How I Learned to Stop Worrying and Love the Debt

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Our nation is a sinking ship, our national debt* is the hole and the only thing to do now is throw social programs overboard and hope the rest of us can swim. At least, that’s what the deficit hawks want us to believe. And many people.  

To be clear, I do not dispute the fact that our country is in debt; our country was born into debt and minus the few years preceding the civil war, we have remained in debt since 1776.

What I do not believe is that balancing our budget by means of throwing vital programs overboard is the only conversation we need to be having regarding our country’s welfare and economic growth. A narrative that places balancing the budget through spending cuts at the forefront of the national conversation hinders our ability to discuss necessary spending that will serve as an investment in long-term growth, productivity and in our nation’s workers. 

To understand the debt situation our nation faces, we must look at the federal debt as a percentage of GDP.  The federal debt held by the public as a percentage of GDP at the end of the fiscal year 2015 was 75%. And, while this is higher than our debt has been since 1950, it is not unusual for it to be this high in years following an economic disruption.

World War II, for example, left us with debts over 50% well into the 1950s and peaked at 103% in 1945. Rather than ruining us, our nation’s spending in response to WWII actually helped propel our economy out of the Great Depression. And after the war was over, rather than cutting taxes and social welfare programs, we invested in our economy and its workers. The GI Bill, for example, was set up through government spending with a goal to allow returning (white) soldiers to get an advanced degree that would lead to well-paying work.

The GI Bill also provided affordable housing (again, for white families) and tax rates remained above 70%, which is nearly double the highest tax rate today. All of this resulted in higher purchasing power of a more robust middle class. Imagine if the GI Bill had been seen as unnecessary spending. Better yet, imagine if something like the GI Bill was made available to all Americans, and this time without racist overtones. Millions of families still benefit from the support previous generations received and if spending like this could be used to assist families today, we may actually be able to begin to deal with our nation’s widening wealth inequality.

So why are deficit hawks focusing so intensely on cutting programs such as social security? In his book Debtor’s Prison: The Politics of Austerity Versus Possibility author Robert Kuttner highlights a mixture of self-interest coupled with a strong anti-government sentiment. By keeping social security a government program, big banks miss out on huge sums of money flowing through their systems and instead the government is responsible for a relatively secure and popular program. Banks hate to lose popularity contests to the government.

Additionally, there is a fear that deficits will cause higher interest rates and increases in inflation, scaring away investors from the private sector. But what has actually been shown is that when the government increases spending, much of the increased demand for services results in a higher need for private sector production, which actually acts as an incentive rather than a deterrent.

It’s time to push back against this narrative of reducing our debt by cutting spending period. Our economy is more complex and requires investment in order to engender long-term economic stimulus. Our collective debt is not a scary phenomenon that should be avoided at all costs. Rather, we should view this debt as a necessary tool that ebbs and flows and can be utilized to grow our workforce participation and social wellbeing. Placing a further burden on America’s workers by cutting vital programs will not save a sinking ship. Investing in these workers and, subsequently, in our nation’s economic growth is enough to build a solid ship and is the only rescuing we need.

*Pro-tip: The debt is different from the deficit. The deficit is the amount of debt we accrue each year while the debt is the total amount of money we owe. This is why the deficit can be decreasing while the debt is still increasing. Many politicians use these terms interchangeably; don’t let them fool you.

Caite Eilenberg
MPP 2017
Poverty Alleviation Concentrator

How the on-demand economy threatens workers and democracy

File illustration picture showing the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign

Image from:https://mises.org/blog/how-uber-threatens-our-way-life

 

 

As on-demand companies like Uber and Instacart find savvy ways to navigate employment law, the misclassification of employees as independent contractors allows them to maximize profits at their workers’ expense. Through misclassification, employers avoid paying both reimbursements for on-the-job costs like gas and car maintenance as well as the minimum hourly wage. The growth of independent contractors not only stifles wage growth for low-wage earners, but also leads to higher rates of poverty and increased costs to US taxpayers.

