“Martin Luther King’s Unfinished Business”: We All Have To Realize That Our Destinies Are Tied Together
On Aug. 28, 1963, Martin Luther King Jr. led a March on Washington that focused in part on economic equality.
“The Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity,” King said that day.
Fifty years later, the income and wealth gap for minorities is still wide and troubling. The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to the Pew Research Center.
And the Great Recession didn’t help an already bad situation. The average net worth of households in the upper 7 percent of the wealth distribution chain increased 28 percent during the first two years of the recovery from the downturn, compared with a 4 percent drop for households in the lower 93 percent, according to Pew’s analysis of data from the Census Bureau.
Another Pew report found that the decline in housing prices had a much greater impact on the net worth of minorities relative to that of whites, because housing assumes a larger share of their portfolios.
The Urban Institute’s Opportunity and Ownership Project recently issued a report that similarly examined the chasm that separates the haves and the have-nots.
In 2010, the average income for whites was twice that of blacks and Hispanics, $89,000 compared with $46,000. Whites on average had six times the wealth of blacks and Hispanics, $632,000 compared with $103,000, according to the Urban Institute.
But it’s the wealth gap that the authors of the report rightly focus on. Over the past 30 years, Americans in the top 20 percent saw their average wealth increase by nearly 120 percent, while families with wealth figures in the middle quintile saw growth of only 13 percent. The folks in the bottom 20 percent saw their net worth drop below zero, meaning their debts exceeded their assets.
“When it comes to economic gaps between whites and communities of color in the United States, income inequality tells part of the story,” the authors of the institute’s report wrote. “But let’s not forget about wealth. Wealth isn’t just money in the bank, it’s insurance against tough times, tuition to get a better education and a better job, savings to retire on, and a springboard into the middle class. In short, wealth translates into opportunity.”
The great wealth gap helps explain “why many middle-income blacks and Hispanics haven’t seen much improvement in their relative economic status and, in fact, are at greater risk of sliding backwards,” the report says.
Poverty rates for blacks and Hispanics seriously exceed the national average, according to the National Poverty Center. In 2010, 27.4 percent of blacks and 26.6 percent of Hispanics were poor, compared with 9.9 percent of non-Hispanic whites and 12.1 percent of Asians. About 38 percent of black children and 35 percent of Hispanic children live in poverty, compared with about 12 percent of white children.
“In hindsight, the organizers of the march were correct: Achieving rights without fully obtaining the resources to actualize them is only a partial victory. In this 50th anniversary year of the March on Washington for Jobs and Freedom, we can best pay tribute to the march and all that it stood for by recommitting to achieving its unfinished goals,” wrote Algernon Austin, director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy. The institute has issued a series of reports examining what it would take to achieve each of the goals of the 1963 March on Washington. Go to www.unfinishedmarch.com to read the essays.
The Rev. Jesse L. Jackson has also stressed the need to “revive the movement to address this unfinished agenda.”
In looking at other economic measures, Jackson wrote in a recent Chicago Sun-Times commentary that African Americans are twice as likely to be unemployed as are whites. Affordable housing is still an issue, as is adequate public transportation that would help people get to jobs.
“We cannot afford to write off a majority of the next generation and still prosper as a great nation,” Jackson wrote.
When I write about the economic state of minorities, I brace myself for the racist, vitriolic comments that follow. Highlighting economic inequalities isn’t about asking for handouts. It’s about finding ways to give people a hand up so that they can become self-sufficient. When the financial lives of the less fortunate are lifted, we all are lifted.
As King said in his “I Have a Dream” speech that summer day 50 years ago, we all have to realize that our destinies are tied together. “We cannot walk alone,” he said.
By: Michele Singletary, Columnist, The Washington Post, August 13, 2013
“Why Our Schools Are Segregated”: There Is Little Support For Aggressive Policies To Integrate Metropolitan Areas
In the May issue of Educational Leadership, I attempt to show how our misunderstanding of the origins of racial segregation stands in the way of efforts to narrow the black-white academic achievement gap.
