Category Archives: poverty

Race, Poverty, and Stereotypes

The Census Bureau compiles statistics on poverty and the poverty rate in the United States. Their chart for 1959 to 2015 shows 13.5% of Americans living in what is officially designated as poverty, which translates to approximately 43.1 million Americans. [Census pdf]  Poverty in this country is measured as a function of the number of members in a household with a range of $12,082 for a single person to $49,177 for a family of nine or more people as of 2015.  [Link to Chart]

The Numbers

The Kaiser Family Foundation reports that 9% of white families are “in poverty,” 24% of African American families, 21% of Hispanic American families and 14% of ethnic groups categorized as “other.”    Other numbers to keep in mind: As of this morning we have 325,178,412 people living in this country, and 82,184,000 households.  [Census dwnld]  77.1% of our population as of July 2015 was white (61.6% not Hispanic or Latino); 13.3% African American; 1.2% Native American; 17.6% Hispanic or Latino; and, 5.6% Asian American. [Census]  Thus, “yes,” the percentage of the total African American and Hispanic American families in poverty is higher than the percentage of white families in poverty – but to get a more accurate picture of the “face of poverty” it should be noted:

76% of African American families are NOT living in poverty; 79% of our Hispanic or Latino families are NOT living in poverty… so when the reporter on the television starts droning on about  income, poverty, and other statistics and the film rolls on with the stereotyped footage of the “inner city,” we need to recall that we’re looking at what mostly white media producers think poverty looks like.

The Persistence of Prejudice

The reality is that if a person is single, living in a central city, female, member of an ethnic minority group,  and southern, then there’s the likelihood that cuts in social safety net programs will be the most damaging.  [IRPHowever, the point needs to be made yet again: “Social scientists and others have long made the observation that the media over-emphasizes people of color in coverage of poverty and government benefits.”  [Root]  Not certain about this? Start with the Luther, Kennedy, Combs-Ormes study for the University of Tennessee, of media coverage from 1993 to 2000.  Add the American Progress report on stereotypes in poverty policy published in 2012.   It isn’t too difficult to surmise how we’ve moved from poverty policy based on the needs of the ‘deserving white widow’ to the African American welfare queen (who never existed) in modern political discussions.

The media attention has a history:

“…starting around 1965, the discourse about the War on Poverty became much more negative, and that was for a few reasons, one of them being that programs that the administration had been promoting were now out in the field, and people, especially conservatives, were starting to take aim at them. And the media started to portray those programs much more negatively as being abused by people who didn’t really need them, as being inefficient and so on. And it’s really right at that time — and it’s a very dramatic shift in the media portrayal — that the imagery shifts from poor white people, positively portrayed, to poor black people, negatively portrayed.” [Moyers/Gilens]

This stereotyping plays into a narrative among a decreasing number of whites about the motivations of African Americans.  While support for overt discrimination has declined, some of the underlying attitudes may not have diminished as much as might be desirable.   There appears to be a gulf between the theoretical and the practical among white Americans about the role of government in promoting equality: “In general, though, apart from these nuanced differences across types of implementation, this set of questions makes it clear that whites are more willing to support the principles of equality than commit resources to its implementation.” [Illinois Edu

In terms of racial stereotyping there’s good and bad news, the good news first:

“The overall patterns for stereotypes show that between 1990 and 2004, there was a striking decline in the percentage of whites who report negative stereotypes of blacks. But after that point, the levels have remained constant (see Figure 9 (W) above). For example, in 1990, two out of three whites rated whites as harder-working than blacks; a percentage that declined steadily until 2004, when the figure was just about half that level (37 percent). From 2004 to 2014, though, the percentage of whites endorsing the stereotype ranged from a high of 42 percent in 2006 to a low of 34 percent in 2014. The belief that blacks are less intelligent than whites similarly declined from 57 percent in 1990 to just over one in four in 2004 and since then endorsement has stabilized at 23 to 27 percent.” [ Illinois Edu]

And, now the bad news:

“On the one hand, these results about the declining use of stereotypes may provide some reason for optimism. Whites are less willing (in a survey interview) to draw sharp distinctions between racial groups on the traits of intelligence and laziness. However, caution is advised against making too much of these findings. First, social desirability pressures may be particularly at work on these kinds of items. It has become increasingly socially unacceptable to admit to believing in racial differences of this type, and thus surveys may under-estimate levels of stereotype endorsement. Indeed, evidence from laboratory studies of “unconscious” stereotyping suggest that stereotypes continue to shape how whites think about race and racial groups (Fazio et al., 1995; McConnell and Leibold, 2001).”  [ Illinois Edu]

Therefore, when that tape depicting “inner city life” rolls behind the reporter commenting on recent statistical releases on income inequality, social safety net programs, or economic opportunity it rolls before a white audience ready to accept the theoretical desirability of equality, but not so anxious to implement policies designed to assist people who are still held to be “lazier.”

