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“No, Poverty Is Not The Fault Of The Poor”: Remember Folks, The Banks Crashed The Economy

We’re starting to prep for “poverty day” around these parts–it’s next Tues, 9/17–the Census Bureau will release the poverty and household income results for last year. There’s lots of rich data and both CBPP and yours truly will have much to say about the results.

But in prepping for a presentation on this stuff for tomorrow, I made the graph below, just showing the sharp increase in the official poverty rate over the great recession. I’ve noted in many posts the limits of the official measure, most importantly re the dates shown in the figure, how it leaves out many of the safety net benefits that expanded to offset the downturn.

But to explain what struck me in gazing upon this simple figure below, we’re actually better off looking at the incomplete official rate. How can it make any sense to blame the poor themselves, as per Charles Murray, Paul Ryan, along with pretty much the rest of the House R’s caucus, for this increase in poverty in the midst of the worst downturn since the Great Depression?

How is it that those of us trying to argue on behalf of providing the poor with the opportunities they need are so often back on our heels, defending the increase in the SNAP (i.e., food stamp) rolls against those who claim the safety net is a hammock? Did the poor come up with the financial “innovations” that inflated the housing bubble? You know, the one that imploded and took the economy down with it…how about the dot.com bubble? Was that also the dastardly work of the bottom 20%?

Perhaps I’m a little sensitive after this debate earlier today on CNBC. Or maybe it’s the juxtaposition of the finance sector’s recent profitability and the flack the $15/hr fast-food strikers are getting from the economic elites.

But really, it’s time to get on offense here, my friends. Listen, elites: you want less people on food stamps? Fine…then stop screwing up the economy. Then we’ll talk. Until then—until we’re back around full employment, until you stop blowing bubbles, I really don’t want to hear from you about hammocks and the bad decisions of the poor. You want to talk job creation, infrastructure investment, skills training, mobility, opportunity—I’m all ears. Otherwise, quiet down and get to work.

OK…rant over.

 

povrt

 

By: Jared Bernstein, Salon September 10, 2013

September 11, 2013 Posted by | Economic Inequality, Poverty | , , , , , , , | Leave a comment

“Finally, Workers Are Fighting Back”: Low-Wage Employers Have Fought Hard to Keep Their Workers Poor

After decades of seeing their incomes shrink, those at the bottom of the economic ladder are starting to band together and fight back — and it’s one of the most important economic stories of our time.

Between 1973 and 2011, the top 10 percent of American households saw their inflation-adjusted incomes rise by almost $100,000, while the bottom 90 percent – the vast majority of us –actually saw their incomes drop by $4,425 per year, according to economists Emmanuel Saez and Thomas Piketty (XLS). During that time, pensions largely disappeared, and the costs of health care and education shot through the roof.

Today, we’re seeing those at the bottom of the economic pile — the 35 million Americans who make $10.55 per hour or less, representing more than a quarter of our workforce – starting to band together and fight back.

Low-wage workers are demanding a living wage (defined as the minimum required to cover basic necessities) and the ability to bargain collectively. Brief strikes by fast-food workers seeking $15 an hour, a campaign that’s brought together traditional labor unions with local community groups, are spreading across the country – last week, walk-outs reportedly occurred in 60 cities.

“The way that this movement has intertwined itself with community organizing has really helped it spread like wildfire,” says Greg Basta, deputy director of New York Communities for Change. “People are realizing that these low-wage jobs, at companies like McDonald’s, are doing serious damage to their community and to their local economy,” he said.

This week, Wal-mart workers and their supporters with the group Our Wal-mart are planning walk-outs in 15 cities, to protest the retail giant’s retaliation against workers who participated in last November’s Black Friday strikes.

But it’s not just companies like Wal-mart and McDonald’s paying their employees too little. According to a study by Demos, the federal government, indirectly, is the nation’s largest low-wage employer.  A coalition called Good Jobs Nation began a campaign earlier this year urging President Obama to sign an executive order requiring federal contractors to pay their employees a living wage. With the stroke of a pen, Obama could lift the living standards of two million American workers.

These campaigns are filling a gap left by Congress, which hasn’t raised the federal minimum wage fast enough to keep up with the cost of living. Poverty wages represent a type of “market failure.” Like selling widgets for less than what it costs to make them, low-wage workers are selling their labor for less than what it costs to cover the basic necessities of life, which is why taxpayers end up subsidizing the profits of low-wage employers with various public benefits. “In today’s economy, the math simply doesn’t make sense,” says Basta. “If you’re paying workers between $10,000 and $18,000 a year, it’s impossible to live in a place like New York City without receiving public assistance.”

