Yawning Opportunity Gap for Our Kids Because We Don’t View Them All As Ours

November 27, 2016

A recently-published book by Professor Robert Putnam warns that the American Dream is in crisis. We’ve had ample evidence of the symptoms for some time. But the fundamental issues Putnam raises seem to me more relevant than ever.

Other research has already told us that children who grow up in low-income families tend to remain low-income as adults, who then have low-income children, etc. Conversely, children who grow up in well-off families generally remain well-off. And so forth.

We’ve also had research showing that whom you’re born to has become more determinative in the last 30 or 40 years — a major point for Putnam.

He focuses on two related reasons. First, the “opportunity gap,” i.e., disparities in the resources parents and communities invest in children, has grown.

And second, we no longer think of everybody’s children as “our kids” because families have become increasingly segregated by income, education, neighborhood and related measures.

Thus, well-off families invest in their own children and what their own children will directly benefit from, e.g., the schools they attend. But they neither know much nor care much about the opportunities for children in the depressed neighborhoods across town.

We’re on our way to becoming a society where class is hereditary, he told a recent gathering (and those of us virtually present). The graphs he showed confirmed the basis for the alarm bells he’s trying to set off.

He referred to most of them as “scissors graphs” because the lines tracking the developmental opportunities children have grow further and further apart over time. Likewise factors he views as related, e.g., two parents in the home.

Now, the opportunities he dwells on don’t altogether explain why children born to poor and near-poor parents tend to remain stuck in the bottom fifth of the income scale.

Those resources their parents don’t have include money for food, decent, stable housing in a safe neighborhood, high-quality child care (unless they’re among the shrinking number for whom it’s subsidized), diapers …. Well, I needn’t go on with this inventory.

We know from other research that food insecurity, homelessness or even just moving from one home to another and then another and the stress parents inevitably communicate when they’re struggling with such things all put children at a disadvantage in the classroom.

We know that low-income children often don’t benefit from high-quality early education. Lack of resources, parental and public, mean that inequalities begin at “the starting gate,” as the Economic Policy Institute entitles its report on the problem.

This, I think, is why Putnam says that schools aren’t to blame for the widening income gap, though they don’t narrow it either. But he cites a related factor that, in his view, is — the unequal opportunities children have to participate in extracurricular activities.

Playing organized sports or in a band or orchestra, he says, teaches teamwork and develops what’s now often called grit — the will to keep working at something, despite setbacks and frustrations.

All children used to have opportunities of this sort. They now cost, on average, $800 a year, he says. That’s nothing, of course, for well-off parents, but more than some low-income parents can afford.

Even low-income children who beat the odds and not only graduate from high school, but go on to college don’t overcome the opportunity gap. Only 29% who scored high on standardized tests graduate, while 74% of high-income students do.

The difference here, Putnam says, is mostly not tuition costs or the formidable loans that all but well-off students must incur to gain a degree.

It’s rather a reflection of the investments parents made much earlier — the time they spent interacting with their infants and toddlers, the dinners that brought the whole family together, the religious services they attended, etc.

What this seems to mean is that the low-income students are in some way not prepared for college, test scores notwithstanding. I find this baffling.

Even if what Putnam calls our “pay to play” extracurricular system denied them an opportunity develop grit, they surely have it or they wouldn’t have learned what those test scores reflect, given the well-known problems of the schools they’re likely to have attended.

More baffling is the way he slides over the link between early opportunities children have — or don’t — and the color of their skin, a point the Washington Post‘s reviewer touched on.

If the time and money parents have to invest in their children is correlated to their income, then race discrimination, both past and present, deserves far more attention.

Putanm tends to use parental education, rather than income per se in his analyses — this, it seems, because he’s most concerned about the divide between social classes.

We’ve always had large racial disparities in college-level degrees. But even blacks who’ve graduated from college generally get paid less than whites, as the Economic Policy Institute’s analyses show.

If relatively more low-income children have only a mother to provide the interactions he views as so critical, it’s partly because most low-income women (like their better-off counterparts) want to marry reliable breadwinners.

