“The Naysayers Are In Control”: A Well-Paying Job Is More Effective Than A Lecture
More and more mothers, whether they wear a wedding ring or not, are becoming their family’s breadwinner.
An analysis of 2011 U.S. Census data found that 40 percent of households rely on mom as the primary or sole breadwinner. That’s a massive increase from 1960, when the figure was a mere 11 percent.
This trend won’t shock a lot of Americans. They already see it within their own homes or those of their neighbors. Plenty of mommies are better educated and better compensated than their husbands, and a growing numbers of daddies gladly accept that it is their duty, too, to change diapers and do carpool duty.
But here is the more sobering tale within the data: Nearly two-thirds of these “sole or primary” breadwinning women fit that description because they are the only one working in their household. These are primarily the single mothers. And they tend to be far less educated, and to be black or Hispanic. Their median household income was $23,000.
Compare that to the families studied where it was a married woman who earned more than her mate. Those homes had a median income of $80,000, well above the national median for all households of $57,100.
The most relevant message behind the study is not so much about marriage as about the growing economic divide in this country. If we understand that, we might just agree on policies that can address the problem.
Demographically, these single mothers are a growing and younger percentage of the population. They are the nation’s future, and it’s not a promising one.
Yet it is virtually impossible to bring up the topic of single mothers, whether in Congress or at the dinner table, without inviting a howling lecture. Everybody’s got a convenient scapegoat to blame, and their certitude of their own uprightness permits them to do absolutely nothing to change the status quo. Except to call for more discipline imposed on the already unfortunate.
Attitudes about poorer families feed into the politics of welfare reform, food stamp allocation, education grants, fair wage policy and childcare subsidies.
Concern, when it’s genuine, is not misplaced. Moralizing doesn’t help.
It’s not the fact that these women are unmarried with children that drives their household poverty. It’s their lack of education and too few jobs, including for the equally under-educated men who are most likely to marry them.
Low-income families are more likely to divorce. Arguments and stress about money, after all, are often a contributing factor in divorce.
Those who wish to promote marriage often miss a truth about poorer mothers. The single mother without a college degree, and perhaps more so one without a high school diploma, might be making the best choice for her children by continuing to stay single. College-educated men aren’t exactly searching low-income areas to find a suitable spouse. The men who are more readily available to many of these single mothers — the men they may have already partnered with to father their children — tend to be of similar if not lower education levels.
And less-educated men have seen their real wages shrink along with job opportunities in the last 40 years, as Stephanie Coontz, director of research and public education at the Council on Contemporary Families, has pointed out.
Coontz also observes that stable single-parent households are better for children’s development than domestic situations in constant flux due to their mother’s relationships, or homes where there is constant parental conflict.
People who are better-educated and who have firm employment opportunities are more likely to marry and stay married.
A study published last year in the Journal of Marriage and Family found that low-income people value marriage as an institution and share thoughts about romance similar to people in higher income brackets.
Researchers at UCLA found that “low-income respondents were more likely than affluent couples to report that their romantic relationships were negatively affected by economic and social issues such as money problems, drinking and drug use.”
The low-income respondents actually held more negative views about divorce than their wealthier counterparts.
So let’s not pontificate about marriage or make false assumptions about mothers raising kids who aren’t living with a spouse.
Ordinary people in this country need to be able to find stable, legal employment that pays wages that make it possible to raise a family in a safe, nurturing environment. We have the ability to make that happen through education and training programs, minimum-wage legislation, trade policy, fiscal policy and other means.
If we ever resolve to turn the tide that is swamping Americans of modest means, we’ll inevitably find that some policy gambits succeed and others are bound to fail. Have you noticed, though, that our political class isn’t even trying?
The naysayers are in control. Their message is that nothing can be done. They also happen to be the loudest moralizers.
We know where that will lead us, because we’re already there.
By: Mary Sanchez, The National Memo. June 3, 2013
“The Morose Middle Class”: At Best, Treading Water And At Worst, Sinking
The Middle Class is in a funk, its view of the future growing dim as fear rolls in like a storm.
