Losing the War on Poverty

This January marked the 50^th anniversary of the War on Poverty started by President Lyndon Baines Johnson.  Of course this had led to discussions among pundits and politicians as to whether this program really did much to eliminate poverty.  There are those who say that we had poverty back then and we still do now – perhaps even more.  So does this mean that its critics were right in that this was just another well-meaning government program that failed because it is just another thing that government just doesn’t do well? 

It’s hard to make such a generalization because life in the United States back in 1964 was so much different than it is now. 

It cannot be denied that the best way to stay out of poverty is a steady job that pays a living wage.  Back then at least for most of us, opportunities for these were ample if not abundant.  There was a choice of perhaps a manufacturing job for those who preferred a job working with their hands and for those who went to college, an opportunity to perhaps reach for the upper classes.  But while the college graduate could command a better salary, the blue collar workers were by and large also members of the middle class.  Do a good job and keep your nose clean and you could expect to not only make a living wage (often because of a union to negotiate on your behalf) but also have secure employment until you retire and get your company pension. 

Poverty existed, but much of it was suffered by minorities who didn’t get the same educational and job opportunities as others (remember it was the Civil Rights Act of 1964 that actually allowed blacks to share the same public facilities with whites where there was segregation). Ample job opportunities existed – it was just that some were shut out of them.  The only way to address this was for the government to get involved to try and promote equal opportunity for everybody to enter the middle class.  But regrettably, minority unemployment is still significantly higher than for others. 

The above scenario of 1964 has changed radically since then.  Blue collar manufacturing jobs have disappeared offshore to be replaced by low-paying service jobs.  While some have returned, many of them do not pay a living wage, especially with unions being stripped of much of their negotiating power.  Investing in a college degree nowadays is just as likely to result in a large college loan to pay off with no real professional job prospects. The dream of working for one company for life is now a fantasy with workers being dumped on a whim. And company pensions have gone the way of the dinosaur. 

So while poverty can have a number of different social causes, it is my view that the main driver of poverty today in the US is the severe and persisting lack of jobs that pay a living wage.   

At the present time, there are still about 3 job seekers for every job opening in the US as detailed in this link.

The Job Openings and Labor Turnover Survey (JOLTS) data released this morning [11/22/2013] by the Bureau of Labor Statistics showed that there were 3.9 million job openings for 11.3 million job seekers in September—meaning that for every job opening there were 2.9 people looking for work.  

While the job seekers ratio has been decreasing from a high of 6.7-to-1 during the Great Recession, today’s ratio of 2.9-to-1 matches the highest the ratio ever got in the early 2000s downturn In a labor market with strong job opportunities, the ratio would be close to 1-to-1, as it was in December 2000.

The JOLTS data are also a reminder that the current elevated unemployment rate has little to do with a skills shortage or mismatch, as unemployed workers dramatically outnumber job openings in all industries.

“In no industry does the number of job openings even come close to the number of people looking for work,” writes Gould. “This demonstrates that the main problem in the labor market is a broad-based lack of demand for workers—not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.”

When the problem of long term unemployment and its possible leading into poverty is viewed this way, a lot of the prevailing “wisdom” on the subject turns out to be little more than hot air.  e.g. If we cut unemployment benefits, everybody will then go out and get a job.  If we can only retrain workers, they can then all get jobs.  If we could only reinvent ourselves, we can all get jobs. blah, blah , blah.  Moreover, the article points out that a decline in the number of job seekers because of people giving up in this weak labor market makes even these statistics look better than they actually are.  

In addition, there are conservative commentators such as David Brooks who for example in this op-ed column decry that the main cause of poverty and low social mobility is the fraying of the social fabric in America.  Surely there is something to this.  But few things can fray the social fabric of society better than poverty.  I believe the argument that poverty being a driver of much of our social dysfunction is a more persuasive one. 

Of course, one of the inevitable results of a lack of jobs is the unrelenting downward pressure on wages. So even if one can find a job, it is no guarantee that it will pay enough to avoid poverty.  The concept of a living wage for the so-called working poor is one that has been discussed by some.  The reader is invited to check out one of my previous postings A Living Wage for Americans for my thoughts on the subject.  

But for now, the pertinent question for Americans to answer is whether someone who works a 40 hour workweek deserves to live above the poverty line.  Sadly, there are all too many who believe the answer is not necessarily.  The argument goes that someone who does what is considered unskilled labor doesn’t deserve to be paid a living wage.  If they want a living wage, so the argument goes, they should go to school or get the training to acquire the skills to demand a larger paycheck.  This argument made perfect sense when there were an adequate number of jobs to be had, but makes less sense when there are job shortages in just about every field as noted above. 