Socially and economically disadvantaged children perform, on average, at lower levels of achievement than advantaged children. The achievement gap primarily results from disadvantaged children coming to school unprepared to take advantage of what schools have to offer, not primarily from inadequate teachers or schools. Children who come to school from households with poor literacy levels, who are in poor health, whose housing is unstable, whose parents are suffering the stress of unemployment, and who are themselves stressed as well in neighborhoods with high levels of crime and violence, cannot be expected to achieve, on average, as well as middle class children, even if all have high quality instruction.
Disadvantaged children’s obstacles to achievement are exacerbated when these children are concentrated in racially and economically homogeneous and isolated schools. Meaningful narrowing of the achievement gap will not be possible without breaking down these barriers and integrating black children into middle-class schools.
Otherwise informed opinion accepts that school segregation is “de facto” because schools are located in segregated neighborhoods, and that residential segregation today is also mostly “de facto,” the result of personal choices, financial means, or demographic changes.
Partly from this conviction, there is little support for aggressive policies, including race-conscious ones, to integrate metropolitan areas, a necessary precondition for meaningful school integration. The Supreme Court’s view, expressed in the Louisville-Seattle school integration case (“Parents Involved,” 2007), that there is no constitutionally mandated remedy for existing (“de facto”) segregation is also widely accepted.
Yet most Americans have forgotten that residential racial segregation, North and South, was created and perpetuated by, and continues to exist today because of, racially motivated and racially explicit federal, state and local banking regulation, mortgage guarantee, public housing, law enforcement, planning and zoning, highway and school construction, urban renewal and other policies that succeeded in their purpose of creating racially segregated metropolises. The racial segregation of major urban areas today offends the Constitution.
Familiarizing Americans with the history of state-sponsored segregation is necessary before support will be possible for policies to undo that segregation.
By: Richard Rothstein, Economic Policy Institute, June 10, 2013
“The Sorry Spectacle Continues”: Polarized Washington Ignores Long-Term Issues At Its Peril
Scandalfest continues. Official Washington is still flitting from one minor controversy to another, with the news media breathlessly reporting the latest leaked email or unsubstantiated accusation. Clearly, the chattering classes have declared the jobs crisis ended and the economic recovery complete.
While the Obama administration hasn’t popped open champagne bottles to celebrate, the air of silliness that hangs over the Beltway is a reminder that the worst is over. After all, the stock market is soaring. Consumer confidence is climbing.
The latest national unemployment number is down to 7.5 percent, the lowest level since December 2007, when the economy started its steep descent. Indeed, the sustained economic uptick may have a direct tie-in to Washington’s current obsession with less consequential matters: The economy is strong enough to have persuaded Republicans to stop blasting President Barack Obama over joblessness, so they’ve had to find other issues with which to batter him.
Here’s an update from outside the Beltway Bubble: The jobs crisis is not over. Average Americans are still struggling through an ugly economic transformation — a structural change decades in the making that jumped into overdrive with the Great Recession. Millions of Americans of working age remain unemployed, while others patch together two or three part-time jobs to keep food on the table. Still others have found full-time jobs but at far less pay than they used to earn.
A recent Quinnipiac poll provides a clear look into the minds of voters, who have little interest in the imbroglios of the moment. Rightly, 44 percent believe the revelations about the Internal Revenue Service, which singled out conservative organizations for unfair screening, as most important among the current controversies. Only 24 percent cited the deaths of four Americans at a diplomatic outpost in Benghazi, despite the GOP’s obsession with it. Far fewer, just 14 percent, listed the Justice Department’s scrutiny of reporters.
But here’s the news you may have missed: An overwhelming 73 percent said that boosting the economy and creating jobs is more important than any of the other three issues. If politicians were as poll-obsessed as they are rumored to be, they’d at least pretend to be devoting most of their time to helping middle-class Americans get back into stable jobs with good pay.