An Allstate/National Journal Heartland Monitor poll released Thursday found that while most Americans (56 percent) hold out hope that they‘ll be in a higher class at some point, even more Americans (59 percent) are worried about falling out of their current class over the next few years. In fact, more than eight in 10 Americans believe that more people have fallen out of the middle class than moved into it in the past few years.
The poll paints a picture of a group that is scared to death about its station in life.
By the way, 58 percent of respondents in the poll viewed themselves as either middle class (46 percent) or upper middle class (12 percent).
According to the poll, Americans see a middle class with less opportunity to get ahead, less job security and less disposable income than the middle class of previous generations.
Respondents were most likely (52 percent) to say that losing a job would put them at the greatest risk of falling out of their current class, followed by an unexpected illness or injury in the family.
Most of those polled believe that higher education is the key to staying in the middle class, but many worry about its prohibitive cost and inaccessibility.
And who did most of them say is responsible for making it worse for the middle class? Congress, chief executives of major corporations and big financial institutions.
Of those who blame politicians, there is some evidence that Republicans get more of the blame than Democrats. A CNN/ORC poll released last month found that 32 percent of respondents thought that Democrats favor the middle class compared with 27 percent who believed the same of Republicans. Sixty-eight percent of those polled believed that Republicans favor the wealthy, compared with 24 percent who believed that Democrats do.
This anxiety about a shrinking middle class is understandable.
A Pew Research Center study, “The Lost Decade of the Middle Class,” released in August, found that “since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some — but by no means all — of its characteristic faith in the future.”
According to the report, “Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living.”
The report continued:
“Their downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers. But the middle-income tier — defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median — is the only one that also shrunk in size, a trend that has continued over the past four decades.”
It’s important to note that many of the people who describe themselves as middle class would not be placed under that rubric by most objective observers. For instance, the Pew study found that 35 percent of people making $30,000 and under and 46 percent of those making $100,000 and over self-identified as middle class. (Meantime, six percent of those making $30,000 and under self-identified as upper class, and six percent of those making $100,000 and over self-identified as lower class. Go figure.)
As Pew pointed out, over the last decade, “middle-tier median household income” fell and median net worth plummeted, and people in the middle class said it was becoming harder to maintain their lifestyles.
To add insult to injury, another Pew report, released this week, found that “during the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”
As The Washington Post reported in September after the release of a frightening Census report: “The vise on the middle class tightened last year, driving down its share of the income pie as the number of Americans in poverty leveled off and the most affluent households saw their portion grow.”
The wealthy have come surging back, riding record stock market highs, but many in the middle class are at best treading water and at worst sinking.
In his State of the Union speech in February, President Obama said that the “true engine of America’s economic growth” is “a rising, thriving middle class.”
It certainly looks as if that engine has stalled.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, April 27, 2013
“Two America’s Truer Now Than Ever”: Perishing On A Lonely Island Of Poverty In The Midst Of A Vast Ocean Of Material Prosperity
You may think you know about Martin Luther King, Jr., but there is much about the man and his message we have conveniently forgotten. He was a prophet, like Amos, Isaiah and Jeremiah of old, calling kings and plutocrats to account — speaking truth to power.
King was only 39 when he was murdered in Memphis 45 years ago, on April 4th, 1968. The 1963 March on Washington and the 1965 March from Selma to Montgomery were behind him. So was the successful passage of the Civil Rights Act and the Voting Rights Act. In the last year of his life, as he moved toward Memphis and his death, he announced what he called the Poor People’s Campaign, a “multi-racial army” that would come to Washington, build an encampment and demand from Congress an “Economic Bill of Rights” for all Americans — black, white, or brown. He had long known that the fight for racial equality could not be separated from the need for economic equity — fairness for all, including working people and the poor.
Martin Luther King, Jr., had more than a dream — he envisioned what America could be, if only it lived up to its promise of life, liberty, and the pursuit of happiness for each and every citizen. That’s what we have conveniently forgotten as the years have passed and his reality has slowly been shrouded in the marble monuments of sainthood.