But even if these people were able to move up to a better job in this scenario, what about the jobs they left behind?  Somebody still has to do these jobs!  For whatever the skills are of the management of say, a fast food restaurant to deserve their higher pay, without the so-called unskilled labor provided by the burger flippers, the counter workers, and even the people who clean the rest rooms, the company would be unable to make a dime!  When viewed in this light, don’t these workers at least deserve the dignity of a wage that takes them out of poverty? 

There is no question that poverty is becoming an ever increasing problem in the US, even with the economy said to be recovering.  We have increasing numbers of people needing food stamps to live on and many of the food banks are having trouble keeping up with the demand of hungry people. What is even more disturbing is that there are those in the middle class who are only a lost job, a divorce, or a healthcare catastrophe from falling into the depths of poverty themselves.  And although poverty has traditionally been associated with urban and rural dwellers, poverty rates are now surging in America's suburbs.

For example, poverty is up by almost 16 percent in the suburbs of Pittsburgh.  Up more than 27 percent in the suburbs of Providence.  Nearly 79 percent outside Seattle.  And in the suburbs of Austin, Texas, the number of poor has swelled almost 143 percent.  More poor people now live in America’s suburbs than in cities or in rural areas.

But America with its culture of individualism all too often pays lip service to those in need.  Instead of an attitude that we are all in this together, there is the attitude that you are on your own.  How else can one explain that there are so many who are not only against a living wage for the working poor but even a paltry raise in the minimum wage?  Or the campaign by some to cut safety net benefits like food stamps. 

But surely we can take care of the needs of our veterans who served honorably in Afghanistan and Iraq and to make sure that they can return to this country and successfully integrate into the workforce. Right? But for all of the times we say that we “salute their service”, news like this says all too often that we are giving them little more than the one-finger salute.  

It is the shame of America. The Department of Veteran Affairs reports that 48,000 veterans who served in Afghanistan and Iraq since 2001 are either homeless or in a special program to keep them off the streets.

We are the richest country on Earth that has the resources to eventually win the war on poverty – or at the very least, win some major battles against it.  Our economy generates an incredible amount of wealth – but little or none of it goes to those at the bottom who need it the most.  As long as our economy is unable to produce enough jobs that pay a living wage for everybody who wants to work, we will continue to lose the War on Poverty.  A prosperous economy for all simply cannot exist when there is stubbornly high unemployment.  Past experience has shown that government spending to stimulate the economy for things like needed infrastructure improvements have been much more successful in creating jobs than austerity measures that have resulted in Great Depression levels of unemployment in parts of Europe.

 

President Obama in his recent State of the Union address did note the need for infrastructure spending and also noted that nobody should work a 40 hour week and live in poverty.  So he then advocated a minimum wage increase to $10.10 per hour.  What is disheartening is that he is unlikely to get any support whatsoever for this from Republicans.  And even if he did, $10.10 per hour is hardly enough to raise anyone out of poverty.

 

An adequate number of jobs that pay a living wage is the only way to have a fighting chance to truly win the War Against Poverty nowadays. We have the means to do it.  All we need is enough people to really care!

Will the Affordable Care Act Really Be Affordable?

With a name like the Affordable Care Act (a.k.a. Obamacare) it is obvious that the intent of the law is to make healthcare affordable to as many Americans as possible, especially those who up to now because of preexisting conditions have found health insurance to be unaffordable or simply unavailable at any price.

 

But how well will it accomplish this aim? Right now, it is too early to say because most of the attention has been on getting the website fixed so people can actually shop for and buy insurance and not yet so much on how much the policies will cost.

 

There have been some reports of ‘sticker shock’ where the premium costs are at higher rates than expected (even with the government subsidy) and in some cases, what people were paying before for policies they already had. 

 

But the problem with comparing insurance policies simply based on the premiums is that the coverage, deductibles, and out-of-pocket costs may not be the same.  Put another way, it is easy for an insurance company to make the price of a policy more attractive by cutting out some of the benefits.  To try and prevent this ‘race to the bottom’ by insurers competing on price by stripping down benefits, the ACA has a level of benefits that all of the policies must adhere to so that the prospective customer can more easily compare ‘apples to apples’.  In some cases, the ACA policies offered cost more because they provide coverage that preexisting policies did not.  Because of this, it was a big mistake for President Obama to tell everybody that if they liked their policy, they could keep it. And his approval ratings have taken a hit because of this.

