History > 2013 > USA > Economy > Poverty (I)

More Hunger for the Poorest Americans

December 24, 2013
The New York Times
By THE EDITORIAL BOARD

This is a harsh season for Americans struggling to afford food. Last month, the long lines at food pantries across the country grew longer with the expiration of the boost to food stamp benefit levels included in the 2009 economic stimulus plan. Those lines are apt to grow even longer thanks to the refusal of House Republicans to renew extended unemployment benefits as part of the recent budget deal.

And if that isn’t sufficient pain for the neediest, Congress is getting ready to make another big cut to nutrition aid when it returns in early January.

Senator Debbie Stabenow, a Democrat of Michigan and the chairwoman of the Senate Agriculture Committee, and Representative Frank Lucas, a Republican of Oklahoma who leads the House Agriculture Committee, are close to a deal on a farm bill that is said to include an increase in crop insurance subsidies for farmers and a more than $8 billion cut in food stamp benefits for the poor over the next 10 years.

That cut, about double the one contained in the Senate version of the farm bill, is more modest than the devastating $40 billion reduction in the farm bill passed by House Republicans that would have denied benefits to about 3.8 million people in 2014, according to the Congressional Budget Office. The House bill would also impose drug-testing, work requirements and other conditions, which are not expected to be included in the compromise bill. Still, the compromise deal, driven by the Republican obsession with cutting the food stamps program, will leave many Americans worse off than before.

The deal being finalized would not kick people off the rolls, but it would end a practice used in some 16 states to boost food stamp benefits. That change would reduce benefits for 850,000 of the nation’s poorest households, according the Congressional Budget Office, with the cut falling particularly hard on seniors, disabled people and working-poor families with children.

The households affected currently receive higher food stamp benefits (on average around $90 a month) under a practice known as “heat-and-eat,” which is intended to prevent poor families from having to choose between heating fuel and food. States employing this practice trigger the increased food assistance by providing selected households a nominal amount of fuel aid (as little as $1 per year), regardless of whether they actually pay utility bills.

This gaming of the system has had the positive effect of giving some hard-pressed families in high-cost areas like New York City help with their overall household budget, but it has also provided a talking point for critics bent on gutting the food stamps program.

The proposed Senate-House deal would require states to pay $20 a year to trigger the higher benefits. Some states will likely decline to increase their subsidies to that amount, so to achieve the bill’s projected savings benefits would have to be taken away from many poor families.

The right fix would be to take any savings and devote it along with other new financing to make sure basic food needs of the poorest families are met. Some Democratic lawmakers and antihunger advocates say the $8 billion cut being contemplated in the compromise deal is necessary to get the food stamps program reauthorized by both the Senate and House and that keeping the cuts to that level would be a political defeat for right-wing Republicans, who sought to do much more damage. That may be true, but it’s not much consolation for people lining up at food pantries because their inadequate monthly food stamps allotment has run out.

    More Hunger for the Poorest Americans, NYT, 24.12.2013,
    http://www.nytimes.com/2013/12/25/opinion/
    more-hunger-for-the-poorest-americans.html

Few Places to Go

December 9, 2013
The New York Times
By ANNIE LOWREY

WASHINGTON — Violeta Torres cannot afford her apartment.

Ms. Torres, a 54-year-old nanny, pays $828 a month for a rundown one-bedroom that she keeps spotlessly clean, making the rent only by letting an acquaintance sleep on a mattress in the living room for about $400 a month.

But her one-bedroom happens to be in the booming Columbia Heights area here, where such an apartment, once renovated, would easily command twice the price. Her landlords have been trying to drive the tenants out of the building, she explained in Spanish. The broken fire alarms go off in the middle of the night. The common areas are filthy, and the apartments have been infested by rats, bedbugs and cockroaches.

In March, Ms. Torres said, the landlords tried to raise the rent. Like her neighbors, most of them also immigrants from El Salvador, she has simply ignored the demand for an additional $261 a month. “I don’t have the money,” she said.

Ms. Torres struggles to stay and cannot afford to leave. She makes about $1,000 a month caring for two toddlers. She sends $250 to her mother, who recently emerged from a diabetic coma and needs insulin. And $100 goes to her mother’s caretaker. After rent, that leaves just $200 or $250 for her.

Today, millions of poor Americans are caught in a similar trap, with the collapse of the housing boom helping stoke a severe shortage of affordable apartments. Demand for rental units has surged, with credit standards tight and many families unable to scrape together enough for a down payment for buying a home. At the same time, supply has declined, with homebuilders and landlords often targeting the upper end of the market.

“We are in the midst of the worst rental affordability crisis that this country has known,” Shaun Donovan, the secretary of housing and urban development, said at a conference here on Monday.

And the less income a household has, the harder the sting. “These are the people with the fewest financial resources,” said Sheila Crowley, the president of the National Low Income Housing Coalition, a research and advocacy group based in Washington. “These are the people in danger of becoming homeless.”

The problem is national, and particularly acute among the working poor. The number of renters with very low incomes — less than 30 percent of the local median income, or about $19,000 nationally — surged by 3 million to 11.8 million between 2001 and 2011, according to a report released Monday by the Joint Center for Housing Studies at Harvard. But the number of affordable rentals available to those households held steady at about 7 million. And by 2011, about 2.6 million of those rentals were occupied by higher-income households.

As a result, the share of renters paying more than 30 percent of their income for housing jumped to 50 percent in 2010 from 38 percent in 2000. For renters with incomes of less than $15,000 a year, 83 percent pay more than 30 percent of their income in rent.

Many of the worst shortages are in major cities with healthy local economies, like Seattle, San Francisco, New York and Washington. “We’ve seen a huge loss of affordable housing stock,” said Jenny Reed, the policy director at the D.C. Fiscal Policy Institute. “We have lost 50 percent of our low-cost units over the past 10 years, and at the same time, the number of high-cost apartments, the ones going for more than $1,500 a month, more than tripled.”

The squeeze comes both from supply and demand. Even as the housing market has started to turn around, the number of renting households has continued to climb — by a million in 2011 alone, the biggest annual increase in three decades. Many Americans have lost their mortgaged homes and chosen to rent. Others were unable to obtain financing for a purchase, because of a loss of income or tighter credit standards.

In many markets, investors have rushed to meet the new demand by building new multifamily housing units or by buying up foreclosed homes and renting them out. But that has not translated into a surge of new units available to low-income renters.

“Builders always are aiming at that higher end,” said Jed Kolko, the chief economist at Trulia. “And eventually, as those new units age, they trickle down to lower-income borrowers.”

But not now. With demand surging, inventories are shrinking, vacancy rates are falling and rents are rising at the low end.

The long-term federal budget cuts known as sequestration are only adding to the problem, hitting housing programs especially hard. Many local housing authorities, which rely on federal funds, have stopped rolling over vouchers, leaving even more families on waiting lists, to fend for themselves in rental markets where prices keep rising.

“I can’t emphasize enough how draconian these cuts have been on the backs of the poorest folks in the country,” said Sunia Zaterman of the Council of Large Public Housing Authorities.

In some cases, the shortage of affordable rentals for the poor has meant an increased number of homeless people and families. That often means churning through housing options, spending a few days with friends, a few weeks with relatives, a few months in short-term rentals.

More often, housing advocates said, it means workers living in aging and often substandard housing, like Ms. Torres’s crowded apartment. The Latino Economic Development Center, which is helping Ms. Torres and her neighbors fight the rent increase, said it had heard increased complaints about mold, flooding, delayed maintenance repairs and other issues from low-income rentals.

It also means hundreds of thousands of poor Americans are paying far more for housing than they can really afford, squeezing out spending on other priorities. The Harvard study found that many low-income renters cut back most on food and transportation.

“If you’re putting 60, 70, 80 percent of a small income into housing, then obviously you have less to spend on everything else you need,” said Ms. Crowley of the National Low Income Housing Coalition. “There’s a squeeze on basic necessities. You end up making very hard choices. Am I going to fill a prescription, or do my kids get a birthday cake? Do I give up my car?”

To help with her housing costs, Ms. Torres has considered taking on a third roommate, and is eagerly searching for a second job.

Washington, like many other cities, has tried to tackle the problems with local government funds and regulations intended to protect low-income renters against eviction or undue rental increases. Recently, Mayor Vincent C. Gray announced a new $100 million campaign to increase affordable housing in the city.

Even more ambitiously, Bill de Blasio, the incoming mayor of New York, has put forward a plan to build or preserve about 200,000 affordable units.

But housing advocates described such campaigns as too little, too late, given the powerful economic forces at work and the cutbacks at the federal level.

“Are these cities going to be places that poor people can live?” asked Elizabeth Falcon, the campaign organizer for the Coalition for Nonprofit Housing and Economic Development, a local housing advocacy group.

“I think government investment is the only way that significant numbers of people are going to able to stay,” she said. “And right now we are not seeing government at any level commit enough to help a significant number of people.”

Michael S. Schmidt contributed reporting.

    Few Places to Go, NYT, 9.12.2013,
    http://www.nytimes.com/2013/12/10/business/
    economy/the-poor-are-squeezed-as-rental-housing-demand-soars.html

For Gay Community,

Finding Acceptance

Is Even More Difficult on the Streets

December 2, 2013
The New York Times
By ERICA GOODE

SAN FRANCISCO — There were times — after he told his parents he was gay, for example, and his mother wept and his father tried to hit him — when Fredy Bolvito curled up on a bench in Union Square here and cried because he had AIDS and no job and no place to stay and he felt, he said, that “my life was over.”

But there were also days when he sat on the bench in the square and sang “The Star-Spangled Banner,” looking up at the flags atop the Westin St. Francis hotel and thinking, “That’s breathtaking, that’s my American dream.” Or when he mingled with tourists, giving them directions to the cable cars, or gazed through the windows at the shoppers in Macy’s and was saddened by how rich and healthy they looked.

He scavenged for meals in garbage bins. He avoided the homeless shelters, where he had heard that gays were taunted, or worse. His “angel,” he said, was in the center of the square: the statue “Victory,” a trident in one hand, a wreath in the other.

“I would look at it at night and think, ‘Oh my God, that’s my hope,’ ” he said.

San Francisco is often viewed as a Mecca for gay people. But the warmth of the city’s welcome can quickly vanish for those who are poor.

City leaders were startled this year when a survey revealed that 29 percent of the homeless population —about 2,100 of the 7,350 people counted — identified themselves as gay, lesbian, bisexual or transgender.

Bevan Dufty, the director of the city’s homelessness initiatives, said he was surprised the percentage held true for all age groups, even adults and the elderly. “What was really staggering was to see that it didn’t change as you got older,” he said.

The survey found that gay, lesbian, bisexual or transgender people who are homeless had higher rates of disability than homeless heterosexuals and were more likely to be homeless when they arrived in the city. Some of them were older gay men with AIDS who had been evicted from their apartments or people who had been cast out by their families in other states. Others, like Mr. Bolvito, a native of Guatemala who graduated from college in Hayward, Calif., with a degree in political science and once worked as a real estate agent, had good jobs that disappeared during the recession.

In response to the findings, Mr. Dufty and Kara Zordel, a coordinator of Homeless Connect, organized an event in October that offered medical and dental services and other assistance to gay, lesbian, bisexual and transgender people who are homeless. And in August, the city’s planning commission approved permits for a 24-bed shelter with a focus on helping them. The shelter is expected to open in the coming months. Other cities have shown interest in San Francisco’s efforts, Mr. Dufty said. Officials from Santa Clara and Phoenix attended the Homeless Connect event.

Brian Basinger, a co-founder of the AIDS Housing Alliance in San Francisco, said the harassment of gays is common in the city’s shelters.