But read part of the speech Dr. King made at Stanford University in 1967, a year before his assassination and marvel at how relevant his words remain:
“There are literally two Americas. One America is beautiful for situation. And in a sense this America is overflowing with the milk of prosperity and the honey of opportunity. This America is the habitat of millions of people who have food and material necessities for their bodies, and culture and education for their minds; and freedom and dignity for their spirits…
“…Tragically and unfortunately, there is another America. This other America has a daily ugliness about it that constantly transforms the buoyancy of hope into the fatigue of despair. In this America millions of work-starved men walk the streets daily in search for jobs that do not exist. In this America millions of people find themselves living in rat-infected vermin-filled slums. In this America people are poor by the millions. They find themselves perishing on a lonely island of poverty in the midst of a vast ocean of material prosperity.”
Breathtakingly prescient words as we look around us at a society where the chasm between the super-rich and poor is wider and deeper than ever. According to a Department of Housing and Urban Development press release, “On a single night last January, 633,782 people were homeless in the United States.” The Institute for Policy Studies’ online weekly “Too Much” notes that single-room-occupancy shelter rates run about $558 per month and quotes analyst Paul Buchheit, who says that at that rate, “Any one of America’s ten richest collected enough in 2012 income to pay an entire year’s rent for all of America’s homeless.”
But why rent when you can buy? “Too Much” also reports that the widow of recently deceased financier Martin Zweig “amid a Manhattan luxury boom” has placed their apartment at the top of the posh Pierre Hotel on the market for $125 million: “A sale at that price would set a new New York record for a luxury personal residence, more than $30 million over the current real estate high marks.”
Meanwhile, a new briefing paper from the advocacy group National Employment Law Project (NELP) finds there are 27 million unemployed or underemployed workers in the U.S. labor force, including “not only the unemployed counted by official jobs reports, but also the eight million part-time workers who would rather be working full-time and the 6.8 million discouraged workers who want to work but who have stopped looking altogether.” Five years after the financial meltdown, “the average duration of unemployment remains at least twice that of any other recession since the 1950s.”
And if you think austerity’s a good idea, NELP estimates that, “Taken together, the ‘sequester’ and other budget-cutting policies will likely slow GDP this year by 2.1 percentage points, costing the U.S. economy over 2.4 million jobs.”
Walmart’s one of those companies laying people off, but according to the website Business Insider, the mega-chain’s CEO Michael Duke gets paid 1,034 times more than his average worker. Matter of fact, “In the past 30 years, compensation for chief executives in America has increased 127 times faster than the average worker’s salary.”
Two Americas indeed.
By: Bill Moyers and Michael Winship, Moyers and Company, April 10, 2013
“Welfare For The Rich”: What If The Outrage Over Excessive Welfare Extended To The Tax Code?
Senator Jeff Sessions (R-AL) has created quite a stir with his estimates that every household below the poverty level receives an average of $168-a-day (or about $61,000-a-year) in government welfare.
Sessions’ calculations are extremely controversial and overstate the amount of government assistance for those in poverty. But for the sake of argument, let’s assume he’s right. How would $61,000 in direct government spending and refundable tax credits for the poor stack up against tax subsidies for the rich?
It isn’t even close. Indeed, my colleagues at the Tax Policy Center figure that in 2011 households making $1 million and up got that much in average tax benefits from just two deductions–for charitable gifts and state and local taxes. Add a fistful of other preferences–such as deductions for mortgage interest and exclusions such as the one for employer-sponsored health insurance– and top-bracket households got far more in tax benefits than the poor got in means-tested assistance.
These estimates exclude low tax rates on capital gains and dividends which are, arguably, very different from, say, subsidies for mortgage interest or employer-sponsored health insurance. If you include preferential rates on investment income, households making $1 million or more got an additional $119,000 in tax benefits, on average, in 2011.
Keep in mind that tax rates on ordinary income were relatively low in 2011. Now that the rate for high-income households has gone up significantly, their tax subsidies will be even more generous.
I readily admit that on one level, this is a fairly silly exercise. But there is an important point here: In much public discourse, direct government aid for the poor is easily dismissed by the pejorative “welfare.” Yet, spending-like subsidies administered through the revenue code provoke far less outrage. This is true even though many of these tax preferences are economically indistinguishable from direct spending and often add far more to the deficit.