Thus the White Face of Poverty, obscured by the Black image of inner city disadvantage, perhaps allows some voters to continue their illogical dependence on the idea that one can be theoretically pure while being a rugged individual, and demanding others be the same: “Presumably, then, voters imagine that pledges to slash government spending mean cutting programs for the idle poor, not things they themselves count on. And this is a confusion politicians deliberately encourage.” [Krugman]

Meanwhile, there’s Owsley County, Kentucky, home to about 4,461 people, of whom 98.3% are white, with a median household income of $20,985 per year, and 42.4% of its population living in poverty. [Census]

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Filed under Economy, Politics, poverty, racism

Income Inequality Matters for Nevada’s Children

child poverty

We ought to be embarrassed.  The Kids Count Data Book 2015 edition is out, and the numbers aren’t pretty.

“Nevada ranks 47th among states in overall child well-being, up one spot from last year. The study found that Nevada ranks 43rd in family and community development indicators, like children living in high-poverty areas; 46th in health statistics, like low birthweight babies; 46th in economic well-being, including parents lacking secure employment; and 50th in educational achievement, including 69% of Nevada’s children not attending pre-school.” [LVSun]

Yes, there we are, ranked down there with Louisiana, Mississippi, and New Mexico.   Overall, things aren’t looking up for children, and there’s an explanation:

“Although we are several years past the end of the recession, millions of families still have not benefited from the economic recovery,” Patrick McCarthy, president and CEO of the Casey Foundation, said in a statement. “While we’ve seen an increase in employment in recent years, many of these jobs are low-wage and cannot support even basic family expenses.” [LVSun]

And why might this be a correct assessment of the situation? There has been income growth since the end of the Great Recession, but the recovery has benefited those at the top –thus much for anything trickling down:

“The states in which all income growth between 2009 and 2012 accrued to the top 1 percent include Delaware, Florida, Missouri, South Carolina, North Carolina, Connecticut, Washington, Louisiana, California, Virginia, Pennsylvania, Idaho, Massachusetts, Colorado, New York, Rhode Island, and Nevada.” [EPI]

Nevada has made some improvements – if bouncing off the bottom is an indication of progress – in health, for example, 5% fewer children are without health insurance, and education in which 69% of our kids aren’t attending pre-schools, up from a previous 72%.  But, the economic picture is bleak at best.  23% of the youngsters live in poverty, 34% are in families experiencing what’s euphemistically called “employment insecurity,” and 39% of the kids live in a situation in which housing costs are eating up the family budget.  [AECfnd]

If we tread deeper into the income inequality waters we can see why the numbers for Nevada youngsters didn’t improve. Here’s the answer: “In four states — Alaska, Michigan, Nevada and Wyoming — average income increased exclusively for the top 1% and declined for the bottom 99%.” [247Wallst]  So, in the Silver State, not only did all the income growth get sucked up by the top 1% during the recovery, but the bottom 99% actually saw their incomes decline.

Most analyses get the first part right.  In the last downturn the bottom fell out of the construction sector in Nevada; the housing bubble burst, and employees were laid off.  Laid off employees have less discretionary income to spend, and less income equates to fewer purchases.  Fewer purchases yield less economic activity in the community, and everyone starts to go down hill.  When we get to the middle part of the explanation some analysts start getting fuzzy.

First Law of Staffing

The question in the middle is how to encourage more employment.  For the umpteenth time here’s the answer:  There is no rational reason to hire anyone to do anything unless the DEMAND for goods and services is greater than the capacity of current staffing levels to provide an acceptable level of customer service.  Amen. Again.

The Small Business Chronicle offers some very sound advice which expands on this generalization.  Their five step process asks: (1) Are your projects or other business activities getting done on time? If yes, then you probably don’t need any additional employees. If no, or the business is thinking of more marketing to drive up revenues then ask (2)  if you were to increase your marketing efforts could your present staff handle the additional work load? The next step (3) is to look at your overtime records. One sure sign that the business is understaffed is increased overtime from current employees.  In the first step the business owner gauged the project or work time, in the next (4) step it’s important to look at the issue from the customer or client’s perspective – if the business is monitoring customer wait time and it seems (or is reported to be) excessive, then the business is understaffed. Finally, in Step (5) a savvy business owner will determine if the increases in demand are continual or seasonal. If seasonal, then temporary employee hiring may be the solution.