People there “do not have a lot of status in society to begin with, and so the way they protect or generate status in these social environments is to step on the queers,” Mr. Basinger said.

Gay and transgender residents have their shoes stolen, he said. They are robbed or beaten up in line.

Mr. Basinger, whose partner was homeless for 10 years and who came close to being homeless himself after he developed AIDS, brought in an architect to design the new shelter.

“I really wanted to think about how does the built environment impact people’s experiences,” he said. “So we spent a lot of time thinking that through and talking to people and designing something that was going to be functional and respect people’s dignity.”

But the shelter will house only a fraction of those who are without homes.

On a recent evening in the Castro District, Hjalmar Bjorkman, 48, sat cross-legged in a doorway. He has lived in the Bay Area for years. But two months ago, he said, he lost his job at a bar and his partner kicked him out. Since then, he has been sleeping on the sidewalk behind an old theater, he said, or at the home of a friend, who charges him $20 a night for the couch.

“My ex-partner walks by me every day,” Mr. Bjorkman said.

Bobby Spencer, 47, arrived in San Francisco from Atlanta in May, thinking he had a job as a nanny with a former co-worker at the company where he had worked as an executive assistant.

He was excited about the move. “Being gay in the South is still a lot different than being gay here, even in Atlanta,” he said. “I moved here to be queer, that was part of the plan.”

But the job did not work out and, after having volunteered in soup kitchens in Atlanta, Mr. Spencer abruptly found himself without a place to stay.

He bunked for a while with people he had met, but then ended up on the streets. He was hungry and sick. He is H.I.V. positive, and his viral load rose from undetectable to high levels after his medication ran out, he said.

Mr. Spencer said the gay community he had expected to open its arms to him had been less than gracious.

“It’s a mad, cold world out there, even in your own family,” he said. “My own community treats most queers that are homeless as pariahs; they want nothing to do with them.”

He eventually found a clinic where he can get his medication and moved to a shelter, where he has settled in for now, taking cooking classes and living on food stamps.

But he said he is constantly alert for trouble. On his first night in the shelter, a man in the next bed became abusive.

“It makes you anxious and it makes you nervous to have things like that going on and knowing that it’s absolutely being directed at you,” Mr. Spencer said.

Supervisor David Campos, who held hearings on the shelter problem, said that even though the homeless population may not have grown, homelessness has become more visible in San Francisco recently, perhaps because of an increase in evictions. Mr. Basinger and other advocates held a “sleep in” in Dolores Park in October to protest a proposed ordinance that would close city parks, where many homeless people sleep, between midnight and 5 a.m. The proposal narrowly passed on Nov. 5.

For Mr. Bolvito, Union Square, with its tourists and constant stream of pedestrians, provided a sense of safety for the months he spent there. But he is happy now to have enough to eat and a roof over his head — in September he moved into a single-room-occupancy hotel that he found with the assistance of Mr. Basinger’s housing alliance. Mr. Bolvito earned a cosmetology degree while he was homeless and is looking for a job. His mother, who lives in Oakland, helps him out when she can.

“I wanted people to know that poverty is not just the addicts,” he said. “It’s people who are educated like me. It is so many.”

    For Gay Community, Finding Acceptance Is Even More Difficult on the Streets,
    NYT, 2.12.2013,
    http://www.nytimes.com/2013/12/03/us/
    for-gay-community-finding-acceptance-is-even-more-difficult-on-the-streets.html

Caught in Unemployment’s Revolving Door

November 16, 2013
The New York Times
By ANNIE LOWREY

On a cold October morning, just after the federal government shutdown came to an end, Jenner Barrington-Ward headed into court in Boston to declare bankruptcy.

It took weeks to put the paperwork together, given that her papers and belongings were scattered across the country — there was a broken-down car and boxes of paperwork in Virginia Beach, clothes in Colorado and personal possessions at a friend’s house in Somerville, Mass. She managed to estimate her income — maybe $5,000 last year, but maybe half that this year — from odd jobs. Soon, she would officially have nothing.

It has been a painful slide. A five-year spell of unemployment has slowly scrubbed away nearly every vestige of Ms. Barrington-Ward’s middle-class life. She is a 53-year-old college graduate who worked steadily for three decades. She is now broke and homeless.

Ms. Barrington-Ward describes it as “my journey through hell.” She was laid off from an administrative position at the Massachusetts Institute of Technology in 2008; she had earned about $50,000 that year. With the recession spurring employers to dump hundreds of thousands of workers a month and the unemployment rate climbing to the double digits, she found that no matter the number of résumés she sent out — she stopped counting in the thousands — she could not find work.

“I’ve been turned down from McDonald’s because I was told I was too articulate,” she says. “I got denied a job scrubbing toilets because I didn’t speak Spanish and turned away from a laundromat because I was ‘too pretty.’ I’ve also been told point-blank to my face, ‘We don’t hire the unemployed.’ And the two times I got real interest from a prospective employer, the credit check ended it immediately.”

For Ms. Barrington-Ward, joblessness itself has become a trap, an impediment to finding a job. Economists see it the same way, concerned that joblessness lasting more than six months is a major factor preventing people from getting rehired, with potentially grave consequences for tens of millions of Americans.

The long-term jobless, after all, tend to be in poorer health, and to have higher rates of suicide and strained family relations. Even the children of the long-term unemployed see lower earnings down the road.

The consequences are grave for the country, too: lost production, increased social spending, decreased tax revenue and slower growth. Policy makers and academics are now asking whether an improving economy might absorb those workers in time to prevent long-term economic damage.

“I don’t think we know the answer,” said Jesse Rothstein, an economist at the University of California, Berkeley. “But right now, I think everybody’s worst fears are coming true, as far as we can tell.”

Soon after we first talked in October, Ms. Barrington-Ward left her sister’s house in Ohio, where she had crashed for six weeks, and went back to Boston and filed her bankruptcy paperwork. She contacted a headhunter. “I’ve got to get a job,” she said. “I just have to.” She had two job interviews lined up and her fingers crossed.

Long-term joblessness — the kind that Ms. Barrington-Ward and about four million others are experiencing — is now one of the defining realities of the American work force.

The unemployment rate has fallen to 7.3 percent, down from 10 percent four years ago. Private businesses have added about 7.6 million positions over the same period. But while recent numbers show that there are about as many people unemployed for short periods as in 2007 — before the crisis hit — they also show that long-term joblessness is up 213 percent.

In part, that’s because people don’t return to work in an orderly, first-fired, first-hired fashion. In any given month, a newly jobless worker has about a 20 to 30 percent chance of finding a new job. By the time he or she has been out of work for six months, though, the chance drops to one in 10, according to research by the Federal Reserve Bank of San Francisco.

Facing those kinds of odds, some of the long-term jobless have simply given up and dropped out of the labor force. So while official figures show that the number of long-term jobless has fallen steeply from its recessionary high of 6.7 million, many researchers fear that this number could mean as much bad news as good. Workers over 50 may be biding their time until they can start receiving Social Security. Younger workers may be going to school to avoid a tough job market. Others may be going on disability, helping to explain that program’s surging rolls.

Stan Hampton, 59, a veteran of the Iraq war, is now earning his associate degree. But he has not had a job since returning from active duty in 2007, and is now living in an apartment complex for veterans near Las Vegas.

“I’m just trying to hang on until my retirement kicks in,” he said, though he stressed that he would still look for a job. “I have not been in jail or prison, nor am I an alcoholic, drug addict or gambling addict. I am simply old, unemployed and out of money.”

To answer the question of whether the improving economy might help people like Mr. Hampton and Ms. Barrington-Ward, economists often phrase the question as “Is it structural or cyclical?” Cyclical unemployment is temporary, caused by a slack economy. Structural unemployment stems from a mismatch between what businesses want and what workers offer. You are a car mechanic, for example, but the economy needs programmers.

If long-term joblessness is cyclical, a growing economy should bring people back into the job market. But if structural factors are at play, the concern is dire for the whole economy, with a normal unemployment rate “significantly higher than what has been achieved in the past,” said Janet L. Yellen, the presumptive new Federal Reserve chairwoman, in a speech this year.

Right now, most economists argue that unemployment remains primarily cyclical. Ben S. Bernanke, the departing Fed chairman, made this point last summer, adding that an unemployment rate in the 5 percent range — an indication of a healthy economy — was still obtainable. Growth simply hasn’t proved strong enough to spur businesses to hire all the people who want jobs.

Economists come to this conclusion in part because there is no evidence that the long-term jobless are accumulating in any one industry, which would be a signal that the economy needs to move workers from, say, manufacturing into nursing. Long-term unemployment has hit workers young and old, of all industries, races and backgrounds. But the long-term jobless actually tend to be more educated. And long spells of joblessness have hit black workers especially hard, as well as single parents, the disabled and older workers.

With time, however, even people with desired skills can become “structurally” unemployed. Longer spells of unemployment become harder to explain away. Jobless workers’ skills can atrophy. Job seekers find it harder to appear eager. Wounds become scars.

After she lost her job, Ms. Barrington-Ward lived off her 99 weeks of unemployment benefits. Two years ago, she had to give up the house she shared with friends outside Boston. She cannot get Medicaid because she does not have a fixed address. She has no car to get around. She does freelance “intuitive” readings, similar to psychic readings, and web production work. A jobless friend committed suicide.

She tries not to let those strains show, but she describes the experience as wearying. “After working since I was 15, I have nothing to show for it,” she said.

“She’s brilliant,” said Allyson Hartzell, a longtime friend with whom Ms. Barrington-Ward is currently staying. “She gets up in the morning. She has her tasks. She’s always working on her personal projects, trying to generate money. She goes to job interviews. She keeps herself in shape.”

Ms. Hartzell continued: “I think it’s emotionally difficult to handle so much rejection, and I think others sometimes feel she needs to justify why she’s in the position she’s in.”

Economists have long thought that the strain of unemployment, plus the erosion of skills and loss of contacts that naturally occur, helps explain the “structural” unemployed in a nation’s work force. But new evidence shows that bias plays a much larger role than previously thought. Some of the long-term unemployed might never find work because businesses simply refuse to hire them.

In a recent study, Rand Ghayad a Ph.D. candidate at Northeastern University, sent out 4,800 dummy résumés to job postings. Those résumés that were supposedly from recently unemployed applicants with no relevant experience were more likely to elicit a call for an interview than those supposedly from experienced workers out of a job for more than six months. Indeed, the callback rate for the long-term jobless ranged from just 1 to 3 percent, versus 9 to 16 percent for newly unemployed workers.

Unemployment becomes a “sorting criterion,” in the words of a separate study with similar findings. It found that being out of a job for more than nine months decreased interview requests by 20 percent among people applying to low- or medium-skilled jobs.

In dozens of interviews, the long-term unemployed described discrimination as being foremost in their minds, though at the same time they said the experience of joblessness had changed them.

Robin Hastey, 53, who lives in Cornwall, N.Y., lost her job in 2009 and has not found steady work since. Her husband went through a spell of unemployment, but eventually found a job that paid half of what he made in the 1990s. They are deeply in debt, she said, estimating that they have about $100 in their bank account.

“We look older,” she said. “I’m not as cute. People aren’t as forgiving. When I was young, you could ask stupid questions and people would hire you anyhow. Now, you’re just a crazy old lady. There’s a lot less forgiveness in the marketplace.”

Still, the slack economy remains the primary culprit behind all the pain in the labor market, economists say. “We’ve got to be doing everything we can,” said Professor Rothstein at Berkeley. “That means direct hiring”— with the government providing jobs — “employment tax credits, just about anything you could think of.”

