The Lasting Damage of High Inequality

In my previous post, I shared the grim results of a recent OECD study that found a consistent rise in wealth and income inequality across much of the developed world, with the U.S. taking the lead among the richest countries (though comparatively less wealthy countries Chile, Mexico, and Turkey were ahead).

Reporting on the same survey, the New York Times delved further and explored the impact that this worsening inequality is already having on societies: Continue reading

Income Inequality Growing Across The World

The Organization for Economic Cooperation and Development (OECD), a group of 34 mostly wealthy countries, has published the results of a study finding that income inequality is “at its highest since records began”, with the with the United States ranking among the highest on the spectrum.

More from Al Jazeera:

The United States was near the high end of the inequality spectrum, followed by Israel, the United Kingdom and Greece. Only Turkey, Mexico and Chile were found to have higher levels of income inequality than the U.S.

Denmark was the least unequal country according to the report, as measured using the Gini index, a common measure of income distribution. Slovenia, the Slovak Republic and Norway also ranked near the low end of the spectrum.

Overall wealth is even more unevenly distributed than income, according to the report. Across all 34 countries studied, the bottom 40 percent of households were found to possess 3 percent of all wealth. In contrast, the top 10 percent laid claim to half of all wealth, and the top one percent held almost 20 percent of all wealth.

Gurría said the report’s findings demonstrate that inequality slows down economic growth. He urged OECD member countries to adopt more redistributive policies, saying that redirecting wealth flows would benefit not just low-income households but the economy as a whole.

“Well-designed, prudent redistribution does not harm growth”, he said. “In fact, it goes hand-in-hand with growth”.

In addition to tax transfers, the OECD report recommends more investment in education, policies that promote remunerative employment, and measures that “remove barriers to female employment and career progression”. Bringing more women into the workforce and narrowing the pay gap was found to have a mitigating effect on income inequality.

In recent years, global elites have become increasingly concerned about income inequality. Last November, the World Economic Forum, which hosts the annual gathering of political and economic leaders in Davos, Switzerland, put out a report identifying income inequality as the number one trend to watch in 2015.

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How An Iron Fish Can Help Millions of People

Anemia, caused mostly by iron deficiency, is one of the most widespread and consequential health afflictions in the world, impacting 30 percent of the world’s population, mainly children, teens, and young mothers. From constant fatigue and headaches, to potentially deadly hemorrhaging, it literally weakens entire communities and makes the already laborious lives of the poor even more miserable.

It is easy to take for granted the prevalence of iron in most developed-world diets. But for most people living in the developing world, such as in Cambodia, it can be difficult to grow or access iron-rich food, let alone take expensive and equally unavailable iron tablets. It is one of those problems that should not be so widespread and intractable, indicative of the pervasive neglect and inequality of many economic and political systems (and indeed the world).

The BBC highlights a promising solution by Canadian scientist Dr. Christopher Charles so simple and cost-effective that there can be no excuse for not implementing it.  Continue reading

College Grads Still Have It Rough In Post-Recession America

College graduates are spending more and more years — and money — to get worse and worse entry-level jobs. That is the grim conclusion from this recent report from The Atlantic:

The majority of young people aren’t graduating from a four-year university. Rather they are dropping out of high school, graduating from high school and not going to college, or dropping out of college. Millennial is often used, in the media, as a synonym for “bachelor-degree-holding young person”, but about 60 percent of this generation doesn’t have a bachelor’s degree.

And how are they doing, as a group? Young people don’t seem to have a jobs problem—their jobless rate is a bit elevated, but not alarmingly so. Rather they have a money problem. The jobs they’re getting don’t pay much and their wages aren’t growing. A recent analysis of the Current Population Survey last year found that the median income for people between 25 and 34 has fallen in every major industry but healthcare since the Great Recession began.

Again, it is not that young degree-holders are having a hard time getting employed — on the contrary, they still have a better chance of finding a job than those of any age without degrees. It is that the quality of their work — in terms of pay, growth prospects, treatment, etc. — is poor and not corresponding to their skills and investment in education. It is under-employment rather than unemployment that is the big issue. Continue reading

The Need To Re-Think Capitalism

Hedge fund manager and philanthropist Paul Tudor Jones II challenges American businesses to incorporate “justness” and ethics into their corporate model. A self-described lover of capitalism, he believes that the economic system has lost its way and is becoming corrupted by greed and a lack of social responsibility — hardly a novel observation, but definitely an interesting one to hear from a wealthy beneficiary of said system.