Greg Basta explains that before the fast-food workers campaign got underway, “people who were working low-wage jobs didn’t even think about the possibility of organizing or fighting for higher wages. They bought into the mentality that they’re not worthy of fighting back. They bought into the mainstream mentality that their jobs just aren’t ‘good jobs.’ And to see the evolution of these workers from being really fearful to now saying, ‘we’re fighting because this is the right thing to do’ – that transformation I’ve seen on the ground in the past year and a half is the most moving thing I’ve ever been a part of.”

There’s no particular reason why millions of service workers should be paid poverty wages. With the exception of occupations that require rare skills or lots of education, there’s often a loose correlation between what people are paid and how much value they offer to society.

For instance, manufacturing jobs pay decent wages, but not because operating machines in a factory requires some special magic. Over 10 percent of manufacturing workers were covered by a union contract last year, compared with around seven percent of private sector workers overall. And fewer than five percent of food preparation and serving related professions belonged to a union in 2012, according to the Bureau of Labor Statistics.

Throughout American labor history, people working what society viewed as inherently crappy jobs fought hard to make them decent jobs with a modicum of human dignity.

In the last century, the meatpacking industry provides a good case study. In 1906, Upton Sinclair’s The Jungle shocked the public when it exposed meatpacking as a dangerous, disgusting occupation that paid slave wages. Workers organized throughout the 1920s and 1930s – often facing violent retaliation – and in 1943, they formed the United Packinghouse Workers of America (UPWA), based in Chicago, where the country’s biggest livestock yards were located.

The occupation got safer. And for a few decades mid-century, it paid more or less the same as a good manufacturing job. But in the 1970s and 1980s, as corporate union-busting accelerated dramatically, meat processors moved their operations closer to cattle and swine lots as the industry shifted transport from rail to truck. Far from its original urban base, and with new high-speed cutting machines making the industry less labor-intensive, the UPWA had a harder time organizing, and the union was gradually decimated. Today meat processing is once again an industry that relies heavily on low-wage, migrant labor. According to a 2005 report by Human Rights Watch, it’s also the most dangerous manufacturing job in America.

Now, another group of low-wage workers who often toil in uncomfortable, under-regulated workplaces are fighting for some basic human dignity. Whether they succeed or fail is just as important for the middle class as it is for the working poor. Not only do rising wages at the bottom exert upward pressure on the earnings of people higher up on the ladder, but poverty and inequality also give rise to a host of social disorders that affect us all. Cheap fast-food ultimately comes with high hidden costs.

 

By: Joshua Holland, Moyers and Company, September 4, 2013

September 8, 2013 Posted by | Economic Inequality, Minimum Wage | , , , , , , , | Leave a comment

“The Rejection Of Reality”: Conservative Claims About Low-Income Excess Are Just Wrong

Are people better off than they were before the recession? By most headline figures they’re not: Poverty and inequality have risen to record levels, median incomes declined. Unemployment has improved marginally, but 37 states have yet to regain their pre-recession job levels.

Conservatives like to push back on claims of rising inequality or worsening poverty by pointing out that their measure of poverty or inequality insufficiently captures the increasing well-being of even the poor. They’re better off, they say, because low and middle-income Americans are living better than they did in the past. These arguments manifest themselves in concern over “Obamaphones” or access to liquor or drugs, and generally recommend policy solutions as odious as drug-testing as a prerequisite for welfare or stricter control over food stamps. As Matt Bruenig aptly pointed out on this blog, even taking these conservative policy solutions at their face value, fraud complaints are spurious. We want poor people to have more money. Programs like food stamps and Medicaid undoubtedly accomplish that.

But let’s dive deeper into whether families are better off. The Census Bureau periodically publishes assessments of well-being. Their most recent iteration, released yesterday, measures well-being comprehensively based on various conditions such as homeownership (or rentership) and housing condition, access to appliances and electronic goods, neighborhood conditions, meeting basic needs to avoid eviction and eat, and ability to get help from families or the community should they need it. Most of the trends in the results aren’t shocking, with extreme differences in situation based on age, sex and race.

Their headline results are sobering, however. How households fared from 2005 to 2011, according to the Census Bureau’s more comprehensive assessment:

Families are having an increasingly difficult time paying basic expenses. From 2005 to 2011, the number of Americans who couldn’t pay rent or afford food climbed from 16.4 to 16.9 million, a 16 percent increase.