But the government is now doing the opposite. The mandatory federal budget cuts known as sequestration took as much as 60 percent out of unemployment checks this summer and fall. And, as of this winter, the federal emergency program that extends the maximum number of weeks of jobless payments will end, though the White House is pushing to extend it again.

Some fear that it may already be too late to prevent long-term joblessness from permanently scarring the American work force and broader economy. International Monetary Fund researchers estimate that the level of structural unemployment has increased significantly since the recession. And striking new Federal Reserve research shows that the scars from the recession have knocked the economy off its long-term growth trend.

For the long-term jobless, there is little to do but hope and wait. When I visited Ms. Barrington-Ward in November, she was planning to produce a show for Somerville Community Access Television. Unemployment itself consumes a lot of time. “I’ve been in seven states over the last five years, living with friends and family,” she said. “I usually stay somewhere for three weeks maximum. People want me to leave but don’t want to ask me to leave.”

She never got a second interview for one of the two positions for which she applied. She wrote a detailed plan for and had phone conversations about the other job, this one at a web start-up. She offered to work on a consulting basis. The company told her that it would go with a temp.

On a cold evening in Somerville, she sipped a mocha she had bought with a coupon. She had not given up — not quite. But she was disappointed that jobs hadn’t panned out. Again.

“I just know I’m not going to get another full-time job again,” she said. “It’s just so hard.” She had to leave her friend’s house soon. She did not know where she would go.

    Caught in Unemployment’s Revolving Door, NYT, 16.11.2013,
    http://www.nytimes.com/2013/11/17/business/
    caught-in-unemployments-revolving-door.html

The Insanity of Our Food Policy

Opinionator - A Gathering of Opinion From Around the Web

November 16, 2013
2:30 pm
The New York Times
By JOSEPH E. STIGLITZ

American food policy has long been rife with head-scratching illogic. We spend billions every year on farm subsidies, many of which help wealthy commercial operations to plant more crops than we need. The glut depresses world crop prices, harming farmers in developing countries. Meanwhile, millions of Americans live tenuously close to hunger, which is barely kept at bay by a food stamp program that gives most beneficiaries just a little more than $4 a day.

So it’s almost too absurd to believe that House Republicans are asking for a farm bill that would make all of these problems worse. For the putative purpose of balancing the country’s books, the measures that the House Republican caucus is pushing for in negotiations with the Senate, as Congress attempts to pass a long-stalled extension of the farm bill, would cut back the meager aid to our country’s most vulnerable and use the proceeds to continue fattening up a small number of wealthy American farmers.

The House has proposed cutting food stamp benefits by $40 billion over 10 years — that’s on top of $5 billion in cuts that already came into effect this month with the expiration of increases to the food stamp program that were included in the 2009 stimulus law. Meanwhile, House Republicans appear satisfied to allow farm subsidies, which totaled some $14.9 billion last year, to continue apace. Republican proposals would shift government assistance from direct payments — paid at a set rate to farmers every year to encourage them to keep growing particular crops, regardless of market fluctuations — to crop insurance premium subsidies. But this is unlikely to be any cheaper. Worse, unlike direct payments, the insurance premium subsidies carry no income limit for the farmers who would receive this form of largess.

The proposal is a perfect example of how growing inequality has been fed by what economists call rent-seeking. As small numbers of Americans have grown extremely wealthy, their political power has also ballooned to a disproportionate size. Small, powerful interests — in this case, wealthy commercial farmers — help create market-skewing public policies that benefit only themselves, appropriating a larger slice of the nation’s economic pie. Their larger slice means everyone else gets a smaller one — the pie doesn’t get any bigger — though the rent-seekers are usually adept at taking little enough from individual Americans that they are hardly aware of the loss. While the money that they’ve picked from each individual American’s pocket is small, the aggregate is huge for the rent-seeker. And this in turn deepens inequality.

The nonsensical arrangement being proposed in the House Republicans’ farm bill is an especially egregious version of this process. It takes real money, money that is necessary for bare survival, from the poorest Americans, and gives it to a small group of the undeserving rich, in return for their campaign contributions and political support. There is no economic justification: The bill actually distorts our economy by promoting the kind of production we don’t need and shrinking the consumption of those with the smallest incomes. There is no moral justification either: It actually increases misery and precariousness of daily life for millions of Americans.

FARM subsidies were much more sensible when they began eight decades ago, in 1933, at a time when more than 40 percent of Americans lived in rural areas. Farm incomes had fallen by about a half in the first three years of the Great Depression. In that context, the subsidies were an anti-poverty program.

Now, though, the farm subsidies serve a quite different purpose. From 1995 to 2012, 1 percent of farms received about $1.5 million each, which is more than a quarter of all subsidies, according to the Environmental Working Group. Some three-quarters of the subsidies went to just 10 percent of farms. These farms received an average of more than $30,000 a year — about 20 times the amount received by the average individual beneficiary last year from the federal Supplemental Nutrition Assistant Program, or SNAP, commonly called food stamps.

Today, food stamps are one of the main support beams in our anti-poverty efforts. More than 80 percent of the 45 million or so Americans who participated in SNAP in 2011, the last year for which there is comprehensive data from the United States Department of Agriculture, had gross household incomes below the poverty level. (Since then, the total number of participants has expanded to nearly 48 million.) Even with that support, many of them experience food insecurity, that is, they had trouble putting food on the table at some point during the year.

Historically, food stamp programs and agricultural subsidies have been tied together. The two may seem strange bedfellows, but there is a rationale: There is a need to address both sides of the economics of food — production and consumption. Having a bounteous supply within a country does not ensure that the citizens of that country are well fed. The radical imbalance between farm subsidies to the wealthy and nutritional assistance to the neediest — an imbalance that the farm bill proposals would directly promote — is a painful testament to this established economic fact.

The Nobel Prize winning economist Amartya Sen has reminded us that even famines are not necessarily caused by a lack of supply, but by a failure to get the food that exists to the people who need it. This was true in the Bengal famine of 1943 and in the Irish potato famine a century earlier: Ireland, controlled by its British masters, was exporting food even as its citizens died of starvation.

A similar dynamic is playing out in the United States. American farmers are heralded as among the most efficient in the world. Our country is the largest producer and exporter of corn and soybeans, to name just two of its biggest crops. And yet millions of Americans still suffer from hunger, and millions more would, were it not for the vital programs that government provides to prevent hunger and malnutrition — the programs that the Republicans are now seeking to cut back.

And there is an extra layer of irony to America’s food policies: While they encourage overproduction, they pay little attention to the quality and diversity of foods our farms produce. The heavy subsidization of corn, for instance, means that many unhealthful foods are relatively cheap. So grocery shopping on a tight budget often means choosing foods that are not nutritious. This is part of the reason that Americans face the paradox of hunger out of proportion to their wealth, along with some of the world’s highest obesity rates, and a high incidence of Type 2 diabetes. Poor Americans are especially at risk for obesity.

A few years ago, I was in India, a country of 1.2 billion, in which tens of millions face hunger on a daily basis, when a front-page headline blared that one in seven Americans faced food insecurity because they couldn’t afford the basic necessities of life. Indian friends I met that day and in the following week were puzzled by this news: How could it be that in the richest country of the world there was still hunger?

Their puzzlement was understandable: Hunger in this rich land is unnecessary. What my Indian friends didn’t understand is that 15 percent of Americans — and 22 percent of America’s children — live in poverty. Someone working full time (2,080 hours a year) at the minimum wage of $7.25 would earn about $15,000 a year, far less than the poverty threshold for a family of four ($23,492 in 2012), and even less than the poverty level of a family of three.

This grim picture is a result of political decisions made in Washington that have helped create an economic system in which the undereducated must work exceptionally hard simply to remain in poverty.

This is not how America is supposed to work. In his famous 1941 “four freedoms” speech, Franklin D. Roosevelt enunciated the principle that all Americans should have certain basic economic rights, including “freedom from want.” These ideas were later embraced by the international community in the Universal Declaration of Human Rights, which also enshrined the right to adequate food. But while the United States was instrumental in advocating for these basic economic human rights on the international scene — and getting them adopted — America’s performance back home has been disappointing.

It is, of course, no surprise that with the high level of poverty millions of Americans have had to turn to the government to meet the basic necessities of life. And those numbers increased drastically with the onset of the Great Recession. The number of Americans on food stamps went up by more than 80 percent between 2007 and 2013.

To say that most of these Americans are technically poor only begins to get at the depth of their need. In 2012, for example, two in five SNAP recipients had gross incomes that were less than half of the poverty line. The amount they get from the program is very small — $4.39 a day per recipient. This is hardly enough to survive on, but it makes an enormous difference in the lives of those who get it: The Center on Budget and Policy Priorities estimates that SNAP lifted four million Americans out of poverty in 2010.

Given the inadequacies of the existing programs to combat hunger and poor nutrition, and given the magnitude of poverty in the aftermath of the Great Recession, one might have thought that the natural response of our political leaders would be to expand programs enhancing food security. But the members of the Republican caucus in the House of Representatives see things differently. They seem to want to blame the victims — the poor who have been provided an inadequate public education and so lack marketable skills, and those who earnestly seek work, but can’t find any, because of an economic system that has stalled, with almost one out of seven Americans who would like to find full-time employment still unable to obtain it. Far from alleviating the impacts of these problems, the Republicans’ proposal would reinforce privation and inequalities.

And the calamitous effects of the Republicans’ proposal will reach even beyond our borders.

Viewed from a larger perspective, the farming subsidies, combined with the cutbacks in food stamps, increase global poverty and hunger. This is because, with American consumption diminished from what it otherwise would be and production increased, food exports will inevitably increase. Greater exports drive down global prices, hurting poor farmers around the world. Agriculture is the main source of livelihood for the 70 percent of the world’s poor living in rural areas, who overwhelmingly reside in developing countries.

The adoption of the House Republicans’ plan will reverberate in our economy through several channels. One is simply that poor families with diminished resources will tamp down growth. More pernicious is that the Republicans’ farm bill would deepen inequality — and not just through the immediate giveaways to wealthy farmers and corresponding cuts to the poor. Children with poor nutrition — whether they are hungry or ill because of bad diets — do not learn as well as those who are better fed.

By cutting back on food stamps, we are ensuring the perpetuation of inequality, and at that, one of its worst manifestations: the inequality of opportunity. When it comes to opportunity, America is doing an alarmingly bad job, as I’ve written before in this series. We are endangering our future because there will be a large coterie of people at the bottom who will not live up to their potential, who will not be able to make the contribution that they could have made, to the prosperity of the country as a whole.

All of this exposes the Republicans’ argument in favor of these food policies — a concern for our future, particularly the impact of the national debt on our children — as a dishonest and deeply cynical pretense. Not only has the intellectual undergirding of debt fetishism been knocked out (with the debunking of work by the Harvard economists Carmen M. Reinhart and Kenneth S. Rogoff that tied slowed growth to debt-to-G.D.P. ratios above 90 percent). The Republicans’ farm bill also clearly harms both America’s children and the world’s in a variety of ways.

For these proposals to become law would be a moral and economic failure for the country.

    The Insanity of Our Food Policy, NYT, 16.11.2013,
    http://opinionator.blogs.nytimes.com/2013/11/16/the-insanity-of-our-food-policy/

Bloomberg, Champion of the Poor

November 5, 2013
The New York Times
By MICHAEL B. KATZ

DURING New York City’s mayoral race, criticism of Mayor Michael R. Bloomberg for neglecting the poor ignored his bold and unprecedented antipoverty measures. He may not have eliminated inequality or reversed the impact of the Great Recession — over the last two years, the poverty rate has crept up to 21.2 percent from 20.1 percent — but failure to acknowledge what he did in fact accomplish is not only unfair but also shortsighted. Usually depicted as a champion of the rich, Mr. Bloomberg mounted an antipoverty program at a moment when poverty as an issue was off the national radar and even politically toxic.