What’s not under consideration here?  The advice offered above didn’t include a question about whether Nephew Lester needs a job. Familial ties are wonderful, but they don’t constitute a reason to hire an employee.  Hiring veterans is a healthy business practice – but again, no matter the benefits, if his or her skills aren’t necessary to get things done or made on time, and if a barrel of overtime isn’t on the current books, there’s no rational reason to make a new hire.  Tax breaks for hiring the unemployed are fine – but just as in familial or socially beneficial cases, there’s NO reason to hire anyone for any tax break if there is insufficient good old fashioned demand for the products and services.   It’s at this point that the conservative, trickle down, no new taxes, barrage of talking points becomes almost ludicrous.

tax incentives accounting There is a wonderful leap of logic, stretching that term to its extrapolated limits, in asserting that more tax incentives, tax breaks, tax forbearance, tax limits, tax deductions, and tax treatments will magically yield more employment.   What is required is to believe that if a company is more profitable it will automatically hire more people.   Yes, a more profitable firm is capable of hiring more but NOT if there is no increased demand for the goods or services.  A more profitable firm has the potential for more hiring – but not if it is corporate policy to put more effort into mergers and acquisitions than into actual plant expansion. A more profitable company may hire additional workers but not if the firm has decided that it will put its revenue into stock buy-backs, dividends, or management compensation. Potential may be a powerful argument, but unless it is translated into a realistic appraisal of company or corporate intentions and vision it’s as ephemeral as a fruit fly.  And it’s not really useful for putting food on the table for the kids.

And, now we return to the economic problems of children. If the jobs available for their parents are seasonal, temporary, or permanent but low wage then all the job “expansion” in the nation isn’t going to improve their prospects.

Seasonal employment is relatively easy to understand.  It’s everything from harvest time to Christmas sales.  The sector of the labor market into which more parents are finding themselves is the temporary work force.  About 75% of Fortune 500 firms are relying on third party logistics companies to handle their warehousing, and employment in transportation and materials moving and production now accounts for some 42% of temporary hiring. [NELP]   The advocates of temporary hiring note that only about 3% of the workforce is on temporary status, which is true but doesn’t include the fact that temporary employment grew from just a bit over 0.5% in 1983 to over 2.5% as of 1999. [BLS] Further, the trend is increasing as this graphic from Staffing Industry illustrates in YOY growth from 2013 to 2015:

temp jobs trendsAs this sector of the labor market increases the “employment security” of parents becomes more tenuous.  As long as this trend continues we’ll likely find more youngsters in that “parents lack secure employment category.” 

There’s no reason to believe that corporations in Nevada are functioning any differently than those in the rest of the country in terms of staunch adherence to the Shareholder Value Theory of Management, the interest in mergers and acquisitions rather than plant expansion in general, and the interest in utilizing temporary labor for logistics, warehousing, and service jobs.

In sum, there’s no rational explanation for hiring (temporary or permanent) which doesn’t relate directly to demand – and there’s no reason to expect demand to increase if the jobs created are temporary, low wage service or retail sector, and with reduced hours or misclassification of employees. Meanwhile the kids need housing, clothing, food, medical attention, and school supplies.

We ought to be embarrassed, but we probably won’t be until we can shake the 1% awake to the fact that profitability doesn’t necessarily equate to employment. To the fact that potential employment isn’t actual employment. To the fact that temporary employment isn’t secure employment, and to the fact that taxation has precious little to do with hiring the parents of Nevada’s children.

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Filed under Economy, family issues, Nevada economy, Nevada news, Nevada politics, poverty, Taxation

Happy Fourth of July: A More Perfect Union

Flag July 4th

It’s a good 4th of July weekend.  The benefits of citizenship have been affirmed for members of the LGBT community, but as the founders told us we’re on a path to create “a more perfect union.”  Therefore, there’s more work to be done to insure that housing, employment, and other areas of American life aren’t stumbling blocks of discrimination. We will have to keep up efforts toward building that “more perfect” union.

