The Economy's Poor Bricks and Mortar
Be sure to check out Politico's package on water infrastructure and rights in the United States, and why poverty plays a significant role. In this piece, Patricia Leigh Brown discusses California's new rule on a "human right to water" and what it could mean for one impoverished community:
Like hundreds of unincorporated communities nationally, the Tract has been “mapped out of democracy,” in Anderson’s words. Residents under county jurisdiction don’t vote in city elections; they don’t receive municipal services, and their low property tax base contributes to their being overlooked. Many of these communities lie just beyond, and some within, the boundaries of cities that are happy to provide safe drinking water to brand new subdivisions—even ones outside their jurisdiction that they plan to annex—while ignoring impoverished areas in their midst.
There's a way to boost the U.S. economy, says Tim Fernholz of Quartz, and it's as easy as investing in the fundamentals:
If you’re confused about why American economic growth has been so disappointing, consider this: US government investment in capital, research and development, and education and training is at its lowest point in 45 years. In 2014, federal investment turned negative for the first time since 2001, meaning that government capital is depreciating or becoming obsolete faster than it is being replaced.
Over at Policy Map, Morgan Robinson explores where people deeply entrenched in poverty live in the United States:
In Boston, the Walsh administration has announced a $75 million investment to help landlords buy apartments, as long as they remain affordable to tenants. Over at CityLab Tanvi Misra reports that as demand for rental apartments increases, hourly wages will have to work to keep up:
To really understand the weight of 2016’s housing wage, consider this: The average hourly wage for Americans is actually $15.42 per the report, which is not nearly enough to afford a two-bedroom. And the federal minimum wage, at $7.25, is around a third of what’s required. That means minimum-wage workers would have to work three jobs, or 112 hours a week, to be able to afford a decent two-bedroom accommodation.
In Vox, Alvin Chang juxtaposes stark income inequality with cartoons that illustrate the income division in the United States over the past 50 years. Speaking of income inequality, in Quartz, Oliver Staley says the average CEO pay raise last year was ten times the pay of the average U.S. worker. In the Washington Post Ylan Q. Mui reviews the data behind this Atlantic piece that says 46 percent of Americans can't cover a $400 expense.
Surprise—McDonald's CEO Steve Easterbrook credits its sales increase for the third consecutive quarter to better employee benefits and higher wages at the 10 percent of stores owned by the company, which led to lower crew turnover and higher higher customer satisfaction scores, reports Fortune's Phil Wahba. (A year ago Wahba was reporting on the company's fears that higher wages and benefits would squeeze margins.) However Easterbrook's predecessor Ed Rensi, writing in Forbes, remains unconvinced that the $15 minimum being sought by workers is workable at franchises without losing jobs.
Speaking of jobs, in the Wall Street Journal Jeffrey Sparshott reports that foreign-born workers now account for 17 percent of the total labor force. And the National Foundation for American Policy found "that immigrants started more than half of the current crop of U.S.-based startups valued at $1 billion or more."
Please be sure to watch this poetic commencement speech from Donovan Livingston, who graduated from the Harvard Graduate School of Education:
So a child can see their potential from right where they stand.
An injustice is telling them they are stars
Without acknowledging night that surrounds them.
Injustice is telling them education is the key
While you continue to change the locks.
Education is no equalizer —
Rather, it is the sleep that precedes the American Dream.
So wake up — wake up! Lift your voices
Until you’ve patched every hole in a child’s broken sky.
You might be interested in this our post on this Economic Policy Insitute report arguing that investing in early childhood education would not only usher immeasurable benefits for families, but also society and the economy as a whole. The Atlantic's Ronald Brownstein tackles educational inequality, noting that students of color became the majority in public schools nationwide for the first time in 2014:
Even with undeniable gains since 2000, the racial disparities in educational outcomes remain imposing. While 87 percent of white students, for instance, graduate from high school on time, that number falls to 76 percent for Hispanics, and 73 percent among African Americans. And although white, African American and Hispanic students are now about equally likely to start college immediately after completing high school, black and brown students remain much less likely to complete a BA within six years. That disparity hints at the large enduring difference in the quality of the K-12 preparation many minority students are receiving.
As the class of 2016 departs from their college dorm rooms, let's look at the reality they're about to face. Over at the Pew Research Center, Richard Fry reports for the first time in 130 years living with your parents has become the most popular living arrangement for adults between 18 and 34. Meanwhile, Fast Company's Lydia Dishman says recent grads have a passionate but pragmatic approach in their job hunt.
