Making Connections Visible

Part of the reason American policy debates are so unsatisfactory is that they tend to be conducted in “silos”–with little or no recognition of how Policy A might affect issues B and C. This is particularly true of arguments about raising the minimum wage, which tend to focus exclusively on assertions that jobs will be lost and consumer prices will rise.

As cities have ignored those assertions and raised their minimum wages, data has emerged to dispel those concerns. According to economists at the University of California, Berkeley,  who studied nine cities that raised the minimum wage in the past decade, higher wages have virtually no effect on employment;  only restaurants, with their higher-than-average concentrations of low-wage workers, raised prices, but those raises were trivial.

What this wage discussion consistently misses is the fact that the effects of worker pay go far beyond job numbers and the pros and cons of an extra nickel for a Big Mac.

There is research, for example, suggesting that economic insecurity increases domestic violence and other criminal activity, and contributes to social discord generally. But the effect on our communities doesn’t stop there.

Economic development professionals spend their days trying to lure new employers to their cities and towns, and they are acutely aware of what those prospects look for when they are seeking a new location: an educated workforce and good schools, decent roads and public transportation to get workers and customers to and from their place of business, infrastructure (sewers, etc.) adequate for their particular needs, and more generally, an appealing “quality of life.”

Those community assets are supported by tax revenues. Poorly paid workers pay very little in taxes, of course, but that is a relatively minor part of the problem.

When large numbers of workers in an area are underpaid, when they make wages that barely allow them to subsist, they lack the means to purchase any but the most essential goods and services. Overall demand drops. When demand is weak, businesses suffer. (They also don’t need–or hire–more workers.) When the business’ bottom line declines, so do tax revenues.

Anyone who works for municipal government understands the dilemma: how do we stretch declining revenues? Hire fewer police and firemen? Fail to fill potholes and board up vacant buildings In neighborhoods? Grow classroom sizes?  Collect garbage less frequently?

Declining revenues, blighted neighborhoods, fewer city services and a lower quality of life don’t attract new businesses. Economic development stalls.

The American economy depends upon consumption. I happen to think there are a number of unfortunate consequences of that economic model, but it is what we have. When significant numbers of residents in a city or town aren’t being paid enough to allow them to consume, the consequences go far beyond their kitchen tables.

As Kevin Drum has written, in an article for Mother Jones,

Obviously, there’s a limit to how high you can raise the minimum wage without harming the economy, but evidence suggests we’re nowhere close to that tipping point. The ratio between the United States’ minimum wage and its median wage has been slipping for years—it’s now far lower than in the rest of the developed world. Even after San Francisco increases its minimum wage to $15 next year, it will still amount to just 46 percent of the median wage, putting the city well within the normal historical range.

The bigger threat to the economy may come from not raising the minimum wage. Even Wall Street analysts agree that our ever-widening income inequality threatens to dampen economic growth. And according to a new study by the UC-Berkeley Labor Center, it’s the taxpayers who ultimately pick up the tab for low wages, because the federal government subsidizes the working poor through social-service programs to the tune of $153 billion a year.

How many public school teachers and police officers could we pay, how many streets  could we pave, how many parks could we maintain with $153 billion dollars a year…

They Run (for Office) and They Hide….

The unremitting chaos in Washington has triggered a number of Town Halls in which GOP members of Congress have faced rooms filled with angry constituents. As a result, a number of other Representatives have evidently decided against holding such events.

Not surprisingly, hiding from the people you represent hasn’t made those constituents very happy. Their reactions have varied.

I recently had an interesting conversation with a woman who lives in Indiana’s Fifth District, represented by Congresswoman Susan Brooks. She told me that she and several of her friends and neighbors had been frustrated by Brooks’ unwillingness to hold a Town Hall, so they decided that they would organize a meeting and invite her. If she wasn’t going to take the initiative, they would.

A meeting was organized via Facebook and word of mouth, and at 2:00 in the afternoon of May 13rth, approximately 120 5th District constituents gathered at the Sullivan Muncie Cultural Center in Zionsville.