In March 2006, the mayor appointed a 32-member blue-ribbon commission to advise him on antipoverty strategy, at a time when no other mayor of a major American city had made poverty a priority. Mr. Bloomberg’s commission developed an alternative measure of the poverty line, prompting the United States Census Bureau to do the same, which calculated that more New Yorkers were poor in 2009 than the official measures suggested — 19.9 percent compared with 17.3 percent. The commission recommended directing the city’s resources to three groups that were especially at risk: the working poor, young adults between the of ages 16 and 24, and families with children below age 6.

Nine months later, Mr. Bloomberg announced the introduction of citywide antipoverty programs that incorporated virtually all of the commission’s recommendations. Responsibility for the individual programs, previously distributed throughout the various government departments, became the purview of a new Center for Economic Opportunity. The center was supported by an annual $100 million Innovation Fund, a public-private initiative that received more than half of its funding from the city. Programs like the Young Adult Internship Program stressed human capital development — education, job training and workplace skills. A program called $aveNYC offered a 50 percent match to low-income workers for saving a portion of their earned-income tax credit. Mr. Bloomberg also added a conditional cash transfer program, modeled on a program in Mexico and privately financed by foundations, which rewarded families with cash for specific behaviors related mainly to health and education. (This was the most criticized and, arguably, least successful component of his antipoverty effort.)

For the most part, however, the new programs offered few cash benefits. As The Economist observed, the Center for Economic Opportunity “bypassed” the city’s service delivery system by investing “a mixture of public and philanthropic money in social entrepreneurs’ ideas to help lift people out of poverty, particularly by emphasizing personal responsibility.” This market-based approach failed to provide much help for those trapped in deep poverty — an increasing part of the poor population — nor did it deploy redistributive measures that could have reduced economic inequality.

Still, some of the results were impressive. By 2011, the center had implemented more than 50 new programs, many of which had met or even exceeded their goals. A particularly good example is CUNY ASAP, the City University of New York Accelerated Study in Associate Programs, which removes barriers to graduation by offering participating students an array of academic and financial supports. The three-year graduation rate for the 2007 cohort was 55 percent, compared with 24 percent for a demographically comparable group.

Mr. Bloomberg’s approach has even exerted an influence at the national level. The center is replicating five of its successful programs, with an $85 million competitive grant from the federal Social Innovation Fund, in seven partner cities across the country. Other cities — notably Philadelphia and Richmond, Va. — have recently mounted their own antipoverty programs, and under Mr. Bloomberg’s leadership, the center has assembled a network of mayors to explore antipoverty innovations that respond to local needs. The possibilities of these city-based programs remain to be seen, but at least they show a willingness to experiment.

The new mayor will need to refocus attention on the growth of poverty and inequality accelerated by the Great Recession, as well as on those poor New Yorkers outside the regular labor market who remain untouched by the center’s array of programs.

Mr. Bloomberg’s antipoverty approach has tested the limits of human-capital and market-based strategies. As impressive as many of its individual components are, the center’s efforts remain unlikely to result in significant reductions in poverty and inequality. To get outcomes like that, we would need an expanded and repaired safety net; direct job creation through publicly funded infrastructure projects; and new programs designed to provide an adequate guaranteed income for every American.

Michael B. Katz is a professor of history

at the University of Pennsylvania

and the author of “The Undeserving Poor.”

    Bloomberg, Champion of the Poor, NYT, 5.11.2013,
    http://www.nytimes.com/2013/11/06/opinion/bloomberg-champion-of-the-poor.html

Slashing the Food Stamps Program

November 1, 2013
11:41 am
The New York Times
By DOROTHY J. SAMUELS

Even as negotiations proceed in Congress over a new farm bill likely to contain a large cut in food stamps, needy Americans who rely on the program are confronting an immediate drop in benefits.

As of today, the boost to the federal food stamps program included in the 2009 Economic Recovery Act expires, abruptly slashing benefit levels that were already inadequate for millions of poor children and their families, as well as impoverished disabled and elderly people, who will now find it significantly harder to afford adequate food.

The callous Republican obsession with eviscerating the program is only partly to blame. Today’s cut is the product of a shabby deal Democrats made in December 2010, which accelerated the sunset of the benefit increase contained in the economic stimulus plan. Essentially, Congressional Democrats, cajoled by the Obama White House, gambled that they could restore the lost money before the cut became effective — a convenient but unrealistic bet given that Republicans were about to take control of the House.

Anti-hunger advocates expressed concern at the time about the bargain and its potential to seriously hurt food-stamp recipients not too far down the road — a worry, unfortunately, that has now become reality.

As a result of today’s cut, a household of three will lose, on average, $29 a month in food stamp benefits. That might not sound like much. But consider that just two months ago, the Agriculture Department reported that 17.6 million households lacked sufficient resources at some point during 2012 to put food on the table. The Census reported that 15 percent of Americans live in poverty.

A newly-released study by the Food Bank for New York City found that even before the Nov. 1 cut, three-quarters of the food-stamp recipients using city pantries and soup kitchens reported that their benefits lasted only through the first three weeks of the month.

And a survey last year by the New York City Coalition Against Hunger found that 63 percent of local food charities were unable to come up with sufficient food to meet demand and were forced to ration food with steps like reducing portion size, closing doors early or turning people away — a situation replicated all across the country and bound to worsen given shrunken monthly benefit allotments.

Far from minor, today’s food stamp cut means more misery for the most vulnerable in New York City and beyond. Just in time for the holiday season.

    Slashing the Food Stamps Program, NYT, 1.11.2013,
    http://takingnote.blogs.nytimes.com/2013/11/01/
    eviscerating-the-food-stamps-program/

Budget Grief for the Poor and Jobless

November 1, 2013
The New York Times
By THE EDITORIAL BOARD

More than four years into an economic recovery, poverty and unemployment remain elevated, while the income gains from economic growth have flowed almost exclusively to the top 1 percent of earners. Those are not the hallmarks of a healthy economy, let alone a just society or a stable democracy.

Yet the pressure for reductions to programs for low-income groups has not subsided, with possible cuts to food stamps and federal unemployment benefits moving to the top of Congress’s agenda. The danger, as always, is that Republicans will pull Democrats in their slipstream, winning their agreement to cuts that are deemed acceptable simply because they are not as harsh as Republicans demanded. Lost in the debate is that big cuts already have occurred in both food stamps and federal jobless benefits. Further cuts will only make things worse.

Case in point: House Republicans have proposed $40 billion in food stamp cuts over 10 years in the pending farm bill; the Senate has proposed a tamer $4 billion reduction. The cuts, whatever they turn out to be, will come on top of significant cuts to food stamps that kicked in on Friday, when increases enacted in the 2009 stimulus law expired. That expiration affects all of the nearly 48 million food stamp recipients and, according to the Center on Budget and Policy Priorities, works out to about 16 fewer meals a month for a family of three.

Meanwhile, the program for federal unemployment benefits will expire at the end of 2013, unless Congress renews it. Designed to address long-term unemployment, federal benefits begin when state benefits end, usually after 26 weeks, and typically provide an additional 14 to 37 weeks of aid. The current program, begun in 2008, has been renewed many times, though in recent renewals benefits have been cut far more deeply than is warranted by continued high unemployment.

As a result, the program is doing less and less to combat poverty. The Center on Budget and Policy Priorities recently reported that one million jobless workers who fell into poverty in 2012 would have escaped that fate if benefits simply had kept pace with the need.

Even more harm will be done if those benefits, which average $260 a week, are cut again or stopped outright at year-end. Nearly 37 percent of the nation’s 11.3 million jobless workers have been out of work for more than six months, still higher by far than at any time before the Great Recession, in records going back to 1948.

It is useful to recall that premature cuts to food stamps and federal unemployment benefits hurt everyone because they reduce consumer spending and, with it, economic growth. There are, in fact, no good reasons at this time for cutting either program, but there are plenty of bad ones.

    Budget Grief for the Poor and Jobless, NYT, 1.11.2013,
    http://www.nytimes.com/2013/11/02/opinion/
    budget-grief-for-the-poor-and-jobless.html

Getting Older, Growing Poorer

October 5, 2013
The New York Times
By THE EDITORIAL BOARD

The basic outlines of poverty in America are sadly familiar. At last count, 46.5 million people were poor — 15 percent of the population. Women and children, especially in single-mother families, were, as always, hit hardest.

Another group, people 65 and older, now seems vulnerable as well. In analyzing the recent Census Bureau report on poverty, researchers at the National Women’s Law Center found that from 2011 to 2012, the rate of extreme poverty rose by a statistically significant amount among those 65 and older, meaning that a growing number of them were living at or below 50 percent of the poverty line. In 2012, this was $11,011 a year for an older person living alone.

An additional 135,000 older women became extremely poor in 2012, raising the extreme-poverty rate in that group to 3.1 percent, And 100,000 older men were extremely poor in 2012, raising the extreme-poverty rate in that group to 2.3 percent In all, nearly 1.2 million people age 65 and up were classified as extremely poor in 2012.

The increase in extreme poverty requires utmost attention. For the most part, Social Security has protected older Americans from poverty. In cases where older people are poor, the afflicted often have been very old women, who have long outlived their spouses and any nest egg.

In the law center’s research, however, the increase in extreme poverty was concentrated in the 65-to-75 age group. Some of them could be among the long-term unemployed, whose jobless benefits have been cut or run out. Or they might be people who would generally qualify for public assistance in addition to Social Security but are having trouble getting those benefits in the face of administrative cutbacks at the state and federal levels.

The numbers alone don’t say why extreme poverty has risen or whether the rise will be lasting or fleeting. But other data echo the law center’s findings. The Census Bureau’s American Community Survey, which tracks a larger sample than in its poverty report, shows an increase in poverty among those 65 and older, from 9.0 percent in 2010 to 9.3 percent in 2011 and 9.5 percent in 2012. That is not a record; poverty rates for that group have reached 9.9 percent

But it would be devastating if recent increases became a growing trend. For now, the best policy response is to do no harm. For example, budget proposals to cut Social Security’s cost-of-living benefit, ill advised in any case, would be especially unwise and untimely.

    Getting Older, Growing Poorer, NYT, 5.10.2013,
    http://www.nytimes.com/2013/10/06/opinion/
    sunday/getting-older-growing-poorer.html

A Population Betrayed

October 3, 2013
The New York Times
By THE EDITORIAL BOARD

It is outrageous that millions of the poorest people in the country will be denied health insurance because of decisions made mostly by Republican governors and legislators. These people will neither qualify for their state’s Medicaid program for the poor nor for subsidized coverage on new insurance exchanges that are being established in every state by the health care reform law.

Their plight is a result of the Supreme Court’s decision last year that struck down the reform law’s mandatory expansion of Medicaid and made expansion optional. Every state in the Deep South except Arkansas has rejected expansion, as have Republican-led states elsewhere. These 26 states would rather turn down incredibly generous federal funds that would finance 100 percent of the expansion costs for three years and at least 90 percent thereafter than offer a helping hand to their most vulnerable residents.

As Sabrina Tavernise and Robert Gebeloff reported in The Times on Thursday, two-thirds of the country’s poor, uninsured blacks and single mothers and more than half of the uninsured low-wage workers live in those states. The reform law originally sought to help poor and middle-income people through two parallel mechanisms. One was a mandatory expansion of Medicaid (which in most states cover primarily children and their parents with incomes well below the poverty level) to cover childless adults and to help people with income levels above the poverty line. Those with slightly higher incomes would be eligible for federal subsidies to buy private policies on the new insurance exchanges.