The jobs crisis has been decades in the making, an economic restructuring fueled by globalization and technology. Think about it: Those Bangladeshi textile workers killed in an April building collapse were doing work once done in the United States. No matter how many affluent Americans protest the conditions and boycott the designers who contributed to the disaster, those jobs are not coming back to these shores. Manufacturers will continue to pursue cheap labor.
As a result, the jobs that once guaranteed good wages and stable futures to generations of Americans without college degrees have all but disappeared. That transformation, which started in the 1970s, has contributed to the wage gap, the ever-widening rift between the haves and have-nots. The average American worker has been losing economic ground for decades.
Politicians ignore that growing gap at their peril. The notion of an America where everybody has an equal shot has always been more myth than reality, but there was once a time when it was not so difficult for young adults to imagine a more prosperous future than their parents had. That is no longer a likely scenario.
That’s a very difficult problem to solve, which helps explain why politicians don’t like to discuss it. It calls for a multigenerational response, the sort of bipartisan approach that is usually reserved for battles against foreign enemies.
But Washington is stuck in a period of deepening polarization, incapable, it seems, of even agreeing on the causes of our economic woes. Democrats, at least, have a language for discussing widening income inequality. Republicans haven’t yet come to terms with its existence. So the sorry spectacle continues.
By: Cynthia Tucker, The National Memo, June 6, 2013
“Taxing The Most Vulnerable”: Student Loan Debt Is Bad For Women And Congress Is Making It Worse
How bad is the wage gap for women in the workplace?
For college graduates, it’s so bad that it begins even before women begin their careers.
According to a study by AAUW, Graduating to a Pay Gap: The Earnings of Women and Men One Year After College Graduation:
Women and men pay the same amount for their college degrees, but they often do not reap the same rewards. Among 2007-08 college graduates, women and men typically borrowed similar amounts to finance their educations, about $20,000. Because women are paid less than men are paid after college, student loan repayments make up a larger part of women’s earnings. In 2009, among full-time workers repaying their loans one year after college graduation, just over half of women (53 percent) compared with 39 percent of men were paying more than what we estimate a typical woman or man could reasonably afford to pay toward student loan debt. These numbers have risen in recent years.
Outstanding student loans today total more than $1 trillion, surpassing credit card debt. Student loan debt has increased nearly 300 percent over the last eight years, according to a report by the New York Federal Reserve.
Is Congress doing anything about this problem? As a matter of fact they are. They’re making it worse.
This July, unless Congress acts, the interest rate on federally subsidized Stafford loans is set to increase from 3.4 to 6.8 percent. In another example of the Congress’ attitude of “don’t tax the rich, but tax the most vulnerable,” student loans are seen as a nice little moneymaker.
The federal government will make $34 billion this year on student loans. If Congress allows the interest rate on these loans to double, the federal government will bring in even more revenue — money that comes straight from the pockets of students who had to borrow money to go to college.
Of course, not everyone has to pay such a burdensome rate of interest on loans. Big banks can borrow money from the Federal Reserve at a rate of less than 1 percent. There’s something very wrong with this picture.
This week, I attended a breakfast meeting with Senator Elizabeth Warren (D. Mass.) where she spoke about the first piece of standalone legislation she is introducing in the United States Senate.
In a speech on the Senate floor, Sen. Warren said:
The Bank on Students Loan Fairness Act would allow students who are eligible for federally subsidized Stafford loans to borrow at the same rate that big banks get through the Federal Reserve discount window. For one year, the Federal Reserve would make funds available to the Department of Education to make loans to students at the same low rate offered to the big banks. This will give students relief from high interest rates while giving Congress time to find a long-term solution.
At our breakfast, I remembered that it was the mobilization of enormous grassroots support for the Consumer Financial Protection Bureau (then-Professor Warren’s brainchild) that kept pressure on Congress to pass the legislation that established that agency. Her fight to keep student loan interest rates low is her next big campaign, and women should pull out all the stops to support her.
AAUW’s findings tell us that women are disproportionately likely to take out loans; among 2007-2008 graduates, 68 percent of women borrowed money for college compared to 63 percent of men.