So the disadvantages black men suffer in our labor market, e.g., higher unemployment rates, lower wages, help explain why a high percent of black mothers are single.

If low-income black children don’t always have fathers investing quality time in them, it’s also in part because our criminal justice system puts a disproportionate number of black men behind bars, thus giving them an additional disadvantage when they’re released.

And if communities consist of class-based enclaves, that’s partly because of discriminatory zoning and other housing policies — and discriminatory practices by lenders, real estate agents and landlords.

Putnam’s nevertheless right in saying that policy choices have widened the opportunity gap — and that policy choices can narrow it. Those he recommends are themselves fairly narrow.

This perhaps is because, as he stresses, he’s trying to start a national conversation about a problem that’s got no simple, quick fixes. But it’s also because he’s focused on children, especially the very young — and on what could conceivably prove politically feasible.

So nothing new here, as Jill Lepore’s account in The New Yorker says. But we don’t need new as much as do. And, as she also (sort of) says, we can’t count on much do from our federal policymakers.

The book is nevertheless timely — more so than I think Putnam expected — because it calls on us to consider whom we view as our kids and, more broadly, as members of our community.

How to Narrow the DC Income Gap: Some First Steps

March 29, 2012

As I recently wrote, the DC Fiscal Policy Institute has issued an eye-opening report on income inequality in the District of Columbia.

It’s got some recommendations for narrowing the income gap between the richest and the poorest. No revolutionary attack on “the system” that’s enriching the top 1% at the expense of the rest of us.

Instead some modest, politically-feasible our steps our local government could take right now to lift the incomes of some portion of the bottom 20% — now, on average, well below the poverty line.

With two limited exceptions, the recommendations address policies and programs already in place. As so often in the District, it’s the funding that’s wanting — and for the most part, will be wanting if the DC Council approves what Mayor Gray has proposed.

Bigger budgets for the initiatives would help achieve three objectives.

Help Residents Prepare for Living Wage Jobs

One initiative DCFPI cites is the recently-established workforce intermediary pilot. When/if implemented, the intermediary would get training programs better tailored to local workforce needs and then refer qualified candidates to employers.

Mayor Gray’s Fiscal Year 2013 proposes $1.6 million to “fully fund the creation of the pilot.” Unclear, at least to me, whether this means we’d have an ongoing, fully functional intermediary.

The second initiative is the unfolding redesign of the Temporary Assistance for Needy Families program. Participants are to get in-depth assessments of their strengths and needs, then be linked to appropriate services and a broader range of work-preparation opportunities than was previously available.

The problem here, as I (and others) have mentioned before, is that the current law calls for a phase-out of cash benefits for long-term participants who’ve had no opportunity to benefit from the improvements. It also fails to carve out needed exemptions, as federal rules allow.

Unfair and very unwise, given all we know about the lifelong disadvantages children suffer when they grow up in poverty.

Address Housing Concerns

The “concerns” here are budget cuts to the District’s main affordable housing programs.

One — the Housing Production Trust Fund — was all but gutted last year, stalling numerous projects to develop and preserve housing that low and moderate-income residents could afford.

The other — the Local Rent Supplement Program — provides housing vouchers residents can use to rent apartments on the open market.

It would need regular budget increases just to keep pace with rising rents. It hasn’t gotten them and now reportedly has a shortfall that could leave more than 500 households with no more rental assistance.

The Mayor’s proposed budget addresses the shortfall — by once again raiding the Trust Fund. Says he’ll put the money back if revenues come in substantially higher than projected. Well, he agreed to something similar last year. And the Trust Fund got zip.

Make Work Pay Better

DCFPI focuses on the District’s living wage law, which establishes a higher minimum wage requirement for employers that benefit from District government contracts and/or various types of financial assistance worth $100,000 or more.

The law, DCFPI says, needs to be more strictly enforced, suggesting that the District has finally gotten around to enforcing it at all. DCFPI also recommends expanding the law. No details here.