Ravenal Bridge

There may be some dead-enders, some battle flag flying remnants of blatant racism, but no matter how hard the Klan and their allies try, their proposed demonstration will be nothing compared to the thousands who walked along the Ravenal Bridge in Charleston, South Carolina.  We’re closer to being a nation of people who are taking Dr. Martin Luther King Jr.’s message to heart:

“When evil men plot, good men must plan.  When evil men burn and bomb, good men must build and bind.  When evil men shout ugly words of hatred, good men must commit themselves to the glories of love. “

At least two churches in the south have been the target of recent arson attacks, so in order to form that more perfect union it’s time for people of good will to build and bind.   It’s been a long walk from the bridge in Selma to the bridge in Charleston, but we’re getting there.  We still have to acknowledge the often painful accuracy of Winston Churchill’s backhanded compliment, “You can always count on the Americans to do the right thing, after they’ve tried everything else.”  

In a more perfect union, we’d not have maps showing that a person earning minimum wages cannot achieve a point at which only 30% of his income can pay for a one bedroom apartment.

Rent map

The darker the blue the worse the problem.  We’ll have a more perfect union when we address the complications of living on inadequate wages.  It does no good to march behind banners proclaiming that hard working Americans should “save for the future,” – when simply meeting basic needs for food, housing, and adequate clothing consume all the family’s income. It takes us no closer to a more perfect union to proclaim, “if the poor would just work harder they’d get ahead,” when elements of our judicial system, parts of our educational system, and the myopia of commerce combine to force workers into multiple jobs at minimal wages.  We are no closer to forming a more perfect union when we reward those who prosper at the expense of those who produce.

Unassisted graph

In a more perfect union this graph would be significantly lower.  How do we care for the least able among us? The learning disabled young man with nerve damage, but not quite enough to meet disability standards?  Unmarried, with no dependent children, unemployed except for odd jobs paying about $10 per hour?  A victim of child abuse, and now a victim of a system in which he doesn’t qualify for benefits because he’s never been able to find employment which sustains them. [Reuters]

We’ll be a more perfect union when we are more aware that the able-bodied are not necessarily able to fully function in our modern economy.  In a more perfect union there is more educational, job, housing, and food support for those who live on the margins of despair.

I look to the diffusion of light and education as the resource most to be relied on for ameliorating the condition, promoting the virtue and advancing the happiness of man.” Thomas Jefferson to Cornelius Blatchly, October 1822

And yet:

“About seven in 10 (69%) college seniors who graduated from public and private nonprofit colleges in 2013 had student loan debt. These borrowers owed an average of $28,400, up two percent compared to $27,850 for public and nonprofit graduates in 2012.   About one-fifth (19%) of the  Class of 2013’s debt was comprised of private loans, which are typically more costly and provide fewer consumer protections and repayment options than safer federal loans.”  [TICAS]

In a more perfect union, education advances the “happiness of man,” not merely the bottom line of banking institutions, and certainly not the unrestrained avarice of some for-profit operations who once having the federal funds in hand look to more recruitment without much concern for those already recruited.

And, then – predictably – there’s the Wall Street Casino, which has created SLABS (Student Loan Asset Based Securities).  While certainly not in the mortgage meltdown class, these are problematic because:

“What I find most disturbing about SLABS is that they create a system where an increase in tuition (and the debt-burden on the borrower) equals an increased profit for the investor. When you consider the role that unscrupulous speculators played in the mortgage crisis, one can’t help but wonder if a similar over-valuation of college tuition is taking place for the benefit of SLABS investors. With the cost of attending college increasing nearly 80% between 2003-2013 while wages have decreased, it’s no wonder that so many people are having difficulty paying off their student loans.” [MDA]

This situation is NOT the way to “diffuse light and education.”

There are countless other topics and issues on which we might dwell, assistance for the elderly, transportation, trade, economic security, police and community relations, infrastructure issues, voting rights,  domestic terrorism, domestic violence, gun violence, climate change … the list is  as long as the population rolls, as we try to create that more perfect union of imperfect human beings.

What we need is Churchill’s optimism – that eventually, after avoiding problems, exacerbating problems, tinkering with problems – we’ll do the right thing.

