This week the Washington Post's Jim Tankersley is back with news that the wealthy have fully recovered from the recession; the poor, meanwhile, are even further behind:
Americans who live in poverty, or even at the lower end of the middle class, have never had much wealth. They don't tend to play the stock market much, or even own their own houses. From 1989 to 2007, the average family in the bottom 25 percent of the wealth distribution found itself with around $1,000 in debt. After the recession that average debt ballooned to $13,000 per family...More than half of the homeowners at that bottom end of the wealth distribution were underwater on their mortgages in 2013, the CBO reported, meaning they owe more than their homes are worth. That's up from 10 percent underwater before the recession.
Speaking of homeowners, also in the Washington Post this month Charles Lane argued that the decline in ownership is a good thing:
Thanks to recovering real estate values, today’s homeowners as a group have the same equity in their property — roughly 58 percent — that the record-size cohort did back in late 2004, according to the Federal Reserve. Ergo, there’s now more equity, on a per- household basis; current homeowners’ tenure is that much more sustainable and secure...To put it another way: The United States actually has more homeownership, in economic terms, than it did when the homeownership rate, a measure of mere legal ownership, was higher. Accordingly, the economy should also be less vulnerable to another real estate shock.
Over at Shelter Force blog Rooflines, Doug Ryan offers an irate response to the dismissal Lane seems to make on inequality:
Lane asserts that all this loss of wealth is a positive, even though it impacted low-, moderate- income, and new buyers disproportionately. He frames it as a “re-concentration of home equity,” an astonishing statement in an age of striking inequality. Essentially, lots of low-income, low-wealth people lost their homes, leaving the remaining, better-off homeowners with more equity. Is this good public policy?..
Let’s face it, the too-often sordid history of mortgage lending in the U.S., from redlining to predatory loans, limited the prospects of far too many potential owners, raised costs on others, and simply set many up to fail. Much of the good old years Lane and others remember are too poisoned with discrimination and its legacies to be reasonable or wise benchmarks. Moreover, there are clear links between segregation and predatory lending, which can combine to depress home values and strip wealth from homes and communities.
In TalkPoverty, Angela Pupino discusses suburban poverty and why it remains largely invisible:
Even as the numbers of suburban poor climb, awareness of their existence is minimal. The suburbs still conjure images straight from a 1950s sitcom, complete with soccer moms, family dinners around a table, and perfectly manicured lawns. And while these things still exist in the suburbs, it is shockingly easy to ignore the rising tide of poverty there.
The suburban poor themselves may help to exacerbate to these stereotypes by hiding behind them. Looking presentable and fitting in are made easier by hand-me-downs and thrift stores that sell nice clothes for cheap. Poor suburban children may be able to attend highly-rated suburban schools alongside the children of affluent families, their classmates and teachers none the wiser. And once proud middle-class citizens, now unable to pay for rent or food, may struggle with guilt or shame and opt not to share their stories or even seek out help.
Also in the Washington Post, the Manhattan Institute's Scott Winship and Center on Budget and Policy Priorities' Jared Bernstein had dueling op-eds on inequality. Winship offered this:
In truth, nothing helps the poor and middle class like economic growth, and that is best pursued by policy reforms that ignore inequality. To promote growth, the next president should abolish corporate taxes and reform individual taxes to keep the overall burden of taxation the same across poor, middle-class and rich Americans. She should promote state and local reform of occupational licensing and land-use regulation. She should reform entitlements, including Obamacare, and reorient immigration policy in favor of admitting more higher-skilled and less lower-skilled immigrants. She should pursue a deregulatory agenda and nominate economists to the Federal Reserve Board of Governors who favor nominal GDP targeting, which prioritizes achieving desired growth rates over inflation targets and would tend to allow more wage growth.
Bernstein countered with this:
Inequality is high because the mechanisms meant to ensure that growth is broadly shared have either eroded or were never sufficiently in place. These include labor unions — which have fallen from around 30 percent of the workforce following World War II to 11 percent today — and labor standards such as minimum wages and overtime protections. They include a commitment to full employment in the job market, which historically gives workers increased power at the negotiating table— we were at full employment about 70 percent of the time between 1949 and 1979, but have only been there about 30 percent of the time since. And they include measures to combat systemic, race-based discrimination in our schools, job markets, voting systems and more.
In the New York Times, a glimpse of what post-coal communities in Appalachia are doing to forge a new economic path, from IT services to growing hemp to retrofitting homes for energy efficiency. Still, there are tensions as the old clashes with the new, reports Sheryl Gay Stolberg:
On a bright Monday in June, SOAR held its third Innovation Summit here. It looked like a convention of tree-huggers and suits. Lunch was served outside while a bluegrass band played. There were two sandwich options: pulled pork and vegan wraps.
Old coal country tensions flared. While [Congressman Hal Rogers] was speaking, Ada and Herb Smith helped unfurl a banner opposing the construction of a $444 million prison. Mr. Rogers says it will bring 300 jobs, but Mr. Smith calls it “the wrong answer to the region’s economic problems.”
Let's have a cartoon:
This week the Justice Department announced that it would not renew contracts with two of the largest for-profit prisons in the nation on the heels of an inspector general report that found "privately operated facilities incurred more safety and security incidents than those run by the federal Bureau of Prisons:"
Disturbances in the facilities, the report said, led in recent years to “extensive property damage, bodily injury, and the death of a Correctional Officer.” The report listed several examples of mayhem at private facilities, including a May 2012 riot at the Adams County Correctional Center in Mississippi in which 20 people were injured and a correctional officer killed. That incident, according to the report, involved 250 inmates who were upset about low-quality food and medical care.