Other Work-Related Needs

The DCFPI recommendations are, as I said, very modest. And with the exception of affordable housing funding, they’d help only those in the bottom fifth who work or potentially could work if properly trained.

Even for this group, the District could — and should — do more. But the Mayor doesn’t see it that way.

For example, as the Fair Budget Coalition notes, child care programs have been cut by more than $20 million in the last five years. The Mayor’s proposed budget cuts an additional $5.7 million from child care subsidies.

Without funding to increase provider reimbursement rates, low-income parents with little kids may have no choice but to stay home.

Funding for basic adult education has also been cut. Two years ago, programs funded in part by local taxpayer dollars served only 8% of need — this when more than one in three  D.C. adults is functionally illiterate.

How many aren’t working because they can’t read even well enough to fill out a job application? How many are stuck in part-time, minimum wage jobs because they can’t pass the GED exams?

How many more will be stuck if the Council approves the Mayor’s proposed $950,000 cut for adults and family education?

New Report Shows Huge Income Gap Between Richest and Poorest in DC

March 19, 2012

Everyone who lives in the District of Columbia knows that there’s a yawning gulf between the haves and the have-nots. But the new income inequality report from the DC Fiscal Policy Institute could still be a shocker. I know it was for me.

Turns out that the income gap between the richest and poorest 20% of households is the third largest among U.S. cities — this based on data from the 2010 American Community Survey.

The average income for the richest fifth was 29 times greater than for the poorest fifth. Look only at the top 5% and the mutiple rises to 52.2% — $473,343, as compared to $9,062.

I know that conservatives generally don’t view income inequality as a problem. What matters, they say, is income mobility, i.e., the opportunity to move up the income scale.

But, to my mind, such enormous gaps should concern us — and for various reasons.

Some research indicates that severe income inequality is, in and of itself, bad for society.

Researchers at the University of York, for example, have found that people in countries with high income inequality — the U.S. among them — fare worse on a host of indicators, e.g., physical and mental health, violence and drug abuse, mutual trust and community cohesion.

The findings are controversial. Other explanations have been offered for what are, after all, only statistical correlations. Yet we surely see something like them at the local level.

The two cities Mayor Gray is rightly concerned about depress many measures of community well-being. And they’re fraught with cross-class hostilities — some more overt than others.

We also know — or surely should — that wealthy people have disproportionate political clout and, of course, use it to protect their own interests. The bigger the income gap, the more these interests are likely to diverge from those of people at the bottom of the income scale.

We need only look at the fate of some very reasonable tax reform proposals to see how this plays out — and to the detriment of residents who depend on our safety net programs.

But the biggest deal here is the very low average income for the bottom fifth of D.C. households — under 50% of the federal poverty line for a family of three. About $4,800 less than the yearly rent on a modest efficiency unit.

The rising tide that’s supposed to lift all boats hasn’t done much for these households. Since 1979, their inflation-adjusted wages have grown just 14%, while those for the high earners have grown 44%.

This reflects a nationwide trend. The Economic Policy Institute reports that the inflation-adjusted income for the top fifth of families grew 49% during about the same period as DCFPI carved out. For the bottom fifth, income actually shrank by 7.9%.

The problem, many analysts say, is that the top fifth — and even more the notorious top 1% — have been gaining ground at the expense of everyone else.

Explanations abound. Solutions also. President Obama is again campaigning on some. We’ll soon see a related, bigger bundle in Senator Tom Harkin’s Rebuild America Act.

DCFPI instead focuses on a handful of local policies and programs that could lift the incomes of our bottom fifth. With two limited exceptions, they’re already on the books. What’s not is sufficient funding.

Given the resources, the initiatives would:

  • Help residents prepare for living-wage jobs.
  • Address housing concerns, i.e., remedy the budget cuts to the District’s main affordable housing programs.
  • Make work pay better for a subset of current and future D.C. workers.

I’ll return to these in a separate post. Will say here only that DCFPI’s recommendations are — I assume deliberately — very modest.

