Policy Shop

Policy as if people mattered

How Much Money Would It Take to Eliminate Poverty In America?

Last week, the Census Bureau put out its annual income and poverty figures for 2012 . The big news on the poverty front is that the percentage of Americans living in poverty is unchanged at 15 percent, which amounts to 46.5 million Americans. More than one in five kids under the age of 18 are in poverty, and nearly one in four kids under the age of six are impoverished as well. These are numbers we’ve all become accustomed to, but they can still shock the conscience if you make an effort to let them soak in again. The sheer scale of poverty in the U.S. is so massive that it can seem as if eliminating or dramatically reducing it would be nearly impossible. After all, 46 million people is a lot of people. But in reality, if we stick to the official poverty line, the amount of money standing in the way of poverty eradication is much lower than people realize. In its annual poverty report, the Census Bureau includes a table that few take note of which actually details by how much families...

If New York Didn’t Have One of the Best Systems of Small-Donor Public Financing ...

(Flickr/Johannes Valkama)
Last week, we talked about the role that outside spending played in the New York City Council race and how of the 20 candidates Jobs for New York supported, 16 won. However, as Mark Schmitt at The New Republic pointed out , over half of the candidates Jobs for New York supported also had the support of the Working Families Party, who are often on the opposite side of the real estate debate. According to Common Cause’s scorecard , both groups supported the same 13 candidates, the vast majority of whom won their races. It’s unclear why Jobs for New York would support candidates that also have the backing of their opponents—perhaps they were just shrewdly banking on the winners—but it is clear that the group’s spending highlights the rise of outside spending and the importance of public financing. Jobs for New York’s spending raises two issues: One, as Schmitt points out, New York City at least has a public financing system allows small donors to offset some of the impact of outside...

Obama Just Changed the Most Racist Law in the Country

(flickr/uncgspecia)
You may have missed it, but yesterday President Obama dramatically altered one of the most racially damaging laws in America when the Department of Labor announced that it would extend minimum wage and overtime protections to home care workers. To say there's a backstory here would be a wild understatement. Seventy-five years ago, Franklin Roosevelt achieved a historic victory—but a morally compromised one—when he signed the Fair Labor Standards Act (FLSA) of 1938. The law created the modern labor regulations that we're all familiar with today, including the minimum wage, overtime pay, and much more. Yet getting the FLSA passed entailed a major concession to southern Democrats, who successfully fought to exclude agricultural and domestic workers. Why? Because, as legal scholar Juan Perea has shown in his illuminating history of the law, that exclusion was seen as crucial to preserving a southern way of life that hinged on exploiting cheap African-American labor—both in the fields...

Outside Money Wins in New York City Elections

Last week, we highlighted how the outside money group, Jobs for New York, was dominating the New York City Council races. So, how did they do? Not too shabby—of the 20 candidates they supported , 16 won , two are still too close to call, and two more were unsuccessful. Let’s look at the two races that are too close to call, Council District 19 and Council District 36. In Council District 19, the chart below shows the level of outside funding. Jobs for New York contributed over $324,000 to Paul Vallone’s campaign, it also spent over $21,000 in opposition spending against Shafran. Vallone won. In Council District 36, a similar spending pattern emerges. Currently Robert Cornegy is leading, but Kirsten Foy is less than 100 votes behind and the race has not been called either way. Let’s assume Cornegy wins and Foy loses. Jobs for New York would have supported 17 successful candidates, which is an 85 percent success rate. It’s hard to quantify the impact of outside spending, but...

How The Richest Americans Are Doing Better Than Ever, In Two Charts

The top 1 percent captured 95 percent of the income growth during the economic recovery. That’s just one depressing lowlight in Thomas Piketty and Emmanuel Saez's 2012 update on the fortunes of the nation's top earners. Piketty and Saez's dataset, drawn from exclusive access to the IRS filings of the top 1 percent of wage earners since 1913 , paints a clear picture of the increasingly potent ability of the richest Americans to extract rents from the rest of the society. Taking into account capital gains, Piketty and Saez find that the current recovery has been a windfall for the richest Americans. After a momentary decline during the Great Recession, the incomes of the top 1 percent of earners surged again during the 2011-2012 period. The addition of 2012 data helps paint of a more complete picture of the missing recovery for most Americans. During the recession, the incomes of the richest fell, but not nearly at the rate of everyone else , despite their role in precipitating the...