That approach fell apart when 26 states decided not to expand Medicaid, at least for now. There is no provision in the law to provide health insurance subsidies for anyone below the poverty line because those people are supposed to be covered by Medicaid.

The Times report, based on an analysis of census data, found that eight million Americans who are impoverished and uninsured will be ineligible for help of either kind. To add to the insanity, people whose incomes initially qualify them for subsidies on the exchanges could — if their income fell because they lost a job — end up with no coverage at all.

There are no easy solutions to the difficulties wrought by the Supreme Court decision and the callousness of state officials who seized on that opening to victimize the poor.

States like New Hampshire, Ohio, Pennsylvania and Tennessee that are still flirting with the idea of expansion should do the right thing and expand. States that have adamantly refused to expand should relent and take the generous federal funds. And if Congressional Republicans ever give up on their obsession to destroy the health reform law, Congress could surely find ways to make certain that the people most in need of help get it.

    A Population Betrayed, NYT, 3.10.2013,
    http://www.nytimes.com/2013/10/04/opinion/a-population-betrayed.html

Millions of Poor Are Left Uncovered

by Health Law

October 2, 2013
The New York Times
By SABRINA TAVERNISE and ROBERT GEBELOFF

A sweeping national effort to extend health coverage to millions of Americans will leave out two-thirds of the poor blacks and single mothers and more than half of the low-wage workers who do not have insurance, the very kinds of people that the program was intended to help, according to an analysis of census data by The New York Times.

Because they live in states largely controlled by Republicans that have declined to participate in a vast expansion of Medicaid, the medical insurance program for the poor, they are among the eight million Americans who are impoverished, uninsured and ineligible for help. The federal government will pay for the expansion through 2016 and no less than 90 percent of costs in later years.

Those excluded will be stranded without insurance, stuck between people with slightly higher incomes who will qualify for federal subsidies on the new health exchanges that went live this week, and those who are poor enough to qualify for Medicaid in its current form, which has income ceilings as low as $11 a day in some states.

People shopping for insurance on the health exchanges are already discovering this bitter twist.

“How can somebody in poverty not be eligible for subsidies?” an unemployed health care worker in Virginia asked through tears. The woman, who identified herself only as Robin L. because she does not want potential employers to know she is down on her luck, thought she had run into a computer problem when she went online Tuesday and learned she would not qualify.

At 55, she has high blood pressure, and she had been waiting for the law to take effect so she could get coverage. Before she lost her job and her house and had to move in with her brother in Virginia, she lived in Maryland, a state that is expanding Medicaid. “Would I go back there?” she asked. “It might involve me living in my car. I don’t know. I might consider it.”

The 26 states that have rejected the Medicaid expansion are home to about half of the country’s population, but about 68 percent of poor, uninsured blacks and single mothers. About 60 percent of the country’s uninsured working poor are in those states. Among those excluded are about 435,000 cashiers, 341,000 cooks and 253,000 nurses’ aides.

“The irony is that these states that are rejecting Medicaid expansion — many of them Southern — are the very places where the concentration of poverty and lack of health insurance are the most acute,” said Dr. H. Jack Geiger, a founder of the community health center model. “It is their populations that have the highest burden of illness and costs to the entire health care system.”

The disproportionate impact on poor blacks introduces the prickly issue of race into the already politically charged atmosphere around the health care law. Race was rarely, if ever, mentioned in the state-level debates about the Medicaid expansion. But the issue courses just below the surface, civil rights leaders say, pointing to the pattern of exclusion.

Every state in the Deep South, with the exception of Arkansas, has rejected the expansion. Opponents of the expansion say they are against it on exclusively economic grounds, and that the demographics of the South — with its large share of poor blacks — make it easy to say race is an issue when it is not.

In Mississippi, Republican leaders note that a large share of people in the state are on Medicaid already, and that, with an expansion, about a third of the state would have been insured through the program. Even supporters of the health law say that eventually covering 10 percent of that cost would have been onerous for a predominantly rural state with a modest tax base.

“Any additional cost in Medicaid is going to be too much,” said State Senator Chris McDaniel, a Republican, who opposes expansion.

The law was written to require all Americans to have health coverage. For lower and middle-income earners, there are subsidies on the new health exchanges to help them afford insurance. An expanded Medicaid program was intended to cover the poorest. In all, about 30 million uninsured Americans were to have become eligible for financial help.

But the Supreme Court’s ruling on the health care law last year, while upholding it, allowed states to choose whether to expand Medicaid. Those that opted not to leave about eight million uninsured people who live in poverty ($19,530 for a family of three) without any assistance at all.

Poor people excluded from the Medicaid expansion will not be subject to fines for lacking coverage. In all, about 14 million eligible Americans are uninsured and living in poverty, the Times analysis found.

The federal government provided the tally of how many states were not expanding Medicaid for the first time on Tuesday. It included states like New Hampshire, Ohio, Pennsylvania and Tennessee that might still decide to expand Medicaid before coverage takes effect in January. If those states go forward, the number would change, but the trends that emerged in the analysis would be similar.

Mississippi has the largest percentage of poor and uninsured people in the country — 13 percent. Willie Charles Carter, an unemployed 53-year-old whose most recent job was as a maintenance worker at a public school, has had problems with his leg since surgery last year.

His income is below Mississippi’s ceiling for Medicaid — which is about $3,000 a year — but he has no dependent children, so he does not qualify. And his income is too low to make him eligible for subsidies on the federal health exchange.

“You got to be almost dead before you can get Medicaid in Mississippi,” he said.

He does not know what he will do when the clinic where he goes for medical care, the Good Samaritan Health Center in Greenville, closes next month because of lack of funding.

“I’m scared all the time,” he said. “I just walk around here with faith in God to take care of me.”

The states that did not expand Medicaid have less generous safety nets: For adults with children, the median income limit for Medicaid is just under half of the federal poverty level — or about $5,600 a year for an individual — while in states that are expanding, it is above the poverty line, or about $12,200, according to the Kaiser Family Foundation. There is little or no coverage of childless adults in the states not expanding, Kaiser said.

The New York Times analysis excluded immigrants in the country illegally and those foreign-born residents who would not be eligible for benefits under Medicaid expansion. It included people who are uninsured even though they qualify for Medicaid in its current form.

Blacks are disproportionately affected, largely because more of them are poor and living in Southern states. In all, 6 out of 10 blacks live in the states not expanding Medicaid. In Mississippi, 56 percent of all poor and uninsured adults are black, though they account for just 38 percent of the population.

Dr. Aaron Shirley, a physician who has worked for better health care for blacks in Mississippi, said that the history of segregation and violence against blacks still informs the way people see one another, particularly in the South, making some whites reluctant to support programs that they believe benefit blacks.

That is compounded by the country’s rapidly changing demographics, Dr. Geiger said, in which minorities will eventually become a majority, a pattern that has produced a profound cultural unease, particularly when it has collided with economic insecurity.

Dr. Shirley said: “If you look at the history of Mississippi, politicians have used race to oppose minimum wage, Head Start, all these social programs. It’s a tactic that appeals to people who would rather suffer themselves than see a black person benefit.”

Opponents of the expansion bristled at the suggestion that race had anything to do with their position. State Senator Giles Ward of Mississippi, a Republican, called the idea that race was a factor “preposterous,” and said that with the demographics of the South — large shares of poor people and, in particular, poor blacks — “you can argue pretty much any way you want.”

The decision not to expand Medicaid will also hit the working poor. Claretha Briscoe earns just under $11,000 a year making fried chicken and other fast food at a convenience store in Hollandale, Miss., too much to qualify for Medicaid but not enough to get subsidies on the new health exchange. She had a heart attack in 2002 that a local hospital treated as part of its charity care program.

“I skip months on my blood pressure pills,” said Ms. Briscoe, 48, who visited the Good Samaritan Health Center last week because she was having chest pains. “I buy them when I can afford them.”

About half of poor and uninsured Hispanics live in states that are expanding Medicaid. But Texas, which has a large Hispanic population, rejected the expansion. Gladys Arbila, a housekeeper in Houston who earns $17,000 a year and supports two children, is under the poverty line and therefore not eligible for new subsidies. But she makes too much to qualify for Medicaid under the state’s rules. She recently spent 36 hours waiting in the emergency room for a searing pain in her back.

“We came to this country, and we are legal and we work really hard,” said Ms. Arbila, 45, who immigrated to the United States 12 years ago, and whose son is a soldier in Afghanistan. “Why we don’t have the same opportunities as the others?”

    Millions of Poor Are Left Uncovered by Health Law, NYT, 2.10.2013,
    http://www.nytimes.com/2013/10/03/health/
    millions-of-poor-are-left-uncovered-by-health-law.html

Another Insult to the Poor

September 19, 2013
The New York Times
By THE EDITORIAL BOARD

In what can be seen only as an act of supreme indifference, House Republicans passed a bill on Thursday that would drastically cut federal food stamps and throw 3.8 million Americans out of the program in 2014.

The vote came two weeks after the Agriculture Department reported that 17.6 million households did not have enough to eat at some point in 2012 because they lacked the resources to put food on the table. It came two days after the Census Bureau reported that 15 percent of Americans, or 46.5 million people, live in poverty.

These numbers were basically unchanged from 2011, but in a growing economy steady rates of hunger and poverty amount, in effect, to backsliding. Cutting food stamps would accelerate the slide. Food stamps kept four million people out of poverty last year and kept millions more from falling deeper into poverty. Under the House Republican bill, many of these people would be impoverished.

The struggling middle class is also faring poorly. Though the unemployment rate dropped to a low of 7.8 percent last year from a high of 9.1 percent in 2011, median household income was virtually unchanged, at $51,017. In a healthy economy, income would rise when unemployment falls. But in today’s weak economy, much of the decline in the jobless rate is not due to new hiring, but to a shrinking work force — the very definition of a feeble labor market in which employed people work for years without raises and unemployed job seekers routinely end up in new jobs that pay less than their previous ones.

Even so, congressional Republicans have shown no inclination to end the automatic budget cuts that, if left in place, will lead to an estimated loss of 900,000 jobs in the coming year, keeping poverty high and incomes stagnant. In addition, there seems to be little Republican appetite for renewing federal unemployment benefits — a lifeline for millions of unemployed Americans — when they expire at the end of 2013.

It is nothing new that poor people are stuck and those in the middle class are struggling. The poverty rate, though steady last year, has worsened or failed to improve in 11 of the last 12 years. The latest numbers would have been worse but for “doubling up.” There are currently 10.1 million adults age 25 to 34 who are not in school and who live with parents or others who are not spouses of cohabitating partners. If they were on their own, 43 percent of them would fall below the poverty line, which last year was $11,945 for someone under age 65.

Similarly, while median household income held steady last year, it was still lower by 8.3 percent, or $4,600, (measured in 2012 dollars) than in 2007, before the recession. And the longer the historical perspective, the more dire the situation. From 2000 to 2012, median income for working-age households headed by someone under age 65 (again in 2012 dollars) fell almost $7,500, from nearly $65,000 to just under $57,500, a decline of 11.6 percent.

Against that backdrop, there is no justification for savaging the safety net and decimating the budget.

    Another Insult to the Poor, NYT, 19.9.2013,
    http://www.nytimes.com/2013/09/20/opinion/another-insult-to-the-poor.html

The Mismeasure of Poverty

September 17, 2013
The New York Times
By SHELDON H. DANZIGER

THE Census Bureau reported yesterday that the poverty rate in America held stable between 2011 and 2012, at about 15 percent. According to the official measure, poverty today is higher than it was in 1973, when it reached a historical low of 11.1 percent.

