In this issue, revisiting the racial wealth gap, taxing robots, reducing the charitable deduction and Obama's social innovation experiment.
Over at Salon, Leonard Steinhorn says that despite all the attention paid to the white working class since the election, the rust belt has not truly been forgotten when compared to the "black belt":
Many Delta and Black Belt residents live in dilapidated shacks with no proper sanitation, where sewage drains right into the ground and contaminates both the soil and water. The Greenville, Mississippi, infrastructure was in such disrepair that for years the town spilled raw sewage into creeks, rivers and bayous, according to a 2016 lawsuit brought by the Environmental Protection Agency and the Mississippi Department of Environmental Quality. The Economist reports that life expectancy in parts of the Delta is lower than it is in Tanzania.
Nor is education a way out for many Black Belt and Delta residents. In Sumter County, Alabama, 38.5 percent of adults with either some college or a two-year degree are living in poverty, meaning that those who try to pull themselves up still can’t catch a break...In the Delta, because there is only a patchwork public transportation system supplemented by a makeshift arrangement of buses and vans provided by a network of nonprofits, cars are a lifeline for most people trying to work or buy groceries. But driving itself can be a ticket to prison. Travel around the Delta and you’ll hear story after story about black drivers, especially men, who get pulled over and fined for a broken taillight — and then, with no money to fix the car or pay the fine, they get pulled over again and suffer incarceration for their punishment.
In the Atlantic, Adia Wingfield Harvey looks at why race-blind economic policy does not work for everyone:
In his book When Affirmative Action Was White, the Columbia University political scientist Ira Katznelson discusses some examples of economics-oriented policy initiatives that favored white people, including many that were ostensibly race neutral. Most of these colorblind policies were developed as part of the Roosevelt administration’s New Deal programs, and were designed to help lift America out of the Depression. Social Security, minimum-wage laws, and the G.I. Bill are all examples of legislation written with language that wasn’t explicitly discriminatory. And yet, these policies did not work for everyone: It was primarily white Americans who were able to benefit from them once they were put in place... [For example] the job-training component of the G.I. Bill was hampered by the fact that it was implemented on the state level. The program’s administrators, most of them white, tended to steer black veterans away from higher-paying jobs in carpentry, woodworking, photography, or electrical work and instead toward training programs for lower-paying service jobs, such as those in dry cleaning or tailoring.
In the Washington Post, Tracy Jan reports on new research that finds working-class whites are the biggest beneficiaries of federal safety net programs in terms of getting a hand over the poverty line:
“There is a perception out there that the safety net is only for minorities. While it’s very important to minorities because they have higher poverty rates and face barriers that lead to lower earnings, it’s also quite important to whites, particularly the white working class,” said Isaac Shapiro, a senior fellow at the Center on Budget and Policy Priorities and one of the report’s authors.
The researchers did not draw a conclusion from their study as to why working class whites are disproportionately helped by government poverty reduction programs. One possibility is that white Americans are better positioned to know all the government benefits that are available to them, Shapiro said. Whites also benefit more from the Social Security system than minorities, both because they may have paid more into it and they are an older population, he said.
Over at the Nation, we have a look at what is killing black infants in America, which finds that racism rather than poverty may be to blame:
Across the United States, black infants die at a rate that’s more than twice as high as that of white infants. The disparity is acute in a number of booming urban areas, from San Francisco—where black mothers are more than six times as likely to lose infants as white mothers—to Washington, DC. In the capital’s Ward 8, which is the poorest in the city and over 93 percent black, the infant-mortality rate is 10 times what it is in the affluent, predominantly white Ward 3... [A] growing body of evidence points to racial discrimination, rather than race itself, as the dominant factor in explaining why so many black babies are dying. The research suggests that what happens outside a woman’s body—not just during the nine months of pregnancy—can profoundly affect the biology within.
In the Huffington Post, Stephanie Watkins Cruz recounts her painful experience growing up without a steady place to live:
When we lost our home and moved into an apartment, a house was still my dream, but with it came the desire for this newly introduced concept of “financial stress” to be nonexistent in my future. I wanted a yard again. I wanted a big kitchen again. Even the foyer. But more than anything, I wanted the stress to be gone. I had this dream until I was 16.
When we lost our apartment for the first time, and then the second, forcing us into a hotel, I found my American Dream reduced to an image that was based on need. I wanted another apartment. Didn’t care about the big kitchen, didn’t care about the foyer, or care if I would have my own room. The dream was a home. I still have this dream now.
These were my phases of dream reduction, and I fear that for too many Americans, the ideal of the American Dream has been replaced with a harsher image of American Need...
In 2015, The National Alliance to End Homelessness reported that the number of people in poor households living doubled-up with family and friends has grown by 67 percent since 2007. That same year, almost 40,000 youth were homeless in just a single night.
Did you know that nearly one in four school districts gets money to combat student homelessness? Over at PBS News Hour, Education Week's Lisa Stark reports on how one district in Kansas is trying to help. Meanwhile a Michigan jail forced a woman to give birth on the floor of her cell. Her crime: driving on a suspended license with bail set at a whopping $10,000.
Finally, this Heron video with Linda Tirado discussing poverty and the working poor was picked up by Upworthy and has gotten almost 300 thousand views and robust debate.
A coal plant in Navajo country is closing early and it will hit the local economy hard reports Jonathan Thompson in Grist:
-935 — Full-time employees in 2014 of Navajo Generating Station, the Kayenta Coal Mine on Black Mesa, which exists only to fuel the plant, and the 78-mile electric railroad that carries coal from the mine to the plant.
