(Your editor this week was inspired by the songs of Miss Carol King.)
It seems at least one U.S. television network was so inspired by the success of the Hunger Games movies that they decided it is a good idea to have a reality show that literally borrows from a really messed up episode of the Twilight Zone, reports Kali Holloway over at Raw Story. And who will be starring in this new show? You guessed it, poor people:
As if to prove there are new depths to be plumbed in the world of reality television (because who knew?), CBS just debuted The Briefcase, a show which takes poverty porn, class anxiety, emotional manipulation and exploitation and packages them all neatly into a pretty despicable hour of primetime television. Kicking off each episode with the question, “What would you do with $101,000?” the show then deep-dives into a competition that asks two unwitting, financially strapped families to choose between two no-win options: being financially solvent yet appearing heartless and greedy, or drowning in debt yet having audiences recognize them as selfless and giving.
CBS's decision to literally profit off impoverished Americans is more than just a story of corporate greed, but rather something tragically reflective of the times. Income inequality in the United States has soared in recent years, reaching levels not seen since 1928. Meanwhile, with living costs up and median household income now lower than in 1999, more and more people are struggling to get by. As a result, show like The Briefcase become painfully more relevant...
In the fiscal year 2014, CBS chief Les Moonves made in excess of $54 million, Vulture reported. In other words, he made more in a day than the entire amount each family is competing for. For him and other CBS executives to take American's economically vulnerable and force them into a bizarre cage match of faux-selflessness is just sick. Rather than gawking at poverty, CBS, and everyone else should be looking for ways to eliminate it.
Newt Gingrich and Van Jones joined together to protest the U.S. prison system in an op-ed in CNN, and argue that new incentives are needed at every step of the corrections system to reduce recidivism and break the poverty cycle:
We know that inmates who earn a GED while incarcerated are substantially less likely to return to prison. There are readily available online tools that our prisons could use extensively for a minimal cost to increase the number of inmates receiving valuable education and skills training.
Khan Academy has replicated virtually the entire K-12 curriculum online for free. Udacity and other online education sites offer introductions to software programming for free. Our prisons should be using tools such as these extensively. They offer the opportunity to interrupt the cycle of poverty, a failing education system, crime and incarceration.
At most prisons, however, inmates would never be allowed to spend eight hours a day working on educational courses and are instead forced to mill about their cells with little or nothing to occupy their time.
Over at Shelter Force, George Washington University's Gregory Squires looks at the dueling narratives around poverty and place, do we move people out of places of poverty or transform those places:
In progressive community development circles there is one group of organizations whose focus is on fighting gentrification, advocating for reinvestment in traditionally underserved neighborhoods recently discovered by many professionals and middle income families, and assisting long term residents in their efforts to remain in their neighborhoods. A second group focuses on fair housing (and fair lending) issues and advocates mobility policies to help racial minorities and poor people relocate to neighborhoods previously closed to them. These are not mutually exclusive policy agendas and, again, most of these organizations have sympathies for both. But they are growing apart in some ways...
To be clear, virtually all parties to this debate pay at least lip service to the need for both relocation and reinvestment. The challenge is whether agreement on such a dual agenda will become more than a throwaway line. To more concretely illustrate the emerging divide, the executive director of a civil rights research and advocacy organization recently told me that the Community Reinvestment Act (a federal law prohibiting redlining and encouraging mortgage lenders to serve traditionally underserved inner city neighborhoods) was the nation’s largest resegregation program since urban renewal. His concern was that the CRA may be creating more housing opportunities for low-income and minority families in central cities, but the objective should be to help these families move to higher opportunity neighborhoods.
Speaking of place, a new report from the National Low-Income Housing Coalition shows what kind of hourly wage it takes to rent a two-bedroom apartment around the country, reports CityLabs' Tanvi Misra:
Currently, an average American needs to earn $19.35 to afford rent on a two-bedroom unit. That’s a few dollars more than the $15.16 average hourly wage earned by the average American renters, and 2.5 times the federal minimum wage. It’s also more than the median hourly wage of the the average American worker, which is $17.09. For 13 states home to cities with skyrocketing rents—including California, Washington, New York, and Virginia—a person would have to earn well above $20 per hour to afford a two-bedroom place...
Expanding the nation’s affordable housing stock is one obvious solution. Raising the minimum wage, and fixing exploitative scheduling policies for part-time and full-time workers, are others. The National Low Income Housing Coalition report calculated that counties in Washington and Oregon, where state minimum wage is above $9, were the only ones where a worker earning that much could afford a one-bedroom apartment rent. For people earning a little more than $7 an hour, making rent for a one-bedroom place would take an average of 85 hours per week; for a two-bedroom, they’d have to work 102 hours per week.
