In business the three spheres of influence account for the extraordinary success of companies like Apple, McDonalds, Nike and Coca-Cola. For example, when Coke was the number one soft drink it had Credibility because of its long storied history; Creativity because of its “secret formula”; and, Connection because of the very successful “I’d Like to Teach the World to Sing®” commercials which has resonated emotionally with millions of people over the years. Coca-Cola has been the number one brand because of their ability to demonstrate the three spheres of influence consistently over many years.

If you are serious about becoming an exceptional leader (or just having extraordinary relationships) you must identify the influences that shaped who you are (Influence Awareness); honestly assess your current influence strengths and weaknesses (Influence Impact); develop a career (and life) plan that identifies your influence-based developmental needs (Influence Management); and, demonstrate credibility, creativity and connection to maximize the influence that you have on the people who determine the level of success you have in both your life and your career (Influence Maximization). Intelligent Influence is the secret of success in the complex, diverse and fast paced world of today. Are you ready to use this strategy to influence the world around you?

Sunday, June 22, 2014

Neuroinfluence

I have been overwhelmed by the extremely positive response to my book Intelligent Influence: The 4 Steps of Highly Successful Leaders and Organizations. This publication is built around the belief that “we do what we do, think the way we think and accomplish what we accomplish because of influence.” People from around the world tell me that this book has changed the way that they view themselves and the world. My research for this book has also changed my view of the world by teaching me that there are two very distinct types of influence.
 
The first type is “Social Influence” where a person is influenced to do or think things because of other people or situations. This type of influence, depending on its intensity, is often temporary. The second type of influence is a term I created called “NeuroinfluenceTM” which is defined as “influence that is powerful enough to cause neurological changes in an individual.” These changes to the brain frequently make this type of influence more permanent because the only way to change it is to expose a person to counter-influences capable of causing neurological changes.

I am frequently asked the question: What types of influences are strong enough to change the brain? The traumatic experiences that many individuals face on a regular basis can directly affect the parts of the brain that control emotions and memory. Studies, such as the Adverse Childhood Experiences (ACE) research on 17,000 Kaiser Permanente patients, clearly indicate that traumatic childhood experiences are a fundamental reason why individuals do poorly in school and suffer later in life. Additional research has indicated that the hippocampus, the part of the brain involved in memory forming, organizing and storing, and the amygdala, the part of the brain that processes emotions such as anger, fear and pleasure, are extremely sensitive to stress and trauma.

If a person is exposed to prolonged or extreme trauma (which is called “Negative NeuroinfluenceTM” or “NNI”) the amygdala and hippocampus change in a way that negatively affects an individual’s stability, sensitivity to others, memory and ability to learn. However, the good news is that “Positive NeuroinfluenceTM” or “PNI” can reverse the changes to the brain caused by the trauma generated by NNI.

The recognition of the widespread impact of negative and positive neuroinfluence has the potential to drastically change public policy in areas as diverse as healthcare, law enforcement and public education. The right public policy will influence physicians to use MRI’s more frequently to examine the impact of trauma on the brain. These policies would enable law enforcement to identify potential violent criminals before they commit a crime.  

The chronic academic achievement gap between urban and suburban and black and white students exists because current special education programs are inadequate in addressing the neurological problems of many urban and black students. These students, therefore, continue to do poorly in class and often distract other students from learning. Unfortunately, these classroom distractions, and their root causes, are one of the main reasons that there is a 30 point academic achievement gap on standardized tests between black and white students. The right public policy will lead to the creation of PNI programs that can transform students struggling from NNI into outstanding students.

Violence, suffering and abuse has become an unfortunate way of life for far too many students living in cities like Atlanta, Camden, Chicago, Detroit, Houston, Los Angeles, Newark, New York and Trenton where the school that I lead is located. Many students hear gunshots on a regular basis in their neighborhoods. Sometimes they are threatened at gun point or deal with the brutal murder of a family member or friend. To make matters worse, many of these students are forced to skip dinner or have to move from house to house or car to car for shelter at night. Some of these students experience unthinkable abuse that causes even greater trauma to their young lives.

There are many programs treating Post Traumatic Stress Disorder (negative neuroinfluence) in war veterans. Society is starting to realize how significant a problem this is for people who have fought for their country. Unfortunately, there are not enough programs effectively treating this ailment in public school students and their parents. Educational leaders ignore the sad reality that many urban students have great difficulty learning because they are suffering from a form of NNI caused by violence, hunger, homelessness and abuse in the communities where they live.