To many, this dismaying fact suggests that taxpayers waste billions of dollars a year fighting a war on poverty that has been largely lost. As Representative Paul D. Ryan, Republican of Wisconsin, said earlier this year, “We have spent $15 trillion from the federal government fighting poverty, and look at where we are, the highest poverty rates in a generation, 15 percent of Americans in poverty.”

But this position is wrong, for two reasons. The first is that the official measure is misleading — it measures only cash income, and it does not count benefits from many programs that help the poor. If they were counted, the rate would be closer to 11 percent.

Consider the Supplemental Nutrition Assistance Program, commonly known as food stamps, which was first put into nationwide use in the 1960s. The immediate benefits are easy to calculate: a dollar of SNAP subsidies spent on food frees up a dollar for low-income families to spend on rent, utilities or other needs. When SNAP benefits are counted as income, they lift almost four million people above the poverty line.

And SNAP benefits not only reduce food insecurity and poverty this year; they also reduce poverty in the next generation. Recent research that tracked children into adulthood found that families’ access to food stamps improved their infants’ health and birth weight. Children who benefited from the program later posted better health, higher educational attainment, less heart disease and, for women, greater earnings and less reliance on welfare as adults.

The earned-income tax credit is also ignored in calculating the poverty rate. Yet this program offers working low-income families with children about $3,000 a year. When these tax refunds are counted, they reduce the number of people in poverty by about 5.5 million people.

Social Security benefits are counted in the official measure, but their large antipoverty effect receives little attention. Without these benefits, the elderly poverty rate would have been more than 44 percent, instead of the actual rate of less than 9 percent.

The next time critics of the safety net claim that we fought a war on poverty and poverty won, remind them that without these and other programs, poverty would be much higher.

But, says the critic, if all these programs have such broad effects, why has the poverty rate stayed so frustratingly stable? That’s the second flaw in the conventional wisdom.

All things being equal, such programs, whether we count them or not, should have reduced the official poverty rate across generations. But all things have not been equal. Although these programs help the poor, poverty remains high because inequality of economic outcomes has increased sharply since the 1970s.

Before income inequality took off, the poverty rate fell more rapidly with G.D.P. growth. But while the economy grew by 2.8 percent in 2012 and corporate profits went up as a share of national income, the earnings of full-time workers, median household income and the poverty rate barely changed.

Antipoverty programs do help, but their recipients don’t move forward because they no longer benefit much from that other great poverty-ameliorating factor, economic growth.

That’s not to say that growth is no longer necessary for reducing poverty. But in our gilded age of inequality, growth alone is insufficient.

A few changes would make a difference. First, a poverty measure that incorporated all anti-poverty policies would show that the safety net is more effective than critics say, and would show how painful cuts to those programs could be.

In fact, the Census Bureau has already developed a supplemental measure that reveals the importance of these programs to low-income families. But when it is released next month, it will receive far less attention than the official rate from policy makers and the press.

Second, more benefits from growth must reach the poor, and the best way to do that is through matching robust antipoverty measures with policies that lower the unemployment rate and increase wages. During the full employment years of the late 1990s, even low wages rose in step with productivity, and poverty fell more sharply than it had in a generation. A minimum-wage increase helped then, and an increase now would help again.

Lowering poverty means both recognizing the successes of safety net programs we now have and devising new policies that can spread the gains generated by economic growth. If we don’t, then we will continue to face poverty rates that are unacceptably high, and wonder why we can’t do anything about them.

Sheldon H. Danziger

is the president of the Russell Sage Foundation

and a co-editor of “Legacies of the War on Poverty.”

    The Mismeasure of Poverty, NYT, 17.9.2013,
    http://www.nytimes.com/2013/09/18/opinion/the-mismeasure-of-poverty.html

Lifelines for Poor Children

September 14, 2013
6:33 pm
The New York Times
Opinionator -
A Gathering of Opinion From Around the Web
By JAMES J. HECKMAN

What’s missing in the current debate over economic inequality is enough serious discussion about investing in effective early childhood development from birth to age 5. This is not a big government boondoggle policy that would require a huge redistribution of wealth. Acting on it would, however, require us to rethink long-held notions of how we develop productive people and promote shared prosperity.

Everyone knows that education boosts productivity and enlarges opportunities, so it is natural that proposals for reducing inequality emphasize effective education for all. But these proposals are too timid. They ignore a powerful body of research in the economics of human development that tells us which skills matter for producing successful lives. They ignore the role of families in producing the relevant skills They also ignore or play down the critical gap in skills between advantaged and disadvantaged children that emerges long before they enter school.

While education is a great equalizer of opportunity when done right, American policy is going about it all wrong: current programs don’t start early enough, nor do they produce the skills that matter most for personal and societal prosperity.

The cognitive skills prized by the American educational establishment and measured by achievement tests are only part of what is required for success in life. Character skills are equally important determinants of wages, education, health and many other significant aspects of flourishing lives. Self-control, openness, the ability to engage with others, to plan and to persist — these are the attributes that get people in the door and on the job, and lead to productive lives. Cognitive and character skills work together as dynamic complements; they are inseparable. Skills beget skills. More motivated children learn more. Those who are more informed usually make wiser decisions.

These established findings should lead to a major reorientation of policies for human development. Because skill begets skill, the opportunity for education should begin at birth — and not depend on the accident of birth.

The family into which a child is born plays a powerful role in determining lifetime opportunities. This is hardly news, but it bears repeating: some kids win the lottery at birth, far too many don’t — and most people have a hard time catching up over the rest of their lives. Children raised in disadvantaged environments are not only much less likely to succeed in school or in society, but they are also much less likely to be healthy adults. A variety of studies show that factors determined before the end of high school contribute to roughly half of lifetime earnings inequality. This is where our blind spot lies: success nominally attributed to the beneficial effects of education, especially graduating from college, is in truth largely a result of factors determined long before children even enter school.

Improving the early environments of disadvantaged children is a promising way to reduce inequality, but conventional wisdom is to level the playing field with cash transfers, tuition assistance and raising the minimum wage. High-quality early childhood programs are great economic and social equalizers — they supplement the family lives of disadvantaged children by teaching consistent parenting and by giving children the mentoring, encouragement and support available to functioning middle-class families. Children in these programs develop foundational skills on par with those of more affluent children and create a stronger family structure for themselves. Caring parents and early stimulation are essential ingredients of successful early childhood environments.

Critics say that early childhood education is expensive and that it is not effective. They are right about the cost, but terribly wrong about the large return on the investment. Quality early childhood programs for disadvantaged children more than pay for themselves in better education, health and economic outcomes.

Proof comes in the form of a long-term cost-benefit analysis of effective early childhood programs. The Perry Preschool project was an intensive two-year voluntary program administered between 1962 and 1967 to disadvantaged 3- and 4-year-old, low-I.Q. African-American children in Ypslanti, Mich. The curriculum emphasized the development of self-control, perseverance and social skills in conjunction with basic cognitive skills. It also worked with the mothers to foster attachment, develop parenting skills and deepen their interactions with their children. The participants were randomly assigned to treatment and control groups, with the outcomes evaluated over a period of four decades.

Perry did not produce lasting gains in the I.Q.’s of its participants, but it did boost character skills that produced better education, economic and life outcomes. The economic rate of return from Perry is in the range of 6 percent to 10 percent per year per dollar invested, based on greater productivity and savings in expenditures on remediation, criminal justice and social dependency. This compares favorably to the estimated 6.9 percent annual rate of return of the United States stock market from the end of World War II to the 2008 meltdown. And yes, these estimates account for the costs of raising taxes and any resulting loss of economic activity.

A similar long-term early childhood study, the Carolina Abecedarian Project, better known as ABC, gave cognitive stimulation, training in self-control and social skills, and parental education starting in the first few months of life. The children were also provided with health checkups and health care. Four groups of individuals born between 1972 and 1977 were randomly assigned to treatment and control groups, and their progress has been monitored so far through studies conducted at ages 12, 15, 21 and 30. This program had lasting effects on I.Q., parenting practices and child attachment, leading to higher educational attainment and more skilled employment among those in the treatment group.

Most dramatic were ABC’s effects on lifelong health. Now, over 30 years later, those treated in ABC have lower blood pressure, lower abdominal obesity, less hypertension and less likelihood of metabolic syndrome and cardiovascular conditions as adults. This evidence clearly shows the power of quality early childhood programs for producing flourishing people with healthier lives, which increases productivity and lowers health care costs.

Why aren’t we moving forward and changing our ways by making investments in life-changing early childhood development for disadvantaged children? Two things: unfounded doubt and fear of doing things differently.

Doubters say that high-quality programs like Perry and ABC cannot be replicated and scaled up. However private groups, states and municipalities have used these models to custom-build their own programs, and they are seeing substantial results and cost savings. What’s not working is taking away funding for these programs in the face of budget cuts. Also holding back progress are those who claim that Perry and ABC are experiments with samples too small to accurately predict widespread impact and return on investment. This is a nonsensical argument. Their relatively small sample sizes actually speak for — not against — the strength of their findings. Dramatic differences between treatment and control-group outcomes are usually not found in small sample experiments, yet the differences in Perry and ABC are big and consistent in rigorous analyses of these data.

These unfounded doubts feed our fear of taking new and more effective approaches. American public policy throws money at programs that don’t produce results as good or better than what is obtained from early childhood education.

What doesn’t work? Investing in smaller class sizes is not as effective as making sure each child has the foundational skills to do well inside the classroom, regardless of its size. Because skill begets skill, it’s common sense that adult literacy programs and many job-training programs are too little, too late. It is much more effective and cost efficient to create instead of remediate.

This is not to say that we should abandon all remediation programs; only that our focus on fixing downstream problems should not preclude enlightened upstream solutions.

Fortunately, the public knows that something is wrong and senses that early childhood development might be the solution. A recent public opinion poll commissioned by the First Five Years Fund found that 68 percent of voters think that only half or even fewer children begin kindergarten with the knowledge and skills they need to do their best in school. Eighty-nine percent say it is important to make early education and child care more affordable for working families to give their children a strong start, and a similar number want the federal government to help states build better preschools and make them more accessible to low- and middle-income children.

President Obama has proposed an early childhood initiative that combines family visitation, infant health and development, early learning, quality child care and more effective preschooling at ages 4 and 5. This is an encouraging shift in American policy, one that could significantly reduce inequality if it remained true to the evidence of what works — not to the politics of what is convenient.

Our choice in these difficult economic times is not just whether to spend or cut, but whether to choose knowledge over conventional wisdom. Will we put money in programs that pay off? Quality early childhood programs for disadvantaged children are not “entitlements” or bottomless wells of social spending. They foster human flourishing and they improve our economic productivity in the process. There is no trade-off between equity and efficiency, as there is for other social programs. Early investment in the lives of disadvantaged children will help reduce inequality, in both the short and the long run.

James J. Heckman is a professor of economics

at the University of Chicago

and a Nobel Laureate in Economics.

    Lifelines for Poor Children, NYT, 14.9.2013,
    http://opinionator.blogs.nytimes.com/2013/09/14/lifelines-for-poor-children/

Cul-de-Sac Poverty

May 20, 2013
The New York Times
By ELIZABETH KNEEBONE and ALAN BERUBE

WASHINGTON — LONG before Robert F. Kennedy toured Appalachia and the Mississippi Delta in 1964, before Jimmy Carter walked through the South Bronx in 1977, Americans thought of poverty as synonymous with inner cities and rural hinterlands.

But in the 1990s, poverty in suburbia began to accelerate at a faster rate than poverty in the cities. Sometime after the 2001 recession, more poor people lived in suburbs than in cities for the first time (even though the poverty rate remains higher in cities). The Great Recession, set off by a subprime mortgage crisis that began in suburbs and exurbs, accelerated the trend.

