Your editor would love for readers to weigh in on the following section. Over at Demos, Matt Bruenig looks at what he calls the U.S. "corporatist model" of welfare and why it is failing people at the bottom:
For the top half, at least, the US really does have a pretty serious corporatist welfare system operating. Employers often handle sickness (health insurance, subsidized by federal government), old-age insurance (401k and defined-benefit pensions, subsidized by federal government), survivor's insurance (life insurance, subsidized by federal government), family benefits (paid leave and health insurance for children), unemployment (severance, though more typically rely heavily on public unemployment insurance), on top of providing socially adequate levels of cash income. For the bottom half though, and the bottom fifth in particular, the corporatist model has been a failure, in some cases not even able to deliver a socially acceptable minimum cash income level, let alone the other benefits. Because the corporatist ideology ultimately puts the normative duty of providing social minimums on employers, those who fail to do so are then naturally seen by many as derelict. When the community must then come in and backstop the employer to bring the workers up to a social minimum, the social injustice brought on by the employer's duty-shirking is thought to be compounded further still.
Bruenig rejects this "corporatist model", adding cuttingly:
Asking the boss to be uncle sugar based on some notion of company communitarianism is misguided about the true nature of the labor-management relationship, which is antagonistic at its core. Additionally, asking bosses to be uncle sugar while also having them compete within market institutions is a recipe for disaster: all it takes is a few ruthless duty-shirkers to seriously compromise the viability of corporations that sincerely try to play their corporatist role.
Bruenig's argument rests on the uneasy relationship between the government and provide sector to "provide for the general welfare." He acknowledges that there are corporations out there that take their part in this relationship seriously while fretting over how few bad apples it takes to upset the apple cart. Meanwhile in the New York Times, a "Room for Debate" discusses that the Etsy IPO is driving new discussion about shareholder value versus social good, which includes thinkers such as Jean Rogers of Heron investee SASB and Cornell's Lynn Stout. It also includes Santa Clara University's David G. Yosifon looking again at the uneasy relationship between government and corporations on ensuring social welfare and why it may be just as important to focus on internal corporate culture as regulation:
Advocates of shareholder value as the “sole end” of corporate governance say that such a rule is necessary to protect stockholders, since they have no control over corporate operations and get nothing unless the firm profits. They insist that bad conduct should be restrained not by corporate law reform, but by external governmental regulation, like labor, consumer or environmental protection statutes. But government is not insulated from corporate influence. Firms that work to serve shareholders often do so both in the market and in the halls of government. Corporations campaign and lobby to block the very regulations that shareholder primacy advocates call on the government to create to protect non-shareholders. And because of the Citizens United ruling, corporations have a constitutional right to such political activity. As long as Citizens United is good constitutional law, shareholder primacy will be bad for society. If we cannot keep corporations out of our democracy, then we must have more democracy in our corporations.
In Slate, Reihan Salam discusses some of the worries Bruenig alludes to in terms of competing in the market and providing social welfare under the lens of the fight for the so-called $15 minimum wage:
[E]ven if we completely ignore the possibility that firms will learn to economize on less-skilled labor, $15 an hour is a bridge too far. My deeper concern is that people who in decades past might have had a fighting chance at making their way into the middle class are now finding it hard to get on the bottom rungs of the job ladder. This matters because low-wage employers aren’t just employers. They’re also institutions that invest in the human capital of their workforces. Some people learn the basics of what it takes to get and to keep a job (the ability to exercise self-control, to be persistent, to show up on time, to get along with others, to speak the language of your workplace reasonably well) from their parents. Formal education also helps, but not everyone flourishes in formal education... Low-wage employers take on the challenge of succeeding where families and schools have failed. They don’t do this because they’re saints. They take on this challenge when they have no choice—they’d much prefer to hire workers who are already fully qualified to take on demanding jobs than to nurture talent in-house. What happens when they do have a choice? Firms are losing interest in financing the training of their employees. Peter Cappelli, director of Wharton’s Center for Human Resources, notes that although “employers in the postwar era typically selected employees for general abilities at entry-level positions, then trained them over a lifetime to meet the employers’ needs,” things have changed. Though employers don’t generally say this outright, the new expectation is that “job candidates’ skills, which are either adequate or not, are supposed to arrive with the applicants.”
In this TEDx talk, English teacher John Loonam looks at poverty in the United States and tradition of American writers masquerading as the poor to help explain what it is like:
He asks why we need to continually ask this question and says "the factual existence of poverty clashes with the mythology of America as a place where prosperity is inevitable." Over at the Atlantic's CityLab, Richard Florida looks at the United States in a report from the Social Science Research Council’s Measure of America:
The overall index is based on three key dimensions of well-being:
- A long and healthy life, as measured by life expectancy at birth.