Studies have shown that positive neuroinfluence programs designed to help students improve their self-esteem can help students significantly increase their academic proficiency. Programs like Northwestern University’s Project Harmony music program (where students learn to play instruments) change the brain in a way that makes it easier for students experiencing NNI to learn. According to Hugh Knowles, professor of neurobiology and physiology and director of the Auditory Neuroscience Laboratory at Northwestern, “musical training has a positive effect on biological processes important for auditory learning, memory and hearing speech … which appear to translate into better language learning results.”

PNI programs can help war veterans, victims of violence and traumatized students improve their social and emotional response mechanisms so that they can succeed in school, work and life. Unfortunately, violent crime will increase and the academic achievement gap will likely widen unless policy makers support the expansion of PNI programs designed to address the social, emotional and learning needs of children, youth and adults who have experienced significant trauma in their daily lives.

Tuesday, January 21, 2014

Twilight Tutoring

There has been a lot of discussion on the relative value of lengthening the school day. Not surprisingly, there is a great deal of disagreement about the need to lengthen the school day in successful schools. However, there is almost unanimous agreement that the school day needs to be lengthened in schools where student academic proficiency rates are low.

As the son of a Civil Rights Leader who knew and marched with Dr. King, Head of School of a Charter School in Trenton, a school board member in New Brunswick, president of the Middlesex Regional Educational Services Commission (MRESC) and chair of the New Brunswick Housing Authority, I have a unique understanding of education and the roots and consequences of poverty in America. However, I returned a few days ago from an amazing 14 day trip to China over Christmas and New Year’s that opened my eyes to the deficiencies in the American education system.

This trip was designed to connect New Jersey and New York school leaders with Chinese educators to share best practices and foster student exchanges. However, to my surprise, it provided extraordinary insight into the ways that the US needs to adjust our approach to education to maintain our competitive advantage over other countries.

Most educational leaders know that Chinese students are among the best in the world when it comes to international assessments of academic achievement. The US is falling further and further behind other countries on these tests. My trip to China taught me some fascinating things. First, the good news is that the American education system is the best in the world when it comes to educating students from 8am to 3pm. Our class sizes, the quality of our classrooms and our teacher training is as good as it gets.

Contrary to the view of many educational leaders, I do not think we need to make major adjustments to our standard educational approach before 3pm. We visited some of the best schools in China where the ratio of teachers to students was more than 50 to 1 and the classrooms (and bathrooms) were so cold every student wore a heavy coat throughout the day. No American parent would tolerate student learning in these conditions. However, academically, these students can run circles around our best students.

I therefore asked myself the question, if our schools are better during the day how can we be so far behind academically? I was initially confused by this contradiction until I realized that China is as focused on the education of students from 3pm to 8pm as they are from 8am to 3pm. Many of the K through 12th grade schools in China have more than 6,000 students. However, students from very poor families and those that live far away are housed for free near the school. Consequently, to create a culture of learning at the school, more than 4,000 of these students live in local dorms. These dorms ensure that students are as focused on academic excellence after school as they are during the school day. This is not the case in the US.

This trip opened my eyes to the reality that the primary reason American students are not doing as well academically as Chinese students is that in suburban, urban and rural schools most students are more focused on entertainment from 3pm to 8pm than they are on learning. They would rather listen to the most popular music, play the latest video game, watch TV or communicate via social media than study the subject areas that confuse them. Most students do their homework. However, academic excellence comes from working on academic weaknesses in addition to completing homework in the evening. American students are not doing this. We have a culture of after-school entertainment while China has a culture of after-school learning.

Proposals for a longer school day are being criticized by teachers unions who want more money for a longer day and parents who think their students have enough homework. I believe that the school day should be lengthened only for struggling students and teachers that are willing to work for standard hourly rates. If government is serious about increasing student achievement it should advocate for (and in some cases support financially) a two hour academic excellence program immediately after the end of the school day for struggling students. I call this a “Twilight Tutoring” program.

The good news is that new technology programs allow for very focused and productive tutoring. The only way that this tutoring will be effective is if the students are assessed weekly by a technology program that is highly correlated with state standardized tests that identifies the specific remediation needs of the students (and provides curriculum to help them address these needs). The tutoring must therefore be aligned to this curriculum and focused specifically on the areas were the student is weak based on the assessment. The program will enable the school and the students’ parents to measure academic growth on a weekly basis.

To manage program costs the government can set hourly rates and open it up to teachers and others who have the knowledge and experience to ensure that the tutoring is aligned to the unique needs of the students. This will keep contentious negotiations out of the process and enable the most committed tutors to participate. This approach will not guarantee that the US catches up academically to China. To do that we need to establish boarding programs directly aligned with poor performing public schools. This will ensure that struggling students are in environments in the evening that are conducive to achieving academic excellence. However, the Twilight Tutoring program that I am proposing will significantly increase the academic achievement of struggling students. This approach is an essential first step in making American pre-college education a global leader once again.