His ten minute TED Talk below is highly informative and dense with charts and data showing just how much the nation’s business elites have become out of touch and self-serving.

Jones II’s message appeals to both self-interest and compassion: his contention is not only that it is more ethical to utilize vast profits to do more social good — through corporate charity, better wages, etc. — but that making capitalism fairer and more beneficial to society is the only way to prevent less desirable (to capitalists) alternative means to that end — namely higher taxes, revolution, and war (implicitly socialism or some other Leftist movement would be a threat, but it would allegedly operate through any or all of those). Continue reading

Survey Finds Majority of Americans Face Near-Poverty

CBS News reports on a recent poll that found what most us no doubt know well: that the average American is teetering on the brink of poverty and hardship:

Four out of five U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

The report classifies “economic insecurity” as a year or more of periodic joblessness, reliance on government aid such as food stamps, or income below 150 percent of the poverty line. When all races are taken into account, the risk of succumbing to one or all of these incidents rises to an incredible 79 percent.

The breakdown by race is particularly telling, as it signifies just how broad the impact of economic inequality and stagnation has been:

While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in the government’s poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.

Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.

Nationwide, the count of America’s poor remains stuck at a record number: 46.2 million, or 15 percent of the population, due in part to lingering high unemployment following the recession. While poverty rates for blacks and Hispanics are nearly three times higher, by absolute numbers the predominant face of the poor is white.

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation’s destitute, nearly double the number of poor blacks.

Sometimes termed “the invisible poor” by demographers, lower-income whites generally are dispersed in suburbs as well as small rural towns, where more than 60 percent of the poor are white. Concentrated in Appalachia in the East, they are numerous in the industrial Midwest and spread across America’s heartland, from Missouri, Arkansas and Oklahoma up through the Great Plains.

Buchanan County, in southwest Virginia, is among the nation’s most destitute based on median income, with poverty hovering at 24 percent. The county is mostly white, as are 99 percent of its poor.

There is no ignoring the racial dimension to poverty, and the roles played by both social and institutionalized racism. But class is increasingly becoming a determining factor, as those lacking the resources and connections needed to advance in the post-industrial economy — the vast majority of Americans — enjoy less of the country’s vast economic potential.

The U.S. remains the richest country in the world by a significant margin, and its economy has continued to grow rather healthily by global standards. There is no reason why so much of its population remains immiserated or, at best, hanging on by a thread. The capital and resources are there, but they are not being allocated and invested properly.

More corporate profits are going to shareholders and upper management, rather than in workers’ pay and benefits. More public revenue is being siphoned off by the military or through tax breaks and subsidies for the wealthy and big business. The political economy is woefully inefficient and tapping into the potential of the American public, whether through the provision of affordable education and job training, or by rewarding hard work through reasonable, liveable wages.

How we fix that is a whole different conversation for another day.

The World Needs a Better United States

, former South African ambassador to the United States, has written an opinion piece for Al Jazeera that makes the case, as so many others have, that the world’s leading superpower is failing to live up to its potential. America has the capital, resources, and raw talent to be a model of fairness and prosperity to the world.

Though he draws five main lessons from his diplomatic service in the U.S., the last one is most pertinent:

The final lesson is evident in an observation made by U.S. Supreme Court Justice Ruth Bader Ginsburg, who during the 2011 Egyptian revolution recommended, amongst others, the South African constitution — and not the U.S. constitution — as the model for post Arab Spring societies. South Africa’s constitution, approved in 1996, establishes equality and dignity as cornerstones, and includes such socio-economic rights as the rights to health, shelter and pensions. America’s founding document, by contrast, excludes socio-economic rights in favor of basic liberal rights such as freedom of expression and outmoded ones such as the right to bear arms.

