More than Pennies in Your Pocket
In depressing news, we start with a pair of stories looking at the reasons why workers are fighting for a $15 minimum wage. The Boston Globe has this story of one woman's fight to work three jobs and make enough to help support her family:
Johnson helps pay the bills and buy clothes with her paycheck from Chipotle, working as a wheelchair assistant at Logan Airport, and helping clients in their homes as a medical assistant.
She works seven days a week, and she gets paid just above minimum wage for two of her jobs, making about $2,000 a month.
On Tuesday, she will join demonstrations in Boston calling for a raise in the minimum wage to $15 an hour. Organizers hope thousands will attend. “If I get to $15, it would be better for me and my family because I wouldn’t have to wake up at 6 o’clock in the morning to go to one job and then don’t come home until three or four o’clock in the morning or one o’clock in the morning,” she told Boston.com. “And I’m tired. I’m 23 years old, you know. I miss getting eight hours of sleep. I miss that, I really do. It’s like, I work 7 days a week, and when you work 7 days a week, you get tired. You get tired of working.”
A recent New York Times article looks at a new study examining how many low-wage workers need federal safety nets to get by:
A home health care worker in Durham, N.C.; a McDonald’s cashier in Chicago; a bank teller in New York; an adjunct professor in Maywood, Ill. They are all evidence of an improving economy, because they are working and not among the steadily declining ranks of the unemployed.
Yet these same people also are on public assistance — relying on food stamps, Medicaid or other stretches of the safety net to help cover basic expenses when their paychecks come up short.
And they are not alone. Nearly three-quarters of the people helped by programs geared to the poor are members of a family headed by a worker, according to a new study by the Berkeley Center for Labor Research and Education at the University of California. As a result, taxpayers are providing not only support to the poor but also, in effect, a huge subsidy for employers of low-wage workers, from giants like McDonald’s and Walmart to mom-and-pop businesses.
Earlier this month, the New York Times editorial board argued the decision by McDonald's to raise their wages by a dollar wasn't far enough:
The increase follows moves by other low-wage employers but is more limited. It covers 12 percent of the McDonald’s work force and costs an amount equal to about 2 percent of profits in 2014. The recent raise at Walmart, to at least $10 an hour, covered nearly 40 percent of workers at a cost of about 6 percent of Walmart’s 2014 profits. Clearly, if the McDonald’s raise were a response to the competition for workers, it would be bigger.
You may recall that Aetna made waves in January by announcing that it would raise the wages of its lowest-paid employees to a minimum of $16 an hour. The Wall Street Journal’s Eric Morath recently heard Aetna CEO Mark Bertolini predict that “there are a number of CEOs that will come out in the next six months with wage increases that will matter. …Corporations can make the investment in their communities and their employees, and we can improve the middle class as a result.” The New York Times’ Patricia Cohen reports just days later, Gravity Payments CEO Dan Price planned to make such an investment:
Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000...
If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year...
The United States has one of the world’s largest pay gaps, with chief executives earning nearly 300 times what the average worker makes, according to some economists’ estimates. That is much higher than the 20-to-1 ratio recommended by Gilded Age magnates like J. Pierpont Morgan and the 20th century management visionary Peter Drucker…Under a financial overhaul passed by Congress in 2010, the Securities and Exchange Commission was supposed to require all publicly held companies to disclose the ratio of C.E.O. pay to the median pay of all other employees, but it has so far failed to put it in effect. Corporate executives have vigorously opposed the idea, complaining it would be cumbersome and costly to implement.
Price was inspired by research showing that money’s contribution to human well-being tops out around $70,000, a data point which might be interesting to executives of UK energy company SSE. They recently released a report in an attempt to define, quantify and help them grow their “human capital”:
Human capital should not be thought of as an asset a company owns, rather it's the people SSE 'borrows' from society which allows our business to operate and to grow. But this does not mean we don't have a responsibility to invest in our employees. On the contrary, the responsibility is even greater because it's not just the company that benefits from that investment: society does, for example through increased tax payments; and, the individual does through increased earnings.
Also in the NYT, Jared Bernstein says the real target should be raising the country's median wage:
The median wage is a lot like what Mark Twain supposedly said about the weather: Everybody talks about it but nobody does anything about it.
This is ironic, because politicians are always going on about how much they want to help the middle class, and some of them actually mean it. But it’s harder than you think.
In the Boston Globe, we have this story of what it is like to be poor attending an Ivy League school:
After parachuting into a culture where many kids seem to have a direct line to prestigious internships through their well-off parents and feel entitled to argue with a professor over a grade, poor kids sense their disadvantage. Even if they’re in the same school as some of the nation’s smartest and best-connected young people, students’ socioeconomic backgrounds seem to dictate how they navigate campus. Research shows, for example, that upper-middle-class kids are better at asking for help at college than low-income ones, in part because they know the resources available to them. Disadvantaged students are accustomed to doing everything on their own because they rarely have parents educated enough to help them with things like homework or college applications, so they may be less likely to go to a writing center or ask a professor for extra help.