Wednesday, May 8, 2013

The United Hymnal

The Musical Divide
As the son, grandson and great grandson of activist ministers, I have been influenced to make religion an essential part of my daily life and examine its importance in the lives of human beings around the world. My research on religion taught me that music is a powerful vehicle in faith because it influences people to develop a deeper emotional bond with God. By singing to and about God on a regular basis individuals can experience a very personal and lasting connection to both the worship service and their Lord.

Many people believe that God has given human beings the gift of music to bring them together. However, throughout history, music has fueled religious differences. There is clearly a doctrinal divide among the religions of the world. However, I am convinced that the musical divide (because of the powerful connection between music and human emotion) is one of the major reasons for the intensity of the doctrinal divide and religious warfare. This deep musical divide in religion takes place because there is a lack of sensitivity to the “Musical Influences“ of others.

Whether we want to admit it or not, as human beings, we are a product of our influences in life. The language we speak, the food we eat, the people we find attractive, our political views, our occupation, etc. are determined largely by the unique mix of influences in our lives. This fact is at the heart of the religious music divide.

Musical Arrogance
Throughout human history there has been a passionate debate about music. People argue intensely that their favorite music is the best music of all time. I have enjoyed telling people that my research on Intelligent Influence (for my book of the same name found on www.IntelligentInfluence.com) has enabled me to identify the “best” music in human history. When I say that to someone they usually look at me skeptically and ask me “What do you think is the best music?” I respond by saying “The best music ever created is the music that people hear between the ages of 10 and 20.” Most people take a second to think about my statement and respond with “You are so right! I never thought of it that way.”

This critical and challenging time in every human being’s life is a period when they use music to help them through the emotional, developmental and intellectual challenges they face when growing up. Most people on earth are influenced to fall in love (typically for the rest of their life) with the popular music on the radio, television, record/CD players and the internet that helped them mature through puberty to adulthood. 

The religious music chasm is rooted in the way that people have been influenced to worship (or not worship) God (especially during the ages 10 to 20). The extent of this influence is directly related to the amount of time and intensity of the music a person is exposed to. Most people do not listen to religious music as much as they do secular music. However, the intensity of the music at their favorite religious institution subconsciously increases the power and influence of that type of music on their psyche.

Many individuals, who grew up in the traditional church, mosque, temple, synagogue, etc., are influenced to believe that the traditional music of their place of worship represents the only “true” religious music. Others, who attend more modern religious institutions on a regular basis, are influenced to feel that their modern version of religious music is the only way to connect with God. This “Musical Arrogance” is at the heart of the music-driven conflict between religious institutions.

The United Hymnal
Merriam-Webster’s Dictionary defines the word “Hymn” as simply “a song of praise to God.” A “Hymnal” is therefore a collection of songs of praise to God. Over the years I have developed a passion for writing and studying hymn music. In my research, I was surprised to discover that there was no Christian hymnal that celebrated traditional hymns; gospel and praise music equally. I therefore was not surprised to find that there is no hymnal that contains the songs of praise to God of the four most influential religions of the world-Christianity; Hinduism; Islam and Judaism.

I have been deeply troubled by the human suffering caused by religious zealots in each of these faiths. I feel compelled to attempt to do what little I can to bring people together through music. The Intelligent Influence framework has inspired me to create something that I call the United Hymnal (both electronically and in traditional book form) to enable people to understand the power of worshipping God through different religions and music.

This one of a kind hymnal will celebrate the music of different Christian denominations and reduce musical arrogance throughout the globe. My hope is that the United Hymnal will influence people to respect other religions, eliminate the religious music divide and prove to the world that people who truly believe in God have many things in common. If this hymnal is well-received, then another hymnal will be developed to celebrate the music of Hinduism, Islam, Judaism, Christianity and any other religion that believes in one divine God.

I recognize that as this project receives greater visibility it is likely to be criticized by those who use religious differences to gain political power within their religion. However, those who truly believe in God will understand the need for a hymnal designed to bring a divided religious world together through music. I clearly cannot do this alone. I am hoping to connect with people who believe in God and the power of bringing people together through music.

If you are interested in helping me create the United Hymnal please email me your contact information at dalegcaldwell@aol.com. My team will let you know where we are in the process of developing the hymnal and how you can help. Our goal is to provide the most powerful Christian hymns sung in the "Traditional", "Praise" and "Gospel" music styles in an e-book, on an app accessible on all platforms and on the website www.UnitedHymnal.org by 2016.