Brooks declined to appear, nor did she send a representative, so the organizers set up an empty chair with her photo and proceeded to conduct a meeting without her.

According to her report, the voters who gathered at the Cultural Center were there primarily to voice their very serious concerns about the GOP Healthcare Plan, although  several other issues were raised as well.

Given the Congresswoman’s reluctance to attend either in person or through a surrogate, the organizers anticipated an effort to dismiss attendees as “agitators” or people from outside the district; in order to rebut any such claims, they prepared a “sign in” book in which those present provided their names, addresses and emails.  During the meeting, each voter was offered an opportunity to speak, to fill out a card with questions for Ms. Brooks, and to sign a large paper scroll expressing their views. The organizers plan to deliver these items to Brooks’ office.

The constituents who spoke at the nearly three-hour meeting shared stories of people with pre-existing conditions, children with ongoing medical needs, and people injured on the job who then saw those jobs eliminated. They  talked about the extent to which they and their families would be harmed by the repeal of Obamacare and its replacement by the current iteration of the GOP healthcare bill.  Some cried.

At the conclusion of the emotional meeting, those in attendance agreed to redouble efforts to meet face to face with Congresswoman Brooks. With or without the Congresswoman, however, they are determined to hold a series of Town Hall Meetings throughout the 5th District.

What is remarkable about this–at least to me–was the event’s genesis and spontaneity. I’ve complained bitterly over the years about Hoosiers’ civic apathy and lack of political engagement, our embarrassingly low voter turnout…Yet here in central Indiana, with no partisan sponsorship, no encouragement from activist organizations, no donations from any lobby or special interest group, ordinary voters got together and demanded to be heard.

It will be fascinating to watch this new democratic (small d) wave play out, not just in Indiana but in Congressional districts across the country. Will elected officials listen? If not, will they be voted out? How safe are those safe, gerrymandered districts?

What’s that old saying? They can run but they can’t hide….

 

Making America Sick Again

With the introduction of its proposed budget, the Trump Administration has continued its effort to cut the ground out from under all but the wealthiest Americans–and especially from under the people who voted for Trump.

Fortunately, that budget displays the stunning ineptitude that is a hallmark of this Administration (Hey–what’s a two trillion dollar math mistake among friends..?) and is unlikely to pass.

We often hear exhortations to “follow the money,” or to “put your money where your mouth is.” Those phrases reflect an undeniable truth of human behavior: whatever our rhetoric, where we commit our resources shows our real priorities.  Trump’s budget not only makes his priorities painfully clear; it reflects his callous disregard for struggling Americans, including those who voted for him.

Time Magazine has detailed the consequences of the savage Medicaid cuts proposed by the Trump budget. Nearly one in four Americans–and 42 percent of Trump voters– rely on Medicaid. The budget assumes passage of the deeply unpopular Obamacare replacement passed by the House and currently pending in the Senate; that measure–which the CBO calculates would cost 23 million Americans their health insurance– cuts Medicaid funding by $839 billion over the next decade. The budget proposal reduces Medicaid by an additional $610 billion.

Those cuts endanger medical access for 74 million Americans.

Medicaid reaches far beyond able-bodied adults out of work, despite the proposal’s rhetoric. The elderly and disabled account for around 60% of Medicaid’s expenditures, with the disabled, including the mentally ill, accounting for a full 42% of spending.

The program is the country’s largest funder of long-term care expenses, covering 40% of the costs, as well as more than 60% of all nursing home residents. For Baby Boomers nearing or past retirement age, these funds are crucial: As MONEY has previously reported, nursing homes for the elderly cost an average of $80,000 annually, and those expenditures aren’t covered under Medicare, the health program for seniors over 65. In fact, because Medicaid absorbs high healthcare costs of people with expensive conditions like dementia, it has kept private insurance around 7% lower than they would be.

Slashing funds also disproportionately affects women and children: one-half of births in the U.S. are covered by Medicaid (that varies widely by state—in Louisiana, 65% of births are covered by Medicaid, according to the Kaiser Family Foundation). The Children’s Health Insurance Program, which covered more than 8.4 million children in 2015, would also see its budget significantly reduced, according to Joan Alker, Executive Director of the Georgetown Center for Children and Families. Medicaid also provides essential health coverage for low income women, particularly women (and children) of color.

