Much Progress Toward Reducing Poverty, But Much More to Do

March 23, 2017

So many news reports, analyses, blog posts, etc. on how the House Republicans’ repeal-replace bill and/or Trump’s budget would harm poor people. I thought I should clear my mind and purge anger, however briefly.

So I reread a fleshed-out speech that Jason Furman, Obama’s Chairman of the White House Council of Economic Advisors—gave a few days before Trump’s inauguration.

It seems even more timely now, as we learn more about what the new administration and Republican House leaders have in mind. But it’s relevant also to what state — and in some cases, local — policymakers have done and can do.

So a brief summary of the hefty, research-based framework and then the agenda Furman lays out.

What Accounts for Poverty

“Poverty is shaped by market forces and government policies and programs,” Furman says. Market forces are basically those that determine what people earn by working, investments and profits from sales. Furman focuses solely on the first.

Government policies and programs include other pre-tax income, e.g., Social Security benefits, post-tax cash transfers like refunds from the Earned Income Tax Credit and cash-equivalent transfers like SNAP (food stamp) benefits.

Significant Progress Toward Reducing Poverty

Forget all that rhetoric about throwing trillions at the problem with no impact on poverty rates. The poverty rate, as measured by a back-looking version of the Census Bureau’s Supplemental Poverty Measure was 41% lower in 2015 than in 1967, as the War on Poverty was setting in.

But the news here is that government anti-poverty programs account for the drop. Market-income poverty has remained essentially flat — and its deep poverty rate risen by nearly 3%.

Why No Progress From Market-Income Poverty

Furman identifies three market-income factors that could lift poor workers and their families over the poverty line — productivity growth, i.e., output per worker per hour, where the income generated flows and labor force participation, i.e., the percent of the population over 16 years old that’s working or actively looking for work.

Productivity growth slowed about 20 years ago, though it recently ticked up. The big difference from the prime period the CEA identified is that most of the income flows to the top — very large salaries for top management, corporate decisions to boost stock prices by buying back shares and maximizing dividends.

So productivity growth and average worker pay, plus benefits no longer closely track. The gap has, in fact, steadily widened, as the Economic Policy Institute’s graphs show.

Meanwhile, the labor force participation rate has trended down, recently reaching a 38-year low. Many reasons for this—retirement of baby boomers, for example, more young people going to college, more people (mainly women deciding to stay home with the kids because child care costs more than they’d earn.

But that still leaves a contingent of discouraged workers — those who looked, but gave up, those who decided it was futile to try — in many cases because they’ve found or have reasons to believe that they don’t have the knowledge and/or skills employers demand.

What the participation rate means, of course, is less household income — and less pressure on employers to offer higher wages.

Where to Go From Here

Furman’s agenda for further progress follows logically from his analysis. It has four major items.

Do no harm. Evidence shows that the safety net works — not only in the short term during recessions, but in the long term because the benefits it delivers have lasting effects on children’s prospects for moving up the income scale. So we should avoid policies that make it less effective, including block grants. (Told you this was timely.)

Focus on raising market incomes. This will involve policies to boost economic growth, but also changes to shift more of the gains to lower-income workers. Measures would raising minimum wages, as 22 states, the District of Columbia and more than 60 local communities have.

Furman also names expanded unions — presumably mostly in the private sector. This would also require repealing laws in half the states that allow workers to benefit from union bargaining without joining — and laws in three that have weakened public-sector union bargaining.

For individual workers and prospective workers, we need better programs to connect workers to jobs. Also more and better formal education.

On the more side, Furman cites research showing that low-income children fared better as adults when they participated in early childhood education programs. On the better, everything from that to college and beyond.

Rounding out this part, Furman looks to unspecified steps to reduce monopsony, i.e., cases where only one employer or a few control the labor market, thus enabling them to keep wages low..

Take further steps to improve the safety net. We need, for example, to increase funding for programs that egregiously fail to serve people who are or ought to eligible, e.g., for Temporary Assistance for Needy Families, housing assistance.

We need to expand the EITC so that it’s a work incentive for childless adults, whom we still tax into poverty or deeper poverty.

And we should redesign the unemployment insurance program so that recessions automatically trigger more weeks of benefits or bigger benefits, rather than depending on what Congress decides at any given moment to do..

Think harder about people who fall through the cracks. Furman has no specific suggestions here, just notes the Edin-Shaefer findings on families living on $2 or less per day.

Worth noting, however, that the team attributes the sharp rise in such extreme poverty to the virtual end of cash assistance for non-working families when TANF replaced welfare as we knew it. Furman too zeroes in on TANF in a lengthy boxed insert.

