There's No Place Like Homelessness
Let's start with a cartoon over at Cagle:
The Chronicle of Higher Education looks at a new book by Matthew Desmond, which studies eviction and poverty in America:
The housing odyssey of Arleen, a focal point of Desmond’s research, was a good example. In January of 2008, the snowiest Milwaukee winter on record, her 13-year-old son Jori tossed a snowball at a car. A man hopped out. Jori ran into his apartment. The man kicked in the door. Nothing else happened, but when Arleen’s landlord learned about the damage, she evicted the single mother and her two sons. Arleen eventually rented a two-bedroom apartment from Sherrena in one of the worst parts of Milwaukee. The $550-a-month rent (utilities not included) amounted to 88 percent of her $628 welfare check, an impossible sum.
What resulted was a system that functioned a bit like college tuition, with its disparity between "sticker" and actual prices. A landlord might let a tenant move in for partial payment. It was a kind of bargain. The landlord got the ability to be slow with repairs. The tenant got a house. But that state of always being in arrears stripped tenants of legal protections.
Over at the New York Times, Desmond himself writes of what he calls the eviction economy:
Throughout our history, wage gains won by workers through organized protest were quickly absorbed by rising rents. As industrial capitalists tried to put down the strikes, landlords cheered workers on. It is no different today. When incomes rise, the housing market takes its cut, which is why a two-bedroom apartment in the oil boomtown Williston, N.D., was going last year for $2,800 a month and why entire capital-rich cities like San Francisco are becoming unaffordable to the middle class. If rents rise alongside incomes, what progress is made?
...Poor families are stuck. Because they are already at the bottom of the market, they can’t get cheaper housing unless they uproot their lives, quit their jobs and leave the city. Those with eviction records are pushed into substandard private housing in high-crime neighborhoods because many landlords and public housing authorities turn them away. When poor families finally find a new place to rent, they often start off owing their landlord because they simply can’t pay the first and last month’s rent and a security deposit.
Meanwhile the Boston Globe looks at increasing economic segregation in the Boston area:
Blue- and white-collar families who once lived close enough to bump into each other in the aisles of the local hardware store or chat in the pews of the neighborhood church live in much more homogenous places now.
Low-income people can go an entire day without talking to someone who has a college degree or a job in a downtown office. And for the affluent, handing a credit card to the gas station attendant or grocery clerk may be their only weekend brush with blue-collar America.
Over at Talk Poverty Stephanie Land discusses the messed up narrative of the "legitimate poor":
Jumping through hoops to receive assistance is exhausting and further stigmatized by legislators who introduce laws that limit access to resources. For example, Kansas State Senator Michael O’Donnell—who successfully advocated for legislation to ban people from using cash assistance to see a movie or go to a swimming pool—is eager to take his place as an arbiter in determining which poor person is “legitimate.” Who is the “real” victim and who will turn around and take advantage of the assistance, using it toward, heaven forbid, a leisurely activity once in a while. Who has made poor decisions and who has found themselves without a home due to causes beyond their control. It’s as if these legislators are looking only to help the poor person who fits an ideal mold, the one most like Oliver Twist...
And in their rush to judge who is legitimate, other acquaintances have told me that I’m not “really” poor. They assume that since I’m white and educated, I’m broke but not living in poverty. And now that I am on my way to making a pretty decent living that is close to putting me over the federal poverty line, I’ve thought about this a lot as well. What is the difference between being impoverished and being temporarily broke?
More Investment Needed to Change the World
In presidential campaign news, Hector Barreto of the Wall Street Journal looks at the economic message missing from the election from the point of view of Latino small businesses:
Like most Americans, Hispanics understand and appreciate the economic opportunity that small business offers, both to entrepreneurs themselves and to their employees. Small businesses traditionally create two-thirds of the net new jobs in this country, an important fact for any group of voters who are worried about jobs.
All this is missing from the presidential race. Why aren’t candidates competing to be the best small business advocate? And why aren’t any of them addressing the disturbing fact that fewer people want to start businesses than ever before?...
This missing small business message is especially puzzling to many Hispanic Americans who have watched immigrant parents realize their American dreams through business ownership.
Meanwhile President Obama and Prime Minister Trudeau have a blossoming friendship and a pledge to fight climate change together. So, what can we do about climate change from the private sector? Morgan Stanley recently released an environmental impact investing tool, recognizing that investors need different tools for what they want in their investments- check out this framework:
There is also this piece from Robert Eccles and Tim Youmans in MIT Sloan’s Management Review about how large custody banks need to assume the role of climate custodians for corporations:
By linking assets under custody to a key climate change measure, custody banks would be taking the first step in becoming climate custodians. This role would be compatible with their safekeeping, settlement, and reporting roles and would be aligned with their eight OCC-required significant audiences. It would also be in their economic self-interest to assume this role, since the fees on which their custody business is based are a function of assets under custody, which are at risk of losing value if climate change goes unchecked.
And what would a discussion of climate action be without taking on America's aging infrastructure, which this Quartz piece states can only be done by addressing local economies:
A massive infrastructure upgrade from the federal government is great in theory. It gives people jobs and makes us safer and more productive in the future. But, in practice, high-level bureaucrats have a mixed record picking projects that provide economic value, with studies varying widely on how effective federal infrastructure spending actually is. Some studies estimate federal infrastructure spending costs more than the benefit produced, while others claim it generates $2 of economic activity for every $1 spent. The differences often come down to measurement and how the money was used. Well-targeted federal infrastructure spending can pay off, but most projects aren’t always the free lunch they’re made out to be...