It seems JP Morgan Chase's Jamie Dimon has had enough of proxy voting on the advice from Institutional Shareholder Services Inc. and Glass Lewis & Co., according to the Wall Street Journal, which puts in its own two cents:
[I]nstitutional investors should apply the same rigorous analysis to the proxy advisers that they apply to investments. For years ISS has graded the governance of public companies even as it sells to public companies advice on how to improve governance. ISS also offers management services for securities class-action lawsuits, touting its ability to “maximize recoveries” for plaintiffs. A firm in this line of work has a large incentive to identify governance failures at public companies.
Why should our readers care about this debate? Apparently when it comes down to it, this all about ESG practices, including CEO pay, reports Responsible Investor's Paul Hodgson:
Both the main proxy vote advisory services – Institutional Shareholder Services and Glass Lewis – had recommended investors vote against the Say on Pay resolution, prompting Dimon’s comments that shareholders blindly following such recommendations are just irresponsible. Criticism from both advisers centred on the lack of any preset performance metrics or targets to determine cash and equity incentives...
The myth that pension and mutual funds blindly vote with Glass Lewis and ISS is not borne out by any actual evidence. Both firms recommend ‘no’ votes on pay far more often than investors, as a group, actually vote ‘no’. This is because most leading funds not only listen to their proxy advisers but conduct internal reviews of pay policies against their own criteria, which sometimes align with those of their advisers and sometimes don’t.
You might also be interested in this CERES report on how institutional investors can "incorporate ESG considerations into their corporate interactions", with 37 experts spanning six countries giving real-life examples. There is also this report from Pacific Community Ventures on why impact measurement is important.
You know who else said enough this week? The New York Times' Malcolm Gladwell, who had kind of a Twitter meltdown because hedge fund billionaire John Paulson donated $400 million to Harvard. Here is your editor's favorite tweet:
Paulson to Harvard: is there a way to give back without actually giving anything back?
— Gladwell (@Gladwell) June 3, 2015
Speaking of donations, Inside Philanthropy's David Calllahan in a NYT op-ed looks at recent charity scandals and asks who is watching. He argues that "the charitable sector is a bit like the Wild West — by design," and says their is not enough transparency. Callahan lays out four main reforms:
"None of these reforms will make much difference without strong watchdogs to oversee philanthropy and nonprofits," he says. "It’s time to create a new federal bureau to police this sector, much as Britain has a national Charity Commission. State law enforcement officials must also do a better job of enforcing state-level laws."
Does it suck to be a big bank investor? The New York Times' Andrew Ross Sorkin reports on a string of banker suicides that seem more than a coincidence.
In nicer news, the Community Reinvestment Fund is getting a boost from Goldman Sachs to do small business finance, reports the Star Tribune:
CRF will help expand Goldman's 10,000 Small Businesses loan program in underserved urban areas. The loans will target businesses that have at least two years’ experience, more than $150,000 in revenue and at least two employees. CRF serves a disproportionately high number of female- and minority-headed businesses in struggling neighborhoods, such as veteran businesswoman Gloria Freeman’s $1.2 million purchase-and-renovation of a long-shuttered north Minneapolis charter school into Olu’s Center, a day care for toddlers as well as seniors that will employ 25 people at $11 to $25 per hour plus benefits...
CRF is a U.S. Treasury-certified Community Financial Development Institution that is authorized to make U.S. Small Business Administration loans that target capital-poor communities. Last year it originated $43 million in SBA “7A” business loans
In even better news, this CEO plans to pay the college tuition of all the kids of his employees, reports the Washington Post:
About a month ago, co-founder and CEO Chieh Huang said he would set aside a double-digit percentage of his personal stake in the company to pay for it. "I actually don't think of it as a perk," he said in an interview, noting that the benefit will be funded by his own money rather than company funds, as well as investors whom he's asked to contribute. "I tell them I love that you're investing in me and us, but you have to value the employees as much as me." Perk or not, what Huang is doing is certainly generous. The program covers four years of tuition (not room and board, say, or books). He says it is designed to help employees who chose to work at Boxed before the company goes public.
News.Mic notes this is "the latest in a trend of cool bosses giving back to their employees":
The generosity from employers comes as more and more Americans continue to struggle to finance their daily lives. In the U.S., real median household income has been declining since 1999, even as the cost of living has continued to rise. The sobering numbers have contributed to the worst levels of income inequality in the country since 1928. The U.S. middle class has become so battered, presidential candidates now openly fear even mentioning it on the campaign trail.
Forbes reports that Chrysler Fiat is also testing a program for free college tuition for employees of its dealers in the Southeast in partnership with Strayer University.