So as we martial our defenses of safety net programs and protections for under-paid (and unpaid) workers, it’s still worth holding onto a vision and speaking out for a better day and better ways. And worth not losing sight of the policy-driven progress we’ve already made.


Food for Thought About the Food on Our Thanksgiving Table

November 23, 2016

Last December, Barbara Ehrenreich took us to task for exercising gratitude. Well, not all of us, but the many who’ve heeded the research—often distilled into self-help guidance—that promotes gratitude because it’s so good for us.

Even those of us who still actually bother to thank people who’ve done nice things for us—rather than, for example, just jotting them down a journal—don’t escape scot-free.

Because, says Ehrenreich, we’re unlikely to feel thankful for the labors of low-income people—and because our gratitude, in and of itself, won’t make a damn bit of difference to them.

The op-ed struck me at the time as more appropriate for Thanksgiving than for the new year we were about to ring in. And perhaps Ehrenreich wrote it for publication then. In any event, I’m recurring to it now, thinking especially about the people whose labors feed us.

Not them only, however. Our Thanksgiving celebrations depend on other low-income people too—the clerks at the grocery stores, the workers in the other stores where we bought the napkins, candles, etc.

They won’t all have a Thanksgiving Day because many of the grocery stores will stay open so we can pick up what we forgot—and because a goodly number of us will start our holiday shopping while we’re still digesting turkey. That, at least, is what stores offering the extra-early Black Friday sales intend.

But back to our food.

Recent events have raised our consciousness of very disgruntled people in rural communities. They’re not, for the most part, actually poor. Or so one gathers from the polls. But many of the people in rural areas are—among them, those who plant, weed and harvest the fruits and vegetables that we’ll have on our tables.

They’re generally supposed to get paid at least the federal minimum wage. So they’d earn slightly over $15,000 a year if they worked full time, year round. But many don’t because crops have growing seasons.

That’s only one reason that farm workers are reportedly among the lowest-paid in the country—paid so little that 25% of their families have incomes below the federal poverty line, according to the Department of Labor’s latest (not altogether current) survey.

For one thing, not all farm owners have to pay the minimum wage. The Fair Labor Standards Act exempts those who use fewer than 500 “man days” during any calendar quarter, i.e., the equivalent of 500 people working each day.

Sounds like a lot, it but translates into roughly seven workers per quarter, according to Farmworker Justice. It means, in fact, that about a third of our country’s farm workers can legally get paid less than the minimum wage.

Others may wind up short because they’re paid by how much they harvest—so much per bucket, for example. The burden thus falls on them to prove how much they’ve earned, whether more than the minimum wage or less. If less, than they’re owed the minimum.

That’s the most they’re entitled to under federal law. The FLSA doesn’t require farm owners to pay time and a half to workers who put in more than 40 hours a week. California and a few other states mandate overtime pay.

But surely not all farm workers who ought to get it do. Nearly a third of those the Labor Department surveyed spoke no English whatever. Nearly as many spoke only a little. And only 20% said they could read English well.

They’re ripe for wage theft and other abuses, e.g., lack of protection from poisonous pesticides. This is all the more true because nearly half—or perhaps even more—have no legal authority to work here.

Even farm workers born in this country or equipped with green cards run more than the usual risks if they try organize and collectively bargain for better wages and working conditions because they’ve no protections under the National Labor Relations Act.

Well, most of us look forward to Thanksgiving dinner because of the turkey, not the green beans or the mashed sweet potatoes (especially if they’ve got marshmallows mixed in). The pies are a different matter, of course.

What I’ve already said about farm workers applies to those who feed birds, clean up after them and toss them into crates, then onto the trucks that take them to the slaughterhouses—commonly and euphemistically called processing plants.

What life’s like for workers in plants that process turkeys isn’t easily learned—at least, for someone sitting at a computer. But we can learn quite a bit about workers in chicken processing plants. And presumably conditions are comparable.

Pay is low, though generally more than the minimum wage. Hours can be extremely long. But we can guess from past investigations that workers don’t always get paid for overtime. A recent survey of workers in Arkansas poultry plants found that 62% had experienced wage theft of one sort or another.

Further—and more singular problems—have to do with working conditions. Processing involves a lot of tasks, as Oxfam America explains in its lengthy report on workers in the processing plants owned by our major suppliers.

Basically, the birds get hung upside down on a line that speeds along very fast. Workers must keep up. They can’t always go to the bathroom when they need to. They suffer unusually high rates of repetitive motion disorders and other injuries. They’re exposed to harmful chemicals.

They can’t take time off when they’re sick or in too much pain to work without losing pay—and perhaps their jobs. Well-founded fears of job loss causes them to put up with whatever they’re subject to—especially immigrants, documented and otherwise.