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Filed under banking, civil liberties, education, financial regulation, Global warming, homelessness, income inequality, Minimum Wage, poverty, racism

So, What About the Children?

child poverty rate

Should the Nevada Legislature care to address some issues other than those espoused by the gun-happy among us, there is one which should attract more attention than it’s getting.  23% of the children in this state are living in households at 100% of the official poverty line. [datacenter]  That’s an increase from the 2009 rate of 18%. In fact, the rate has been increasing – from 18% in 2009, steady at 22% in 2010 and 2011, up to 24% in 2012, and leveling at 23% as of 2013. [datacenter] The percentage in 2013 in Congressional District 1 was 36%, in Congressional District 2 – 18%, Congressional District 3 – 13%, and Congressional District 4 – 24%. [datacenter]  The numbers didn’t get any better in 2014.  Nevada’s 23.4% of children living in poverty was higher than the national average 22.6%. [LVRJ]

This has some significant implications for those ‘education reformers’ who are touting accountability in the public schools because the income/achievement gap was grown significantly in the last three decades.  And, this matters because, “By the early part of the 21st century, racial inequality was much lower (although far from eliminated) in terms of wages, health disparities, and residential segregation. Meanwhile, economic inequality reached historic highs (Saez, 2012). Although both remain high, economic inequality now exceeds racial inequality in education outcomes.” [ASCD] (emphasis added)

Wait, there’s more:

“The fact that the income achievement gap is large when children enter kindergarten—and does not grow substantially during the school years—suggests that the primary cause of the gap is not unequal school quality. In fact, the data in Figure 2 show that schools may actually narrow academic achievement gaps, rather than widen them. The data show the gap narrowing between the fall and spring of the kindergarten and 1st grade years—periods when students were in school—and widening in the summer between kindergarten and 1st grade—when they were not in school. Although we can’t assume that the same pattern holds in later grades, the ECLS-K data do suggest that schools may reduce inequality rather than widen it.” [ASCD] (emphasis added)

Isn’t it convenient to blame low test scores on ‘failing schools’ without looking at the impact of poverty on the kids who are entering those schools in kindergarten and first grade?  Rather than railing on about ‘failing schools’ and children not reading at grade level, it might be more useful to take a harder look at the conditions from which those children are coming.

There is a “language gap” which has nothing to do with English or Spanish, but with the vocabulary to which youngsters are accustomed in low and high income households.  We have about 50 years worth on research on this topic: [see also: ASCD, NYT, Stanford]

“…five-year-old children of lower socioeconomic status (SES) score two years behind on standardized language development tests by the time they enter school. In fact, a March 2013 study (link is external) by Fernald and colleagues titled, “SES Differences in Language processing Skill and Vocabulary Are Evident at 18 Months,” reported that signs of the vocabulary gap are evident before a child is even two-years-old.”

In short, by lumping all schools in a test-score matrix with bench marks for ‘success’ which don’t factor in poverty, we’re getting only half the picture.  How does one classify a school as failing when a significant number of kids entering it are already two years behind?  Further, if a significant number of kids attending ‘Moose Moon Elementary School’ are already behind before the doors open to them – then perhaps if the kids are reading only 1 level below ‘grade’ in the 3rd grade then we should call that success?

Poverty isn’t only a matter of vocabulary, nutrition plays a role as well.  One study conducted in Canada is instructive:

“These findings demonstrate an independent association between overall diet quality and academic performance among grade 5 students in Nova Scotia, Canada. Dietary adequacy and variety were identified as specific aspects of diet quality important to academic performance, thereby highlighting the value of consuming a diverse selection of foods in order to meet the recommended number of servings from each food group.”

There are all manner of research reports on the relationship between nutrition status and educational achievement.  [USDA, NCBI, GenYouth, NMichU]  However, we also know that, as the headline asserts, “Poverty drains Nutrition from the Family Diet.”  What tends to happen is that carbohydrates (cheap) tend to be a higher portion of the family diet as opposed to fresh fruit and vegetables (more expensive) or proteins in meat and fish.   Makes sense when we figure that Mac/Cheese comes to about 90 cents per box, with about 3 servings per box, that works out to about 30 cents per serving.  Compare that to broccoli at about 63 cents per serving, or fresh spinach at about 52 cents per serving, or even the orange at 34 cents [mdand]  and we can see where this is going.  Then there’s the lard, which can be purchased for about $5.88 for 64 oz.  The commodity markets are showing butter at about $1.61 for 16 oz.  48 oz of cooking oil go for about $2.50.  In sum, if a family is trying to make it on SNAP benefits those dollars and cents will go further on Mac/Cheese than on salmon and broccoli.