In 2011, the suburban poor outnumbered the urban poor by three million; from 2000 to 2011, the number of poor people soared by 64 percent in the suburbs, compared with 29 percent in cities. Today nearly one-third of all Americans are poor or nearly poor. One in three poor Americans live in the suburbs. If you’re poor in the Seattle, Atlanta or Chicago regions, you’re more likely than not living outside the city limits.

The 10 metropolitan regions that saw the highest increases in suburban poverty between 2000 and 2010 stretched across the nation: Cape Coral, in southwestern Florida; Greensboro, N.C.; Colorado Springs; Atlanta; Grand Rapids, Mich.; Dayton, Ohio; Detroit; Youngstown, Ohio; Boise, Idaho; and Salt Lake City.

The differences between the Midwest, and the South and West, are significant.

In communities like Lakewood, Ohio, west of Cleveland, and Penn Hills, Pa., east of Pittsburgh, the long-run decline of manufacturing jobs lowered income in an already suburbanized work force. Small suburbs south of Chicago, like Harvey and Blue Island, Ill., became home to low-income families pushed out of the central cities by higher housing costs, a pattern also occurring in the Northeast. Restrictive zoning, redlining and limits on annexation reinforced patterns of segregation and blocked struggling cities from absorbing affluent suburbs, as cities did in the 19th century.

Suburban poverty in the South and West is more closely associated with demographic change. South of Seattle, small communities like Tukwila, Wash., were transformed over two decades by the arrival of refugees from the Balkans, East Africa and the Himalayas. The growing job base east of Houston attracted low-income Latinos to formerly middle-class white suburbs like Pasadena, Tex. In Antioch, Calif., at the eastern edge of the San Francisco Bay Area, lower-income black households used subsidized vouchers to rent homes from owners who were underwater because of the foreclosure crisis.

To be sure, there are some relative benefits to being poor in the suburbs, which, compared with inner cities sometimes offer better schools, greater socioeconomic diversity, safer streets and, if there are jobs nearby, shorter commutes. The Fair Housing Act of 1968, the introduction of Section 8 housing vouchers in the 1980s, and the demolition of distressed public housing in the 1990s were all part of a benign effort to de-concentrate poverty and open suburbia to low-income households, especially members of minority groups, who had been excluded for generations.

But the suburbs haven’t kept up with rising demand for services. In Penn Hills, public transportation is modest, and runs in and out of downtown Pittsburgh — not to other suburbs where lower-skilled jobs are more plentiful. In Tukwila, the small school district has struggled to prepare hundreds of non-English-speaking low-income students for state-mandated achievement tests. In Antioch, social services were overwhelmed after the housing market crashed.

Those struggles reflect the fact that policies to help poor places — as opposed to poor people — haven’t evolved much beyond the War on Poverty’s neighborhood-based solutions. Many federal programs were designed for urban neighborhoods: Head Start and Community Health Centers, in 1965; the Community Development Block Grant, to promote economic development, in 1974; the HOPE VI program, to modernize distressed public housing, in 1992; the Obama administration’s Promise Neighborhoods, which is based on the Harlem Children’s Zone and tries to coordinate school and family support, in 2010.

These approaches are often ill suited for suburbs, where poverty is more diffuse, where the institutions and expertise to help the poor are lacking, and where local leaders sometimes resist such programs, fearing they will only attract more poor residents.

Moreover, the aid is fragmented. In a new book, we estimate that the federal government spends $82 billion on place-based efforts to combat poverty, but fragments that effort among more than 80 programs across 10 different agencies. Delivering services across more than one jurisdiction means that nonprofit groups, which provide services under government contracts, must grapple with multiple bureaucracies, regulations and reporting structures.

Innovative organizations are struggling to address suburban poverty. In the Houston area, a nonprofit agency called Neighborhood Centers blends 35 different federal programs with state, local and private dollars to provide a continuum of education, child care, financial and immigration services to more than 400,000 people a year at over 60 different sites. But federal requirements force the agency to maintain 40 different data systems, and report separately on each program throughout the year to several federal agencies.

Two groups in the Chicago area — the Chicago Southland Housing and Community Development Collaborative and the West Cook County Housing Collaborative — have joined forces to blend public and private money to mitigate the fallout from the foreclosure crisis in the city’s southern and western suburbs. But they’ve encountered bureaucratic roadblocks in using federal grants across more than one jurisdiction.

We need to transform social policy for the age of suburban poverty. But reforming 80-plus programs one by one is neither efficient nor realistic. Instead, we should equip regions with aid that cuts across jurisdictional lines, help them use limited resources more efficiently, and reinvent the system from the ground up.

By carving out just 5 percent of what the federal government now spends on place-based antipoverty efforts (around $4 billion), we could create a competitive grant program focused on increasing access to economic opportunity. Call it a “Metropolitan Opportunity Challenge.” It would give states and localities an incentive to join forces to compete for federal dollars. President Obama’s Race to the Top educational program already provides such a model: it gave the Seattle Public Schools and six suburban districts, including Tukwila, an award to reduce achievement gaps and to ensure that high school graduates were prepared for college or entering competitive fields.

Getting Congress to act in this age of gridlock is a tall order. But state and local policy makers can also help, by putting their scarce discretionary antipoverty resources behind organizations that have proved their ability to provide services in both urban and suburban communities.

Americans moved to the suburbs after World War II to escape the problem of poverty in cities. Running away is no longer an option — the cities’ traditional woes are now in the suburbs, too. We have to recognize that the face of American poverty is an increasingly suburban one, and act accordingly.

Elizabeth Kneebone and Alan Berube,

fellows in the Metropolitan Policy Program

at the Brookings Institution,

are the authors of “Confronting Suburban Poverty in America.”

    Cul-de-Sac Poverty, NYT, 20.5.2013,
    http://www.nytimes.com/2013/05/21/opinion/cul-de-sac-poverty.html

The Rise of the Permanent Temp Economy

January 26, 2013
3:41 pm
The New York Times
Opinionator
A Gathering of Opinion From Around the Web
By ERIN HATTON

Politicians across the political spectrum herald "job creation," but frightfully few of them talk about what kinds of jobs are being created. Yet this clearly matters: According to the Census Bureau, one-third of adults who live in poverty are working but do not earn enough to support themselves and their families.

A quarter of jobs in America pay below the federal poverty line for a family of four ($23,050). Not only are many jobs low-wage, they are also temporary and insecure. Over the last three years, the temp industry added more jobs in the United States than any other, according to the American Staffing Association, the trade group representing temp recruitment agencies, outsourcing specialists and the like.

Low-wage, temporary jobs have become so widespread that they threaten to become the norm. But for some reason this isn't causing a scandal. At least in the business press, we are more likely to hear plaudits for "lean and mean" companies than angst about the changing nature of work for ordinary Americans.

How did we arrive at this state of affairs? Many argue that it was the inevitable result of macroeconomic forces - globalization, deindustrialization and technological change - beyond our political control. Yet employers had (and have) choices. Rather than squeezing workers, they could have invested in workers and boosted product quality, taking what economists call the high road toward more advanced manufacturing and skilled service work. But this hasn't happened. Instead, American employers have generally taken the low road: lowering wages and cutting benefits, converting permanent employees into part-time and contingent workers, busting unions and subcontracting and outsourcing jobs. They have done so, in part, because of the extraordinary evangelizing of the temp industry, which rose from humble origins to become a global behemoth.

The story begins in the years after World War II, when a handful of temp agencies were started, largely in the Midwest. In 1947, William Russell Kelly founded Russell Kelly Office Service (later known as Kelly Girl Services) in Detroit, with three employees, 12 customers and $848 in sales. A year later, two lawyers, Aaron Scheinfeld and Elmer Winter, founded a similarly small outfit, Manpower Inc., in Milwaukee. At the time, the future of these fledgling agencies was no foregone conclusion. Unions were at the peak of their power, and the protections that they had fought so hard to achieve - workers' compensation, pensions, health benefits and more - had been adopted by union and nonunion employers alike.

But temp leaders were creating a new category of work (and workers) that would be exempt from such protections.

To avoid union opposition, they developed a clever strategy, casting temp work as "women's work," and advertising thousands of images of young, white, middle-class women doing a variety of short-term office jobs. The Kelly Girls, Manpower's White Glove Girls, Western Girl's Cowgirls, the American Girls of American Girl Services and numerous other such "girls" appeared in the pages of Newsweek, Business Week, U.S. News & World Report, Good Housekeeping, Fortune, The New York Times and The Chicago Daily Tribune. In 1961 alone, Manpower spent $1 million to put its White Glove Girls in the Sunday issue of big city newspapers across the country.

The strategy was an extraordinary success. Not only did the Kelly Girls become cultural icons, but the temp agencies grew and grew. By 1957, Kelly reported nearly $7 million in sales; in 1962, with 148 branches and $24 million in sales, it went public. Meanwhile, by 1956 Manpower had 91 branches in 65 cities (and 10 abroad) and, with sales at $12 million annually, employed some 4,000 workers a day. In 1962, Manpower also went public, boasting 270 offices across four continents and over $40 million in sales.

The temp agencies' Kelly Girl strategy was clever (and successful) because it exploited the era's cultural ambivalence about white, middle-class women working outside the home. Instead of seeking to replace "breadwinning" union jobs with low-wage temp work, temp agencies went the culturally safer route: selling temp work for housewives who were (allegedly) only working for pin money. As a Kelly executive told The New York Times in 1958, "The typical Kelly Girl... doesn't want full-time work, but she's bored with strictly keeping house. Or maybe she just wants to take a job until she pays for a davenport or a new fur coat."

Protected by the era's gender biases, early temp leaders thus established a new sector of low-wage, unreliable work right under the noses of powerful labor unions. While greater numbers of employers in the postwar era offered family-supporting wages and health insurance, the rapidly expanding temp agencies established a different precedent by explicitly refusing to do so. That precedent held for more than half a century: even today "temp" jobs are beyond the reach of many workplace protections, not only health benefits but also unemployment insurance, anti-discrimination laws and union-organizing rights.

By 1967 Manpower employed more workers than corporate giants like Standard Oil of New Jersey and the U.S. Steel Corporation. Manpower and the other temp agencies had gained a foothold, and temporary employment was widely considered a legitimate part of the economy. Now eyeing a bigger prize - expansion beyond pink-collar work - temp industry leaders dropped their "Kelly Girl" image and began to argue that all employees, not just secretaries, should be replaced by temps. And rather than simply selling temps, they sold a bigger product: a lean and mean approach to business that considered workers to be burdensome costs that should be minimized.

For example, in 1971 the recently renamed Kelly Services ran a series of ads in The Office, a human resources journal, promoting the "Never-Never Girl," who, the company claimed: "Never takes a vacation or holiday. Never asks for a raise. Never costs you a dime for slack time. (When the workload drops, you drop her.) Never has a cold, slipped disc or loose tooth. (Not on your time anyway!) Never costs you for unemployment taxes and Social Security payments. (None of the paperwork, either!) Never costs you for fringe benefits. (They add up to 30% of every payroll dollar.) Never fails to please. (If your Kelly Girl employee doesn't work out, you don't pay.)"

Around the same time, the New York agency Olsten Temporary Help Services announced a new product: "The Semi-Permanent Employee." Comparing its innovation to the wireless, the phonograph and the telephone, company leaders presented the "Semi-Permanent" as "a new kind of temporary employee...not for days or even weeks, but for two- and three-month periods to help your business grow more profitably." This new "invention," Olsten told businesses, would boost profits by shrinking the payroll (to "a slim, trim personnel budget, not one which chokes profitability"); by smoothing over the ebb and flow of the business cycle ("you needn't carry 'dead wood' for months when business is slow"); and by cutting training costs (employers would get "trained personnel without having to engage in expensive and unprofitable retraining").