And of course, the budget continues the Republican war on women and women’s health by defunding Planned Parenthood–effectively eliminating preventive care (pap tests, breast cancer screenings) for most poor women.

Pointing to the cruelty of this proposal is unlikely to move lawmakers for whom tax cuts for rich people are the highest priority, but you would think they might realize that such a wholesale assault on access to preventive care would wildly increase overall medical costs. (The old adage “penny wise, pound foolish, comes to mind.) Trump’s budget would throw people back to the tender mercies of the emergency room, return us to the days when medical costs and nursing home fees bankrupted families, and ensconce a system in which healthcare is simply a consumer good, available to those who can afford it and too bad for the rest of you.

Destroying Obamacare and slashing Medicaid aren’t even the end of the story: the proposed budget also “severely cuts funding for science and public health agencies, including a $1 billion cut to the National Cancer Institute.”

Notably, the National Institute of Health’s budget would be slashed from $31.8 billion to $26 billion. The Center for Disease Control and Prevention would face cuts of more than $1 billion, including a $222 million decrease in funding to the chronic disease prevention programs, which help people with conditions like diabetes, heart disease, and obesity.The National Science Foundation would face a decrease of $776 million.

Welcome to dystopia.

Our Mr. Brooks….

In the early days of television, Eve Arden played “Our Miss Brooks”– a sardonic, wise-cracking and self-aware observer of life around her.

David Brooks, our present-day “Mr. Brooks,” is a columnist for the New York Times who often produces perceptive analyses of governance and American society–and sometimes follows them with truly bizarre “meditations.”  The link is to one of the latter.

He opens the column with a broadside:

The campaign of 2016 was an education in the deep problems facing the country. Angry voters made a few things abundantly clear: that modern democratic capitalism is not working for them; that basic institutions like the family and communities are falling apart; that we have a college educated elite that has found ingenious ways to make everybody else feel invisible, that has managed to transfer wealth upward to itself, that crashes the hammer of political correctness down on anybody who does not have faculty lounge views.

As Robert W. Merry put it recently in The American Conservative, “When a man as uncouth and reckless as Trump becomes president by running against the nation’s elites, it’s a strong signal that the elites are the problem.”

It has become fashionable among highly-educated and self-important writers commenting on current American schisms to sneer at “elites,” a category they themselves rather clearly inhabit. (We live in an irony-free age.)

I don’t know what “faculty lounges” Brooks has visited, but conversations among my colleagues in the halls of academia (we’re a state school–we don’t have lounges) are rarely characterized by “political correctness”–unless that category includes bitching about grading papers and the inability of students to write a grammatical sentence.

Most of Brooks’ column was devoted to the subject of alienation, which he has apparently decided is the explanation for many if not most of the ills of American society.

Alienation breeds a hysterical public conversation. Its public intellectuals are addicted to overstatement, sloppiness, pessimism, and despair. They are self-indulgent and self-lionizing prophets of doom who use formulations like “the Flight 93 election” — who speak of every problem as if it were the apocalypse.

Alienation also breeds a zero-sum mind-set — it’s us or them — and with it a tribal clannishness and desire for exclusion. As Levin notes, on the right alienation can foster a desire for purity — to exclude the foreign — and on the left it can foster a desire for conformity — to squelch differing speakers and faiths.

Here, Brooks paints with a very broad brush. Are there people who exhibit these behaviors–who are “self-indulgent and self-lionizing”? Certainly. Are there partisans who divide all of humanity into “them” and “us.” Indubitably. Do these descriptions fit all, or even most, of those on either side of the political divide? I don’t think so–and I don’t think such facile characterizations of entire groups of people advances either  public understanding or civility.

The truth is, I know some privileged people who are wonderful human beings, and I know some who are assholes. Some disadvantaged people are saintly, and some are real jerks. Humans are complicated that way.