Take housing, for instance. CBO figures that the lowest-income 20 percent of households get an average of about $1,100-a-year in means-tested rental housing assistance. TPC estimates that the lowest-income households got no benefit from tax deductions for mortgage interest and real estate taxes in 2011. But those in the top 20 percent, who make more than $100,000, got an average tax benefit of $2,900. Those in the top 1 percent, who make an average of $1.5 million, did even better. They got an average tax break of $5,700, more than five times the benefit the government provided low-income renters.
As with so much of the tax code, these homeowner tax benefits are upside down. On average, the more you make, the more you get. This seems an odd design in an era when fiscal restraint is all the rage. Yet politicians still recoil when tax expenditures—the vast bulk of which go to middle-class and high-income households—are described as subsidies.
In recent years, both Democrats and Republicans (including their recent presidential candidates) did talk about capping or limiting tax preferences for the highest income households. But so far, at least, that talk has come to nothing. It would be helpful if Sen. Sessions directed some of his outrage to the more than $1 trillion in tax expenditures that litter the revenue code—much of which go to those who need help the least.
By: Howard Gleckman, Tax Policy Center, February 26, 2013
“A Nonpartisan No-Brainer”: Raising The Minimum Wage Is Beneficial For Individuals And Businesses
In Tuesday’s State of the Union speech, President Obama called on members of Congress to raise the federal minimum wage from $7.25 to $9.00 an hour, something Governor Mitt Romney (R-MA) supported during the 2012 election. The president said, “This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead.”
Who could argue with that?
Two Republican leaders have voiced their opposition to the president’s proposal. House Speaker John Boehner (R-OH) and Senator Marco Rubio (R-FL) agree that raising the minimum wage hurts businesses, claiming that increasing the cost of employment makes it difficult for businesses to sustain themselves and deters them from hiring employees.
A study released yesterday by the Center for Economic and Policy Research suggests otherwise. John Schmitt, who authored Why Does The Minimum Wage Have No Discernible Effect on Employment?, argues that raising wages actually has little to no effect on employment. Schmitt offers 11 “channels of adjustment,” ways in which businesses could respond to a raise in minimum wage. These include raising prices on goods and services (offset by higher demand), increase in worker efficiency and effort, and less difficulty in recruiting and retaining employees which “may compensate some or all of the increased wage costs, allowing employers to maintain employment levels.”
Based on the results of this study, small businesses have everything to gain in paying their employees a wage they can live on. Economist and New York Times columnist Paul Krugman addressed the myth behind cutting minimum wage during a time of recession back in 2009. “In reality, reducing wages would at best do nothing for employment; more likely it would actually be contractionary,” Krugman said. “Proposing wage cuts as a solution to unemployment is a totally counterproductive idea.”
Larger corporations such as Walmart and McDonald’s that employ 66% of low-wage workers are rewarding their top executives in profitable years with raises, while their low-wage employees are still making minimum wage — a pay level that is not sustainable for many American families. In fact, if minimum wage matched inflation, it would be $10.58 per hour.
As stated in a Huffington Post article, “This would guarantee that workers on the lowest rung of the economic ladder don’t lose purchasing power, but it would also mean fast-food companies and other low-wage employers would have to pay higher wages just about every year, except in rare cases of deflation.”
This type of proposal was already favored in 2010, when the Public Religion Research Institute conducted a poll and found that 67 percent of respondents were in favor of increasing the minimum wage to $10.00 an hour—that includes a majority of respondents who identified as Republicans.
In 2007, President Bush signed the Fair Minimum Wage Act, which easily passed in the House 315-116, including bipartisan support from 82 Republicans. It passed the Senate — with the help of Mitch McConnell (R-KY) — by a 94-3 vote before making it to the president’s desk.
Studies clearly point to the profitable effects on individuals and businesses if earnings per hour are raised to a level where low-wage workers are actually able to support themselves and their families. If Republicans like Boehner and Rubio are truly advocating for their middle-class constituents, then supporting the president in ensuring that workers earn what they deserve — and can live on — ought to be a nonpartisan no-brainer.
By: Allison Brito, The National Memo, February 14, 2013
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