We will start with this investigative journalism piece from Mother Jones Magazine, which sent a reporter acting as a guard into a prison run by Corrections Corporation of America so he could experience the nightmarish conditions. His two-week paycheck for prison guard duty was just $587 and compensation for the prisoners is far less:
Officially, inmates are only allowed to keep money in special prison-operated accounts that can be used at the canteen. In these accounts, prisoners with jobs receive their wages, which may be as little as 2 cents an hour for a dishwasher and as much as 20 cents for a sewing-machine operator at Winn's garment factory. Their families can also deposit money in the accounts.
In 2014, Heron divested itself of this company, check out some statistics on this very large real estate investment trust:
In USAToday, the University of Washington's Alexes Harrington says we need to stop criminalizing poverty by requiring fines in addition to jail time:
As a result of mass conviction and incarceration over the past 20 years, the U.S. is increasingly turning to law violators to pay beyond their sentences. This money funds not only our justice system, but also non-justice related functions like supporting publicly financed political campaigns.
Those who are poor and unable to fully pay their court bill are then charged 12% interest (a staggering rate akin to those charged by payday lenders), a $100 annual collections surcharge and even per-payment “convenience” fees. These practices leave many saddled with debt and often unable to piece their lives back together, long after they have served their time.
Adult felony defendants in Washington state, for example, are routinely charged $600 for a conviction ($500 for a penalty assessment and, in many circumstances, another $100 for a DNA extraction). Additional discretionary fees, including $450 for the use of a public defender and $200 for court costs, mean that defendants statewide can be charged on average $1,000 per felony conviction in addition to other sentences such as jail, community service and supervision.
There's a lot more chatter about Speaker Ryan's plan to tackle poverty so let's have another point/counterpoint on the issue. In the new conservative blog Opportunity Lives, editor Kara McKee discusses why it is time to reform welfare programs:
[A] person who receives food stamps every month, copayment-free health insurance via Medicaid and a housing voucher could still be classified as having almost no income (and thus being among the most desperately poor in our society) because the poverty measure looks only at how much work income or cash aid they get...
It’s time for leaders on both sides of the aisle to drop disputes on definitional differences and admit the following: first, that our antipoverty efforts have “won” in the sense that they’ve improved living standards for our society’s poorest. But second, that we’ve utterly failed to enable and empower individuals and families to transition over time from reliance on government aid to self-sufficiency — and that if we truly care about helping the poor, we’ll work to address the mobility crisis as soon as we possibly can.
At the TalkPoverty blog, Rebecca Vallas takes issue with conservatives who think our safety net programs is too generous:
Most observers view the austere federal poverty line as an inadequate measure of hardship. Experts say a family of four needs an annual income of $50,000 to achieve an adequate but basic standard of living—more than twice the poverty line for a family of four, which is a measly $24,000.
By that measure, the number of people in this country struggling to make ends meet far exceeds the 47 million Americans with incomes below the poverty line; it amounts to nearly 1 in 3 Americans—more than 105 million people—living on the economic brink today...It is clear that after decades of growing income inequality, economic hardship can hardly be described as an “us and them” phenomenon. With working families facing flat and declining wages and gains from economic growth increasingly concentrated in the hands of the wealthy, economic instability is now a widespread experience.
Rector’s comments on Washington Journal made clear his proposed solution: just deny the existence of poverty and hardship in America. If poor families are actually doing just fine—they have refrigerators and microwaves, after all—then not only does that free up policymakers to slash aid programs, it also removes any need to boost wages or enact any other policies that would cut poverty and make it easier to get ahead.
The Brookings' Alan Berube looks at a recent White House report that finds that the labor force participation of men age 25-54 has dropped from 98 percent in 1954 to 88 percent currently. The report also looks at the geographic break-down:
There are clear regional patterns to this important statistic. Many of the metro areas with the highest employment rates for prime-age men are smaller places located in the middle of the country, from the Upper Midwest, to energy-rich areas in Texas and the Plains states, to the Intermountain West. In several large, economically dynamic metro areas such as Denver, Houston, Minneapolis, San Jose, and Washington, D.C., rates of work among prime-age men are also very high.
You know where banking seems to be thriving? The restructuring market for struggling companies, ckeck out this chart from Bloomberg:
The Vatican is hosting its second impact investing conference focused on inequality, reports Stephen Foley and Adam Samson in the Financial Times:
When the Vatican assembles investors, entrepreneurs and academics for its second Impact Investing Conference later this month, it will do so as the mainstream wealth management industry has started to catch on to the term. Impact investments are made with the aim of generating not just a financial return but also a measurable social or environmental one. It is an alluring — if often elusive — proposition: doing good while also making money.
Pope Francis has made it a theme of his papacy that capital markets should be redirected to help the poor, and the conference will explore how the Catholic Church might channel some of its riches to impact investing. Wealth managers are perhaps more concerned with mammon than with God: they have watched as some very rich clients pulled their money from firms who cannot offer impact investing advice.