It just might be more constructive, in terms of educational achievement, to stop mocking, and rolling back, school lunch nutrition requirements – even if the little darlings aren’t that fond of veggies; and to look at increasing SNAP benefits to families with children so that a few heads of broccoli and more meat and fish proteins were included in the family diet.

It often seems that families in poverty can’t win no matter what they do – Should they try to purchase more books for the kiddies they can be chastised for not spending the money on better food.  If they add a bag of oranges to the grocery trip then they can be taunted for not making the most economical use of their grocery dollars.  Heaven forefend they should add some raw spinach or broccoli to the grocery bag.   I can almost hear it now, “I was at the grocery store and the lady in front of me was buying Kale, KALE! with food stamps!”  No matter that Kale is one of the more nutritious  veggies available.

Sadly, as long as the I Got Mine Now You Try To Get Yours attitude prevails amongst legislators at the state and national level, we’ll have a “language gap” because we’ve not addressed the paucity of time and resources available for lower income working families. How easy it is to ‘save money’ by reducing the hours or staff at the public library!  And, we’ll have achievement gaps because kids are filled (or unfilled) with carbohydrate laden diets because that’s the way to stretch the grocery funds.  Even notions about increasing the minimum wage are met with vehement protests that we are creating a Nation of Takers, and speak to a Living Wage and the air fills with dire warnings of moral hazards.

What IF we tried thinking of children as an investment rather than a line item expense?  What IF we thought of them as assets in need of maintenance and care?  What IF we recognized that their poverty will be a factor in their educational achievement?  What IF we rewarded the schools which helped close the language, achievement, and nutritional gaps in their lives? Children aren’t abstractions, slogans like “freedom” don’t mean much on an empty stomach; they aren’t philosophical constructions, pronouncements on “entitlements” don’t mean much when the parents are working three or four minimum wage jobs to keep up.  We should save the sermons for the pulpits and invest in reducing the number of Nevada children who are falling into language, achievement, and nutritional gaps.  One in four is unacceptable.

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Filed under education, nevada education, Nevada legislature, poverty

Marching Down The Aisle With Capitalism

The Nevada Progressive nails it in Marco’s Masquerade.  We should have seen this coming, the Republican answer to poverty in America is (drum roll please) Marriage.  Not necessarily marriage for members of the LBGT community, but that good old fashioned march to the altar for the right people.

The Numbers Don’t Add Up

First, if we buy into the Republican stereotypical person in poverty the individual in question would be a single mother and member of an ethnic minority community, which goes absolutely nowhere toward explaining that of the 20% of Nevadan adults who have earnings below the poverty line the gender categories are almost identical. [Kaiser FF] There’s 1% difference.

Secondly, 22% of Nevada citizens living in poverty do not have children, while 17% do.   There is something to the ethnic minority figures.  Of the people in Nevada living with below poverty line earnings 15% are white, 34% are African American, and 29% are Hispanic. [KFF]  However, a better correlation might be established if we were to consider educational attainment levels.   The unemployment rate for those with less than a high school diploma stands at 12.4%,  High School diploma 8.5%, and a professional degree at 2.1%. [BLS]

And the unwed mother mythology?  In 1990, unmarried white women accounted for 57.5% of the births to unmarried women, and unmarried African American women accounted for 39.1%.  By 2008 the numbers had changed with the rate for white women increasing to 67.7% and the number for African American women dropping to 27.9%.  [Census pdf]

Finally, when we look at the numbers, a hard cold fact sets in.  “There are more married parents with incomes below the poverty line than there are never-married ones, and more food-insecure adults live in households with children headed by married couples than in ones headed by just a man or woman.” [CPER]

In short it is more common for adults caring for children on incomes below the poverty line to be married (43% married, 6% separated) than in the homes of 40% of adults earning poverty level wages who have never been married.

Married PovertyNoticing the Obvious — the major cause of poverty is not having enough money.

Yes, young people do tend to be well represented among those paid minimum wages.  Those under 25 years of age make up about 20% of our workforce, but constitute about 50% of those earning minimum wages.  However, that information is only 50% of the story.

49.4% of our hourly wage earners over the age of 25 are working for minimum wages. [BLS]  15% of men over 25 years of age are working for minimum wages, compared to 30% of women in the same age group.  [BLS Table 1]

The cherished myth is that people who start out earning minimum wages in their teens go on by dint of Horatio Alger-like effort (remembering, of course, that he married the boss’s daughter) to Do Great Things.   This is such a good story one hates to diminish it, however reality kicks in all too quickly.  The Council of Economic Advisers (pdf) cautions:

“While the United States is often seen as the land of economic opportunity, only about half of low- income Americans make it out of the lowest income distribution quintile over a 20-year period. About 40 percent of the differences in parents’ income are reflected in children’s income as they become adults, pointing to strong lingering effects from growing up in poverty.”