According to the AAUW report:
For many young women, the challenge of paying back student loans is their first encounter with the pay gap. “Student loan debt burden” is defined as the percentage of earnings devoted to student loan payments. A high student loan debt burden is an indicator that repayment may create hardship. Individuals with high student loan debt burden are less likely to own a home, have a car loan, or even make rent payments. High student loan debt burden is a challenge for a growing number of college graduates, men and women alike, but is particularly widespread among women, in large part because of the pay gap.
The National Organization for Women (NOW) has a long history of supporting equal pay, comparable worth and other policies that advance women’s economic security. NOW was proud to support Elizabeth Warren in her successful campaign for the U.S. Senate, and we are equally proud to support her urgently needed legislation to reduce the burden of student loan debt.
It’s hard to imagine how anyone could oppose a bill that simply requires the Fed to set interest rates for students at the same low rate the big banks get. But get this: an opponent of Sen. Warren’s bill reportedly suggested — presumably hoping we’ve all forgotten about the taxpayers’ bailout of the too-big-to-fail banks — that unlike students, the big banks deserve to pay a super-low interest rate because they never fail. And they say the 1 Percent has no sense of humor.
Elizabeth Warren has planted the flag for student loan reform by introducing her bill, and now it’s up to us to mobilize support and pressure Congress to pass it. This is grassroots democracy at its best. So, blog about this, write letters to the editor, lobby your senators and your representative.
Help ensure that a college education is a pathway to fulfillment and success for women, and not an opening to crushing debt.
By: Terry O’Neill, President, National Organization for Women, The Huffington Post, May 20, 2013
“Robots And Robber Barons”: Profits Continue To Rise At The Expense Of Workers
The American economy is still, by most measures, deeply depressed. But corporate profits are at a record high. How is that possible? It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.
Wait — are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy? Well, that’s what many people thought; for the past generation discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers, either on the gap between more- and less-educated workers or on the soaring incomes of a handful of superstars in finance and other fields. But that may be yesterday’s story.
More specifically, while it’s true that the finance guys are still making out like bandits — in part because, as we now know, some of them actually are bandits — the wage gap between workers with a college education and those without, which grew a lot in the 1980s and early 1990s, hasn’t changed much since then. Indeed, recent college graduates had stagnant incomes even before the financial crisis struck. Increasingly, profits have been rising at the expense of workers in general, including workers with the skills that were supposed to lead to success in today’s economy.
Why is this happening? As best as I can tell, there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power. Think of these two stories as emphasizing robots on one side, robber barons on the other.
About the robots: there’s no question that in some high-profile industries, technology is displacing workers of all, or almost all, kinds. For example, one of the reasons some high-technology manufacturing has lately been moving back to the United States is that these days the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad.
In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.
Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries. The early-19th-century economist David Ricardo is best known for the theory of comparative advantage, which makes the case for free trade; but the same 1817 book in which he presented that theory also included a chapter on how the new, capital-intensive technologies of the Industrial Revolution could actually make workers worse off, at least for a while — which modern scholarship suggests may indeed have happened for several decades.
What about robber barons? We don’t talk much about monopoly power these days; antitrust enforcement largely collapsed during the Reagan years and has never really recovered. Yet Barry Lynn and Phillip Longman of the New America Foundation argue, persuasively in my view, that increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.
I don’t know how much of the devaluation of labor either technology or monopoly explains, in part because there has been so little discussion of what’s going on. I think it’s fair to say that the shift of income from labor to capital has not yet made it into our national discourse.
Yet that shift is happening — and it has major implications. For example, there is a big, lavishly financed push to reduce corporate tax rates; is this really what we want to be doing at a time when profits are surging at workers’ expense? Or what about the push to reduce or eliminate inheritance taxes; if we’re moving back to a world in which financial capital, not skill or education, determines income, do we really want to make it even easier to inherit wealth?
As I said, this is a discussion that has barely begun — but it’s time to get started, before the robots and the robber barons turn our society into something unrecognizable.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 9, 2012
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