Conservative Tropes About Low-Income Excess Are Wrong

Are people better off than they were before the recession? By most headline figures they’re not: Poverty and inequality have risen to record levels, median incomes declined. Unemployment has improved marginally, but 37 states have yet to regain their pre-recession job levels . Conservatives like to push back on claims of rising inequality or worsening poverty by pointing out that their measure of poverty or inequality insufficiently captures the increasing well-being of even the poor. They're better off, they say, because low and middle-income Americans are living better than they did in the past. These arguments manifest themselves in concern over “Obamaphones” or access to liquor or drugs, and generally recommend policy solutions as odious as drug-testing as a prerequisite for welfare or stricter control over food stamps. As Matt Bruenig aptly pointed out on this blog , even taking these conservative policy solutions at their face value, fraud complaints are spurious. We want poor...

Libertarianism's Battle With History

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Economic libertarianism’s most amusing failing is philosophical. In particular, the non-aggression form of libertarianism so popular among the Paul clan and their followers quite straightforwardly generates the conclusion that all private property is unjust theft . Internal contradictions abound in libertarianism, but that is surely the most problematic one. As much as I enjoy the philosophical arguments, experience tells me others prefer an approach that seem less like game-playing. If you are that kind of person, then you are in luck. Karl Polanyi wrote The Great Transformation in 1944 to provide a more meaty historical and sociological takedown of the libertarian approach to the market economy. The first thing to note is that free market capitalism hasn’t always been around. If you listen to libertarians long enough, you may get the sense that laissez-faire capitalism is the natural and default way of the world. But in fact, it's a newcomer in the historical scene. All of known...

Middle-Class Blacks and Whites Have Vastly Different Fortunes

With the passing of the 50th anniversary of the March on Washington, commentators have been assessing the status of blacks in society. Matt Yglesias has a post about the black-white income gap, and how it has not budged in 40 years. Brad Plumer has a post at Wonkblog that features ten charts showing the persistence of the black-white economic gap, including rates of unemployment, poverty, and so on. The statistics provided in these posts—and indeed most statistics provided on this question—compare all blacks against all whites. This kind of comparison is worth making for certain purposes, but it also has its limitations. By itself, such group-level comparisons lend themselves to the hasty conclusion that the difference between the economic situations of blacks and whites is mainly that blacks are more concentrated on the low end of the economic ladder. When you've concluded that the black-white disparity is primarily an issue of black over-representation on the bottom and white over-...

Ten Reasons Fast Food Workers Deserve A Raise

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There is a growing, industry-wide movement to push the fast food economy to work for all involved. Today, workers have called for a national strike that is expected to cross company lines and reach dozens of cities. The fast food labor force has never been protected by collective bargaining power or labor scarcity, making their demands for higher wages and the right to organize a unique historical event. It is also a bold stance from workers made vulnerable by a frail economy, asking for benefits that reach well beyond their own household budgets to the economy as a whole. Right now, fast food companies keep employees at poverty-level wages while reaping billions of dollars in profits for their shareholders every year. Across the economy this practice drives increasing inequality, slow growth, and declining living standards. It is holding back our economic recovery and contributing to our high poverty rates and rates of working poor. Americans deserve better. The fast food workers’...

Challenging the Myths of the Libertarian Right

(Flickr/Gage Skidmore)
The emergence of Rand Paul as a leading contender for the Republican presidential nomination marks an important turning point: Extreme libertarianism has entered the mainstream of American politics. This shift has been coming for 30 years, a period of growing attacks on government as "the enemy" combined with extolling the laissez-faire idea that the free market can solve all our problems. These attacks have not emerged out of thin air. Billions of dollars have been spent by corporations, foundations, and wealthy individuals to fund a large conservative policy and media infrastructure on the right, led by think tanks like the Heritage Foundation, the Cato Institute, and the American Enterprise Institute. In recent years, though, the right has moved even further to the right, as more base Republican voters have embraced libertarian ideology and deep-pocketed funders like the Koch brothers have put more resources behind promoting this extreme worldview. Meanwhile, a new generation of...