In the Stanford Social Innovation Review, we have a debate over nonprofit overhead costs and whether funders should be "paying what it takes". Here is what folks from the Bridgespan group had to say on the issue:
We discovered that indirect costs make up a much larger percentage of a nonprofit’s total costs than is widely understood. Of the nonprofits we surveyed, indirect costs made up between 21 percent and 89 percent of total costs. The median indirect cost rate for all 20 nonprofits was 40 percent, nearly three times the 15 percent overhead rate that most foundations provide. To be clear: Higher or lower is neither better nor worse. These figures are not measures of either effectiveness or efficiency. Rather, they reflect the mix of direct and indirect costs required to deliver impact.
In the Chronicle of Philanthropy, Manoj Bhargava argues funders should listen more closely to the needs of the people they serve:
In my experience, many philanthropists today are not thinking through what people really need. We make assumptions based on what we believe or "know" to be true; we make promises and give away billions of dollars with the best of intentions. But intentions don’t win the game. No amount of money is going to make a difference if it’s not spent in ways that directly meet the needs of the people we’re serving.
Before doing anything, we need to understand something about what we’re doing. If we rush in and haven’t thought through the roots of the problems we want to solve, or the ripple effects of our actions, we inevitably will do the wrong things.
The United States and other wealthy nations, for instance, have aid programs that import food to developing countries at very low or no cost. The result in some places has been the complete collapse of agricultural economies and local markets, because no farmer can compete against free. These programs, which were meant to help the poor, have ended up driving even more people into poverty.
Meanwhile, the Foundation Center's Brad Smith looks at what new machine-readable 990 tax returns will mean for the nonprofit sector:
...Work will shift away from the mechanics of capturing and processing the data to higher level analysis and visualization to stimulate the generation and sharing of new insights and knowledge. This will fuel greater collaboration between peer organizations, innovation, the merging of previous disparate bodies of data, better philanthropy, and a stronger social sector.
The (Potentially) Bad
...The negative potential could be two-fold. Funders will inevitably be intrigued by the start-ups, their genius and their newness and divert funding towards them. Foundations are free to take risks and that is one of their virtues. But while needs grow, funding for the data and information infrastructure of philanthropy is limited, technology literacy among foundations relatively low, and many of these start-ups will prove to be shooting stars (anybody remember Jumo?)...
Once the 990 data is "in the wild," it is possible if not probable, conclusions will be drawn that foundations find uncomfortable if not unfair. Those who are new to the field and relatively uninformed (or uninterested) in its complexity, may make claims about executive compensation based on comparisons of foundations of wildly disparate size and scope.
The same could be done with overhead rates, payout, or any other figure or calculation that can be made based on information found in the 990-PF.
This report from the Center for American Progress surveyed the wage and benefit practices of major retailers that have recently announced an intention to raise their workers' wages:
The retail companies’ moves to raise wages hardly have been acts of charity. The companies have framed their decisions as prudent business moves that would benefit their workers, customers, and businesses overall, reasoning that happier, more financially secure workers would reduce employee turnover and improve customers’ experiences. In announcing his company’s decision to raise wages for the second time in two years, Ikea U.S. President Lars Petersson said, “This latest wage increase is just the most recent in a series of investments grounded in our commitment to have a positive impact on our co-workers (sic) lives.” Too often, retailers see raising wages and maintaining profitability as an either/or choice rather than as two sides of the same coin. In fact, research indicates that investing in employees and offering good wages and benefits can improve retailers’ performance. Although wage growth in the broader economy has remained flat over the long term, very recently, employers have been boosting wages to attract more prospective workers to open jobs at their firms. With more jobs available following the recovery from the recession, workers can be more selective and seek jobs that offer better wages.
In the Nation Magazine, we have a stark look from Mark Bentacourt on what it looks like to die without insurance in the United States:
Some 28 million people in the United States do not have health insurance, and for the dying and their families, lack of insurance is devastating. Though the care needs that arise with terminal illness are simple, they are often prohibitively difficult to meet without insurance. The uninsured and their families are left to navigate public and charity end-of-life care options that vary widely across the country, if they are available at all. There are no data on how or where the uninsured access this care, and the scope of unmet need is virtually unknown. What is known is that, at the end of their lives, many uninsured people quite literally cannot afford to die with dignity...
For safety-net providers, expanding access to hospice is not a simple question of funding the service itself. Though outpatient hospice services cost on average 15 times less than treating the dying in a hospital—between $100 and $200 per day for hospice versus close to $3,000 per day in a Texas public hospital—offering hospice through public systems like Harris Health would actually increase the overall cost to those systems. Public hospitals tend to have far more demand for care than they can meet, so a bed vacated by a patient transferring to hospice will immediately be filled, and the hospice patient’s care will amount to a new expenditure.
What does your area look like when it comes to inequality? Check out this infographic from the Economic Policy Institute. Earlier this month in the Washington Post, Jim Tankersley interviewed EPI's Joshua Bivens on why inequality might be harmful for our wallets.