Such fundamental limitations are beginning to reveal fault lines in U.S. society with greater frequency. Although the public voices sympathy for victims of brutal shootings, curbing gun violence through robust policies remains impossible. The continuing police mistreatment of young black men sparks protests, but not substantive reform. Resistance by congressional Republicans to the Affordable Care Act dramatizes the fragile commitment the U.S. has to the equality and well-being of its citizens, as more and more people will be excluded from basic rights and privileges as inequality widens.

For the U.S. to continue to become a better country and partner to the world, it must make several transitions. It must go from militarism and unilateralism to engagement and détente in solving global problems. It should move from Africa as an afterthought and security problem to Africa as the last economic frontier to be developed in the mutual interest of the U.S. and the world’s most youthful continent. And it must shift from its rampant individualism to a more balanced social solidarity to manage and overcome the fault lines that continue to emerge in American society. The world needs the U.S. to be at peace with itself.

What do you think? Are these the steps the U.S. needs to take to better itself and, by extension, the world? Could or even should the U.S. play such a role in the world? Share your thoughts.

The Coveted Work-Life Balance of the Modern Economy

Young people nowadays place considerable importance on free time and leisure. That of course doesn’t mean we don’t want to work (contrary to the grumbling of older generations), but rather that we don’t want our jobs are dominant our daily lives. The idea of spending most of our waking hours five days a week in the workplace simply isn’t appealing, and the reasons should be obvious — there is more to life than toiling away just to make enough money to scrape by (low paying and benefit-less jobs certainly do not help matters).

The Washington Post reveals just how much Millennials — those who came of age during the 21st century — value work-life balance, yet are sorely let down by the prevailing American business culture.

Professional workers in companies that shed employees in the Great Recession are still doing the work of two or more people and working longer hours. Salaries have stagnated, and costs continue to rise, according to a new survey of nearly 10,000 workers in eight countries by Ernst & Young’s Global Generations Research.

But another big reason? The boss just doesn’t get it.

Close to 80 percent of millennials surveyed are part of dual-income couples in which both work full time. Of Generation X workers, people in their 30s and 40s now, 73 percent are. But of baby boomers, the generation born just after World War II that now occupies most top management positions, just 47 percent have a full-time working spouse. More than a quarter of baby-boomer workers have a spouse at home, or one who works part time or with flexible hours and is responsible for taking care of all home-front duties.

“I really see that there’s an empathy gap in the workplace”, said Karyn Twaronite, EY global-diversity and inclusiveness officer. “When there’s frustration about work-life balance in the workplace, and you think your boss doesn’t get it, that very likely could be true”.

In short, a bad economy is forcing people to work more hours at the expense of any free time for themselves or their loved ones. This explains why younger people are not marrying (and if so, much later), are not having children, and are not even having as much sex (fatigue and lack of time are cited among the most common reasons).

It all explains why chronic sleeplessness is at epidemic proportions — sleep is the only thing left to cut into if you want time to watch your favorite shows, hang out with friends, and do other leisurely activities. The subsequent increases in stress, anxiety, and even obesity all point to the sense of time deprivation; we just don’t have the time to unwind, cook healthier food at home, or exercise.

This may seem like a lot to attribute to working hours and overall business practice, and certainly there are many other factors (economic, cultural, and even environmental) that contribute to some of these social trends. But in so far as our survival and resources are contingent upon employment, and most people spend an ever-increasing proportion of their time at work, it is not a stretch that what goes on at hours jobs impacts our entire lives.

In the United States, the only advanced economy in the world with no paid parental-leave policy, only 9 percent of companies offered fully paid maternity-leave benefits to workers in 2014, down from 16 percent in 2008, according to the Families and Work Institute’s National Study of Employers. For spouses and partners, 14 percent of U.S. companies offer paid leave, either partially or fully paid, down from 16 percent in 2008.

The institute found that the share of employers offering reduced hours and career flexibility also has fallen and that flexible work options are not available to all employees, but only to certain groups, such as parents.

“Wanting flexibility or work-life balance is the number one thing we hear all the time from candidates. It’s the number one reason why people are looking for a new job, by far”, said Heidi Parsont, who runs TorchLight, a recruiting firm in Alexandria. “We’re definitely seeing more candidates asking for it. But companies still see it as making an exception. It’s still not the norm”.

