Must Reads: The Center for American Progress' Rebecca Vallas discusses the use of legal services as part of an anti-poverty strategy. You also might be interested in this New York Times article on hedge fund founder Geoffrey P. Raynor who has offered students in a philanthropy class in Northwestern the chance to grant $50,000 provided they investigate nonprofits before giving to “fit candidates.” In New Republic, John Judis looks at why the mainstreet rose in backlash to the financial crisis but couldn't make a movement stick and what it means for inequality. Has New Orleans become an all charter school district? Lyndsey Layton reports in the Washington Post on what's going with Nola's education policy.
The jobless rate is down 1.2 percentage points from a year earlier, typically a sign of an improving labor market. But the growth in jobs is not keeping up with the population gains. And at least part of the decline in the jobless rate is due to some Americans giving up looking for work. A broader measure of unemployment that includes those working in part-time positions but who would prefer full-time jobs was 12.2% in May. Full-time jobs, rather than part-time work, often give households the confidence needed to buy houses and increase spending.
Similarly over at the Fiscal Times, Yuval Rosenberg says we have a long way to achieve full recovery:
So we've reached a milestone of sorts in the recovery, but there's still a long way to go before the labor market looks genuinely healthy. Some 10.5 million Americans are still out of work, including 3.7 million who have been unemployed for longer than six months. The unemployment rate, at 6.7 percent, is two full percentage points above where it was before the recession. Factoring in the loss of government jobs, the labor market is still more than 300,000 jobs shy of where it had been in November 2007. And the private sector rebound doesn't look like much of a milestone when you consider that businesses have now added 110,000 workers in just over six years. Recovery!
Meanwhile over at the FiveThirtyEight blog, Ben Casselman says cutting off unemployment benefit extensions hasn't done anything to help people get back to work:
The case against extending unemployment benefits essentially boils down to two arguments. First, the economy has improved, so the unemployed should no longer need extra time to find a new job. Second, extended benefits could lead job seekers either to not search as hard or to become choosier about the kind of job they will accept, ultimately delaying their return to the workforce.2 But the evidence doesn’t support either of those arguments. The economy has indeed improved, but not for the long-term unemployed, whose odds of finding a job are barely higher today than when the recession ended nearly five years ago. And the end of extended benefits hasn’t spurred the unemployed back to work; if anything, it has pushed them out of the labor force altogether.
Over at Slate, Reihan Salam looks at whether Mayor DeBalsio's plan to ease work requirements for welfare recipients is "a mistake" drawing from the meme of who is deserving amongst the poor:
Drawing welfare recipients into the workforce was seen as the best way to get them on the ladder to upward mobility. Despite massive shifts in the economy that have been particularly hard on less-skilled adults, work requirements have by and large been a success. Meanwhile, experiments conducted in the 1960s and 1970s by the federal government found that a no-strings-attached basic income reduced work effort and encouraged marital breakup. Given what we’ve learned about the consequences of family breakdown for children, and particularly for male children, in the years since, this is nothing to scoff at. Moreover, whatever their practical effects, work requirements are central to the moral legitimacy of poverty-fighting efforts in the United States...While most Americans accept the idea that we as a society have a shared responsibility for the well-being of the poor, they also differentiate between those who deserve help and those who don’t. Those who deserve help are those who make an effort to support themselves and their families to the extent they can.
You might be interested in this Forbes piece looking at 16 decent paying jobs that don't require a college degree. And also this novel idea from Britain on cutting the work week to 21 hours to address unemployment (though it dodges pesky solutions to the associated costs of dividing a job up for essentially two workers).
This chart-filled report from the Economic Policy Institute discusses wage stagnation among hourly workers, and argues that "boosting living standards, and alleviating poverty will be extraordinarily difficult without addressing wage growth." Check out this chart:
(The Pioneers Post reports on the minimum wage debate going on in the UK that might be of interest to you.) Has Whole Foods joined the ranks of McDonald's and Walmart in ever growing clash between labor management? Check out this story from Chris Lehman over at In These Times about alleged "union busting" in America's leading grocery chain. (You also might check out this more in-depth MotherJones article by Josh Harkinson from earlier this year on Starbucks and Whole Foods and the right to organize.) In other news McDonald's CEO Don Thompson has come up out in support of raising the minimum wage, just go slow so you don't hurt franchisees reports the Huffington Post:
"You know, our franchisees look at me when I say this and they start to worry: 'Don, don't you say it. Don't you say we support $10.10,'" Thompson said during a little-noticed talk at Northwestern University's Kellogg School of Management last month, according to a Chicago Tribune report. "I will tell you we will support legislation that moves forward." Thompson, who made $9.5 million last year, has been on the defensive about worker pay since at least last July, when the news media discovered McDonald's had a financial-advice website for its employees (no longer available) recommending they get second jobs and not turn on their heat.