Meanwhile, Duke University's Candice Odgers discusses whether mixed income housing is detrimental to poor kids:
In a recent study, my colleagues and I tested whether low-income children would benefit from living alongside more affluent neighbors.
We analyzed data from 1,600 children in urban and suburban areas of England and Wales, following the children and their families from birth to age 12. We conducted intensive home assessments, surveyed teachers and neighbors, and collected census information and parent reports. We also used Google Street View images to gauge neighborhood conditions within a half-mile radius of each child's home.
We found that low-income boys living alongside more affluent neighbors engaged in more antisocial behavior than their low-income peers who lived in concentrated poverty. The behaviors included lying, cheating, stealing and fighting. (For low-income girls, growing up alongside more affluent neighbors had no effect on behavior.)
On the other side is this story in the Atlantic looking at poverty and racial segregation around the country:
Public policy has “focused on the concentration of poverty and residential segregation. This has problematized non-white and high-poverty neighborhoods,” said Goetz, the director of the Center for Urban and Regional Affairs at the University of Minnesota, when presenting his findings at the Lincoln Institute of Land Policy. “It’s shielded the other end of the spectrum from scrutiny—to the point where we think segregation of whites is normal.”
Is it bad policy to demand university endowments to divest from fossil fuels? In the Washington Post, Princeton's William Bowen had this to say:
One argument in favor of divestment that I find entirely unpersuasive is the claim that a university is obligated to take a stand on any issue of broad social import that individuals — including, not infrequently, the president of a university acting in citizen mode! — regard as highly consequential. This is nonsense. To abstain is both a legitimate and appropriate action when the issue is not central to an institution’s educational mission...
But my main quarrel with current debates over divestment is that they pay too little attention, if any attention at all, to what I regard as the insidious moral perils of divestment. There is, first of all, the sometime hypocrisy of seeking institutional “purity” while failing individually to reduce consumption of fossil fuels or, for a faculty member, to divest one’s personal stake in investment vehicles, including index funds, that contain questionable holdings.
In a Wall Street Journal interview, Jean Rogers head of the Sustainability Accounting Standards Board discusses why investors need more information from companies on issues such as the environment:
MR. BALL: There are lots of advocates for these kinds of disclosures. Your sense is that this has led to a lot of glossy reports, but that people don’t know what they’re reading. MS. ROGERS: There are many wonderful organizations who have raised awareness of these issues. We are focused like a laser on investors and capital markets and the narrow subset of information they need to make decisions about sector allocation or evaluation. Climate is one of the most interesting of what we call crosscutting topics. But it doesn’t manifest itself the same way, industry to industry... MR. BALL: [What should the be oil and gas report?] MS. ROGERS: In carbon-intensive industries you want to understand the greenhouse-gas-emissions intensity, the risk of regulation, risk of capital expenditures that may not be able to be brought to fruition. That’s what we ask companies to disclose. In banking, it’s financed emissions and the carbon intensity of the portfolio. Understanding greenhouse-gas emissions in every industry and company is useful from a policy perspective and understanding which industries to regulate. But from an investor’s perspective, it doesn’t tell you the risk that’s embedded in your portfolio.
The Skoll World Forum on Social Entrepreneurship kicked off this week, announcing four nonprofit winners of $1.25 Million each for their “work at a systemic level to advance change that lasts.” On the technology front, NYT’s Claire Cain Miller looks at philanthropy in Silicon Valley and how companies are using tech to address issues such homelessness in the area:
The smartphone giveaway program, though small, typifies the way Bay Area tech companies have started to respond to the glaring homelessness problem right outside their luxurious company campuses: not by donating clothes or serving food, but by using technology... In the United States, though, Internet access has in many ways become like a basic need. Without it, it can be difficult to find a home, apply for a job, sign up for classes, make homeless shelter reservations or find soup kitchens. And for people who live on the streets, smartphones are the most efficient way to connect to the Internet. So while clothing and food are vital, advocates say equipping homeless and low-income people with phones and technical skills also makes sense.
Also, in an attempt to capture the younger, more tech-savvy generations of today as well as those in the future, more organizations are accepting bitcoin as a means of donation, says the Wall Street Journal’s Rachel Silverman:
“We want to remain contemporary and relevant to current and future generations,” says Mr. [Ettore] Rossetti [of Save the Children]. “We don’t only want to be your grandmother’s charity, we want to be your grandchild’s charity. One way to do that is to accept bitcoin.”
Most charities that solicit bitcoin donations don’t accept them directly, but go through processing services, such as BitPay, who exchange some or all of the bitcoin for cash at the time of the donation and pass the cash to the charity, avoiding uncertainty about volatility, says Elizabeth Ploshay, a BitPay account manager.
Ms. Ploshay says that appealing to bitcoin donors can help a charity tap a whole new pool of givers. The currency is of interest to “a lot of charities that are older and want to rebrand themselves or tap into a younger pool of donors,” she says. Bitcoin, she adds, is a great solution for charities interested in accepting gifts of a few dollars or less, since there are no transaction fees.