Is it any wonder that birth rates have plummeted among young people, who have neither the time nor money to start, much less maintain for years, a family? A job that offers the right balance of decent pay and reasonable working hours, let alone paid maternity / paternity leave, is pretty much mythical — especially now that most new jobs are in the low-paying, benefits-slashing retail and fast food sectors.

As the article later points out, many Millennials make due simply by opting out of the rat race for punishing upper-management positions, instead sticking with whatever offers the most free time regardless of pay. We’re just living more thriftily and resourcefully, and forgoing big purchases — like real estate or newer cars — in favor of experiences or comparatively cheaper consumer goods (the smartphone, practically an icon of modern youth, is a lot less expensive than other must-haves of previous younger generations, especially for what it offers as far as functionality and entertainment).

It does not have to be this way. As I have pointed out many times before, most companies have the resources and capital to pay their workers more and hire enough people so that no one has to juggle multiple tasks while putting in vast hours. But in this cutthroat business environment, even record profits are not enough to incentivize companies to invest more in their employees than in their shareholders and top executives.

After all, what obligation does the private sector have beyond its own bottom-line (and that of its shareholders and investors)? Why should companies feel any obligation to give Millennials and other workers a better deal in terms of pay or treatment, when they can just as well keep racing to the bottom and hoarding that extra wealth?

This empathy gap between bosses and their employees speaks to the fundamentally different worlds and interests that separate owners and investors from everyone else. It shows how hierarchical and authoritarian companies can be with policy, despite operating in what is ostensibly a free and democratic society, where consensus and individual empowerment are supposed to be prevailing values.

This problem also speaks to Americans’ mentality towards free time, the widely held perception — including among many stressed and exploited workers — that leisure is secondary to labor, that one’s social value is reflected by what they do and whether they are formally employed. Asking for time off to do other things brands one as lazy and uncommitted. Heaven forbid there is anything else worth doing in life outside of working for someone else in order to get a slimmer piece of the pie.

Obviously, working is not in and of itself a bad thing. But it should be meaningful and rewarding, and it should not be so dominant as to crowd out time for love, creativity, exercise, de-stressing, and other valuable components to a healthy, fulfilling life. So many people, including those at the prime of their lives, are squandering their time at poor jobs that do not compensate them well or value them.

An entire generation is growing up in a system where the only options available to get by (if even) is to slave away for long hours while skimping on leisure, or being cutthroat or connected enough to game the system and get ahead, sometimes at the cost of one’s integrity and morality. We are coming of age in, and being shaped by, an economic system that is not responsive to human need, that beggars us, that shifts all its capital and resources towards enriching only a few, and rewards only the ruthless, well connected, and steadily toiling.

I am not saying everyone and anyone who is successful or financially secure has sold out or done terrible things to get there. But given the enduring stagnation of the economy and the miserable and unrewarding nature of modern employment, it is clear that most people are being locked out of any sustainable opportunity to make decent money without sacrificing time for ourselves, our loved ones, and our community.

It is about time we developed a more human and socially conscious economy. How we get there is another story entirely.

Lessons From Charlotte and Salt Lake City On Ending Homelessness

Hundreds of thousands of Americans are homeless across the country, and it seems no city, big and small, is without a sizeable number residents deprived of permanent shelter.

Though Charlotte, North Carolina may be an exception.

According to a recent article in HuffPo, the city of over 775,200 has made groundbreaking strides in addressing chronic homelessness — and it has done so in the simplest way possible.

Moore Place, a nonprofit that provides permanent housing and other services to homeless people, has saved Charlotte $2.4 million in medical costs alone since 2012, according to a new report from UNC Charlotte. The study also found that the program’s clients are more likely to take advantage of preventative health care services, and get off the streets for good, than people who aren’t offered stable housing.

After two years of partaking in the program, 81 percent of clients remained in permanent housing.

“Stable housing provides a foundation for recovery and well-being,” Lori Thomas, a UNC professor of social work who led the study, said in a statement.

The 85-unit apartment complex follows the “housing first” model, an approach that once raised eyebrows, but has repeatedly proven to be cost-effective and efficient.

