The Bureau of Labor Statistics released its annual data yesterday, and as TCF policy associate Mike Cassidy shows, a lot of Americans are among the “working poor.”READ MORE
While Silicon Valley may have one of the highest living wage ordinances in the country at a minimum of $19.06, economic inequality still persists in this area where a small portion of high-paying jobs has driven the cost of living through the roof. TCF fellow Amy Dean discusses her own experiences as the chief executive officer of the South Bay Labor Council (SBLC) from 1994-2003, along with why collective bargaining and good public policy is needed for California's tech corridor to foster widely shared prosperity.
Last month, the Capital and Main website released a series of articles on inequality in California. The state “is the home to more superrich than anywhere else in the country,” the authors noted. “And it also exhibits the highest poverty rate in the nation, when cost of living is taken into account.”
The report added that Silicon Valley’s digital innovation has led to “unprecedented” rise in productivity levels. “But virtually all of the economic benefits went to those at the top," it said.
Dean's article can be found in Al Jazeera.
Despite the good news in some areas of the labor market such as a drop in the unemployment rate, there is still something that American workers are missing. That missing piece of the labor puzzle is an increase in wages. TCF policy associate Mike Cassidy announced in his recent article for The Fiscal Times that if wage growth had stayed constant over the past forty years, families would be making $51,000 more than the average income today.
While labor productivity depends on numerous factors, the primary explanations for the slowdown are weaker growth in business investment, employee educational attainment and technological innovation.
You can read Cassidy's piece here.
According to an article from the New Republic, Republican senators Mike Lee and Marco Rubio have come out with a new tax plan that appears to penalize poor families and their children. The plan has hints of social engineering because it essentially prevents low-income families who need benefits the most from receiving such credits. The article cites TCF fellow Jeff Madrick and policy associate Clio Chang's newest work on cash allowances.
The Reformocon tax proposal is intentionally designed to exclude the poorest 20 percent of families from these new child benefits, as plan architect Robert Stein previously explained. According to Stein, the plan is intentionally "not designed to encourage fertility in the poor over and above what we already do," meaning that its disproportionate boost to the wealthy is a piece of social engineering, not an unintended facet of the policy.
Read the New Republic article.
Read Madrick and Chang's blog post on cash allowances.
There's more to a 401K savings account than meets the eye, particularly when looking at factors such as age and race. TCF fellow Harold Pollack explains the ways that intergenerational wealth disparities play a role in a worker's ability to save for retirement.
Differences in financial sophistication certainly play an important role. An improved system might help employees make better choices. Minority workers at this firm strongly favored safer asset classes such as money market funds that provide very low returns over the long-run. An opt-out system with simple, low-fee target date funds could be especially helpful.
Read Pollack's full article featured in The Washington Post.
The program known as "Gautreaux" which is native to Chicago, decrees that the Chicago Housing Authority provide rent vouchers for black residents to move to white suburbs in an effort in desegregation. There's been substantial evidence that those families who were gifted the vouchers achieved levels of success over those remaining in low-income areas. TCF fellow Stefanie DeLuca who has worked closely with the Baltimore Mobility Program, which is similar the Gautreaux, confirms in the Deseret News article that there is a real transformative nature to the socio-economic diversity created by the programs.
Between 1976 and 1998, more than 25,000 people relocated to more than 100 communities in the Chicago area, half to integrated suburbs, and half to integrated urban areas.
The result? The children of those families were more likely to graduate from high school, attend four-year colleges and be employed with higher pay and benefits. They were much less likely to be on assistance programs.
The rest of the piece can be read here.
In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.
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