I suppose it seems I’m trying to infuse guilt into what’s supposed to be a special day of gratitude. That’s not my intent, though I confess to feeling a little queasy about the low price I paid for my turkey.

Readers who felt stung by Ehrenreich’s column argued that pausing to focus on what we’re grateful for can make us more generous—even “lead to greater efforts to bring about social change.”

I see some truth in this—if we move beyond the things we’re grateful for to a heartfelt understanding of the privileges they imply and beyond that too. Because knowing we’re more privileged than some other folks does nothing

The food on our table (wine too maybe), the people gathered round, the warmth of the house, the security—these are all privileges and, often as not, derive from injustices in our social and economic systems.


What We Know About DC Parents Up Against the TANF Time Limit

November 3, 2016

The working group deputed to advise on the District’s Temporary Assistance for Needy Families program gathered various kinds of information before making the recommendations I recently blogged on.

Among the most influential, I’d guess, were two newly-gathered sets of data that tell us — and decision-makers — more about the 6,560 or so TANF parents whose families will be at or over the 60-month lifetime participation limit next October, unless the Mayor and Council agree to an alternative.

For one set, the Department of Human Services did what seems a limited analysis of the families’ case records. For the other — and to me, more enlightening — it asked the parents some questions. The working group’s report includes an analysis of the results.

They bolster the case for eliminating the time limit because they cast grave doubts on the parents’ prospects for getting — and keeping — jobs that pay enough to support themselves and their children. Not such grave doubts for all, however, if they’re given more time in the program.

Here’s a sampling of what we learn.

Twenty-two percent of the survey respondents reported they were working, but very few of them full time. All but 39% usually worked for no more than 30 hours a week.

The fact that most of those already over the time limit have children under 10 helps explain this, but so may the hiring and scheduling practices that depress earnings for so many low-wage workers.

Nearly half the working parents earned less than $250 a week. A mother with two children would need about $388 a week, every week, just to lift the family over the federal poverty line.

About half the parents hadn’t participated in TANF for 60 months running. Three-quarters of those who’d left had done so because they’d gotten a job and/or began earning too much for their families to still qualify.

About the same percent were back in the program because they’d lost their jobs or couldn’t find a job that would enable them to support their families. These may include the 11% who said they’d re-enrolled because they couldn’t afford child care. Seems they’d lost the subsidies TANF parents get.

Their resumes may have lacked proof of the high-level skills so many local employers require. Thirty-one percent of the parents surveyed said that lack of sufficient education and/or training made it difficult for them to work.

The same percent are currently trying to get a GED or high school diploma — hardly something they could invest as much (if any) time in if kicked out of the program.

They’ll have a hard time getting any job without even this minimal credential. The unemployment rate for working-age residents with less is nearly 20%, according to the most recent analysis we have.

More than three-quarters of all jobs in the District will require at least some postsecondary education by 2020, the Georgetown University Center on Education and the Workforce projects.

This, of course, suggests that the job market will remain very tight — if not get tighter — for the least educated TANF parents. Hence, the need to ensure that TANF will remain a safety net for them and their children.

But it also argues for eliminating the time limit in a different way because 38% of the at-risk parents are taking college-level courses now. And scholarships the District provides exclusively for TANF parents probably help them cover the costs, as do the childcare and transportation subsidies.

Lack of work experience caused problems for 35% of the parents — perhaps some of the same who cited insufficient education and/or training as a barrier.

Far from all parents face only these barriers. More than half cited at least one sort of health problem as a reason they weren’t working, looking for work or regularly participating in a TANF training program.

Physical health problems pose a barrier for well over one in three. The case review found 18% with mental health needs that remained unmet — presumably meaning that the parents still suffered from them.

The federal Supplemental Security Income program provides modest cash benefits for people whose disabilities make self-supporting work impossible.

But relatively few who apply get them — and none who can’t prove, among other things, that their disability will last at least a year (or that they’ll die sooner) and precludes any sort of paying work.

A top-flight TANF expert at the Center on Budget and Policy Priorities put the chances that the 60-month or over parents could make up for their lost benefits with SSI at no more than 10%.

Understandably, more than half the parents facing lifetime banishments from TANF believe it will be harder for them to meet their families’ needs. An additional 25% don’t know.

They’re, of course, viewing their prospects in today’s job market. Come the next recession — and one will come — there’ll be fewer job openings and more recently-employed people competing for them.

What then for the many thousands of families tossed out of TANF — and others who’ll reach the 60-month limit during the downturn?


What Made DC Councilmembers Back Off Just Hours?

October 27, 2016

Picking up where I left off on a dormant, though perhaps not dead proposal to make the lives of some low-wage workers less hectic — and perhaps less cash-strapped too.

