Bits on Work Requirements, Income Inequality and Judging People

Another “scrapbook” of items that might have become full-fledged posts, but didn’t.

It Really Is All Politics

I observed awhile ago that the Republicans were making a fuss about waivers the Obama administration has offered states to improve their Temporary Assistance for Needy Families programs was based on the source, not the substance.

That was before the Romney campaign jumped on the issue, with a spate of ads accusing the President of “gutting” the TANF work requirements — a claim that’s been roundly debunked by fact-checkers.

Then House Republicans decided they’d flog the issue too. Before they left the Capitol, having briefly visited, they passed a resolution to block the waivers. Some Senate Republicans tried — unsuccessfully — to get a vote on a similar resolution before they also hustled home to campaign.

But Wonkblogger Dylan Matthews has unearthed proof that Republicans — at least those on the House Education and Workforce Committee — don’t really care about those work requirements at all.

In June, they passed a bill revamping the Workforce Investment Act — the single largest source of federal funds for job training, counseling and the like.

The bill would let states roll all their federally-funded workforce-related programs together into one big Workforce Investment Fund — not only those funded under the current WIA, but many others, including TANF.

The Congressional Research Service analyzed the bill and concluded that the TANF work requirements might no longer apply if states opted for the Investment Fund because TANF wouldn’t be a separate program any more.

Some ambiguity here. But none in what the bill tells us about Republicans’ purported concern for those very restrictive work requirements — or their enthusiasm for state flexibility so long as it’s not offered by a Democrat.

What I Didn’t Know About the Census

As I guess you know, the big downside news in the latest Census Bureau report on its Current Population Survey wasn’t the poverty rate.

It was the unusually large increase in income inequality last year — or more precisely, the widening gap between the top fifth on the income scale and all of us who occupy the lower fifths.

What I didn’t know is that the gap is probably much wider — at least, between the richest fifth of households and households trying to get along on incomes that put them in the bottom two fifths.

That’s mainly because the Census Bureau doesn’t count capital gains as income. Yet profits from the sales of stocks, bonds, real property and the like flow primarily to the top fifth — and within this privileged group, to the very wealthiest of all.

The Bureau also limits the income information it collects for this very wealthy group. All salary income over $999,999 per job gets recorded at this amount. We know that some big corporate types get a whole lot more.

So if we want to see what’s really happening with income inequality, we’re better off with analyses based on Internal Revenue Service figures — or a combination of these and the Census figures.

Here’s what the latest of each type look like, courtesy the Center on Budget and Policy Priorities.

Judge Not?

You’ve all heard of food stamp challenges, I’m sure. Now an organization called Everyone Matters has come up with a very different sort of challenge.

On November 19, we’re to go for 24 hours without judging anyone for anything — out loud or in our heads.

“They have as much right to be who they are as you do,” EM says. “Everyone gets to choose for themselves … [W]e are no better or worse.” Meaning, I think, that no one’s choices are better than anyone else’s.

I’m quite sure I could refrain from judging people on most of the bases EM cites as examples. I tend not to judge people by what they wear or how they behave in their everyday, private lives, unless they deliberately hurt others. Never judge by where they come from or their race, age, disability, etc.

But could I go for 24 hours without judging anyone on the basis of their social and/or political views? Highly doubtful, as those of you who’ve read my posts — even the first fragment here — would guess.

Frankly, I don’t think that taking an anything goes attitude toward people who demean others because they don’t earn enough to pay federal income taxes or who claim our government does too much to help the poorest of them is something to strive for.

Nor do I see any value in suppressing admiration for people who commit their lives to serving the needs and interests of the most vulnerable in our society.

There’s a difference, I think, between believing that all men (and women) are created equal and believing that all their opinions — and the actions that follow from them — are equal too.

And you?

New DC Poverty Figures … Surprising and Not

Figures the Census Bureau released two weeks ago indicated that the poverty rate in the District of Columbia had gone up — and by a lot.

Looking at the two-year average to compensate for the small sample size, the poverty rate hit 19.7% in 2010-11. This is 4.6% higher than the comparable rate for the U.S. as a whole — and higher than the rates for all but two states.

Now we’ve got results from the much more comprehensive American Community Survey. It uses samples large enough to make one-year figures for states — and even smaller jurisdictions — reasonably accurate. Also figures for specific age and race/ethnicity groups.

And, lo and behold, the overall poverty rate in the District didn’t rise after all. Here’s more detail on that, plus some other notable numbers.

Poverty and Severe Poverty Rates Halt Upward Climbs

The new D.C. poverty rate looks like a decline — down from from 19.2% in 2010 to 18.7% last year.

The Census Bureau, however, says that the change is not statistically significant.* Even a level rate is, of course, better news than what we read earlier.

As with the two-year averages, the rate in the District was higher than the nationwide ACS rate — by 2.8%. Rates in nine states were higher.

Similar news for the severe poverty rate, i.e., the percent of residents who lived below 50% of the applicable poverty threshold (just $23,021 for a family of four).

It dropped a bit — from 10.7% to 10.3%. Doubtful that this change is statistically significant.