Households with unmet essential expenses increased from 16.4 to 20 million. One in five households now experience difficulty meeting basic needs.

Those experiencing food shortages increased from 2.7 to 3.4 million.

A plurality of households lack access to basic appliances. 36 percent of households didn’t have either a washer, dryer, fridge, stove, dishwasher or phone.

There are strong racial correlations to decreased well-being. Only 44 percent of Hispanics reported access to all six basic appliances compared with 71 percent of white households.

So, even conceding that headline stats don’t tell the whole story, conservative arguments fail on their own merits. No, there isn’t an increasing access to basic appliances that would signal a middle-class lifestyle. No, low-income families aren’t better able to meet basic needs like paying rent or purchasing food. Families are worse off because they’re poorer. Making some goods (like phones) marginally less expensive in the face of collapsing incomes and household wealth hasn’t truly improved the plight of low-income workers. Trying to restrict or reduce proven government programs despite these conditions isn’t then a conservative acknowledgement of nuance, it’s the rejection of reality.

 

By: Joe Hines, The American Prospect, September 6, 2013

September 7, 2013 Posted by | Economic Inequality, Poverty | , , , , , , , | Leave a comment

“A New Kind of Union”: Best Hope For Restoring Political Equality Is For The Poor And Middle Class To Organize Politically

The financial challenges low- and middle-income Americans face are daunting. But the poor and middle class are in an equally serious, if less well recognized, political predicament: the government has become almost entirely unresponsive to them.

This a profound political failure. A democracy in which government policy responds to the rich and not to the poor or the middle class is a democracy unworthy of the name.

For several decades now, we have tried to deal with the problem of money in politics with campaign finance regulation, but reform has failed. Political actors, enabled by the Supreme Court, have responded to regulations simply by redirecting their spending in unregulated directions.

The end of campaign-finance reform, however, is not the end of the line. Although we pay too little attention to this fact, there are still sources of power in American politics that are not dependent on wealth. Primary among these is political organization. In fact, the best hope for restoring political equality is to make it easier for the poor and middle class to organize politically.

Throughout much of the 20th century, we had a legal system in the United States that was remarkably successful at promoting just this kind of political organizing. That legal system was labor law, and it is not a coincidence that during these same decades the labor union was able to serve as a highly successful political voice for the lower and middle classes.

Unions, after all, represent workers, nearly all of whom are in the income classes currently lacking effective political representation. Unions turned out their members to vote and consolidated millions of modest contributions into powerful campaign and lobbying operations. Sometimes, unions pushed for politically liberal causes, and sometimes for conservative ones. But when they were powerful, unions were able to insist that government policy respond to the views of the poor and the middle class.

In contemporary America, however, there is a nearly insurmountable impediment to unions’ ability to serve as a collective political voice for workers. It stems from the legal requirement that unions bundle political organization with collective bargaining, which means that in order to take advantage of the union as a form of political organization, workers must organize economically for collective bargaining purposes.

This bundling of functions, an artifact of how unions formed historically, is a major problem for political organizing today. This is true most obviously because managerial opposition to collective bargaining has become pervasive. It is also true because changes in markets have made the practice of collective bargaining difficult. And because substantial numbers of American workers say they do not want to collectively bargain with their employers, traditional unions are not an attractive form of political organization for many.

All of this has contributed to a dramatic decrease in unionization rates, which has in turn played a central role in the declining responsiveness of government.

But what if we unbundle the union and allow workers to organize politically without also organizing for collective bargaining? If we shift our aim away from reviving collective bargaining and toward enabling political organizing by underrepresented groups, we would allow workers to organize “political unions” even when they don’t want to organize collective bargaining ones.

It’s more straightforward than it sounds. The key is that we would make the workplace available as a site for political organization. While the law would continue to protect workers’ right to organize traditional unions, it would also protect workers’ right to organize strictly political ones. Workers would have the right to talk about politics with one another at work, as long as they did so during nonworking time.

Employers would be prohibited from retaliating against their employees who organized politically, and if the workers did form a political union, they would be entitled — as traditional unions are — to use voluntary payroll deductions to finance their activities. But these political unions would be prohibited from collective bargaining, and no worker would ever be required to pay dues to a political union — or to be represented by one — unless she chose to be.

The types of policies that political unions chose to pursue would be entirely up to their members. Some might fight for bread-and-butter issues like a higher minimum wage, but others might concentrate on social issues or even foreign policy. But whatever issues they chose to pursue, these unions would give a political voice to those in America who currently lack one.

