Must Reads: In the National Review Online, a number of conservative thinkers offer up thoughts on what went right and wrong with the "war on poverty." Demos's Sasha Abramsky in the Nation says forget tributes, we need a new war and "the hard part will be to marshal the moral energies and political imagination of the nation behind an anti-poverty effort as ambitious as the one launched by LBJ." The Family Independence Initiative offers up a new report focusing on their work with poor families, which finds "community is our most vital source of support, self-determination is the energy that drives people forward, and working capital is essential." And Stateline.org looks at which states will produce jobs in 2014 and what they will be.
This week, we start with Lyndon Johnson's 1964 State of the Union speech on poverty:
Very often a lack of jobs and money is not the cause of poverty, but the symptom. The cause may lie deeper -- in our failure to give our fellow citizens a fair chance to develop their own capacities, in a lack of education and training, in a lack of medical care and housing, in a lack of decent communities in which to live and bring up their children... [O]ur joint Federal-local effort must pursue poverty, pursue it wherever it exists -- in city slums and small towns, in sharecropper shacks or in migrant worker camps, on Indian Reservations, among whites as well as Negroes, among the young as well as the aged, in the boom towns and in the depressed areas.
Check out this editorial cartoon from Nate Beeler:
Fifty years later after sweeping measures to aid the poor, U.S. poverty persists and a fractious political debate continues to roil, particularly when it comes to the role of employment. Sojourners' President Jim Willis, in the Huffington Post, says we need to work together to end poverty and concludes it's"impossible to celebrate a victory over poverty in America with our poverty rate still at 15 percent -- 4 percent lower than it was five decades ago":
[W]ork needs to work in overcoming poverty and that means it should pay enough for people to support themselves and their families. If you work hard -- and often 40 hours a week or more -- you should not have to live in poverty in America. Many working families remain poor because they don't have jobs that pay them enough to succeed. We need good jobs that pay a living wage and can support strong families. The War on Poverty might not have failed, but our economy has. Over the last several decades investors have done well, but wage earners have not. Salaries have stagnated, even while American workers' productivity has increased. A fairer balance between the wealth at the top of companies, the middle, and the bottom is a moral challenge that must be answered.
Oxfam's Minor Sinclair also laid out U.S. poverty as a jobs issue:
[P]overty is not a problem of motivation or social determinants or poor choices. The problem is that while jobs are scarce, good jobs are even scarcer. People are forced to take what they can get, even if it doesn’t pay the bills. More than ever before, it’s not the high school kids living at home that are holding the jobs at McDonalds or The Gap, but by the providers in the family. Conservatives may be right that government transfer programs create disincentives, but it’s not individuals receiving the aid who are disincentivized. Instead, it’s the corporations that rely indirectly on government aid to help keep their low-wage workers fed, housed, clothed and receiving health care. The lower the wages, the more the government is making up the difference.
The Atlantic's Derek Thompson, on the other hand, says that beyond low-wage jobs and diminishing job opportunities, single parent households face a big barrier to employment and thus are far more likely to be poor. Check out this chart:
Low wages should be a national concern, as globalization and technology have tag-teamed to devastate the buying power of families who struggle annually to pay the bills and raise their children. But the pesky poverty rate isn't just a measure of low wages. It's sticky high partly because the government's best efforts to get cash to working families have been offset by the fact that Americans are—for a variety of reasons—working less.* The first reason we're working less is that we just suffered a huge recession, and Washington all but abandoned its efforts to heal the labor market. Even with jobless benefits, unemployment stresses poverty in a straightforward way. The poverty rate for full-time workers is very low: 3 percent. For those who don't work, it's very high: 33 percent...
