Poverty & Wealth

America's Neediest Families Are About to Run Out of Money

AP Images/Melanie Stetson Freeman
Update: Governor Jan Brewer has ordered state officials to redirect $650,000 in state funds so that families continue to receive welfare benefits. W hen Congress shut down the government, one of the many programs caught up in the fracas was Temporary Aid for Needy Families (TANF), the program created by the 1996 welfare-reform law. Spending on the program is mandatory, and normally wouldn’t be a casualty of an appropriations fight like the one waged now. But the law officially expired three years ago. Instead of taking it up again, Congress has simply extended the last reauthorization with each new spending bill. No spending bill, no welfare program. The biggest way the ’96 reform law changed the program was by turning it into a block grant to states: Whatever the federal government appropriated for programs designed to help poor families, they would send it in chunks to state governments that were fairly free to decide how to spend it. TANF continues to provide cash benefits to some...

Five Reasons Food Stamps Work Just Fine

Melanie Stetson Freeman/The Christian Science Monitor L ast week, House Republicans passed a bill that would cut the food stamp program by about $40 billion over the next ten years. They’re drawing on headline numbers—the program serves about 47 million people each year and has the biggest price tag of any program in the farm bill, $80 billion—to drum up support. The aid, technically known as the Supplemental Nutrition Assistance Program, or SNAP, is still known as food stamps to nearly everyone who receives it. There’s little chance that the bill will be enacted, given the more moderate makeup of the Senate, although it’s likely that some cuts will end up on the president’s desk. (The Senate is cutting $4.4 billion from the program.) Still, food stamps are one of the most robust federal entitlements for the poor we have left, so it’s always going to be a target for cuts. It’s worth looking beyond those bold-face numbers in the news to see how the program is performing—and why it’s...

Playing Hunger Games with Food Stamps

When the House voted yesterday to cut $40 billion from the food-stamp program, they doubled the cuts the House had previously considered. The Congressional Budget Office estimates that 3.8 million people will be taken off the program, primarily because the House is removing some of the flexibility states have to meet the needs of their communities. They are restoring strict federal rules to the program. That’s an odd move for a bunch of Republicans. Most of the people who will be removed from the Supplemental Nutrition Assistance Program’s (SNAP) rolls are adults in high unemployment areas who don’t have children and can’t find jobs, and families with gross incomes that are slightly higher than the poverty line, but whose disposable incomes fall below it. These changes were introduced a few years ago to meet a rising need. The poverty line is low, and doesn’t take into account how much families spend on the costs of necessities like housing and childcare. More than half of all food...

The Conservative Plan for Medicaid Expansion

AP Photo/Osamu Honda
AP Photo/The Columbus Dispatch, Chris Russell A number of policymakers on both sides of the aisle cheered when, in April, the Arkansas Legislature passed a law both expanding Medicaid and transforming it into a service available in a marketplace of insurance options, a move known as the “private option.” Similar cheers erupted in June when Iowa Governor Terry Branstad approved a similar measure. The legislation marked a major accomplishment—not because the policies are necessarily improvements over traditional Medicaid but because they establish politically palatable paths for conservatives who want to increase access to health care. In Pennsylvania, GOP Governor Tom Corbett—who was against Medicaid expansion and this week announced he is is tepidly for it—has pointed to the these new plans as a model he might consider (among other, more controversial changes.) The private option may be a way to make comprehensive health-care coverage viable in other Republican states—but that depends...

The Fed Stays the Course

AP Photo/Susan Walsh
F inancial markets rallied when the Federal Reserve defied the rumor-mongers and resolved to continue its program of keeping interest rates very low until the unemployment rate improves. There was only one dissenting vote on the Fed’s policy-setting open market committee. What’s going on here? Ever since the run-up to the collapse of 2008, what’s good for Wall Street hasn’t exactly been good for the rest of the economy. Are these ultra-low interest rates just pumping up more financial bubbles, as critics fear? Or does a still weak economy need this form of stimulus? Think of it this way. There are risks to continuing a policy of very easy money, but premature tightening would be even worse. The markets and the pundits got this one wrong because the hawks in the Fed system had been leaking rumors that they had the votes and that the Fed would soon be “tapering” (pulling back) its program of $85 billion-a-month in bond purchases. Chairman Ben Bernanke, to appease the hawks, lent...