Whether or no, it means that more than half of all D.C. residents counted as officially poor — 109,317 — were so very poor as to meet the severe poverty standard.

Unequivocally bad news for the District’s children. The poverty rate for the under-18 population — 30.3% — was virtually the same as in 2010. The new rate is 7.8% higher than the also disturbingly high national rate.

As with the District’s poor population generally, more than half of all poor D.C. children lived in severe poverty last year — 16.5%. That’s nearly 17,285 children in truly desperate circumstances.

Race/Ethnicity Gaps Still Very Large

We’ve got new figures, but no new story for the challenges to Mayor Gray’s One City vision. For example, in 2011:

• The poverty rate for blacks was more than four times the rate for non-Hispanic whites — 27.8%, as compared to 6.8%.
• The severe poverty rate for blacks was also much higher than the rate for non-Hispanic whites — 14.6%, as compared to 4.8%.
• The poverty rate for Hispanics was 18.1% and the severe poverty rate 8%.

We see the same disparities in household income.

• The median income for non-Hispanic white households was a very comfortable $107,679.
• For black households, the median income was barely more than a third of that — $39,302.
• Hispanic households did better, on average, with a median income of $59,607, but their median income was somewhat higher in 2010.

More Jobs Would Help, But …

Commenting on the earlier Census figures, the DC Fiscal Policy Institute noted that the jump in the poverty rate reflects mainly “stubbornly high unemployment” for “some groups of residents.”

Well, we had no jump. But the analysis still applies, with some qualifications.

Nearly half — 47.3% — of the District’s poor residents between the ages of 16 and 65 didn’t work at all last year. Another 25.5% worked less than full time and/or year round.

That leaves 27.2% of working-age residents who were employed full time, year round and nevertheless in poverty.

So it’s pretty obvious that more jobs would be helpful. But it’s also obvious that more jobs alone won’t cut it.

Education is commonly touted as the answer to persistently high poverty rates. I, among others, am  inclined to think that’s over-simple, though no doubt part of the answer — certainly here in the District.

According to the ACS, the poverty rate for adults 25 years and older who had just a high school diploma or the equivalent was 22.8% last year — and for those with less, a whopping 35.6%.

The poverty rate for those with at least a bachelor’s degree was just 4.2%. This is lower than the rate in 2010, while the rate for those with less than a high school diploma or GED is markedly higher.

We could surely narrow the income gaps in the District with better — and more equal — educational opportunities for residents without the advantages of their well-off peers.

Those opportunities unfortunately may diminish, due to the across-the-board federal spending cuts that Congress isn’t even close to averting.

We know that the District’s public education programs would take a significant hit — estimated, for only three major sources, at more than $9.1 million next year.

The cuts would also throw a lot of people out of work — estimated at upwards of two million nationwide. The District would lose its share — perhaps more than its share.

Lost jobs mean lost tax revenues that could be used to shore up our fraying safety net and for programs that reduce needs for the aid it should provide.

All sad — and wholly avoidable — prospects for our egregiously large poor population.

* As the text indicates, the severe poverty rate change I report here may not be statistically significant either. The Census Bureau’s brief doesn’t cover levels above and below the poverty thresholds, though the ACS tables do. They show error margins, but they’re not multi-year.

Income Ladder Hard to Climb If You’re Born at the Bottom, New Report Shows

Many news stories and opinion pieces on the latest report from the Pew Center’s Economic Mobility Project — as well there might be.

Because “pursuing the American dream,” as the report is entitled, could be as rewarding as chasing a will o’ the wisp — especially for those born to low-income parents and most especially of all if they’re black.

At the very least, the report gives the lie to our “rags to riches” story. It’s “more of a Hollywood fairytale than an actual reality,” says Ethan Gelling at the Corporation for Economic Development, echoing the Pew project manager.

I think we need to parse the data into two separate issues, as the Pew analysts also do.

One is economic mobility as measured by movement up or down the quintiles into which income is commonly divided.

As the Pew analysts say, economic growth — especially at the top — puts the major rungs on the income ladder further apart. Obviously harder then to climb from one to another.

That’s how we can have what, at first blush, seem two contradictory findings. On the one hand, 93% of adults in the bottom fifth have family incomes higher than their parents did. On the other hand, only 57% move up into a higher fifth — and only 13% into one of the top two fifths.

Some argue that the root cause, i.e., the grossly disproportionate distribution of the wealth our economy generates, is bad in and of itself.

Rakim Brooks at Demos, for example, warns that the public as a whole loses trust in institutions “when it begins to associate the rich with the fortunes of the country.”

Others have said that income inequality is partly responsible for the credit crunch so many households now find themselves in.

People, they say, often define their wants upward, based on what they see richer folks have. They buy — or rather, make down payments on — houses they can’t afford. They put all sorts of “status-defining” goods on credits cards — enormous flat-screened TVs, designer accessories, etc.

I’m rather more preoccupied with the second issue. Do people in the bottom fifth have enough to live on, plus a modicum of what the Pew analysts call wealth and some others refer to as assets?

Do they, in other words, have a reserve for costly emergencies? A cushion against plain old hard times? Some resources to give their children a good start in life?

The answer from the Pew project is a resounding No.