By peddling products like the "Semi-Permanent Employee," the "Never-Never Girl" and more, temp industry leaders promoted a model in which permanent employees were a "costly burden," a "headache" that needed relief. "Stop paying help you don't use," Western Services advised in 1969. It even urged employers to convert their own permanent employees to temps, as in a 1971 advertisement in The Personnel Journal: "Just say goodbye... then shift them to our payroll and say hello again!"

According to the temp industry, workers were just another capital investment; only the product of the labor had any value. The workers themselves were expendable.

Paradoxically, this model ran counter to the conventional management wisdom of the day. The same year that the "Never-Never Girl" appeared in the pages of national business journals, one of the best-selling management books was "Up the Organization: How to Stop the Organization From Stifling People and Strangling Profits," in which the former Avis Rent-a-Car president Robert Townsend argued for treating workers as valuable assets rather than headaches to be squelched. The "human relations" school of management touted employee satisfaction as the best route to boosting profits.

But temp industry leaders continued to encourage companies to "rent" workers rather than "buy" them. And perhaps even more persuasive than their arguments were the practical tools they were able to offer: thousands of low-cost temps, without the hassle of having to hire, train, supervise and fire them. Becoming lean and mean had never been easier, and thousands of companies began to go the temping route, especially during the deep economic recessions of the 1970s. Temporary employment skyrocketed from 185,000 temps a day to over 400,000 in 1980 - the same number employed each year in 1963. Nor did the numbers slow when good times returned: even through the economic boom of the '90s, temporary employment grew rapidly, from less than 1 million workers a day to nearly 3 million by 2000.

The temp industry's continued growth even in a boom economy was a testament to its success in helping to forge a new cultural consensus about work and workers. Its model of expendable labor became so entrenched, in fact, that it became "common sense," leaching into nearly every sector of the economy and allowing the newly renamed "staffing industry" to become sought-after experts on employment and work force development. Outsourcing, insourcing, offshoring and many other hallmarks of the global economy (including the use of "adjuncts" in academia, my own corner of the world) owe no small debt to the ideas developed by the temp industry in the last half-century.

A growing number of people call for bringing outsourced jobs back to America. But if they return as shoddy, poverty-wage jobs - jobs designed for "Never-Never Girls" rather than valued employees - we won't be better off for having them. If we want good jobs rather than just any jobs, we need to figure out how to preserve what is useful and innovative about temporary employment while jettisoning the anti-worker ideology that has come to accompany it.


Erin Hatton, an assistant professor of sociology

at the State University of New York, Buffalo,

is the author of "The Temp Economy:

From Kelly Girls to Permatemps in Postwar America."

    The Rise of the Permanent Temp Economy, NYT, 26.1.2013,
    http://opinionator.blogs.nytimes.com/2013/01/26/
    the-rise-of-the-permanent-temp-economy/

For Obama’s New Term, Start Here

January 23, 2013
The New York Times
By NICHOLAS D. KRISTOF

Point to a group of toddlers in an upper-middle-class neighborhood in America, and it’s a good bet that they will go to college, buy nice houses and enjoy white-collar careers.

Point to a group of toddlers in a low-income neighborhood, and — especially if they’re boys — they’re much more likely to end up dropping out of school, struggling in dead-end jobs and having trouble with the law.

Something is profoundly wrong when we can point to 2-year-olds in this country and make a plausible bet about their long-term outcomes — not based on their brains and capabilities, but on their ZIP codes. President Obama spoke movingly in his second Inaugural Address of making equality a practice as well as a principle. So, Mr. President, how about using your second term to tackle this most fundamental inequality?

For starters, this will require a fundamental rethinking of antipoverty policy. American assistance programs, from housing support to food stamps, have had an impact, and poverty among the elderly has fallen in particular (they vote in high numbers, so government programs tend to cater to them). But, too often, such initiatives have addressed symptoms of poverty, not causes.

Since President Lyndon Johnson declared a “war on poverty,” the United States has spent some $16 trillion or more on means-tested programs. Yet the proportion of Americans living beneath the poverty line, 15 percent, is higher than in the late 1960s in the Johnson administration.

What accounts for the cycles of poverty that leave so many people mired in the margins, and how can we break these cycles? Some depressing clues emerge from a new book, “Giving Our Children a Fighting Chance,” by Susan Neuman and Donna Celano.

Neuman and Celano focus on two neighborhoods in Philadelphia. In largely affluent Chestnut Hill, most children have access to personal computers and the shops have eight children’s books or magazines on sale for each child living there.

Take a 20-minute bus ride on Germantown Avenue and you’re in the Philadelphia Badlands, a low-income area inhabited mostly by working-class blacks and Hispanics. Here there are few children’s books, few private computers and only two public computers for every 100 children.

On top of that, there’s a difference in parenting strategies, the writers say. Upper-middle-class parents in America increasingly engage in competitive child-rearing. Parents send preschoolers to art classes and violin lessons and read “Harry Potter” books to bewildered children who don’t yet know what a wizard is.

Meanwhile, partly by necessity, working-class families often take a more hands-off attitude to child-raising. Neuman and Celano spent 40 hours monitoring parental reading in the public libraries in each neighborhood. That was easy in the Badlands — on an average day “not one adult entered the preschool area in the Badlands.”

When I was a third-grader, a friend struggling in school once went with me to the library, and my mother helped him get a library card. His grandmother then made him return it immediately, for fear that he would run up library fines.

The upshot is that many low-income children never reach the starting line, and poverty becomes self-replicating.

Maybe that’s why some of the most cost-effective antipoverty programs are aimed at the earliest years. For example, the Nurse-Family Partnership has a home-visitation program that encourages new parents of at-risk children to amp up the hugging, talking and reading. It ends at age 2, yet randomized trials show that those children are less likely to be arrested as teenagers and the families require much less government assistance.

Or take Head Start. Critics have noted that the advantage its preschoolers gain in test scores fades by third grade, but scholars also have found that Head Start has important impacts on graduates, including lessening the chance that they will be convicted of a crime years later.

James Heckman, a Nobel Prize-winning economist, argues that the most crucial investments we as a country can make are in the first five years of life, and that they pay for themselves. Yet these kinds of initiatives are underfinanced and serve only a tiny fraction of children in need.

We don’t have any magic bullets. But randomized trials and long-term data give us a better sense of what works — and, for the most part, it’s what we’re not doing, like improved education, starting with early childhood programs for low-income families. Job-training for at-risk teenagers also has an excellent record. Marriage can be a powerful force, too, but there’s not much robust evidence about which programs work.

So, President Obama, to fulfill the vision for your second term, how about redeploying the resources we’ve spent on the war in Afghanistan to undertake nation-building at home — starting with children so that they will no longer be limited by their ZIP codes.

    For Obama’s New Term, Start Here, NYT, 23.1.2013,
    http://www.nytimes.com/2013/01/24/opinion/
    kristof-for-obamas-new-term-start-here.html

Social Security:

It’s Worse Than You Think

January 5, 2013
The New York Times
By GARY KING and SAMIR S. SONEJI

CONGRESS and President Obama have pushed through a relatively modest stopgap measure to avoid the “fiscal cliff,” but over the coming years, the United States will confront another huge cliff: Social Security.

In the first presidential debate, Mr. Obama described Social Security as “structurally sound,” and Mitt Romney said that “neither the president nor I are proposing any changes” to the program. It was a rare issue on which both men agreed — and both were utterly wrong.

For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.

Those facts are widely known. What’s not is that the Social Security Administration underestimates how long Americans will live and how much the trust funds will need to pay out — to the tune of $800 billion by 2031, more than the current annual defense budget — and that the trust funds will run out, if nothing is done, two years earlier than the government has predicted.

We reached these conclusions, and presented them in an article in the journal Demography, after finding that the government’s methods for forecasting Americans’ longevity were outdated and omitted crucial health and demographic factors. Historic declines in smoking and improvements in the prevention and treatment of cardiovascular disease are adding years of life that the government hasn’t accounted for. (While obesity has rapidly increased, it is not likely, at this point, to offset these public health and medical successes.) More retirees will receive benefits for longer than predicted, supported by the payroll taxes of relatively fewer working adults than projected.

Remarkably, since Social Security was created in 1935, the government’s forecasting methods have barely changed, even as a revolution in big data and statistics has transformed everything from baseball to retailing.

This omission can be explained by the fact that the Office of the Chief Actuary, the branch of the Social Security Administration that is responsible for the forecasts, is almost exclusively composed of, well, actuaries — without any serious representation of statisticians or social science methodologists. While these actuaries are highly responsible and careful and do excellent work curating and describing the data that go into the forecasts, their job is not to make statistical predictions. Yet the agency badly needs such expertise.

With considerable help from the actuaries and other officials at the Social Security Administration, we unearthed how the agency makes mortality forecasts and uses them to predict the program’s solvency. We learned that the methods are antiquated, subjective and needlessly complicated — and, as a result, are prone to error and to potential interference from political appointees. This may explain why the agency’s forecasts have, at times, changed significantly from year to year, even when there was little change in the underlying data.

We have made our methods, calculations and software available online at j.mp/SSecurity so that others can replicate or improve our forecasts. The implications of our findings go beyond social science. As the wave of retirement by the baby boomers continues, doing nothing to shore up Social Security’s solvency is irresponsible. If the amount of money coming in through payroll taxes does not increase and if the amount of money going out as benefits remains the same, the trust funds will become insolvent less than 20 years from now.

To save Social Security, which has lifted generations of elderly people out of poverty, tough choices have to be made. One option is to continue raising the retirement age, perhaps to as high as 69 or 70. While the full retirement age is gradually increasing to 67 (for people born in 1960 or later) from 65, this increase is not enough to counterbalance the gains in longevity.

A second option is to increase payroll taxes, for example by taxing wages over $113,700, the current earnings limit. A third is to limit the annual cost-of-living adjustments, possibly by changing how those adjustments are calculated. A fourth is to reduce benefits — for example, by lowering the initial benefits for workers whose lifetime wages are above the national average (currently $43,000 a year). Other choices, in numerous combinations, are possible, too.

One factor that might be considered is new research suggesting that retirement itself, although popular, may reduce life expectancy by breaking lifelong routines and disrupting deep social connections. One might question how much government policy should actively encourage retirement, as opposed to merely making it an option.

Americans need to discuss these difficult choices — and the Social Security Administration needs the ability to improve its forecasting technology by adding statisticians and social science methodologists to help its actuaries institute more formalized quantitative and statistical procedures.

In 1983, after the last time the trust funds ran a deficit, the National Commission on Social Security Reform, led by Alan Greenspan and with members appointed by President Ronald Reagan and Congressional leaders, produced a report that led to changes in payroll taxes. But in the quarter-century since, there have been only modest changes in the program.

We know much more now about mortality and demography, and so an open debate today about Social Security’s future could be even more productive than it was then. The high levels of partisan strife may not make the present seem like the best time to reach a bipartisan agreement. But few issues are more important to more Americans, of both parties, and the longer we ignore the problem, the more disruptive any change will need to be to keep Social Security alive.

Gary King is a professor of government

and director of the Institute for Quantitative Social Science

at Harvard.

Samir S. Soneji, a demographer, is an assistant professor

at the Dartmouth Institute for Health Policy

and Clinical Practice.

    Social Security: It’s Worse Than You Think, NYT, 5.1.2013,
    http://www.nytimes.com/2013/01/06/opinion/sunday/
    social-security-its-worse-than-you-think.html