To dodge regulation Instacart and Uber classify themselves as software companies rather than grocery delivery or transportation service providers. According to the companies, their software platforms are used by entrepreneurs looking to connect with clients. As an Instacart “independent contractor” myself, I know this classification is both misleading and harmful to working-class people.

Instacart has performance metrics, reliability notices, and on-the-job expectations. Although there is a guise of flexibility, the company actually decides my shifts. They call me when I’m running late and punish me if I cancel within 24 hours. There is no option to skip an order assignment without having a shift terminated, regardless of where the assignment will require me to travel. My vehicle isn’t a resource I use to make money; it is a resource they use to make money. And here is the difference: they don’t pay for it.  

For each order completed, Instacart drivers make $13 plus tip. At an hourly rate, this would place drivers above the minimum wage. However, drivers don’t just deliver groceries, they also buy them, making the completion of more than one order per hour difficult. Additionally, when the company sends drivers from Market Basket in Somerville to an apartment in Boston’s Seaport, 30 minutes away, and then back to Somerville for the next order, commission wages are limited and drivers are working for an entire hour without pay. After calculating gas and wear and tear on the car, earned wages fall below $9/hour.  

In 2015, the US Government Accountability Office (GAO) calculated that 12.9 percent of the US Workforce is now classified as independent contractors. Without thoughtful government intervention, this rate is only expected to increase, and the impact of growing contract employment could have negative implications for millions of Americans.  

As the GAO report points out, independent contractors experience higher rates of poverty than the standard full-time worker and are twice as likely to be laid-off or lose work. Additionally, independent contractors have greater on-the-job expenses, limited access to long-term savings plans, and a higher dependency on taxpayer funded public assistance.

The growth of contract work negatively impacts the financial stability of working class families with a disproportionate impact on urban, lower-income communities of color, targeted by on-demand recruitment efforts. Uber’s recruitment efforts  in lower-income communities with high rates of unemployment indicates that these jobs are a primary source of income for many. And, because of the lack of regulation, lower-income people are subject to jobs without benefits that involve a high degree of wage uncertainty. Depending on how often one is scheduled and how busy shifts are, weekly earnings fluctuate significantly.  

Although the Department of Labor recently released strict guidelines for the classification of workers as independent contractors, the current regulatory framework requires victims to file lawsuits against their employer. The paperwork can be complicated, the process can take months, and an investigation is not guaranteed. To prevent the abuse of low-wage workers, regulators must think outside the box to identify more proactive oversight procedures. Enforcement agencies need adequate funds to proactively investigate the growing on-demand economy and contingent employment classification emerging across all industries.

The concern of strict regulation stifling innovation is also one that regulators should take seriously. The on-demand economy has, in fact, created thousands of jobs in economically depressed areas. Building new regulatory frameworks that simultaneously protect workers and incentivize innovation is an option. However, when companies treat their workers as employees, it only makes sense to regulate such companies as employers. Not doing so undermines US law and creates additional obstacles between working class people and quality employment.
By: Erica Brien
M.P.P./M.B.A. ’17
Poverty Alleviation Concentrator

 

SNAP Cuts in a Land of Constraint

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Image from: http://thinkprogress.org/economy/2013/12/10/3044741/food-stamps-deal-liheap/

“Ma’am, you don’t qualify for food stamps because you’re not working 20 hours a week. You have to work at least 20 hours a week to even be eligible to apply.”

When the Massachusetts Department of Transitional Assistance representative explained to me that I couldn’t receive assistance my gut clenched with anxiety. After weeks of crunching numbers trying to determine how to cover all my expenses as a full-time graduate student, the reality of the inflexible requirements of the public assistance system hit hard. Already working 5-7 hours a week amidst balancing a full course load, working 15 additional hours weekly to qualify for Supplemental Nutrition Assistance Program (SNAP) assistance wasn’t feasible.