Fixing roads and bridges is useful and can provide a temporary boost, but it’s not sufficient to revive these local economies or maintain infrastructure in the future. America is becoming more unequal, not just between high and low earners, but between struggling and thriving pockets of the economy. Ultimately, poor infrastructure isn’t the most pressing issue facing most American cities, it’s a lack of opportunity and quality education. Considering that, you can’t totally fault local politicians for promising lower taxes, to the detriment of infrastructure, when their constituents are living paycheck to paycheck. Struggling local economies are what sparked a race to the bottom with lower taxes and fewer services.
Over at Forbes, Kevin Starr points out the peculiar tendency in philanthropy to withdraw funding from nonprofits that succeed:
It doesn’t make sense. Let’s say you invested in a company and things are going well. Your due diligence was solid, you made a smart bet, and it’s starting to pay off. Profits are growing, and so you what—pull your money? Of course not. If anything, you double down.
Ongoing, unrestricted funding is the closest thing we have to equity investment in the nonprofit world. With a for-profit company, a one-time investment can continue to generate profit. In the not-for-profit world, if you want more impact, you need to put in more money. Good organizations provide ever-greater bang for the buck through efficiencies of scale, opportunities for leverage, and iterative refinement of their model and operations—but they still need that buck…
..So why do funders bail on organizations that are having real, growing impact? Why this constant churn? One reason funders give is, “Our money doesn’t make a difference anymore.” Of course it does! Money’s fungible! When you provide money to an effective organization, your dollars have the same effect as everyone else’s. If those dollars are unrestricted, they’re even more valuable.
In the Chronicle of Philanthropy, Debra Blum looks at the National Wildlife Federation’s transition away from the more-is-better approach.
The Wage-Age Gap
Brendan Duke at the Center for American Progress looks at the data on pay for Millennials versus prior generations, and finds that "more education and a more productive economy have not paid off for working Millennials" but there is hope:
[A] labor market where the deck is stacked in favor of employers at the expense of employees is a primary cause of this poor median compensation growth. Millennials have spent almost their entire working lives in a labor market that is loose—with too many job seekers and too few jobs—and where private-sector labor unions are almost entirely absent. Certainly, monetary policy that promotes employment while making it easier for workers to form unions would help Millennials make up lost ground.
But there also exists an opportunity for Millennials not only to catch up but also to leap ahead: Family-friendly policies such as guaranteed access to paid family and medical leave and subsidized child care would provide a real financial boost. With these family- and worker-affirming policies in place, Millennial women—who are increasingly becoming mothers—would suffer a smaller motherhood earnings penalty than previous generations of female workers. These policies would reduce the motherhood penalty and—coupled with a restoration of workers’ bargaining power—go a long way toward helping Millennials enjoy healthy wage growth.
Rising inequality hasn’t affected seniors as much as younger cohorts, according to a report by Brookings examining the relationship between Social Security and changing life expectancies:
So why are Americans working longer? One reason is education. Men and women with more education tend to have higher-paying, usually more-rewarding, jobs that provide greater incentives to continue working. In 1985, 42 percent of 60-74 year-olds had less than a high school diploma. In 2013, only 12 percent did.
Oregon recently passed a bill to raise their minimum wage to one of the highest in the country—but different dollar minimums apply to different regions, according to the Atlantic’s Bourree Lam:
Oregon’s tiered system is interesting because it addresses one of the chief concerns some economists have about raising federal or state minimum wages: that rural areas will struggle to weather a decrease in jobs that may come with the increased cost of labor. A 2014 study by the Congressional Budget Office estimates that while a federal minimum-wage hike to $10.10 (from $7.25) would lift nearly a million workers above the poverty line, it’s expected that it would also result in 500,000 fewer jobs nationwide. Many economists point out that these job losses would not be evenly distributed—they’d likely cluster in the cities and states whose economies aren’t strong enough to start paying their low-wage workers a bit more. Oregon’s tiered approach is an attempt to try and avoid this consequence.
Looking at a different kind of pay gap, in the state of New York, nonprofits are asking Governor Cuomo to help fund the shortfall in wages for their employees as part of his plan to increase the minimum wage in New York State over the next five years. Over at Brooklyn Magazine a look at how segregated New York City's top public schools are becoming thanks in part to inequality:
Reports are released about the students accepted at New York’s elite, test-based high schools, and it’s revealed that, once again, only a small percentage of the city’s black and Latino students will be attending. The New York City public school system has 405 public high schools, but like much else in this city, taken as a whole, these schools are indicative of the type of inequality that runs rampant here. Some of the lower performing high schools have 4-year graduation rates that hover at around 40% with only a tiny fraction of the students going on to attend college or technical school, while others have 100% graduation rates and with many students going on to attend Harvard, Stanford, and MIT.
And because perhaps no other public high school in this city is as celebrated as Manhattan’s Stuyvesant High School, the scrutiny it (along with the seven other test-based specialized high schools) face with regards to its lack of racial diversity is intense. This year, the specialized high school’s incoming freshman class will contain 5% black students and 7% Latino students, despite the fact that blacks and Latinos make up approximately 70% of the public school student population as a whole.
Editor's Note: Deirdre Hess,Anthony Tagliente, Lily Ma and Inna Karamyan contributed to this report.