I look forward to working with you to bring the world together through religious music. 

Tuesday, April 9, 2013

Neighborhood Economics

Neighborhood Economics
Merriam-Webster’s Dictionary defines “Economics” as “a social science concerned chiefly with the description and analysis of the production, distribution, and consumption of goods and services.” Webster’s defines “Macroeconomics” as “the study of the entire economy in terms of the total amount of goods and services produced, total income earned, level of employment of productive resources, and general behavior of prices.” It defines “Microeconomics” as “the study of the economic behavior of individual consumers, firms, and industries and the distribution of total production and income among them.

Federal, state and local government policies have failed because they are based on national macro and micro economic models that define a community where 100 people make $1 million a year and 1,000 destitute people make $0 a year as a thriving neighborhood (because the average annual salary of the 1,100 residents is $90,909.) This faulty economic analysis has allowed government to largely ignore the employment needs of people struggling in economically challenged neighborhoods. This results in social problems plaguing communities where unemployment is rampant. 

Macroeconomics explores aggregate national economic indicators largely without regard to the unique trends of local economies. Microeconomics explores aggregate corporate and individual economic indicators largely without regard to the unique trends of local economies. I believe that there is an unexplored subset of macro and microeconomics that I call “Neighborhood EconomicsTM” that has not received the focus and attention it deserves.

Tip O’Neil, the late Speaker of the US House of Representatives, was famous for saying that “all politics is local.” It is clear that “solutions to global problems are local” as well.  History has proven that a “strong” global economy does not mean healthy communities around the world.  The only way to effectively solve the most challenging problems in the world is to develop solutions that are custom designed for the unique needs of local communities and neighborhoods.  One size does not fit all in politics or economics.

Neighborhood Capitalism
Merriam-Webster’s Dictionary defines “Capitalism” as “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Webster’s defines “Living Wage” as “a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living.” Many experts believe that individuals have an “acceptable standard of living” when their housing expenses are 25% or less of their income. A living wage can therefore be defined as 4 times the average housing costs in the community where an individual lives.

Communities with high living wage employment are more likely to have low unemployment, higher literacy rates, better health care, lower crime and less poverty. Consequently, the single most important measure of success of local, state and national government public policies should be the extent of living wage employment in a community.

I call the establishment of policies based on living wage statistics in a community Neighborhood CapitalismTM because it is based on free-market economic policies targeting local communities. Most economic theories fail when they are converted to public policy because they are focused on applying aggregate national economic indicators to explain the health of local communities. I am convinced that Neighborhood Capitalism is more reliable than the federal government’s current aggregate economic policies because it is focused on using local economic indicators as the foundation for assessing the health of the national and global economy.

The one indicator that most accurately measures the success of government policies based on Neighborhood Capitalism is the Living Wage IndexTM (LWI) which I created last year. The equation for LWI is: L / W where “L” represents the number of people in “Living Wage Jobs” in the target community and “W” represents the total number of people of “Working Age” in the target community.

Living Wage Index
If every government in the world were evaluated based on this relatively simple equation applied to key large communities they would be influenced to move more rapidly toward peace and prosperity. Public policies would be focused on increasing the LWI by providing incentives for large and small businesses and nonprofits/NGOs to hire unemployed workers at living wages. These new government programs would reduce crime, improve health care, enhance public education and reduce the likelihood of terrorism and war. The LWI is frequently called the “Small Business Index” because this measure puts pressure on politicians to support policies that grow small and independent businesses who are the largest employers of local residents around the world.

The beauty of this approach is that it does not matter how neighborhoods are determined geographically as long as the same geographic boundaries are used when identifying LWI trends. An added benefit of this approach is that the data generated by the LWI could be aggregated in a way that would enable economists to recommend macroeconomic policies benefitting a broader group of people. In a relatively short period of time this very simple measure of free-market prosperity (if enforced) would influence government leaders to significantly increase the quality of life for every person on the planet.

If pressure were placed on government leaders to provide quarterly reporting (as required by publicly traded companies) on the Living Wage Index in predetermined geographic areas (i.e. municipalities or counties) it would be significantly easier to measure the success or failure of public policy. This trend analysis would enable policy makers and average citizens to understand the relationship between increases in the LWI and increase in average incomes, reduction in crime, elimination of poverty, improvement in healthcare and an increase in high school graduation rates. The case could also be made that an increase in the LWI would lead to less pollution because people earning living wages are more interested in the environmental health of the community in which they live.

Most importantly, LWI trends would enable the voting public to quantify the success or failure of their political leaders and make more informed political choices on election day. The LWI will not solve every problem facing the world today. However, it should increase employment and reduce poverty and crime in local communities.