My experience of rejection of SNAP based on work requirements isn’t unique to me or to Massachusetts guidelines. As part of the 1996 welfare reform under President Clinton, policy makers implemented a time limit and a work requirement of the then Food Stamp program to decrease people’s dependency on the government. This measure was intended to increase the independence and self-sufficiency of recipients. That restriction was lifted as the Great Recession drove many Americans into the depths of poverty. For several years, the federal government increased spending in public assistance programs, like SNAP, to ensure the stability of Americans across the country. Now, as the economy grows again and unemployment rates fall, Congress seeks to re-implement the time restriction and work requirements on SNAP.

By the end of this month, up to 1 million Americans will lose their SNAP dollars as 22 states across the country carry out the re-implementation of the federally mandated SNAP time limit and work requirement. Thousands of others will be restricted from accessing SNAP at all. By April of this year, a total of 40 states will require that anyone aged 18-49 who does not have a child and is able-bodied must work a minimum of 20 hours per week in order to qualify for SNAP funds. Further, households are limited to three months of assistance in a 36-month period, regardless of employment status

National Public Radio explains that states and regions can waive the federal restrictions if they prove that their unemployment rate is greater than 10%, if there is a surplus of workers, or if the state or regional unemployment rate has been 20% higher than the national average for two consecutive years. Some states, like Mississippi and regions of North Carolina, are eligible for the waiver but choose not to apply.

Republican Representative Mike Conway from Texas expressed his agreement with federal decisions in a Huffington Post article, stating, “Though there have been dramatic increases in government spending on SNAP and related programs, these numbers are a strong indication that additional resources have simply produced stagnant results, and by in large haven’t helped families improve their overall stability.”

Certainly, tremendous sums of money have been invested in public assistance programs. Despite government funding, the number of U.S. households reporting food insecurity has increased from 11.1% in 2007 to 14% in 2014. With significant government financial investment, some people wonder why that percentage rose and consider time limits and work requirements as a way to curb government spending.

However, as we dig deeper we uncover the comorbid human conditions and environmental constraints that engender the complexities of poverty cycles. Working a minimum of 20 hours weekly isn’t so simple. The Center on Budget and Policy Priorities reports that only half of the people affected by the impending cuts have a high school diploma or GED. One-fourth have not completed high school. Many do not have a license and live in food deserts 1.8 miles from their nearest super market. To garner anything more than “stagnant results”, policy makers must take these other barriers into account by considering the availability and location of jobs, access to computers to apply for jobs, and transportation costs. What results when Representative Conway and other policy makers ignore such complexity are several unintended consequences that knock people further into the depths of poverty and further away from the goal of self-sufficiency.

A more fitting proposal would be to align SNAP eligibility with other assistance programs – recipients must demonstrate an active attempt to find work – while decreasing funding on a sliding scale that considers other life costs such as transportation and education. Doing so will gradually decrease government spending, grant people the flexibility they need to survive, and allow more households to be active participants in the market in the meantime.

Cutting the assistance of those most in need does little to help our nation. To help families gain financial stability, we must provide them the resources they need to survive. Without taking into account the circumstances of those requesting assistance is to ignore the objective of SNAP itself.

By: Anna Mahathey
M.P.P./M.A. in Women and Gender Studies ’17
Poverty Alleviation Concentrator

No, the Unemployment Rate is Not 42 percent, but It’s Not 4.9 Percent Either

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Image from:http://www.breitbart.com/big-government/2016/03/05/is-the-unemployment-rate-lying-to-you/

The unemployment rate might be one of the most contentious measurements of the status of the economy. Numerous economists have claimed that the “official” unemployment rate, which is released every month by the Department of Labor (DOL), actually masks millions of people who should be considered unemployed. The U-3 rate, which the DOL reports to be 4.9 percent, does not consider key “missing” people in the workforce: discouraged workers who have stopped looking for work due to a depressed labor market, marginally attached workers who did not look for work at the time the survey was conducted, and part-time workers who would rather work full-time. When these people are taken into consideration, the unemployment rate stands at 9.7 percent.

