A growing number of activists and politicians think government welfare is the answer. Technological progress excludes minorities, they say, and government must subsidize computer access. The Urban League's Herman Lessard, for example, calls equal technology access "the new frontier of civil rights." The Clinton Administration agrees.
According to Vice President Gore, "We didn't tear down the cotton curtain to replace it with a digital divide." Putting money where its mouth is, the Administration's current budget earmarks $65 million for new programs intended to increase technology access in low-income areas, an expenditure that is expected to balloon in coming years. This policy is unsound, despite its good intentions.
A better policy would recognize how the private sector is already bridging the digital divide, without the government's help.
Information technology is becoming the backbone of the American economy. In turn, the incentives to acquire new technology and the skills to use it are increasing among everyone, including minorities and the poor.
Falling computer prices are making it dramatically easier for individuals to satisfy this demand. PC prices are already dropping below $400. Today, most PC manufacturers offer payment plans that make Internet-ready computers available for as little as $39 a month.
The combination of low prices and high incentives is carrying information technologies down the socioeconomic ladder. The changing demographics of Internet users illustrate this fact.
According to the Pew Research Center, low-income households are quickly migrating online. In 1997, only 16% of Internet users had annual incomes below $30,000. This number jumped as the prices of computers and Internet access fell. Of those who began using the Internet in 1998, 23% earned less than $30,000.
At the same time, the online audience is nearing racial parity. A 1997 study by Baruch College found that only 6% of African-Americans regularly used the Internet. According to Forrester Research, this number had leaped to 23% by early 1999. Forrester predicts that 43% of African-Americans will be online next year, compared to 44% of whites.
This progress has been accelerated by the private sector. When technology truly is out of reach, community groups, nonprofit organizations, and private companies are working together to increase technology access. The most common examples of this are community technology centers (CTCs).
Located in poverty zones, CTCs provide inexpensive access to computers, Internet connections, and training programs. One leading developer of these projects is Break Away Technologies, an organization that uses private money to build and operate CTCs in the Los Angeles area. Supported by a consortium of community groups, local foundations, and private companies such as Microsoft and Sony Entertainment, Break Away has already opened 100 CTCs, with plans for 100 more by year's end. Break Away is not alone; CTCs are emerging nationwide, and their goals are shared by many related organizations.
The Bill and Melinda Gates Foundation, for instance, recently donated $5 billion to Florida's libraries as part of a program to help 10,000 American libraries provide technology access and training to low-income areas. IBM is installing free computers and network connections in public housing projects. Dell Computer offers special discounts to minority students. These examples provide policy makers with valuable lessons.
Given the opportunity, communities and individuals can and will meet their needs. The private sector will assist these efforts. Market economics, private companies, and local organizations work towards racial and economic integration, not against it. Government welfare, on the other hand, hinders these goals. Government programs are never as effective as community-based efforts. They stifle the incentives driving charitable organizations while smothering community independence. Self-reliance is replaced by reliance on government. And, as the welfare state's undeniable failure proves, government programs often harm those whom they are supposed to help.
The Information Age is an opportunity, not a threat. Faced with a new economic era, policy makers should avoid new welfare subsidies and programs. If they do, the private sector will lead America into an era of greater prosperity and unprecedented integration.
*Justin Matlick is Director of the Center for Freedom and Technology. To learn more about the CFT and the Pacific Research Institute, see www.pacificresearch.org.
