Must Reads: In honor of the anniversary of journalist Studs Terkel’s “Working” oral history series, In These Times has invited a range of workers to speak about their jobs in their own words; for example, check out these profiles of a truck unloader and a jazz musician talking about pay. Slate looks at a new report that suggests income inequality may lead to higher high-school dropout rates. New Orleans Foundation CEO Albert Ruesga offers seven lessons in strategic philanthropy, or, "How to Do Things with Humans". Finally, Al Gore (and Pando writer David Sirota) had interesting things to say on how “tech culture and tech philanthropy may exacerbate inequality and undermine democracy”. (Your editor couldn't wait to share that one so you may have already seen it on our blog.)
New research from Harvard, Princeton and the University of Chicago says that money is only one part of the poverty puzzle: the NYTimes’ Maria Konnikova explains that a scarcity of money is compounded by a scarcity of time, when “the demands of the moment override the demands of the future, making that future harder to reach”:
Bandwidth poverty… the type of attention shortage that is fed by the other two: If I’m focused on the immediate deadline, I don’t have the cognitive resources to spend on mundane tasks or later deadlines. If I’m short on money, I can’t stop thinking about today’s expenses — never mind those in the future. In both cases, I end up making decisions that leave me worse off because I lack the ability to focus properly on anything other than what’s staring me in the face right now, at this exact moment.
Two of the researchers, Harvard economist Sendhil Mullainathan and Princeton psychologist Eldar Shafir, are co-authors of a book on how scarcity pushes poor people into making decisions that drag them deeper into poverty. Also in the Times:
Mr. Mullainathan points out. “Poor people can’t say, ‘I’ll take a vacation from being poor.’ It’s the same mental process, but a different feedback loop.” …“That’s what I feel is missing in this whole debate,” he says. “In neuroscience, they understand plasticity,” that the brain changes in response to the external environment. “But the poverty field is stuck in 40 years ago,” he says. “I don’t understand why people haven’t grasped that. Even if you’re poor, you have a brain with all the majesty of any human brain. It’s just subject to different pressures.”
(You may also recall the article by an impoverished mother on "Why I Make Terrible Decisions", which promptly went viral upon its publication last October.) Oxford University's Poverty & Human Development Initiative recently released their 2014 report [PDF] on a different type of multidimensional poverty measure; you may be interested in the microsite of 2014 findings. The Global MPI uses ten indicators to show "not just which people are poor and where, but also how they are poor: which disadvantages they are experiencing simultaneously."
After a look at the grim employment numbers for young people, restaurant executive Andrew Pudzer says in the Wall Street Journal that entry-level jobs for young people are vanishing because of new healthcare laws:
The health-care law … gives businesses an incentive to either eliminate entry-level jobs or keep the workers' hours to under 30 a week. It also gives businesses a reason to reduce the hours of experienced employees to under 30 a week. These experienced employees are now working second jobs to compensate for their lost hours—resulting in fewer positions for less-experienced workers.
The Atlantic's Derek Thompson says that a closer look at the data shows that the unemployment rate has held fairly steady for young people overall (the blue line below), and that it is elevated only for those who don't have a college degree (the green line). (With another graph he proposes that many of those under-24-year-olds are too busy working on that degree to be simultaneously employed.)
Those who are making the simultaneous-work-and-college effort work may soon include more Starbucks employees, as CEO Howard Schultz announced on Monday an arrangement with top online college Arizona State to provide employees with discounted tuition (and a financial aid counselor), saying, “In the last few years, we have seen the fracturing of the American Dream. There’s no doubt, the inequality within the country has created a situation where many Americans are being left behind. The question for all of us is, should we accept that, or should we try and do something about it.” Here’s a follow-up on Center for American Progress’ report on apprenticeships we shared a few months ago, in which Sarah Ayres and Jennifer Erickson highlight Scotland’s successful apprenticeship practice and ways the U.S. could provide opportunities for mobility, job quality and security for its young workers (and would-be workers). Meanwhile, for those who are less young every day, is living with your parents a sign, as it once was, of failure? Or is it a practical, long-term financial move? NYTimes Magazine’s Adam Davidson says it’s a symptom of economic polarization 30 years in the making:
This uncomfortable fact, which many economists have recently accepted, suggests that we are living not simply in an unequal society but rather in two separate, side-by-side economies. For those who can crack the top 20 percent, there is great promise. Most people in that elite group, Rank told me, will spend at least part of their careers among the truly affluent, earning more than $250,000 a year. For those at work in the much larger pool, there will be falling or stagnant wages and far greater uncertainty.