Capitalism Works, and We Should Let It

The corporate think tanks and their media cohorts are fond of repeating the mantra that raising the minimum wage would be a Disaster, A Disaster I Say, for American capitalism.  Employment will decline! [Forbes]  Except for one nitpicky litte detail — there’s no hard evidence this happens.    The Forbes article cited above goes to great length to offer gloom and doom predicated on the assumption that the corporation must recoup any and all losses to its bottom line (read profitability) by adjustments in productivity.  Interestingly enough nowhere in the article does its author mention the bloated executive compensation packages which somehow do not need to be adjusted to improve corporate profitability.

Forbes opines: ” The Law of Demand always works:  the higher the price of anything, the less that will be taken, and this includes labor.”  Yes, it does. However, a person should be careful here to differentiate between micro and macro economics.   If our hypothetical worker, and that seems to be the main form workers take in financialist-land, works for the Acme Widget Company, and the “cost of her labor increases,” Acme may have to adjust, but Acme isn’t where she shops for groceries.  Or, where she purchases her car. Or, where she buys clothing and furniture.   The increased wages (or, increased labor costs) become part of our old friend Aggregate Demand.

Firms cannot pay a worker more than the value the worker brings to the firm.  Raising the minimum denies more low skilled workers the opportunity to get a job and receive “on the job” training.” [Forbes]  Yes they can, and they do.   One of the prime reasons employers are anxious NOT to have high levels of employee turnover is that training is relatively expensive.   No worker, from the bottom to the top, is worth on day 365 what he was worth on day 1.  If the firm is managed rationally, then it is assumed that experienced personnel are more valuable than the rookies, and therefore more valuable — and they all started out as rookies.   Interesting, this “worker value” argument never seems to emerge when Wall Streeters speak of executive retention bonuses?

If it did, we might hear some business pundit say the unimaginable, “We can’t give more executive retention bonuses because this will deny less experienced or skilled people the opportunity to receive on the job training.” I’m not holding my breath waiting to hear that one on some business cable channel.

Capitalism could work very nicely.  If we’d let it.

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Filed under Economy, Politics, poverty

Amodei, Heck: Fire, Ready, Aim on TANF Waivers

Don’t look now, but Nevada Representatives Amodei (R-NV2) and Heck (R-NV3) just voted to usurp the power of governors in our 50 states to implement ‘welfare to work’ programs designed to  increase the number of persons finding employment who are now receiving public assistance.  [vote 589]  Voting against new programs to move more people from welfare to work doesn’t sound like a traditional GOP position — However, that’s what happens when guns are jumped and propaganda replaces position papers.

Here’s what the House Republicans passed:

HJRes 118  Providing for congressional disapproval of the rule submitted by the Office of Family Assistance of the Administration for Children and Families of the Department of HHS relating to waiver and expenditure authority under the Social Security Act with respect to the Temporary Assistance for Needy Families program…

Here’s what the Department of Health and Human Services actually said:

“HHS is encouraging states to consider new, more effective ways to meet the goals of TANF, particularly helping parents successfully prepare for, find, and retain employment.  Therefore, HHS is issuing this information memorandum to notify states of the Secretary’s willingness to exercise her waiver authority under section 1115 of the Social Security Act to allow states to test alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.”  (emphasis added)

Note: The states only get the waiver on the work rules IF their new policies Improve Employment Outcomes — translation — IF more people are moved form the welfare rolls to the employment rosters.

Who requested the waivers?  Nevada and Utah, both with Republican Governors.

“Nevada is very interested in working with your staff to explore program waivers that have the potential to encourage more cooperative relationships among the state agencies engaged in economic stimulus through job creation, employment skill attainment and gainful employment activities. Nevada is also interested in exploring performance measures that ensure program accountability and also increase the probability of families becoming self-sufficient by providing meaningful data as to the services or combination of services with the best outcomes. [Nevada Department of Health and Human Services, 8/2/11, via The Huffington Post]” (emphasis added)

So, congratulations Representatives Amodei and Heck, you’ve both voted in favor of less program accountability, and against innovations that might increase the probability families in Nevada currently receiving public assistance could become self sufficient.