The High Probability of Being Poor

Late last month, the Associated Press ran a report about economic insecurity that managed to gain some traction in certain parts of the political internet, and since then, again and again in certain relevant debates. The statistical bomb dropped in the first sentence of the report really says it all: Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream. To be clear, this figure pertains to the percentage of people facing these problems at least once in their life , not the percentage of people facing them right now . Also, it should be noted that this figure cannot, by itself, be a sign of deteriorating economic security. To show things are deteriorating, you'd have to know whether this figure used to be lower than 80 percent, and we do not know that. Shortly after the AP report blew up, the Wall Street Journal's James Taranto responded with a...

Stop Worrying about Food Stamp "Fraud"

Over at the Weekly Standard blog, Jeryl Bier raised an alarm on Friday about the rise of food stamp (aka SNAP) fraud. The howler in the piece is that although the headline says food stamp fraud is up 30 percent, you soon realize that the fraud rate only rose from 1.0 percent to 1.3 percent. Bier rightly deserves a ding for a ridiculously misleading use of statistics. In response to Bier, Jonathan Cohn points out the misuse of statistics and makes the straightforward case for food stamps . That case is old but worth repeating here: food stamps stabilize households and the economy in bad economic times, pull millions out of poverty, and have very low overhead. Also, the program runs quite well! Beyond Cohn’s takedown, I think we should point out that the kind of food stamp “fraud” Bier is complaining about is not even a problem. The USDA calls the type of fraud in question “trafficking,” and it basically amounts to individually swapping out food stamp dollars for actual dollars. Despite...

Ezra Klein's Blind Spot

(Flickr/Son of Broccoli)
On Monday, Ezra Klein argued that “conventional wisdom on Washington is that corporations win every fight and everyone else—particularly the poor—get shafted" is, wait for it, "wrong, or at least incomplete." He posits that advocates for the poor have increased their influence during the Obama era, pointing to rising food stamp rolls and Obamacare as evidence. His central thesis attacks a straw man: Corporate America and the poor can both wield a lot of power at the same time, as they’re not typically locked in a zero-sum struggle with each other. If anything, it’s the middle class, or perhaps the upper-middle class, that’s been left out. Lo and behold, none other than Larry Bartels, author of the definitive Unequal Democracy: The Political Economy of the New Gilded Age, took to the Monkey Cage to rebut Klein , citing this chart: Bartels sees what Klein does not: there’s a larger economic context. Redistributing income, via food stamps or an Obamacare tax increase is not only...

False Concerns for the Poor

(Flickr/Mark Sedella)
Fast food workers have been organizing across the country for months now, and last week a series of spectacular coordinated strikes generated a deluge of media coverage . As you'd expect, the right-wing media and pundit class came out swinging against the workers with their usual mix of hateful trashing and concern trolling. The hateful trashing mantle was best carried by talking heads at FOX News who slammed fast food workers as mediocre ingrates who should be happy to have a job at all. Comments like these remind us that the right-wing does not merely hate welfare programs due to some anti-spending, anti-government ethos. They just hate the poor in general. Even poor people who, by their very description, are in jobs working hard and seeking to negotiate up their wages with their own employer receive the same vicious treatment the right-wing pretends to reserve only for "lazy welfare cheats." For those of us who don't think the working poor are subhuman garbage, this attack strategy...

How Vast Error-Prone Databases Are Trashing Our Economic Lives

Our personal information is compiled, traded, analyzed, and sold off as never before. Not only do business and government track us online, but retailers trace our cell phones through stores , and vast, little-known databases can keep us from getting jobs, qualifying for loans, and opening bank accounts. Three news reports this week highlight the growing impact of these databases on our daily lives—and the critical need for oversight to ensure that information is compiled accurately, that errors can be fixed, and that the resulting data is used fairly rather than becoming a new means of discrimination against already-disadvantaged citizens. The Consumer Financial Protection Bureau, whose director was finally confirmed by Congress after more than two years of delay, will have its work cut out for it. Consider the report in today’s New York Times finding that more than a million low-income Americans have been denied the opportunity to open bank accounts because of little-known databases...

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