However, even the highest rate of unemployment reported by the DOL is nowhere close to what Presidential candidate Donald Trump speculates the unemployment rate might actually be. During his New Hampshire victory speech, Trump stated: “Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment. The number’s probably 28, 29, as high as 30. In fact, I even heard recently 42 percent.” Trump has repeated these sentiments on numerous occasions. While on the surface it might sound like he is pulling numbers out of thin air, it is actually very likely that he “heard” 42 percent from David Stockman, who was the Director of the Office of Management and Budget during Reagan’s presidency.

In Stockman’s blog post from June 2015, “The Warren Buffett Economy –Why Its Days are Numbered (Part Four),” he states “…there were 180 billion unemployed labor hours, meaning that the real unemployment rate was 42.9%.” Stockman’s numbers are right, but his method is horribly wrong. The unemployment rate, as defined by the Bureau of Labor Statistics, is the measure of the amount of non-institutionalized people, ages 16 and over, who are working compared to those who are not working but want to work. For these purposes, people who are enrolled in school, in the military, imprisoned, or retired are not considered to be part of the labor force.

Stockman did not use the traditional definition of the unemployment rate; instead, he based his rate on the amount of hours worked. According to Stockman’s calculations, there are 210 million Americans between the ages of 16 and 68. He assumes that, if all of these people were working full-time (which he determines to be 2,000 hours per year), there would be 420 billion potential labor hours every year. Since there’s only 240 billion hours supplied to the labor market, Stockman concludes that the unemployment rate is 42.9 percent.

This calculation is heavily flawed because it includes all people between the ages of 16 and 68 as potential workers, even those who are not expected to work. While Stockman somewhat acknowledges this flaw, he flippantly dismisses these people as a small portion of his sample. In reality, they account for over 33 percent of Stockman’s “potential workforce.”

According to Stockman’s model, all 8 million children between the ages of 16 and 18 should be working full-time. This seems highly unlikely since the vast majority of them are still in secondary school. Stockman also assumes that all 20.6 million undergraduate and post-baccalaureate students should be working full-time. He then includes 10.4 million mothers who stay at home to raise their children and almost 21,000 people who choose to work part-time.

Additionally, Stockman’s potential labor force is comprised of a large portion of people who are most likely retired. According to a Gallup poll conducted in April of 2015, the average age of retirement for Americans is 60. Stockman includes all employers up to age 68 as potential full-time employees, which means that there are potentially 14 million people included in his assessment who are probably retired.

Stockman also assumes that all people within his potential workforce are able-bodied, but this is simply not the case. About 8.9 million people could be in the workforce, but are not due to a disability. Furthermore, Stockman’s high unemployment rate incorporates people who do not have the option to work, such as nearly 7 million people who are currently incarcerated and the 1.1 million people who are serving in the military. For Stockman’s purposes, over 70 million people who are not expected to work are all considered unemployed.

While the unemployment rate is not perfect, it still provides a much more accurate depiction of the economy than Stockman does. One can understand why Trump relies on Stockman’s model, though. His exaggerated unemployment rate resonates with voters who are concerned about the economy. His statements also undercut any progress that could be attributed to President Obama. While his rhetoric is substantiated by a former high-ranking political appointee, the model is faulty and unreliable at best.

By,
Brie McLemore
M.P.P./ M.A. in Women and Gender’s Studies 17′

 

 

Striking Out: Michigan’s Anti-Strike Legislation and the Detroit Public Schools Sick-Outs

By: Darcy Kennedy

January 20th, 2016. President Obama, invited to the North American International Auto Show, begins his tour of the Cobo Center. Hours before, teachers and their supporters wave signs that decry the deplorable conditions of Detroit Public Schools (DPS). This protest shut down 88 of DPS’ 100 schools for the day. Teachers in Detroit love their students, and see themselves as the front-line defenders of students’ educational rights. So, sick and tired of working in these conditions, teachers staged multiple “sick-outs” to recuperate from “Snyder Flu” caused by the inaction of Michigan governor.