But they could make a big difference for many of those very poor residents in the bottom fifth. A big difference for our divided community too.

Bush Tax Cuts Anniversary Day

June 7, 2011

This is the 10th anniversary day for the first round of Bush-era tax cuts. Whether an occasion to celebrate depends on how you feel about the results.

On June 7, 2001, President Bush the Second signed into law a package that reduced income tax rates to the levels we’ve got now — thanks to the two-year extension President Obama and Congressional Republicans agreed on last December.

Also in the package were a number of other changes in the tax code, including a repeal of the deductions limit for high-income filers, a partial fix of the so-called marriage penalty and a phase-out of the estate tax — the last brought back from the grave, but in weakened form as part of last December’s deal.

Altogether, lost revenues totaled an estimated $1.35 trillion for the first 10 years.

Bush had campaigned on a promise to return what then seemed a large, growing budget surplus to the American taxpayers who had created it. And surpluses were still projected when the tax cut package began wending its way through Congress.

But the boom of the late Clinton years had given way to a recession. The surplus was shrinking, as tax revenues dropped. The unemployment rate was rising. So the tax cuts were now justified largely as a way to stimulate the economy. Sound familiar?

Most (but not all) Congressional Democrats sounded alarm bells at the size of the package. Also at the distribution of benefits. Because, of course, the reduced tax rates left much more money in the pockets of the wealthiest than in those of low and middle-income filers.

Some Senate Republicans also choked at the price tag. But at the end of the day, key members of both parties forged a compromise. The President declared a victory. And two years later, Congress passed a second round of tax cuts, including the large reductions in capital gains and dividends rates that were also extended last December.

Well, that was then and this is now. And many things have happened since 2001 — some more predictable than others.

Another recession predictable — though probably not as large as the one still afflicting our economy. Stresses on Social Security and Medicare predictable.

But who could have known, 10 years ago today, that some rogue fanatics were about to crash planes into the World Trade Center and the Pentagon? Or that President Bush would decide the response should include invasions of two foreign countries?

The surplus has turned into a ballooning deficit. We’re told that the biggest drivers, in the long run, are rising health care costs.

But, according to analyses by the Center on Budget and Policy Priorities, the Bush tax cuts are the single largest factor in what the country will owe in 2019, barring significant policy changes.

Changes there will be, however. And they’ll surely be more drastic than they’d have been if President Bush had decided to commit more to debt reduction than tax reduction. Which isn’t to say the current crop of Congressional Republicans wouldn’t have aimed for big spending cuts if he had.

Here’s another thing that’s happened in the last 10 years. The income gap between the wealthiest and the rest of us has turned into a yawning gulf.

According to another CBPP analysis, the average after-tax income of the wealthiest 1% of households rose by an inflation-adjusted 281% — $973,100 more per household — between 1979 and 2007.

By contrast, households in the middle fifth of the income scale gained $11,200 or 25%. The bottom fifth gained, on average, 16% — a measly $2,400.

A major factor here is that the wealthiest 1% simply made a whole lot more money. Between 2002 and 2007, their incomes grew 10 times faster than those in the bottom 90% of the income scale.

But the Bush tax cuts played a role too. In 2007, they enabled that lucky 1% to hold onto an extra $41,007, raising their after-tax income by 5%.* Those in the bottom fifth of the income scale received cuts averaging $24 — an after-tax income boost of 0.4%.

And (hold onto your hat) the 400 wealthiest taxpayers in the country paid, on average, 16.6% of their income in individual federal income taxes — down from 30% in 1995. The difference, says CBPP, amounts to an average tax cut per filer of $46 million. And that’s just for 2007.

So, yes, everyone with earned income got a tax break 10 years ago. Many got several. And many got some more two years later. But are we, as a nation, better off?

Perhaps, as an old friend says, what you see depends on where you stand. I’ll bet the tax cuts look better on the deck of a yacht than in a food pantry line.

* More recent figures from the Economic Policy Institute show that, recession notwithstanding, tax cuts for the top 1% of filers increased to an average of $520,000 in 2010.