The concept promotes giving homeless people housing, and then addressing their mental health, unemployment or addiction issues after they’re settled.

Run by Urban Ministry Center, Moore Place opened in 2012 and gives clients access to a team of social workers, therapists, a nurse and psychologist, in addition to a place to call “home.” It costs about $14,000 to house an individual and residents contribute 30 percent of their incomes to rent. The rest is subsidized by private donations and public funding.

The program gives participating clients a fresh start and has led to major savings in the city’s medical system.

Tenants visited emergency rooms 648 fewer times and were in the hospital 292 fewer days after two years in the program.

Moore Place, a nonprofit that provides permanent housing and other services to homeless people, has saved Charlotte $2.4 million in medical costs alone since 2012, according to a new report from UNC Charlotte. The study also found that the program’s clients are more likely to take advantage of preventative health care services, and get off the streets for good, than people who aren’t offered stable housing.

After two years of partaking in the program, 81 percent of clients remained in permanent housing.

“Stable housing provides a foundation for recovery and well-being”, Lori Thomas, a UNC professor of social work who led the study, said in a statement.

The 85-unit apartment complex follows the “housing first” model, an approach that once raised eyebrows, but has repeatedly proven to be cost-effective and efficient.

The concept promotes giving homeless people housing, and then addressing their mental health, unemployment or addiction issues after they’re settled.

Run by Urban Ministry Center, Moore Place opened in 2012 and gives clients access to a team of social workers, therapists, a nurse and psychologist, in addition to a place to call “home”. It costs about $14,000 to house an individual and residents contribute 30 percent of their incomes to rent. The rest is subsidized by private donations and public funding.

The program gives participating clients a fresh start and has led to major savings in the city’s medical system.

Tenants visited emergency rooms 648 fewer times and were in the hospital 292 fewer days after two years in the program.

It seems like common sense: solve homelessness by giving the homeless homes. In some cases, it may not even be necessary to build any new stock, since most cities have ample vacant developments (especially following the burst of the real estate bubble). Providing permanent shelter helps line everything else into place, from finding steady employment (for which a permanent address is contingent) to, as Charlotte found, getting adequate healthcare.

Salt Lake City, Utah has seen similar resounding success with its decade-long “Housing First” initiative, which has lead to an incredible 91 percent reduction in chronic homelessness (defined as those who are homelessness longer than one year or who endure four episodes of homelessness in three years, and they have a disabling condition).

More from Deseret News:

Utah’s program places chronically homeless people in housing and supports them with services that help address the root causes of their homelessness such as physical and mental illness, substance abuse and addiction, low educational attainment, criminal records, or poor work histories.

Before “Housing First” started in 2005, about 14 percent of Utah’s homeless population met the definition of chronic homelessness and consumed about 58 percent of resources.

“Before the ‘Housing First’ model, people had to change their lives, and then we would offer them housing. Now what we do is we offer them housing and allow them to change their lives if they choose to do so,” Walker said.

Utah is the only state that has achieved such a sharp reduction in chronic homelessness on a statewide basis, he said.

“No other state is even close. We’ve had no additional resources than anyone else has had to do this, but by focusing, having a plan and having great collaboration with our partners, we’ve been able to see successes,” Walker said.

Around 10 percent of the nation’s homeless population is chronically homeless, and they account for more than 50 percent of available resources going to Americans experiencing homelessness. Housing these individuals in particular would not only improve their lives substantially, but will free up a considerable amount of capital and resources to other efforts (such as medical care, job training, and the like).

The Global Trend of Silencing Freedom of Assembly

Over at Al Jazeera America,  points to a slew of laws being passed around the world that, in one way or another, severely curtail or prohibit public demonstrations — the bedrock of every true democracy. Among the culprits just over the past three years are Canada (namely Quebec), Spain, Turkey, France, AustraliaEgypt, UkraineRussia, and the United States. (The list is by no means exhaustive.)

While each country’s approach is slightly different as far as parameters, penalties, and other finer legal details, they all have in common the potential to severely frustrate, if not preempt, the fundamental right to peaceful public assembly (enshrined in almost every democratic country’s constitution and in the United Nations’ Universal Declaration of Human Rights).

Continue reading