Time to Give America a Raise

AP Photo/Louie Balukoff
I t’s been a good week for the nation’s numerous poverty-wage workers. They’ve been way overdue for a good week. On Tuesday, the Labor Department issued a much anticipated and delayed extension of the federal minimum wage and overtime regulations to the nation’s 2 million homecare workers. Last Thursday, the California legislature passed (and Governor Jerry Brown pledged to sign) a bill that raised the mega-state’s minimum wage from $8-an-hour to $10. Taken together, these two measures limiting poverty-wage work underscore a host of significant changes to the political economy. The Labor Department’s extension of the minimum wage recognizes the growth of homecare as an industry increasingly like any other, with agencies big and small, many relying on partial government subsidies, employing millions of workers. It also signals the continuing extension of federal work standards beyond those that originally covered white men disproportionately. When the Fair Labor Standards Act (which...

A Long Way from the End of Men

AP Photo/Mark Lennihan
AP Photo/Patrick Semansky T hough we’ve technically been recovering from the Great Recession since late 2009, the poverty rate in the United States has been stuck at about 15 percent since 2010. New data released yesterday from the Census Bureau showed that last year wasn’t much better. Poverty rates held steady at the highest levels in a generation. Median incomes have fallen in the last ten years by more than 11 percent. Coupled with recent studies showing that most of the recovery’s gains have gone to the top 1 percent of income earners, the data on poverty confirms what many already knew: Inequality is growing, and the middle class is dying. That’s especially true when you examine the status of women and racial minorities. The median incomes for Asian and white families last year were $68,636 and $57,009 respectively. For Hispanics and blacks, they were $39,005 and $33,321. These incomes are statistically unchanged from 2011, which means that if the economy is growing, the average...

Homeowners vs. Big Bad Banks

AP Photo/Paul Sakuma, File
AP Photo/Michael Dwyer, File I n June, six former employees of Bank of America's loan-modification department testified in court that since 2009, they had been instructed to lie to struggling homeowners, hide their financial documents, and push them into foreclosure. In the most egregious example, the employees said they were offered Target gift cards as a bonus for more foreclosures, which generated lucrative fees for the bank. The employees, who were in charge of implementing the government’s Home Affordable Modification Program (HAMP) at the bank, described the same deceptive practices across the country. Two weeks ago, U.S. District Court Judge Rya Zobel dismissed the case , denying class-action certification to 43 homeowners in 26 states who suffered because of similar conduct. “Plaintiffs have plausibly alleged that Bank of America utterly failed to administer its HAMP modifications in a timely and efficient way,” Zobel agreed, adding that vulnerable homeowners had to wade...

Proof the Left Coast Is the Best Coast?

AP Images/Reed Saxon
The AFL-CIO held its national convention in California last week, and it turns out it couldn’t have picked a better time to be there. For it was last week that California really began to deliver on the promise of the labor-Latino alliance. On Thursday, with the legislature rushing to meet its targeted adjournment date on Friday, it passed a bill raising the state’s hourly minimum wage from $8 to $10—the highest in the nation. It passed a bill permitting undocumented immigrants to get driver's licenses. Governor Jerry Brown has committed to sign both bills. It also passed a bill mandating overtime pay for domestic workers, and, for good measure, outlawed the sale of rifles with detachable magazines and required owners of such rifles to register them with the state. And perhaps just as remarkably, on Thursday, 15 Republican members of the state legislature announced their support for federal immigration reform, including legalization of the undocumented. None of these victories were...

Trumka's Ploy

AP Images/Carolyn Kaster
The AFL-CIO Convention concluded Wednesday, having made some major structural changes in the way labor will operate—though nowhere near so major as the changes that the Federation’s top leader was advocating in the weeks leading up to the convention. AFL-CIO President Richard Trumka iterated and reiterated that labor would no longer limit its members to those who had successfully convinced their employers to recognize their union. With employers able to flout labor law with impunity, illegally firing workers who sought to organize and refusing to sign contracts with those whose unions had won recognition elections, the number of workers who actually emerge with a contract grows smaller with each passing year. So the Federation’s unions would welcome workers who had tried to organize their workplace but didn’t prevail. It would welcome workers such as cab drivers, who were misclassified as independent contractors and legally proscribed from forming a union, though they were actually...