I’ve already summarized the problems the proposed Hours and Scheduling Stability Act would have addressed, for whom and how. Here, as promised, are the main arguments that apparently persuaded a majority of DC Councilmembers to shelve it.

But I should first note that the bill the Council tabled was substantially different in various ways from the version opponents testified against. The responsible committee clearly sought to accommodate objections.

Nothing it could do, however, to placate the chain businesses the bill covered because they want to keep on doing exactly what they’re doing now. And, they say, their workers want that too. Or so one gathers from their champions who testified.

Our Businesses Are Unique

Spokespersons for retail stores, restaurants and other businesses in the hospitality sector, e.g., bars, nightclubs, all claimed that each and every one has unique staffing needs — and the best way of meeting them.

The bill would impose a “one size fits all” system — a case of government micromanaging operations “typically decided between employers and employees.”

Note here — and not here only — how the erratic schedules and insufficient hours workers have complained of become mutually agreed-on, win-win arrangements.

Workers Will Be Harmed, Not Helped

We’re told, by one spokesperson after another, that workers value the flexibility in their schedules. If they can’t work the hours they’re scheduled for, they just tell their manager, who usually finds someone else to fill in.

But that wouldn’t happen any more because the business would have to pay that someone for an extra hour.

This is true, but only if the manager asked a particular worker to fill in. The business would then owe her, on average, less than twelve bucks, I figure. No such hit to the bottom line if workers just agreed to switch hours or freely volunteered. So the much-touted flexibility isn’t necessarily hampered.

We find other overblown harms in the testimony. The National Restaurant Association, for example, claims that the bill “prohibits restaurants from offering part-time employment to new employees.” But it doesn’t.

It could, however, deny some prospective workers part-time jobs because businesses would have to offer current part-timers more extra hours first. Several spokespersons referred specifically to students trying to earn money to pay for their educations.

Some still might gain jobs in the covered businesses. But they couldn’t count on schedules that would let them go to classes, do their homework, etc.

More generally, spokespersons equated part-time work with “flexibility” that accommodates workers’ needs. That’s, in fact, how large retail stores “create and maintain” their schedules now, says a senior vice president at the Retail Industry Leaders Association.

Reading the testimony I’ve summarized here, I felt as if transported to an alternative universe. Schedules designed as workers want them, readily changed when they ask, generally far less than full time because that’s their preference.

What then to make of the fact that four out of five low-wage D.C. workers surveyed said that getting more hours was important to them? Or that nearly one in four said they’d been disciplined and/or told they might be fired when they asked for a different schedule?

Or the McDonald’s cook who was told she’d have to choose between work and going to school?

The District Is Piling On

The curbs on erratic schedules, pay disparities and hiring are the straw that would break the camel’s back, all the heavy hitters said.

Businesses already have to pay a higher minimum wage. They’ve got to provide some (modest) amount of paid sick leave. They’ve got to provide a transportation benefit (though not necessarily to pay for what their employees must shell out to get to work and home again).

They can’t automatically refuse to consider job applicants who’ve got criminal records. They’ve got to deal with tougher protections against wage theft.

The fast food restaurants and other carryouts have had to switch from styrofoam cups, plates and the like to more environmentally-friendly alternatives.

The skyrocketing growth of the local restaurant industry has already slowed — not because the market is reaching capacity, as one might think. More likely the collective impact of the mandates, says the National Restaurant Association’s local affiliate.

Both it and its parent warn that the hours and scheduling requirements will stunt the growth of “homegrown chains” because they’ll chose to open only as many restaurants as will keep them exempt (and far less profitable than they might be).

So the District will forfeit tax revenues — not only what the restaurants would pay, but what workers who live here would. Because, make no mistake about it, the bill’s a job killer. Further proof that the District is not “a business-friendly city.” Thus, a further incentive for businesses to locate just across the borders.

How often have we heard this, folks? How often the claim that proposals to help low-wage workers will harm them instead?

Others Dampers on the Bill

I don’t want to leave the impression that the bill would have solved the problems low-wage workers struggle with. Nor that a Council majority would have passed it if spokespersons for the retail and restaurant chains hadn’t come out with all guns blazing.

The Bowser administration didn’t expressly oppose it. But the Director of the Department of Employment Services leaned heavily on the negatives — mainly, but not entirely related to compliance and enforcement.

Basically, a very business-friendly position, reflecting the Mayor’s. So she might have vetoed it. We’ll never know.

But the initiative will rise again from the ashes. The head of the recently-formed Subcommittee on the Workforce has announced a public roundtable* on fair scheduling for November 3. So we can look for another lively exchange — and, I think, another bill.

* A roundtable is essentially a hearing open to testimony by anyone who signs up or submits a written statement by date certain.