In this week's must reads, we start with this Foundation Center infographic report, which has some interesting numbers on philanthropy including that the Walton Family Foundation is the nation's top institutional giver. We also have this July Economist report examining the origins of the idea that people should be lifted out of poverty. You also may find of interest this report from the Economic Policy Institute on how to place growing the middle class in the center of U.S. fiscal fights. And finally we have this piece from Steven Pearlstein in the Washington Post on "the cult of shareholder value" and how it is wrecking U.S. business.
So badly has Wall Street damaged its brand that significant numbers of Ivy League business school grads are starting to choose to work elsewhere. First we have risk management CEO Terry Duffy weighing in the Wall Street Journal on the detrimental potential impact and whether Wall Street can recover:
I worry that it won't—that Wall Street has suffered reputational damage, thanks to a few bad actors, that can't be undone simply by waiting for memories to fade and an economic boom to kick in. I'm concerned that those of us in financial services have forgotten who we serve—and that the public knows it...
American finance has always been a place for entrepreneurial risk-takers. Historically, Wall Street has been a haven for young people who are passionate about changing the world with a powerful idea. Now it seems that those young people are much more likely to head for Silicon Valley. Yet where will much of the financing for their projects originate? On Wall Street. I have deep concerns about where the financial-services industry is going if we've lost our ability to connect with those people.
But, in the Washington Post, Lydia DePillis asks why is this a bad thing:
America's fiercest and most creative intellects -- not all of which, mind, are laundered through elite business schools -- could be put to better use figuring out where the jobs lost to automation and globalization will appear next, how to bring better health care to more people, what to do about the monumental challenge of supplying energy without devastating the planet. If people who could make bank on Wall Street are opting instead to make slightly less in more fulfilling ways, that's something to celebrate, not lament.
You also may be interested in this article in the New York Times on the domestic textile industry's revival and the growing problem of finding trained workers to meet ever increasing demand in the United States. Meanwhile, Walmart won the fight over a "living wage" mandate in Washington D.C. and seems to be winning against an overall worker push for better wages around the country. Still, the company is making some attempt at reforming its image with a $50 billion pledge to spend domestically, which Reuters' Jessica Kohl and James Kelleher says has implications beyond public relations:
The initiative is modest for now. For a company with $466.1 billion in annual sales, an additional $50 billion of spending over a decade will barely register. Also, the main Walmart U.S. unit sells mostly groceries and already procures two-thirds of its goods - including a lot of food - from U.S. sources.
Wal-Mart's high-profile commitment is, though, an important symbolic shift. A retailer that for decades has prompted hundreds of U.S. companies to move production overseas, thanks to its relentless insistence on cost-cutting, now is urging at least some production back. It will even offer longer-term purchasing guidance to some companies to encourage them.
In the New York Times Magazine, Catherine Rampell looks at the housing market's investment winners and losers following the crash, finding that "the financial crisis has benefited the upper class while brutalizing the middle class." Check out her chart on this issue in the NYT's Economix blog:
In other words, middle- and lower-income families bought at inflated prices; lost their homes; ended up paying record-high housing rents because so many people lost the ability to own at once, pushing rents up; and of course ended up with their credit scarred for the better part of a decade...
The housing bubble and subsequent bust left the country with winners and losers, as is always the case in capitalism. It just happens that the winners were disproportionately wealthier people, and the losers were disproportionately middle- and lower-income families. Reasonable people can disagree about whether that outcome is a result of public policy, financial expertise or deliberate malfeasance — or perhaps some combination of the three.
In this interesting TEDX talk from MIT Sloan School of Management Professor Zeynep Ton discusses how to think about "good jobs," and challenging the idea that there is a tradeoff between offering low prices and paying low wages. Her main suggestion is "vote with your feet," patronize those places that provides good jobs to incentivize companies to create a paradigm "in which everyone wins, customers, companies, and employees." In the Boston Review, Paul Osterman and Andrew Weaver look at the kinds of skills needed today to get a job in the United States:
Technology is by no means putting most jobs out of the reach of most people, and the average American worker need not inevitably be overtaken by “progress.” Once the economy is back on track—and here investment in infrastructure and support of local-government employment to stimulate aggregate demand are essential—well-designed education and training programs, along with a renewed national commitment to economic equity, will enable most Americans to succeed.
