This week we start with a must watch: Next Friday, the documentary, “Inequality for All,” with former Labor Secretary Robert Reich debuts in about 40 cities around the country. I have seen it and highly recommend it. This report from the Progressive Policy Institute looks at companies that invest most in the United States that should be of interest, especially to Heron folks. Over at the Manhattan Institute's City Journal, Guy Sorman looks at whether it is possible for charities to measure their effect on society. Also a major must read is Stephen Pittam's piece in Alliance Magazine on the potential corrupting nature of the "power relationships that philanthropy engenders."
No editorial cartoon this week but I have some graphics to fill the gap. Last week the Huffington Post published a series of charts showing “the totally unfair and bitterly uneven” recovery, here’s a few:
Is the Fed part of the problem? Billionaire hedge fund manager Stanley Druckenmiller had this to say on CNBC:
"This is fantastic for every rich person," he said Thursday, a day after the Fed's stunning decision to delay tightening its monetary policy. "This is the biggest redistribution of wealth from the middle class and the poor to the rich ever."
"Who owns assets—the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday."
Derek Thompson at the Atlantic offers up a possible way to get started on changing the paradigm—increase taxes on investment income:
Raising taxes on investment income would not, with the wave of a wand, eliminate income inequality. It would not bring back unions. It would not bring back manufacturing jobs. It would neither elongate the workweek nor raise wages. It wouldn't spur innovation. In fairness, it might hurt the financing for new, risky companies that could grow into domestic job-engines.
But it's awfully simple and direct. The most important source of income gains for the investor class is, after all, investments. If we want to mitigate, if not quite solve, income inequality, let's start there.
Folks may not love unions but there is some compelling data that shows a connection between union membership and middle class incomes says the Center for American Progress, check out this chart:
On another, somewhat poignant note, we have the plight of living in the world’s most expensive city. I love New York but it is ridiculously expensive to live here--just ask Cari Luna over at Salon, who had this to say:
According to a 2013 study by the Economic Policy Institute, the average family of four needs $93K to survive modestly in New York, the biggest expenses being housing, childcare and healthcare. (That $93K does not allow for any vacations, eating out or savings, by the way.) It’s the most expensive place to live in the United States.
When my husband and I were born, it was possible to raise a family in New York without extreme struggle. It was still harder than most places, sure. New York has never been easy. But it was possible to raise a family in reasonable comfort without being a corporate lawyer or investment banker or heiress. To be a middle-class family in New York these days is to be in eternal survival mode, always scrabbling, always scraping by. What happens to a city that’s priced itself out of reach of the average family?
Now imagine instead of being a moderately struggling middle class family, you are Alpha Manzueta, who has two jobs in New York City but lives in a homeless shelter, according to the New York Times:
“I feel stuck,” said Ms. Manzueta, 37, who has a 2 ½-year-old daughter and who, on a recent Wednesday, looked crisp in her security guard uniform, waving traffic away from the curb at Kennedy International Airport. “You try, you try and you try and you’re getting nowhere. I’m still in the shelter.”
With New York City’s homeless population in shelters at a record high of 50,000, a growing number of New Yorkers punch out of work and then sign in to a shelter, city officials and advocates for the homeless say. More than one out of four families in shelters, 28 percent, include at least one employed adult, city figures show, and 16 percent of single adults in shelters hold jobs.
Ah, some Republicans continue to use the least powerful among us to make ideological and political points on what they consider “an entitlement program gone wild,” notes the Week. For example, over the Heritage Foundation’s the Foundry blog, Rachel Sheffield argued:
To make a stand-alone food stamp bill a truly worthwhile reform, it should include a mandatory work requirement for all able-bodied adults.
The current bill encourages work among able-bodied recipients but only through an optional program. To encourage self-sufficiency and independence for all, food stamps should be converted into a work activation program.
A new reform should make it mandatory—rather than merely optional, as the House proposal does—for states that receive federal food stamp dollars to implement a work program for able-bodied adult recipients. Similar to the 1996 welfare reform, a new reform should require able-bodied adults to work, prepare for work, or at the very least look for work in exchange for receiving food stamp assistance.
Panera Bread CEO Ron Shaich has joined the brave few willing to take “the SNAP challenge” and live on $4.50 a day. One small data point, on Friday I bought a pack of Dentyne and a box of Tic-Tacs for which I paid $4.00. In the last five years, food prices have risen 20 percent on the consumer price index with only fuel and healthcare prices outpacing them. (Also of general interest if this slideshow on what the world eats and spends to put for on the table form TIME.) SNAP has also entered the debate over the way U.S. poverty is measured. Officially U.S. poverty has been listed at about 15 percent for 2012 but check out this chart from the Wonkblog of what happens when safety nets like food stamps are added in:
Sheldon Danziger at the Russell Sage Foundation had this to say in the New York Times about poverty measurements and safety nets:
SNAP benefits not only reduce food insecurity and poverty this year; they also reduce poverty in the next generation. Recent research that tracked children into adulthood found that families’ access to food stamps improved their infants’ health and birth weight. Children who benefited from the program later posted better health, higher educational attainment, less heart disease and, for women, greater earnings and less reliance on welfare as adults.
The earned-income tax credit is also ignored in calculating the poverty rate. Yet this program offers working low-income families with children about $3,000 a year. When these tax refunds are counted, they reduce the number of people in poverty by about 5.5 million people.
David Henderson of the conservative Hoover Institution offers a pretty measured if a bit confusing conclusion about how safety nets have shored up both the poor and the middle class:
[W]hile the middle class—and especially the poor—saw declines in market income after 2007, the safety net appears to have performed just as we would hope, mitigating the losses experienced by households. By 2011, the safety net had returned middle-class and poor households’ incomes to the highest levels ever seen. Since then, the situation has likely improved. Disposable income among the poor and middle class is probably at an all-time high.
Of course, neither the left nor the right is likely to be happy about this conclusion. The left worries that if things are getting better, public support for helping the poor will wane and their “middle-out” agenda will look misguided. The right does not want to concede that the safety net may have achieved income security. In response, the left might reply that things would be even better today if we had had more stimulus, while the right might say that safety net programs’ work disincentives prevented greater improvement. It is undoubtedly the case that policy could have produced at least a somewhat better result, though if we are honest, we have no idea how or by how much.
In the Guardian, Neelam Makhijani argues "charities and philanthropists pay lip service to the concept of partnership when in reality they work in silos, and the main culprit is a lack of effective communication." Fast Company looks at whether big data is creating a new type of inequality where the only people who count are literally the counted.