The median income of families in the bottom fifth was a paltry $19,202 in 2009 — nearly $2,850 below the federal poverty line for a family of four.

And their median wealth, i.e., assets like home equity, money in the bank, a car, was just $2,748 — about $4,690 less than the bottom fifth had a generation ago.

The two figures are, I assume, closely related. If you’re, at best, making barely enough for basic needs, you’re not squirreling away money for a rainy day — let alone investing in mutual funds and the like that will, in the long run, make your nest egg grow.

Why families in the bottom fifth are in such bad straits is a much more complex question. Panelists at a recent all-day conference co-hosted by Demos and partners went at it from many angles.

I’ll mention here only what seemed one broad consensus. A college education — at the very least, enough to earn an associate’s degree or certificate — is a big part of the solution.

Yet, as we know, college is getting very expensive. Pell grants, which the lowest fifth could qualify for, rarelyt cover the costs — and now have new restrictions that tend to rule out self-supporting work during enrollment.

I don’t suppose I need to say anything about loan burdens — except perhaps to note that they surely seem especially formidable for potential students in the bottom fifth, whose prospects for moving up the income scale are iffy, at best.

Yet the Pew figures indicate that their families can’t help them.

Nor, indeed, will the parents all have the resources to provide what their infants and toddlers need to do well when they start school, e.g., a healthful diet, high-quality child care, time to read to them, take them to the zoo, etc.

Fewer than half of poor children are “school ready” when they start kindergarten, according to a study from the Brookings Institution. Three-quarters of children in families with moderate and high incomes are.

And when you start behind, you tend to stay behind, as some Pew figures on reading skills show.

Not surprising then that the dropout rate for low-income students is five times the rate for students from high-income families.

This is one way that income inequality passes from generation to generation. Not just inequality, but poverty too.

“Poverty Is First and Foremost a Problem of Work”

A thought-provoking Q&A session with Professor Peter Edelman and Heather Boushey, a senior economist at the Center for America Progress.

The occasion was Edelman’s new book, So Rich, So Poor. And like the book, the discussion revolved around poverty in America — why we have so much of it, what we could do to have less.

For both Edelman and Boushey, the key to both is work. Poverty is “first and foremost a problem of work,” Boushey said.

She wasn’t referring to the current shortage of it, but rather, as Edelman later put it, “work that produces a decent income.”

Back in the mid-1970s, “something happened to male wages,” Boushey said. The “something” was a leveling-off in their real value — and an actual drop in wages for men with, at most, a high school diploma.

Family incomes were “held up by women.” Many more of them in the labor force and remaining there after marriage or rejoining when things got tough.

But workplaces are generally “hostile to families,” Boushey added. And it’s still the case that work/family conflicts affect women more than men.

The bigger issue, however, is the growing number of single-mother families — a major theme in Edelman’s book.

No second income here. And wage losses — job losses too — because there’s no dad around to help cope with the child who gets sick or the late-announced scheduling changes that throw child care arrangements out of whack.

Family-friendly workplaces won’t solve the wage problem, however.

Edelman attributed it in part to macroeconomic policies, citing trade and immigration specifically.

He’s referring, among other things, to trade agreements that advantage imports from countries with low labor standards.

Also, I would guess, to policies that allow employers to import temporary workers who will accept lower wages than would otherwise have to be paid. Policies that enable U.S. companies to maximize profits by exporting jobs belong in this category too.

Coming at the issue from a different angle, Boushey said that our macroeconomic policies need to focus on good jobs — specifically, on developing “human capital” by investments in education.

Edelman concurred. He’d like our high schools to offer pathways to work other than college prep — vocational and technical training for bona fide careers.

This, he said, is especially important for youth — most of them racial and ethnic minorities — who are in danger of becoming disconnected from both school and work.

Solutions like these could perhaps lift more of the upcoming generation into the endangered middle class. But what about people who are already working age?

Some, of course, are doing very well, thank you. But, according to Edelman, half the jobs in our economy pay less than $34,000 a year. For a family of four, that’s less than 150% of the federal poverty line — the standard commonly used for low-income.

No silver bullets identified. Edelman, in fact, said he was “very concerned about the next decade.”

He floated some policy changes that could make a difference, but added that we’d first have to decide we have “an income problem.” We’re not facing up to that, he said.

People deflect attention from the wage issue, e.g., by blaming single mothers for having children. Those low on the income scale think that’s where they are because of their “failings” — or because that’s “just how things are.”

Edelman is refreshingly optimistic. We’ve “had other times that were really terrible,” he said. Think of the robber-baron era at the beginning of the 20th century.

But then “people stood up.” They voted to put an end to it. We’re “voting against our own interests now” — and at a time when “we need the largest we we can get to defend what we have.”

Recall that Congressman Paul Ryan, among others, is claiming that we’re helping people too much — and for too long.

So where will the “largest we” come from? Ironically, given the context, Edelman’s said that what we need to do is get people outside of think tanks thinking and talking about poverty — or perhaps about specific poverty-related problems.

This seems to me one of the big challenges of our time.

What will create a broad-based, sustained conversation about work, wages, income supports and the rest? What will translate talk into a political force?