...Today, about a third of young adults will earn a four-year-degree, and many of them — more than a third, by many estimates — are unlikely to find lifelong secure employment sufficient to pay down their debt and place them on track to earn more than their parents. If they want a shot at making it into the top 20 percent, they now need to learn a skill before they get a job. And for many, even with their parents’ help, that’s going to be an impossibility.
Some of these young people may have to move first in order to find employment. David Cay Johnston in AlJazeera America shares the surprising finding that job growth was concentrated in places that raised taxes, such as in the four California counties where every 13th new job in America was created last year. So move to California if you like, but definitely don’t move to the South, or at least that’s what Slate’s Steven Rosenfeld says, as “the region’s businesses and business models overwhelmingly rely on low-wage work":
Looking through the widest lens, one sees that America’s sunbelt contains the poorest states. This is not just because it costs less to live in a warmer climate. The Department of Agriculture, which measures poverty, found that every red state in a 2,500-mile stretch from Arizona to South Carolina along the southern tier had the highest poverty rates in the U.S. in 2011, between 17.9 and 22.8 percent.
Massachusetts is on the verge of raising their minimum wage to $11 an hour by 2017, the highest state-level minimum, says ThinkProgress. Elena Holodny at Business Insider shares data from Morgan Stanley on where minimum wage workers actually work:
Holodny says that federal proposals to increase the minimum "might also help tipped workers, whose significantly lower salaries could also be raised.” The last time that happened was 1991; this interactive chart from EPI indicates that since then these workers have lost the real income gains made at that point:
While we're looking to the past, the New York Times looks back even further, comparing today's events to a re-posted 1964 article when New York was also considering a minimum wage increase. In Fast Company, Jessica Leber looks at data from Oxfam that shows one in five workers would benefit from an increased minimum wage--and says that businesses can benefit too, if higher wages are combined with other "good jobs strategy" factors such as investing in employee development:
“Bad jobs cost companies a lot more than they realize, and they find themselves in a vicious cycle,” says Zeynep Ton, an adjunct associate professor at MIT Sloan School of Management and former professor at Harvard Business School. Poor employee retention and commitment, she says, contributes to operational problems and lower sales--a cycle shown by her studies to lead to lower sales and profits, and then a shrinking budget to pay employees fairly.
The Oxfam data shows that workers all across the country may benefit:
In Fortune, Claire Zillman looks at how a minimum-wage hike would affect the low-wage workforce in Texas. Meanwhile, Amy Traub at Demos says wage growth is directly connected to unions, and wonders why they don’t play a larger role in the wage discussion:
The extent to which workers are empowered to get a better deal on the job has played a large role in their wage trajectories and diverging fates. And yet the role of worker power often gets overlooked the mainstream conversation about inequality and inadequate wages...A minimum wage hike sets a critical floor on the labor market, but it is worker power that ensures that working people will see the gains of a growing, productive economy—and the industries within it.
You may also be interested in our recent Field Notes on the controversial decision of the Seattle city council to slowly raise the local minimum wage to $17.
In the Washington Post, Benjamin Soskis says a report from union-backed group the "Walmart 1 Percent" represents:
[A] new phenomenon of this latest Gilded Age: the rise of philanthro-shaming. Blame the convergence of two related trends: a faith in philanthropy to render lasting social change and an uneasiness with the oversized fortunes concentrated at the cloud-covered apex of the income scale. Combined, they have led the public to scrutinize more carefully the charitable pretensions of the nation’s richest citizens. Philanthro-shaming suggests the promise — but also some of the perils — of this new regime of philanthropic accountability.
Soskis, a fellow at the Center for the Study of Nonprofit Management, Philanthropy and Policy at George Mason University, warns that "philanthro-shaming should be the beginning — and not the end — of a civil and engaged conversation about philanthropic means and ends." In the Chronicle of Philanthropy, Maria Di Mento looks at a new report from a survey of high-net-worth families that says while the vast majority want to help close the income gap between rich and poor, they place more trust in creating jobs or volunteering their time and talents than "donating money to charities that provide education and employment programs". Earlier this week on the Heron blog we posted some thoughts on impact investing in philanthropy from the Rockefeller Foundation's Judith Rodin and, in the Stanford Social Innovation Review, impact investing pioneers Cathy Clark, Ben Thornley and Jed Emerson. And finally, you may be interested in suggestions from Heron chair Buzz Schmidt on how the Gates Foundation can address the challenges faced in attempting philanthropy at such an unusually large scale.