Three weeks later, a fifth grade class at Clippert Academy staged a “walk-in” with the support of their teachers, classmates, and community members. Echoing the outrage of insufficient infrastructure, students had an additional demand: the return of their bilingual secretary, whose absence was acutely felt in their primarily Spanish-speaking community. In defiance of legislators continuously ignoring the needs of the school system, students and teachers marched into the building to continue learning and teaching in sub-par conditions. The message is clear: legislators cannot be allowed to further deprive teachers of opportunities to express outrage at the state of affairs in their schools.

How bad are conditions within these schools? Results from health and safety inspections showed there were numerous health code violations due to rodents, water damage, and broken facilities. Black mold grows in classrooms where students and teachers have to wear coats to combat faulty or broken heating systems. These conditions are the result of years and years of neglect and budget deficits – by the end of this summer, Detroit Public Schools will be carrying $515 million in debt. This is in spite of having been under control of an emergency manager since 2009.

Teachers are calling out sick instead of striking because it is illegal for public employees to strike in 37 states. Due to legislation like the Hutchinson Act of 1947 and Public Act 112 of 1994, DPS teachers are forced to use their own personal sick days to draw attention to the conditions they have spent years teaching in.

The Republican-controlled House and Senate are attempting to fight the sick-outs by proposing increasingly stringent laws and legal action. On February 2nd, the Senate Education Committee voted 4-1 for legislation that would make it easier to punish teachers and schools that are involved in strikes. These punishments include revoking teaching certificates for those involved in strikes, and cutting school aid to districts who don’t dock pay for said teachers.

The House revealed their plan to fix Detroit’s schools last week. These include an eight year plan to reinstate a locally elected school board, switching from a pension plan to a 401-k for new hires to the district, reducing the bargaining power of teacher’s unions, and creating a letter grade system for ranking Detroit schools, complete with merit pay for educators and administrators.  Ivy Bailey, Interim President for the Detroit Federation of Teachers, stated: “There’s a bigger picture here — they want to destroy unions, plain and simple.” It looks like she might be right.

After actions such as 15 years of state-mandated emergency management, continuous budget cuts, and placing the same man who poisoned Flint in charge of the district, legislators in Michigan have subversively underinvested in the education of Detroit’s young people for long enough. Control of Detroit Public Schools must be placed back into the hands of local stakeholders, and restrictions on teachers and administrators’ right to collective bargaining must be curtailed. They have been silenced for long enough, and should not be further punished for using the last tools left to them.

 

Implementing Community Health Worker Models: A Bottom-Up Approach to Improving Pediatric Asthma Care

The Problem: Pediatric Asthma Disparities

Childhood asthma is a serious and costly public health concern. One out of every ten children in the U.S. is affected by asthma, making it the most common chronic childhood disease (CDC, 2013). Unfortunately, children with the highest rates of asthma are living at or below the federal poverty level (12%), and often their families do not have the financial or educational resources to obtain high quality, culturally sensitive healthcare (Forno and Celedon, 2012; Rossier Markus and Artis, 2011). Barriers to obtaining quality asthma care include low literacy levels on health, limited access to culturally competent care, and lack of health insurance.  In addition, children living with chronic conditions are significantly driving up U.S. healthcare costs. The Environmental Protection Agency reports that asthma accounts for $56 billion of annual healthcare spending, including direct medical costs from hospital visits and indirect costs such as lost school and parent workdays (EPA, 2012).

The Solution: Implementation of Community Health Worker Models  Screen Shot 2016-02-10 at 10.48.56 AM

One promising solution to combatting the prevalence and rising healthcare costs associated with pediatric asthma is the utilization of Community Health Workers (CHW) in high poverty and marginalized communities. A CHW, defined as a “frontline public health worker who is a trusted member of and/or has an unusually close understanding of the community served,” serves as a liaison between the patient and health/social service agencies (APHA, 2015). CHW models enhance individual and community capacities by increasing health knowledge and self-sufficiency through a range of activities such as outreach, community education, informal counseling, social support, and advocacy (Sinai Urban Health Institute, 2014). 