-90 — Percent of those workers that are Native American.
-$141,500 — Average payroll expenditure per employee (wages, salaries, benefits, etc.)
In addition to these jobs, both mine and plant have contractors for various purposes and each of the power plant’s three units requires a major overhaul every three years, which temporarily employs an additional 400 or more people. These are highly coveted jobs on the Navajo Nation, which deals with high unemployment and chronic poverty.
In Futurism, we have a piece on why Elon Musk thinks automation will force action on universal basic income:
[H]e noted that we will likely have intelligent, massive-scale automation for transportation relatively soon—within the next few decades, in fact: “Twenty years is a short period of time to have something like 12-15 percent of the workforce be unemployed,” he said, pointing out the extent of how automation will disrupt car-based transportation specifically.
However, displacement due to automation isn’t just limited to transportation, it will sweep across a number of industries, and Musk argues that the government must introduce a UBI program in order to compensate for this. “I don’t think we’re going to have a choice,” he said. “I think it’s going to be necessary. There will be fewer and fewer jobs that a robot cannot do better.”
Meanwhile, in an interview with Quartz, Bill Gates notes that everytime we display a worker with a robot tax revenue is lost and tax policy should reflect our new reality:
There are many ways to take that extra productivity and generate more taxes. Exactly how you’d do it, measure it, you know, it’s interesting for people to start talking about now. Some of it can come on the profits that are generated by the labor-saving efficiency there. Some of it can come directly in some type of robot tax. I don’t think the robot companies are going to be outraged that there might be a tax. It’s OK...at a time when people are saying that the arrival of that robot is a net loss because of displacement, you ought to be willing to raise the tax level and even slow down the speed of that adoption somewhat to figure out, “OK, what about the communities where this has a particularly big impact? Which transition programs have worked and what type of funding do those require?”
Speaking of tech giants, the Atlantic's Derek Thompson points out that the HB1 visa program isn't as laudable as its champions would have you believe:
When technology firms hire foreign-born workers, they often pay them less than what they theoretically would have paid an American in that job. This leads to both lower pay for workers across the company and higher profits for the owners and investors. In other words, the H-1B program is a scheme to reduce wages and increase profits, which has been cleverly remarketed as a paean to multiculturalism and a win-win for American consumers and American inclusivity...A 2016 paper by several economists from the University of Notre Dame, UC Berkeley, and the U.S. Department of the Treasury similarly found evidence that H-1B visas crowded out employment for other workers and "lead to lower average employee earnings and higher firm profits."
The technology community has been outspoken in its defense of the H-1B program, framing it in language that pays homage to American values like diversity, inclusion, and innovation. But it also serves the less honorable goal of restraining wage growth.
You probably heard that the charitable deduction is in danger. In Forbes, contributor Ashlea Edling lays out the plan:
The charitable tax deduction would still be part of the tax code—that way politicians can say they preserved it—but way fewer taxpayers would get to claim it. The House Blueprint would reduce the percentage of American taxpayers who take the charitable deduction from 25% (one out of four taxpayers) to 5% (one out of 20). For the remaining 5%, a 2% of adjusted gross income floor would apply. (In 2014, the charitable contributions deduction was claimed by 36.2 million households, according to the Tax Foundation.)
In the Hill, the Alliance for Charitable Reform's Marques Chavez says this plan could reduce giving by as much as $26 billion:
That is more than the combined operating budgets of the American Red Cross, Goodwill Industries International, YMCA of the USA, Habitat for Humanity, Boys and Girls Clubs of America, Catholic Charities USA, the American Cancer Society, United Way Worldwide and Feeding America.
The research is backed by public opinion. A vast majority of Americans support the charitable deduction as it currently stands and believe reducing or eliminating it would have a negative impact on charities and the people they serve. According to a poll in the Almanac of American Philanthropy, 79 percent of respondents said the charitable deduction should be protected; and 62 percent of respondents said capping the deduction would negatively affect their personal donations.
For 100 years, America has recognized the value of the charitable deduction, which has served as the bedrock of our altruistic society and is a model for the world. It is not a tax loophole, it is a lifeline for the millions of Americans who depend on the services provided by our nonprofit organizations.
Nonprofit leaders were on the Hill this week in an effort to stave off the change reports the Chronicle of Philanthropy. Meanwhile, Big Society Capital has research showing that pensions holders might save up to 30 percent more in they had an option for investing in social good.
In the Stanford Social Innovation Review, Monica Potts looks at the Obama administration's experiment with the office of social innovation:
It was an ambitious goal, and the office worked for eight years to find the best ways to influence the social services sector, and to start to change the way public dollars could serve people in need. Each of the office’s three directors had to push against the inertia of government bureaucracy, as well as skepticism within the nonprofit world toward changing the way that government would fund their efforts. Before Obama’s election, there had been wide bipartisan consensus on the kinds of programs that worked well—such as food stamps, which fed people effectively and pumped money into communities—and areas that could use reform—such as education. There had been a long history of bipartisan interest in using the White House to push for social services and engaging people in a sense of civic responsibility. Obama had finally taken up that bipartisan interest...
Though the future is uncertain, the ideas of the White House office have spread throughout the nonprofit world. Sonal Shah now works for a center at Georgetown University designed to promote the ideas of social innovation globally. Jonathan Greenblatt is the national director and CEO of the Anti-Defamation League. And Melody Barnes is chair of the Aspen Institute Forum for Community Solutions.
Losing the White House Office of Social Innovation and Civic Participation would represent a big setback, however. It has a platform that no other nonprofit could possibly have, and provided a way for the nonprofit sector to get government to listen.