 

In other countries with universal health care like Canada and the United Kingdom, co-pays and out of pocket costs are at a minimum which keeps healthcare in these places truly affordable.  But a look at the Heathcare.gov website gives an array of choices for each policy labeled Bronze, Silver, Gold, or Platinum which corresponds to roughly how much of the medical expenses will be covered at 60%, 70%, 80% and 90% respectively.  Presumably, someone who expects to use lots of medical care will pay the higher rate for more coverage with others opting for the lower rate.

 

Even with annual caps, this can lead to some very hefty out-of-pocket costs to the consumer once the insurer has paid their part of the bill as shown in this link.

 

And as shown in this link, the government subsidies for coverage can fall off very sharply once somebody’s income reaches a certain level which can place some in a very difficult position to afford insurance.

 

And while insurers are no longer permitted to charge differently by gender, they can charge older people more which can make the insurance more difficult to afford for those in their 50s and 60s getting close to the Medicare retirement age of 65.  And there are those who want to raise the Medicare retirement age!

 

In addition, some areas of the country have plenty of competition for the insurance buyer which is good for them.  But other areas have few competitors which makes for more limited (and expensive) choices.  And with health insurance companies still having exemptions from anti-trust laws, it is unclear how this will adversely affect pricing over the long run, especially if not enough healthy people enroll to spread the risk among the other policyholders.

 

To take care of those who are not poor enough to qualify for Medicaid but don’t make enough to afford insurance on the open market even with a subsidy, the ACA proposed to expand Medicaid to cover these people.  But as part of the Supreme Court decision on the constitutionality of Obamacare, states have the choice whether to opt-in and accept the government funds to expand Medicaid in their states.  Unfortunately, many (but not all) states run by Republican governors have refused this help for their people who need it the most based on ideological grounds.

 

All of this is not to bash Obamacare and say that it has to be repealed as so many Republicans are demanding. Indeed, there are many people who now have vital access to health insurance who simply didn’t have it available to them before.  It just means that when a system like this which keeps the private for-profit insurance companies in the loop unlike single-payer systems (like Medicare here in the US) which replace them, there are going to be lots of unforeseen consequences that will have to be worked out and fixed for things to run properly.   The system that has been used in Massachusetts (a.k.a. Romneycare) is pretty much identical to Obamacare.  And while it too had its rocky start, it seems to have worked just fine with about 92% of its residents having health insurance.  As long as Obama is president, Obamacare isn’t going away! Rational members of the Republican Party whether they like Obamacare or not, know this. If someday we can get both sides to finally agree that Obamacare is here to stay and to work on fixing what’s wrong with it instead of non-productive rhetoric arguing for its abolition (a big if)...maybe there is hope for a healthcare system that works for all Americans!

Elizabeth Warren for President?

I believe it was the day after President Obama’s reelection victory last year when the pundits started to speculate on who was going to run for president in 2016, especially with no incumbent in the mix.  Many people, including me objected to this.  After all, the guy just won a new 4 year term; let’s talk about what he hopes to accomplish now instead of dwelling on the distant future and making him into a lame duck already. 

 

Of course, since then the speculation has only continued.  On the Democratic side, we have the ‘inevitable’ nomination of Hillary Clinton if she decides to run (which was also inevitable back in 2008, but a young Senator Barack Obama didn’t get the memo).  On the Republican side, will they nominate someone from the Tea Party like Ted Cruz or Rand Paul? Or will they nominate somebody is who viewed as being a more moderate conservative like Chris Christie?  

 

So once again for liberals, it looks like a choice between another Democratic centrist and someone likely to be from the far right which is what the Republican primary battles seem to be turning out.  Will liberals ever get one of their own to choose from?  With the speculation over the increasingly popular Senator Elizabeth Warren perhaps running for president, especially if Hillary chooses not to run, liberals like me cannot keep from being swept into the same speculation over 2016 that I have criticized.  So if the reader will indulge me...  

 

Elizabeth Warren who was a Harvard Law School professor became well known for her government work not only to liberals, but also to corporate America and Wall Street for her outspoken criticism of how they did business.  President Obama named her to help put together the new Consumer Financial Protection Bureau and in a logical next step, he nominated her to be the first Director of the agency.  Needless to say, the Republicans in general and Wall Street in particular wanted no part of this and with a promise of a Senate filibuster that would make her confirmation unlikely, Warren’s nomination was reluctantly withdrawn.  