The Affordable Care Act recognizes CHWs as integral members of the healthcare
workforce, particularly for their role in Screen Shot 2016-02-10 at 10.49.09 AMlinking clinical and community resources for patients and their families. One of the most important features of CHW models is that they utilize a bottom-up approach to improving care delivery and patient outcomes. CHWs strengthen already existing ties and relationships with community networks, as they generally reside in communities where they work and understand the social context of their patient’s lives (CDC, 2015).

CHWs are closely involved in the on-the-ground implementation and day-to-day operations of pediatric asthma CHW models. Oftentimes CHWs are responsible for conducting home-visits with patients and their families, helping to review medication use, assessing home environments to identify and reduce common asthma triggers, offering educational asthma management techniques and resources, and attending healthcare appointments with families. In some cases, CHWs serve as an advocate in other community settings (e.g., schools, child-care providers, housing authorities); other times CHWs are members of a structured healthcare team. Given their ability to reach community members at a relatively low cost, CHW models have been proposed as a cost-effective means for improving care coordination and improving health outcomes among low-income families.  A key challenge to integrating CHWs into service delivery and payment systems is a general lack of understanding among providers and policymakers about the potential roles and responsibilities of CHWs, effective techniques for sustainability of CHW models, and improved healthcare and social costs associated with the CHW model (California Health Workforce Alliance, 2011).

Community Health Worker models are an important community-based strategy to improve pediatric asthma health outcomes, increase access to culturally competent healthcare, and reduce healthcare costs. The establishment of an infrastructure for a CHW workforce, including appropriate funding and training opportunities, is critical to educating and providing culturally competent asthma care for risk children and their families, as well as reducing the prevalence of asthma in particularly vulnerable communities.

Jessica Levin Rittner
MPP/MBA ’16
Children, Youth, and Families Concentrator

A New Direction for Juveniles Serving Life Sentences

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Photo from New American Media

According to the Campaign for the Fair Sentencing of Youth, the United States is the only country in the world that sentences juveniles to mandatory life sentences. However, on January 25th, 2016, this practice ended with the Montgomery v. Louisiana Supreme Court case. This case determined that the 2012 ruling in Miller v. Alabama, which stated that mandatory life sentences for juveniles were unconstitutional, can be applied retroactively to all juveniles sentenced before the court’s ruling. This decision will affect approximately 2,570 individuals who were sentenced to life without parole as juveniles.

This latest ruling is part of a decade long trend in which the Supreme Court has altered juveniles’ treatment within the criminal justice system. This trend began in 2005 when the court banned death penalty sentences for adolescents under the age of 18. The court’s decision reflected growing evidence that children are less emotionally and cognitively developed than adults, rendering them less culpable for their crimes.

In 2010, the court decided that it was unconstitutional for adolescents to be sentenced to life without parole for crimes other than homicide. In 2012, the court took this decision a step further by banning all life without parole sentences for juveniles. Since then, state and district courts have determined whether this ruling would apply retroactively. The Supreme Court decision as of late determined that their ruling applies to all cases involving juveniles sentenced to mandatory life sentences.

Thousands of individuals who were subjected to harsh penalties as children now have the possibility of release. The question now remains of what their future entails. Within the last few years, there has been increased criticisms regarding mass incarceration, yet little attention has been paid to the reentry barriers facing individuals once they’ve been released.

According to the American Psychological Association, former inmates often experience homelessness, joblessness, addiction, and trauma. These occurrences often lead to mental illness and recidivism. Juvenile offenders face even more barriers to reentry, such as disruptions in education, lack of experience in the job force, and even the inability to obtain a driver’s license.

In recent years, the Obama Administration has created various reentry programs through the National Reentry Resource Center. These initiatives have attempted to improve former inmate’s access to housing, employment, substance addiction treatment, and mental health services. While these programs have provided comprehensive reforms in the treatment of former inmates sentenced as adults, there has been very little focus on adult inmates sentenced as children.

With the Supreme Court ruling, there could potentially be thousands of individuals who have served years, even decades, in prison for crimes they committed as juveniles. The criminal justice system must find new, innovative ways to meet the needs of these adults in order to ease their reentry into society.

Brie McLemore
M.P.P./M.A. in Women and Gender Studies ’17