If you plan on buying a house, Kriston Capps over at the Atlantic says it's getting more likely you'll need a degree to do it:
In 1990, the difference in homeownership rates between people without a high-school diploma and people with a bachelor’s degree or higher was 15 percentage points. “Having an education helped,” Fleming says. But now things are different: The gap between those two groups in 2015 was 28 percentage points.
A 2014 report from the Pew Research Center helps to explain this gap. The median monthly earnings for a young adult with a bachelor’s degree grew 13 percent between 1984 and 2009. Households with a master’s degree also saw their incomes rise. But those without a college degree—meaning people with an associate’s degree, a high-school diploma, or no diploma—saw their median monthly earnings decline between 1984 and 2009.
There will soon be a surplus of jobs that require education beyond high school in Colorado and not enough Coloradans to fill them, says Emily Deruy in the Atlantic, examining the "Colorado Paradox" of a state that attracts educated workers from outside, but struggles to educate those raised there.
Over at Rutgers University, admissions officers are actively recruiting students other colleges deem "at risk" with some remarkable results. Last year the city Chattanooga, Tennessee also decided to lend a helping hand to its residents by supplying discounted internet to families of students who are currently receiving free or discounted lunches. And the New York Times takes a look at the relationship some young people in Appalachia have with e-cigarettes and how they are provinding a bit of solace to those without many economic prospects.
Let's have a cartoon:
In the Atlantic, Debby Bielak and Devin Murphy argue a $1 billion investment in social mobility initiatives could garner a 300 percent return on investment:
Betting big on the American Dream has been tried before: Since the mid-1960s, public and private institutions have invested billions of dollars to create economic opportunity for every American. Remember the War on Poverty and No Child Left Behind? And yet, the data show the United States is far from achieving equal economic opportunity for all. Recently, a team at the Bridgespan Group examined ways of investing in the American Dream again. Recognizing the merely incremental effects of past efforts, they still wondered: Could placing the right bets at the right size move the needle on poverty? Bridgespan then set out to identify opportunities where $1 billion of targeted private funding would have the best chance of making a measurable difference.
They began with a deep dive into the vast body of research on what it would take to create equal economic opportunity for low-income Americans. Working closely with an advisory board of national leaders, and after conducting scores of interviews with experts from various fields, Bridgespan then identified 15 investments, or bets, where $1 billion of philanthropic capital could rekindle upward mobility for large numbers of people currently trapped at the bottom of the income ladder.
In the Stanford Social Innovation Review, Benetech's Jim Fruchterman confronts the growing urgency of the need for data in driving investments made by nonprofits and social businesses:
Donors, impact investors, government agencies, and other funders are entirely justified in wanting to know that their resources are being used well and are making an impact. Many funders, however, are demanding evidence of impact without being willing to invest in the costly and time-consuming work of gathering that evidence. If the social sector is going to benefit from the digital data revolution, funders will have to pay for it. For this shift to become reality, investments in improving measurement need to be seen as essential program costs. And that will require a mindset shift.
Meanwhile Denielle Sachs and Ari Ratner over at BMW Magazine (yes, that BMW) explore what it would be like if companies were global citizens:
Companies today, especially the large incumbents, are at the front line of the defining challenges of the next century. Whether or not they choose to accept it, they are already playing a disproportionate role in shaping the world we live in. The incomes of the largest 200 multinationals are equal to approximately a third of global GDP.
...The 21st century has seen the rise of the “corporate citizen”, signaling a move away from Milton Friedman’s famous adage that “the only social responsibility of business is to increase its profits”. We are witnessing a shift in corporate behavior, with companies moving along a spectrum of social responsibility – from those who have built “side-car” philanthropy and grant-making programmes to those wrestling with questions about fundamental business changes that could shift entire industries. We are also seeing the rise of hybrid business models that blend traditional capitalism with products and services that address the long-term needs of our planet, as well as a whole new category of institutional leaders with job titles like Chief Sustainability Officer or “Green Enabling Officer”.
You may enjoy this piece by Omidyar's Paula Goldman in the Harvard Business Review on how a new generation of business leaders are inciting revolution in philanthropy where business and investing in corporate social impact as part of long-term value creation.
Deirdre Hess, Inna Karamyan, and Toni Johnson contributed to this report.