Brooks makes several points with which it is hard to disagree: America does need a political establishment– people who have been educated to actually know something about public policy problems, people with government experience and a commitment to ethical public service.

But then he gives us this:

Over the longer term, it will be necessary to fight alienation with participation, to reform and devolve the welfare state so that recipients are not treated like passive wards of the state, but take an active role in their own self-government.

As someone who has spent the past 40 years trying–largely in vain– to encourage greater civic participation, first in City government and later in a number of voluntary organizations and  in the classroom, this paragraph made me want to strangle its author. Bromides like these join other endless Sunday sermons and pious political exhortations: We should all welcome the stranger, fight injustice, get out the vote, encourage poor people to eat better….the list of what we should do is endless; the all-important “how” is hotly contested when it isn’t totally ignored.

What Brooks is yearning for requires broad culture change, and cultures don’t change quickly or easily. They certainly aren’t changed by “devolving” social welfare programs–i.e., turning the money and rule-making authority over to the states. We’ve done that in the past, and the consequences weren’t pretty.

The great irony of Trump’s improbable election is that it has done more to prompt civic engagement (albeit not always as courteous an engagement as Brooks might like) than people like me–and Brooks– have done in half a century. We can only hope that the very real concerns that are sending people into the streets will ultimately move the civic culture toward more participation and inclusion–not to mention more self-aware punditry.

A bit more “Our Miss Brooks” and a bit less smugness.

Those Disappearing Consumers…

A recent article in The Week considered the phenomenon of the retail apocalypse–the sudden loss of thousands of jobs in retailing.

Employment in general merchandise stores has fallen by almost 90,000 jobs since October. Just like manufacturing jobs before them, brick-and-mortar retail jobs are finally falling to the twin forces of technology and globalization — this time in the form of Amazon and e-commerce. Or so goes the narrative.

And what, exactly, is inaccurate about that narrative? According to the article–which goes into considerable detail–it omits a key cause. The story being told “vastly oversimplifies what’s going on with retail.” And it completely misses a significant cause of the collapse: the loss of a once-reliable mass of consumers and the effect of that loss on retail stores.

Things get interesting when we pick apart what we mean by “retail.” Employment in department stores has bled 500,000 jobs since 200118 times the number of jobs the coal industry lost in the same period.

 

 

Recognizable brands like Macy’s and Sears are looking shaky: the former plans to close 68 stores and lay off 10,000 workers, while the latter’s business model has been rotting for years and may collapse altogether. Malls across the country — long the home of these department store chains — are dying and emptying out.

As the article points out, department stores and malls depend upon a sufficient number of middle-income consumers. And those consumers need to live pretty much everywhere.

If you’re going to have a mall with department stores in every decent-sized town, you need middle-class consumers in every decent-sized town, too.

That’s precisely the sort of consumer we’ve lost. For the last few decades, middle- and lower-class wages have stagnated, while the portion of Americans high up the income ladder provide more and more of all consumer spending. The national economy has also gone through a remarkable geographic shift, in which pretty much all new job and business creation occurs in major cities.

The article concedes the significant role of the internet in our shifting consumption patterns, but insists that the major culprit is the loss of good-paying jobs–some as a result of trade, but far more as a result of automation and misguided economic policies that have abandoned the mid-century focus on full employment–a focus that drove up wages.

The culprit–the reason those middle-income consumers are vanishing–turns out to be low wages.

In the past few years, we’ve learned that resistance to raising the minimum wage was  based on erroneous assumptions, mostly the argument that a higher wage would lead to fewer jobs. But job creation has actually improved in places that have raised the minimum wage.

What the old argument missed suddenly seems so obvious: When workers have more money to spend, they buy stuff. They consume. When they can barely make ends meet, they don’t go to the mall. They don’t eat out. They don’t browse at the department store.

There’s no doubt that the nature of retailing is changing. The Internet, Amazon’s same or next day delivery, the convenience of online shopping–all present a very real challenge to conventional retail trade. That challenge will require adjustment and innovation.

But first, you need customers with money to spend.