Campaign-finance reform has failed because it does nothing to address the underlying disparities in wealth distribution that produce political inequality in the first place. Legal reforms that enable political organizing are fundamentally different because organization, like wealth, is its own source of political power.

Allowing workers to organize for politics, even when they decide not to organize for collective bargaining, would help restore balance to a democracy that wealth has so badly skewed.

 

By: Benjamin I. Sachs, Op-Ed Contributor, The New York Times, September 1, 2013

September 2, 2013 Posted by | Economic Inequality, Unions | , , , , , , , | Leave a comment

“Love For Labor Is Lost”: Politicians Today Can’t Even Bring Themselves To Fake Respect For Ordinary Workers

It wasn’t always about the hot dogs. Originally, believe it or not, Labor Day actually had something to do with showing respect for labor.

Here’s how it happened: In 1894 Pullman workers, facing wage cuts in the wake of a financial crisis, went on strike — and Grover Cleveland deployed 12,000 soldiers to break the union. He succeeded, but using armed force to protect the interests of property was so blatant that even the Gilded Age was shocked. So Congress, in a lame attempt at appeasement, unanimously passed legislation symbolically honoring the nation’s workers.

It’s all hard to imagine now. Not the bit about financial crisis and wage cuts — that’s going on all around us. Not the bit about the state serving the interests of the wealthy — look at who got bailed out, and who didn’t, after our latter-day version of the Panic of 1893. No, what’s unimaginable now is that Congress would unanimously offer even an empty gesture of support for workers’ dignity. For the fact is that many of today’s politicians can’t even bring themselves to fake respect for ordinary working Americans.

Consider, for example, how Eric Cantor, the House majority leader, marked Labor Day last year: with a Twitter post declaring “Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.” Yep, he saw Labor Day as an occasion to honor business owners.

More broadly, consider the ever-widening definition of those whom conservatives consider parasites. Time was when their ire was directed at bums on welfare. But even at the program’s peak, the number of Americans on “welfare” — Aid to Families With Dependent Children — never exceeded about 5 percent of the population. And that program’s far less generous successor, Temporary Assistance for Needy Families, reaches less than 2 percent of Americans.

Yet even as the number of Americans on what we used to consider welfare has declined, the number of citizens the right considers “takers” rather than “makers” — people of whom Mitt Romney complained, “I’ll never convince them they should take personal responsibility and care for their lives” — has exploded, to encompass almost half the population. And the great majority of this newly defined army of moochers consists of working families that don’t pay income taxes but do pay payroll taxes (most of the rest are elderly).

How can someone who works for a living be considered the moral equivalent of a bum on welfare? Well, part of the answer is that many people on the right engage in word games: they talk about how someone doesn’t pay income taxes, and hope that their listeners fail to notice the word “income” and forget about all the other taxes lower-income working Americans pay.

But it is also true that modern America, while it has pretty much eliminated traditional welfare, does have other programs designed to help the less well-off — notably the earned-income tax credit, food stamps and Medicaid. The majority of these programs’ beneficiaries are either children, the elderly or working adults — this is true by definition for the tax credit, which only supplements earned income, and turns out in practice to be true of the other programs. So if you consider someone who works hard trying to make ends meet, but also gets some help from the government, a “taker,” you’re going to have contempt for a very large number of American workers and their families.

Oh, and just wait until Obamacare kicks in, and millions more working Americans start receiving subsidies to help them purchase health insurance.

You might ask why we should provide any aid to working Americans — after all, they aren’t completely destitute. But the fact is that economic inequality has soared over the past few decades, and while a handful of people have stratospheric incomes, a far larger number of Americans find that no matter how hard they work, they can’t afford the basics of a middle-class existence — health insurance in particular, but even putting food on the table can be a problem. Saying that they can use some help shouldn’t make us think any less of them, and it certainly shouldn’t reduce the respect we grant to anyone who works hard and plays by the rules.

But obviously that’s not the way everyone sees it. In particular, there are evidently a lot of wealthy people in America who consider anyone who isn’t wealthy a loser — an attitude that has clearly gotten stronger as the gap between the 1 percent and everyone else has widened. And such people have a lot of friends in Washington.

So, this time around will we be hearing anything from Mr. Cantor and his colleagues suggesting that they actually do respect people who work for a living? Maybe. But the one thing we’ll know for sure is that they don’t mean it.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, September 1, 2013

September 2, 2013 Posted by | Economic Inequality | , , , , , , , , | Leave a comment

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