This analysis is a counterpoint to a recent Oxford study, which has found "computerization" could kill up to half of U.S. jobs, where "most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labor in production occupations, are at risk." Derek Thompson in the Atlantic looks at a different type of marriage inequality, one that harms economically:
Single moms and single dads are more likely to be poor, not only because they don't have help in the household, but also because they didn't have much money to begin with.
In a strange twist, marriage has recently become a capstone for the privileged class. The decline of marriage, to the extent that we're seeing it, is happening almost exclusively among the poor. The lowest-earning men and women (i.e.: the least-educated men and women) have seen the steepest declines in marriage rates, according to the Hamilton Project.
Check out this striking graphic from Demos on how a change in spending priorities could basically bring all Americans above the poverty line:
Is our massive military budget robbing us of the chance to eliminate poverty? Demos' Matt Bruenig thinks so:
First, we could have around a $2,200 basic income for the money we spend on the military each year. For a family of four, that would be an income boost of $8,800. It would reduce official poverty by about 16 million people, and of course boost the incomes of those who still remain in poverty by quite a bit.
The leadership crisis in Washington remains unabated and the ongoing shutdown is making what was already pretty austere government spending more so. Kids are losing out in particular. WIC benefits, a supplemental nutrition program feeding nearly 9 million pregnant women, infants and children, will soon run out thanks to the shutdown, with just $125 million in contingency funding from the USDA to get it through the month, according to TIME. In the Washington Post, religion scholars Meghan Clark and Nicole Flores go after the political ideology that has left kids out in the cold:
[W]hy wasn’t WIC one of the programs so important to maintain continuity that the House leadership designated it for a separate vote? Why aren’t WIC beneficiaries—children whose livelihood and future depends on access to government-sponsored nutrition—the face of the government shutdown of 2013?
A deeper, and even more insidious, ideological battle concerning poverty looms behind the ideological fight over the Affordable Care Act. Over the last few years, the public battle over social protections and poverty programs has raged on both the federal and state levels. One such example is the ongoing and perpetual battle over funding for the Supplemental Nutrition Assistance Program (aka food stamps) most recently the House resolution removed time waivers for the unemployed currently receiving food stamps. Various states have enacted drug-testing mandates for unemployment or criminalized homelessness.
All of these measures are ways of delineating the deserving from the undeserving poor. This cultural fixation has taken on new and disturbing turn in the wake of the shutdown.
You may also be interested in this piece in the New York Times from two former U.S. officials on how the shutdown is causing a full-on data blackout. And the Chronicle of Philanthropy has a running ticker on how the shutdown is affecting the nonprofit sector. Adam Hersh over at the Center for American Progress looks at how ending fiscal austerity could improve the U.S. economic forecast, especially jobs:
Private-sector forecasters offered the most telling judgment on the economic impact of this political push for spending cuts and the uncertain business investment it created. As the effects of conservative politicking mounted, they downgraded their outlook for U.S. economic growth by more than one-third. Much recent economic research confirms forecasters’ pessimism as it turns out that at times like this—where there is still much business slack in the economy and when interest rates are so low—spending cuts carry a profound negative impact while fiscal stimulus is more powerful at spurring jobs and growth than economists previously realized.
Unfortunately, since 2011, Americans—and the world—have watched the same actors play out the same political drama like a broken record: offering growth-sapping budgets that could not garner a majority of votes and obstructing policymaking with a conservative agenda that found no purchase through legislative, judicial, or electoral means.
In the Huffington Post, Mitchell Kutney says impact investing needs some kind of oversight regime because once it "becomes commonplace, and more and more players enter the market, financial outcomes will again dominate [and] it will be at the expense of social and environmental gains." This report from the Edna McConnell Clark Foundation examines their learning from the first decade as a capital investor, providing "large sums of flexible, upfront money to help grantees build the capacity they need to scale up effective programs." And finally, you may be interested in this report from the New America Foundation on productivity and the healthcare workforce.