- Access to knowledge, based on school enrollment for people ages 3 to 24 (weighted one third) and educational degree attainment for those 25 and older (weighted two-thirds).
- Standard of living, based on median earnings for full- and part-time workers 16 and older.
The overall American Human Development Index is graded on a one to ten scale, with ten being the highest score.
Meanwhile, the Huffington Post's Jonathan Cohn looks at a program designed to put children first as a major poverty intervention:
Child First is a “home visiting” program, which means staff members work with families mostly in their homes rather than in office settings, sometimes meeting as frequently as three or four times a week. The first priority is addressing tangible problems like poor housing or lack of medical care, which sometimes means connecting families with public programs. But the main focus is improving relationships within the family, particularly between the parents and children, through a combination of advice and therapy. [M]any researchers believe that such early, tenative signs of progress are emblematic of what a new federal anti-poverty initiative can ultimately achieve with enough time and money -- and maybe some more judicious management from Washington. That initiative is the Maternal, Infant, and Early Childhood Home Visiting Program, through which Child First gets funding. MIECHV, which officials refer to as “mick-vee,” began as a pilot initiative during the Bush administration and became a full-fledged program in 2010, when the Obama administration tucked funding for a massive expansion into the Affordable Care Act. The program is popular on Capitol Hill, with prominent supporters in both parties, and Congress just renewed it for another two years.
In Think Progress is this longish piece by Scott Rodd on what poverty looks like in Jamestown, Tennessee:
Jamestown and its residents are humble and unpretentious, sustained by generations of hard work and blue-collar values. The story of Jamestown over the last half-century is a fairly typical one: once a thriving, working-class town, it gradually declined as factories and manufacturers closed, unable to keep up with the country’s shift from a goods-based economy to a service-based one. Today, the median household income is $12,800 and 56 percent of the population lives in poverty. On the surface, Jamestown seems to betray these statistics. Unlike many impoverished places in America, it’s filled with restaurants, pharmacies, and gas stations. It comes alive during the day, with cars bustling through the center of town to get to the McDonald’s on North Main Street or the Walmart off of Route 127.
Taking a page from President Obama's executive order last year to mandate certain employer conduct from federal contractors regarding wages and worker treatment, Microsoft recently moved to require "many of its 2,000 contractors and vendors to provide their employees who perform work for Microsoft with 15 paid days off for sick days and vacation time," reports Claire Cain Miller in the New York Times:
As the economy has become more dependent on contract workers, workers’ rights advocates have voiced concern about their working conditions, especially for low-skilled jobs.
The situation is particularly acute in the tech industry, where average full-time employees earn more than $115,000 a year, along with generous benefits like child care, gourmet cafeterias and luxury shuttle rides to work. Many of the contracted service workers — who take care of the children, cook the food or drive the shuttles — earn near poverty-level wages and often do not receive basic benefits like sick leave.
The move comes as lawmakers from Trenton to Spokane look to adopt paid sick leave policies for companies working in their jurisdiction. Why might worker protections when sick be important? Let's look at this story in USA Today detailing the plight of one man in Sioux Falls for illustration:
Five days — that's how many sick days Tom McLaughlin took to lose his job at a carton manufacturer.
McLaughlin was in the hospital for three of those days, being treated for a potentially life-threatening flare-up of an infection in two sores on his right leg... The 49-year-old was two months shy of his one-year anniversary with the company — too green to qualify for Family and Medical Leave Act benefits. Bell told him he had to go, that he didn't quality for medical leave. "Our world fell apart in a week," said his wife, Kristi McLaughlin, who works part-time as a pastor at a small Mitchell, S.D., congregation about an hour west of here. "He was the primary income. He was the primary breadwinner. He provided the insurance. We're looking now at food stamps. We're looking at moving."
[A] negative credit record is associated with many of the disadvantages of being poor, jobless, not white, or in poor health—and not with how trustworthy you are or how well you write computer code or repair a car. But since employers can generally pull up credit data (which has historically been used for actuarial determinations of financial risk, not intended for employment-related decisions), this information can easily be misinterpreted or manipulated. By providing convenient proxies for race and class, data can become a tool to simultaneously affirm and perpetuate negative stereotypes of workers based on arbitrary factors.
You also might be interested in this recent fact sheet from the Economic Policy Institute on why raising the minimum wage is important. Earlier in the year, Lawrence Mishel offered up this chart linking inequality and minimum wage stagnation:
A higher minimum wage is an important way to address wage inequality, as the erosion of the minimum wage is the main reason for the increase in inequality between low-and middle-wage workers (in particular the 50/10 wage gap, that between the median and the 10th percentile earner). This is particularly true among women, the group for whom the wage gap in the bottom half grew the most.