AEI's Josh Good argues in The American that "while it is complicated to incentivize responsible fatherhood and two-parent families rather than subsidizing out-of-wedlock births, this goal should become a hallmark of new anti-poverty efforts in 2014 and beyond." More on the war:
The government released its latest jobs report showing a very modest increase, but a slight lowering of the overall unemployment rate, which may indicate some workers have given up. The National Review Online's Veronique de Rugy offers up this interesting chart:
CNN's Annalyn Kurtz revisits the long-term unemployment issue, check out these charts:
If the firm could pay the worker $4 per hour on, say, a four-month trial basis, then it would be more likely to hire him. But the federal minimum wage prohibits this. So the worker remains unemployed. We should make sure that this doesn't happen by significantly lowering the minimum wage for the long-term unemployed for at least the first six months after the date they begin work at their new job. As with relocation subsidies, we should also lower the minimum wage for workers who exited the labor force after a period of long-term unemployment during the Great Recession. We should keep these policies in place at least until the employment rate for prime-age workers and long-term unemployment's share of total unemployment return to something resembling normalcy. This would enable firms to take a chance on the long-term unemployed: Even if their contributions to the production of goods and services were small at first, the firm wouldn't lose money by employing them. This would give the long-term unemployed the opportunity to begin a résumé in their new occupation or industry, to learn occupation-specific and firm-specific skills that would increase their productivity in the future, to build a professional network in their new career, and to get their first foot back on the employment ladder.
Meanwhile, the Center for Global Development's Charles Kenny in the Oregonian makes a case for sending unemployed Americans abroad:
Why should we be encouraging the young and unemployed to look worldwide for better opportunities? Because the benefits of U.S. emigration extend way beyond ready jobs and a more interesting life for those in search of adventures abroad. Research by economists Gabriel Felbermayr and Benjamin Jung suggest that as little as a 1 percent increase in migration between two countries raises bilateral trade. There's also evidence from development economists Maurice Kugler and Hillel Rapoport that migrating to another country brings greater foreign investment back home. Their research suggests that if you double the number of Americans living in another country, you'll see foreign direct investment from that country to the United States increase by about a fifth. Simply put, there's a profound benefit to the economy in sending your kids overseas.
King McGlaughon of Foundation Source in the Stanford Social Innovation Review discusses the misconceptions on private foundations:
Today’s average private foundation donor is younger than a generation ago. Philanthropists are no longer waiting until retirement to put their resources to work. Instead, they continue to fund their foundations with new capital on a recurring basis, and may regularly contribute more to their own foundations during any given year than they pay out. In 2012, the foundations in our report replenished their endowments by adding $1.06 for every dollar of spending (granting and charitable expenses). That was up from 93 cents contributed to their foundations for every dollar of spending in 2011 (which is still rather high). More and more, philanthropists are still in their earning years, which means their foundations need not take as reactive or defensive a stance to the economy and are less risk-averse. They can be more aggressive, more entrepreneurial, they can embrace risk, they can fail, and they can try again.
You might be interested in the Philanthrocapitalism blog's big picks for 2014 on issues ranging from philanthropy to impact investing. Rohan Martyres of CAN Invest in the Pioneer Post says social investors should move on once an idea they've championed has been baked in:
When a sufficient track record is developed, government should be in a position to pay for the innovation, leaving social investors to move onto the next segment of social need. Herein lie the future prospects for social investment. It will indeed operate at the edges of the ‘brave new world’, in that it will attempt to find a bridge between two poles. On the one hand, social investment attempts to intervene and earn a profit through contracts from government and private payors. On the other, it seeks to fuel activities that address the deepest of society’s ills through net financial loss, grant-based mechanisms. The idea of activity ‘at the edges’ does not belittle social investment. Actually, social investors and investees need to remain focused on the truly innovative.
In Forbes, author Howard Husock discusses the potential for new interference in philanthropy:
A review of [2013's] big-ticket gifts—which are just a small portion of the more than $300 billion in overall household and corporate charitable giving—reminds us that American philanthropy is not just significant for its magnitude. It is also independent—meaning that it is directed in thoughtful, personal ways by individuals with their own interests and enthusiasms, not—at least not yet—directed by government... This good news must be tempered, however, with threats on the horizon to philanthropic independence. Increasingly charitable donations’ tax deduction status has led to the view that government should influence philanthropic funds. California Congressman Xavier Becerra, for instance, has asserted that “only one in 10 (charitable) dollars are serving poor or disadvantaged people. I have to wonder where the other nine dollars are going.” And Aaron Dorfman of the National Committee for Responsive Philanthropy has branded the charitable deduction a “subsidy” –and implicitly raises the question of whether it should be reserved for “social justice philanthropy.” So it is that philanthropic independence could fall victim to narrow views about what helps the neediest.
Meanwhile Jim Clifford of the British firm Baker Tilly in the Pioneer Post argues "social investment doesn't always mean a low rate of return" and the social sector should set aside "concerns around profiteering by investors that might stifle their ability to fund innovative projects."