Business Week's Peter Coy maps minimum wages as a percentage of the median wage by state:
What’s the right minimum wage? A minimum of $100 an hour would be crazy high, while a penny an hour would simply be irrelevant because no one makes that little. Somewhere in between is the right number. The question is how states can pick a minimum that’s high enough to benefit low-wage workers but not so high that less-skilled workers aren’t worth it and get laid off. This map displays a crucial measure that’s too often overlooked by both supporters and critics of higher minimum wages: the ratio of each state’s minimum wage to the median wage in that state. The median wage is the one that splits the workforce evenly, with half getting paid more and half less.
Meanwhile, the Gothamist blog chose five workers illustrate the impact of the October union deal at Resorts World Casino that nearly doubled their pay to about $20 per hour. In this piece in the New York Times, Tony Schwartz and Christine Porath say worker misery should be addressed at all levels of the workforce if companies really want to improve their bottom line:
In a 2012 meta-analysis of 263 research studies across 192 companies, Gallup found that companies in the top quartile for engaged employees, compared with the bottom quartile, had 22 percent higher profitability, 10 percent higher customer ratings, 28 percent less theft and 48 percent fewer safety incidents...How to explain this odd disconnect?
The most obvious answer is that systematically investing in employees, beyond paying them a salary, didn’t seem necessary until recently. So long as employees were able to meet work demands, employers were under no pressure to address their more complex needs. Increasingly, however, employers are recognizing that the relentless stress of increased demand — caused in large part by digital technology — simply must be addressed...
In a numbers-driven world, the most compelling argument for change is the growing evidence that meeting the needs of employees fuels their productivity, loyalty, and performance.
Your editor has enjoyed the Story of Stuff video series so here is one on the Story on Solutions, which deals with changing what we measure to actually create social change: http://youtu.be/cpkRvc-sOKk ClearlySo's Claire Braithwaite in the Pioneers Post uses Dr. Seuss to make a point about impact investing:
“The Lorax” is a classic parody of corporate greed and tells the tale we are all too familiar with of corporates driving the destruction of the planet in their blinkered pursuit of profits. This ambivalence towards impact is what has turned corporates into the enemy and made profit a dirty word. And we have all been complicit in this ambivalence on some level. From investors to service providers to consumers, we have collectively constructed a world where purpose and impact largely exist outside of the day to day choices we make. We take jobs for the money rather than a deeper sense of purpose or passion for the impact we are making. We buy products because they’re cheap or satisfy our materialistic desires and ignore what negative impacts their creation generated. We put our pensions into funds that invest in companies that are destroying our environment. We fool ourselves it doesn’t really matter. The time has arrived for a collective realignment where we all embrace, rather than ignore, purpose and impact. It’s time to acknowledge that all companies make a social impact; sometimes bad, sometimes good and to start to bring intention and awareness to those impacts. To start to act like it matters.
The Rockefeller Foundation's Judith Rodin and Margot Brandenburg look at movement on metrics for impact investing:
Of course, as anyone familiar with the investment and finance sector knows, measuring returns is a complex business. It took decades for the traditional financial sector to develop robust ratings and reporting systems, and even then, there remains room for improvement. Add in the assessment of social and environmental returns, and the complexities increase dramatically. While it’s one thing to count the dollars, another is to put hard numbers on the returns to society of improved health care or the value of a healthy tropical forest... The good news is that much work is being done on developing the kinds of systems needed to help you — as an investor — gain a clearer picture of how your money is being put to work and the impact it is making. In addition, certification and legal systems have emerged that make it easier to identify the investments likely to make and sustain the kind of impact you’re looking for. At the same time, policy makers are introducing measures (whether by offering investors tax incentives or financing the development of an ecosystem of investment fund managers and other intermediaries) that will help attract more people and organizations to impact investing by fostering the growth of robust market infrastructure.
You also might be interested in this article from Liz Skinner on the growing interest in impact investing. Chris Page and David Porteous in the Standford Social Innovation Review tackle financial exclusion and discuss "sustainable banking solutions" for low-income consumers in the United States and abroad.
Brainy Bits The Center for American Progress' Michael Madowitz in this report looks what we learned from the austerity vs. stimulus debate. This report from the Manhattan Institute takes a "fact or fiction" approach to the inequality debate in this new white paper. And over at the Roosevelt Institute Joseph Stiglitz offers a new white paper on that "can restore equitable and sustainable economic growth" and boost jobs in the United States. Click here for more issues of “In Case You Missed It”, our weekly news digest featuring the best thinking on the economy, poverty, inequality and investing, or subscribe to the email.