Earlier this year, the Nation reported on inmate deaths at immigrant-only detention facilities, finding that they mostly staffed with under-qualified and over-worked nurses:
The training for LVNs (known as licensed practical nurses, or LPNs, in some states) takes only a year. They are taught to change dressings, check blood pressure, help patients bathe, and gather basic information. They’re often hired to provide routine care in nursing homes or to assist registered nurses in hospitals. Unlike the RNs, who provide patients with substantive medical care and perform triage and evaluations, LVNs are intended as support staff.
This is the reason that BOP-run prisons rarely hire LVNs, said Sandy Parr, a vice president in the federal correctional officers’ union and formerly a registered nurse in a federal prison. “LVNs are too limited to make sense to hire,” she said. Yet in the BOP’s immigrant-only contract prisons, LVNs often appear in the files as the sole caregivers that sick prisoners see for days or weeks. They seem to perform jobs equivalent to those of registered nurses, a practice that prison medical staff confirm.
The difference in pay between the two types of nurses is an average of about $20,000. The move tanked prison stocks but the industry still has plenty of economic muscle and isn't likely to be going anywhere anytime soon, according to Alexander Kaufman in the Huffington Post:
Over the past decade, immigration detention has become the industry’s cash cow. State contracts remain a lucrative revenue stream, too. Plus, as talk of prison reform gained steam over the past two years, the only three companies ― two public, one private ― under contract from the Federal Bureau of Prisons began diversifying their services to include halfway houses and electronic GPS monitoring.
Meanwhile in other good news, the Koch Industries have banned the check box on former incarcerations from their hiring forms. Mark Holden in the WSJ explains their reasoning:
We believe that banning the box makes sense from a business perspective. The Federal Bureau of Investigation estimates some 77.7 million Americans, or nearly one in three adults, have some type of criminal record. For employers seeking the best talent, it makes sense for a company to consider all factors, including any prior criminal record, in the context of a candidate’s other life experiences. We are in a global competition for the best talent period—not the best talent with or without a record.
While we support policies that ban the box for public-sector employers, we understand that a ban-the-box policy may not work for every private business. That is why we oppose legislative attempts—at the local, state or federal level—to mandate that this policy be adopted by the private sector. But we nonetheless urge companies to consider whether this policy works for them.
You know what isn't good news? The number of women jailed is now outpacing men, reports Timothy Williams in the New York Times—and unsurprisingly, most of those women are poor:
[T]he Vera Institute of Justice and a program called the Safety and Justice Challenge released a report that found that the number of women in local jails in the United States was almost 14 times what it was in the 1970s, a far higher growth rate than for men, although there remain far fewer women than men in jails and prisons.
The study found that the number of women held in the nation’s 3,200 municipal and county jails for misdemeanor crimes or who are awaiting trial or sentencing had increased significantly — to about 110,000 in 2014 from fewer than 8,000 in 1970... The counties with the highest rates of jailed women are nearly all rural and include Nevada County, Calif.; Floyd County, Ga.; and St. Charles Parish, La. Each has a population of fewer than 100,000 people but a rate of incarceration for women of more than 280 per 100,000, according to the Vera Institute.
A federal judge ruled that McDonald's may be held partly liable for a franchisee's wage theft case, reported the Ted Goodman in the Daily Caller, as voices around the country continue to decry the growing practice. Last month in the Chicago Tribune, Catherine Rampell argued Congress needs to step in, especially when the practice is found right under their noses:
Every once in a while, there's a chance to capture the public's imagination on this issue — such as Tuesday, when it turned out that even in the hallowed halls of the U.S. Senate, hundreds of low-wage workers had been shortchanged. For six years.
This case involves Senate cafeteria workers, some of whom were so poorly paid that they were homeless, on public assistance or, in one case, moonlighting as a stripper to make ends meet. For about a year, they staged a series of demonstrations to demand a living wage...
If politicians truly care about inequality and fairness, reducing reliance on public assistance, making sure that the system isn't "rigged" against the little guy and, for that matter, "law and order," they should start by enforcing the laws already on the books — and by making sure hard-working Americans get every cent to which they are entitled.
Are today's tech titans worse than the robber barons of yore? In the Daily Beast, Joel Klotkin seems to think so:
In recent years, like Skynet in the Terminator, the tools have achieved consciousness, imbuing themselves with something of a society-altering mission. To a large extent, they have created what the sociologist Alvin Gouldner called “the new class” of highly educated professionals who would remake society. Initially they made life better—making spaceflight possible, creating advanced medical devices and improving communications (the internet); they built machines that were more efficient and created great research tools for both business and individuals. Yet they did not seek to disrupt all industries—such as energy, food, automobiles—that still employed millions of people. They remained “tools” rather than rulers.
With the massive wealth they have now acquired, the tools at the top now aim to dominate those they used to serve...Once, we hoped that the technology revolution would create ever more dispersion of wealth and power. This dream has been squashed. Rather than an effusion of start-ups we see the downturn in new businesses... Although the tech boom has created some very good jobs for skilled workers, half of all jobs being created today are in low-wage services like retail and restaurants—at least until they are replaced by iPads and robots.
Over at the Third Way, Tamara Hiler and Lanae Erickson Hatalsky say free college will heal students who do not make it through, noting that more than half of students in public colleges fail to finish:
Schools that take in high shares of students coming from low- and moderate-income backgrounds may require more resources to achieve the same outcomes as schools who take in only a handful of low-income students each year. That principle guides the way we distribute federal resources to K-12 schools through Title I funding, which is intended to support schools with higher concentrations of students in poverty. Unfortunately, it plays virtually no role in our current higher education system. And while colleges that are willing to take in a high proportion of Pell students deserve support and recognition if they are delivering good outcomes for those students, we must also ensure institutions are not making this population of students worse off by saddling them with debt and no degree to show for it.