Larry Summers and the Economists’ “Greed Exception”

AP Images/J. Scott Applewhite
AP Images/J. Scott Applewhite I t is said that the late economist Milton Friedman was once asked how much money it would take for him to change his position that humans are primarily motivated by greed, which was at the core of his free-market fundamentalism. Friedman wisely dodged the question. He understood that if he said he could not be bought, it would undercut his economic theory. In order to avoid doing so, he would have had to admit that he, like everyone else, had his price. Lawrence Summers is certainly not a Milton Friedman conservative. But of the top candidates to succeed Ben Bernanke as chairman of the Federal Reserve, he is the leading exponent of free-market dogma. He was an architect of financial deregulation, and champions unfettered global trade and limiting government intervention in the economy. He has also become wealthy selling his services to corporate bankers and brokers who benefit from such policies. Summers and his supporters insist that his ties to Wall...

Upper East Side Snubs de Blasio

The most impressive aspect of Bill de Blasio’s victory in yesterday’s Democratic primary for the post of New York’s mayor is its breadth. He ran first in all the boroughs, carried parts of the city ‘s most African American neighborhoods in Harlem and Brooklyn, despite the presence of a prominent African American candidate in the race (William Thompson, who may yet squeak into a run-off depending on the count of the outstanding ballots), and romped through such white liberal strongholds as Greenwich Village, the Upper West Side, and Park Slope. The New York Times website has a precinct-by-precinct map of how the candidates did. What’s particularly striking is that de Blasio ran either first or second in what was effectively a five-candidate field in every one of the city’s neighborhoods—with one exception. The exception was Manhattan’s Upper East Side, or more precisely, the precincts that encompassed Fifth, Madison, and Park Avenues and their side streets between 59th Street and,...

Investigative Journalism Producing Change, Local Edition

Last Sunday's Post.
One of the main arguments for why it's a bad thing if the newspaper industry dies is that newspapers cover local affairs in a way that nobody else does, and that has demonstrable effects on people's lives. Most of the time we don't see those effects, but every once in a while, a story comes along that proves all over again why newspapers are so vital, not just because of what they can expose but because of the change that can come from it. The Washington Post is in the midst of a series of articles about an unbelievable scam victimizing some extremely vulnerable citizens of the District of Columbia. It's one of those combinations of government incompetence, private greed, and sheer immorality that just makes your blood boil. Here's what happened. The D.C. government, like any local government, has lots of outstanding tax bills from citizens it would like to see paid. Some of these are large, and some are small. Since it doesn't have the resources to go out and hound people to pay...

Unions—Not Just for Middle-Aged White Guys Anymore

AP Images/Carolyn Kaster
During the floor debate yesterday on a resolution expanding the AFL-CIO’s commitment to take the workers excluded from labor law’s protections into its ranks—domestic workers, taxi drivers, day laborers, and the like—one delegate to the union’s quadrennial convention likened the proceedings to the 1935 AFL convention, when a sizable group of unionists wanted the Federation to expand its ranks to include factory workers. The more conservative Federation leaders, including its president, William Green, believed that unions should represent only workers in skilled trades—carpenters, masons, plumbers, and so on. But John L. Lewis of the Mine Workers and Sidney Hillman of the Clothing Workers believed that there were millions of factory workers who would flock to unions if given the chance. Lewis and Hillman’s motion to organize factory workers was put to a vote and lost. They were not happy. Indeed, Lewis decked Big Bill Hutchinson, the president of the Carpenters, and stormed out—to form...

Labor Goes Community

AP Images/Jacquelyn Martin
“Community is the new density,” AFL-CIO Secretary-Treasurer Elizabeth Shuler said yesterday, just moments before the labor federation’s quadrennial convention was gaveled to order in Los Angeles. For those who follow labor-speak, the remark was both an acknowledgement of American labor’s crisis, and a guide to the strategy with which it hopes to recover. For unions, and more fundamentally for workers, density is power. In a market with considerable union density, wages and benefits are high—or at least higher than they are in a nonunion market. In the three cities with the highest density of unionized hotel workers, for instance—New York, San Francisco, and Las Vegas—housekeepers make upwards of $20 an hour. In a city where just half the big hotels are unionized—Los Angeles, say—their wage is close to $13 or $14 an hour. In a city in which no hotels are unionized, as in the case in most of the South and Southwest, housekeepers make barely more than the legal minimum. But more and more...

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