An unsolicited suggestion — next time turn off the cable TV broadcast and read the relevant statutes  before voting?  Just Sayin’

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Filed under 2012 election, Amodei, Heck, Nevada economy, Nevada politics, nevada unemployment, poverty

>Tarmac Sociology: The Myth of the Gambling Poor

>Beacon beam to the Gleaner for picking up on this piece from the Reno Gazette Journal.
Waiting for Bush on the tarmac was Reno volunteer activist Cathy Levine, who received the President’s Volunteer Service Award for her work collecting clothing, toys and blankets for needy families. “Every now and then, we get a check for $100, and I think that is pretty exciting,” said Levine, founder of Warm for All Reasons. “This is overwhelming.” Levine said Bush asked her about the homeless in Reno, asking if they had lost all their money gambling. “I said: ‘That’s true, and we take care of their kids’,” Levine said. Bush presented Levine with a lapel pin, which she said she’ll wear to work today.” (emphasis added)

First, thanks to Ms. Levine and the work she’s doing on behalf of Nevada families who are having a tough time of it. However, that said, it would have been nice had her interpretation of why those families fall into poverty been a more accurate representation of the issue.

The problem with the myth that Nevada has poverty because it has gambling is its simplistic attractiveness for those who don’t particularly care to deal with income issues. Gambling is an optional activity, an “individual sin,” and therefore there is no obligation on the part of government to address the issues involved with anything other than accolades for the volunteers who alleviate the symptoms.

Left unsaid on the tarmac is the fact that median wages and salaries have declined over the past two decades, and that median wages fell for the bottom 2/3rds of the work force, especially for those in the lowest categories. [UNLV] The percentage of Nevadans living at or below the poverty level in 2004 was 12.6%, an increase of 2.7% since 2000. [H2K.state/pdf] Further, nearly 60% of current Nevada jobs pay less than a living wage for a three person family. Among the fastest growing jobs, nearly 90% pay less than a living wage. Poverty level wage jobs have increased from 20% to 25.8% in Nevada in the last thirty years. [PLAN] Unfortunately, affirmation of the Gambling Myth merely serves to bolster the argument that one shouldn’t give the undeserving poor too much money because they will simply waste it. Other myths are equally unhelpful.

The Catholic Campaign for Human Development issued its “Poverty Pulse” report in January 2007 (pdf) indicating most people believed, accurately enough that “The most significant cause of poverty continues to be the lack of jobs that pay a living wage.” However, in their survey fewer than one third of the general public is aware that children under the age of 18 are more likely to live in poverty than other demographic groups. The myth of the elderly poor persists when in fact the rate for elders is 9.8% while 17.8% of children live below the poverty line.

This reality was starkly reported in the Wood Study (2003) which found that the upsurge in poverty among children was statistically related to three factors: (1) The erosion of the real value of wages earned by lower-educated workers; (2) The decline in the value of welfare benefits given to the poor, and (3) the increase in the number of single parent female headed families. Divorce rates play a role as well, among households above the poverty level prior to a marital separation, mothers were much more likely than fathers to fall below the poverty line during the first year after separation, 19% of the women experienced poverty compared to 3% of the men. [FFO] However, myths die hard.

The Joint Center on Poverty Research lists the three most common misconceptions: (1) Poverty is long term — the fact is that poverty is a short term problem for most families; (2) All welfare recipients are long term — fact, the average period of welfare for a recipient is three years; and (3) Most poverty is found in inner cities — fact, while poverty may be severe in urban settings, many more of the nation’s poor live outside these neighborhoods. [JCPR] Thus, the translation of the popular image from the 19th-20th century “dad down at the local saloon / family in squalor” to the 21st century “dad down at the 21 table / family in squalor” is not instructive, but rather a continuation of the mythology of the undeserving poor, and conveniently ignores the statistical realities.

Unfortunately, Ms. Levine may have been trembling from her meeting with the President, but the misinformation aftershocks of her commentary will be with the rest of us far longer. Nevada has not enjoyed a particularly good reputation for social concern of late: “Nevada ranks last in the nation for volunteerism, 49th for per-student spending, 15 percent of Nevadan children live under the poverty, the state has the fourth-highest percentage of adults without health insurance … Nevada is not renowned for its commitment to alleviating pain and suffering within in its own borders, let alone globally.” [NT] And, now, the Myth of the Slot Machine Poor will get yet another round in the political spin cycle.

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Filed under Nevada, poverty