 

In hindsight, maybe the Republicans wish they could have that choice back because her next move which resulted in a successful run for the US Senate in Massachusetts has resulted in her being even more of a thorn in the side of Wall Street with her appointment to be part of the Senate Banking Committee.  There is already a considerable collection of online videos of her tormenting Wall Street executives and even the Treasury Department as in this video during congressional hearings asking the tough (but pertinent) questions many of her colleagues didn’t seem to have the stomach to ask. 

 

But when she ran against the incumbent Republican Senator Scott Brown, many wondered if she had a chance to even be competitive, let alone win against an opponent who was being heavily bankrolled by Wall Street.  But an amazing thing happened in that she actually received a significant amount of campaign donations even from voters outside of Massachusetts, hoping that this populist candidate could beat the odds.  And she did, winning rather comfortably.

 

Senator Warren has been an outspoken advocate for liberal causes, most notably focusing on the harm from our extreme wealth and wage disparity along with the resulting money that those in the top 1% have used to buy favor with politicians of both parties. 

 

You would think that running on such a populist platform would be a natural for an ambitious politician.  But just as Kermit the Frog lamented that It's Not Easy Being Green, nowadays it’s not easy being a liberal either.  Conservatives having control of the White House for most of the last 30 years have seemingly captured much of the political narrative in the US.  Especially with their domination of talk radio along with the success of Fox News, they have sold the notion that America is mainly a conservative nation, which ignores President Obama’s back to back victories.  But just as importantly, whatever one may think of conservatives, they are proud as hell to call themselves conservatives.  And furthermore, there is seemingly no such thing in most of their minds as being too conservative.  A number of politicians with solid conservative credentials have been defeated in Republican primaries by hard-right Tea party activists for in their minds not being conservative enough.  Others are fearful of being ‘primaried’ when it is their turn to run for reelection. Even as someone who once ran as a moderate Republican for governor of a solidly liberal Massachusetts, Mitt Romney had to re-label himself as a "severely conservative" governor during his presidential campaign try and convince the conservative base that he was one of them. 

 

On the other side, the term ‘liberal’ has become a pejorative word – even most liberals will no longer use the word but instead prefer to be known as ‘progressives’.  If conservatives want to paint an opponent as being unworthy to vote for, all they feel they need to do is to paint him or her as a ‘liberal’ and that will do the job (after adding in the word ‘socialist’ for good measure).  With the resounding defeats of liberals George McGovern and Walter Mondale in past presidential elections, the formula for most Democratic presidential candidates nowadays is to say enough to appeal to the liberal base but also at the same time not come across as being too liberal.  The result has been Democratic presidents in the form of Bill Clinton and Barack Obama who on economic issues are centrist at best and maybe even center-right on some issues.   

 

Bill Clinton brought us more financial deregulation, especially the repeal of the Glass-Steagall Act which had put a firewall between the banking and investment parts of financial institutions.  Many feel that if this firewall was still in place, the financial debacle of 2008 which is still inflicting great harm on our economy may not have happened.  And Barack Obama has relied on many of the same members of the Clinton team who were behind all of the financial deregulation. 

 

The frustration of those on the liberal side comes from when a centrist has to negotiate with those on the far right, the compromise has to land somewhere on the right.  For example, with our need to create jobs to address our stubborn unemployment problem, the battle should be between the idea of more government spending to try and stimulate the economy (the liberal/Keynesian approach) or going with spending cuts (the conservative/austerity approach) to try and balance the budget.  Instead, we have an attempt at compromise in which the only detail to work out is how much and where spending cuts are going to be.  Some compromise!  The fear among liberal economists like Paul Krugman is that without some sort of fiscal policy in the way of a government stimulus to create jobs, we are going to be stuck in this unemployment rut for a long time to come. 

 

And as for Hillary, although most of the Democratic campaign money seems to lining up behind her if she runs, it is tough for liberals to get a warm and fuzzy feeling for someone who as a senator from New York was (perhaps understandably) supportive of Wall Street interests. 

 

A recent article from The New Republic, Hillary's Worst Nightmare? provides lots of red meat for liberals to chew on.  While acknowledging that Hillary is again considered to be the “inevitable” Democratic nominee if she decides to run, they write that Elizabeth Warren’s liberal populist message may prove to give Hillary more of a battle than many would expect or at the very least, would nudge Hillary a little more to the left.  And just to prove that liberal populism is not totally extinct, there is the recent mayoral race in New York City won in a landslide by unabashed liberal Bill de Blasio.  

 

OK, back to reality.  Elizabeth Warren and her staffers have repeatedly said that she is not running for president.  Of course this is speculation, but I think this is more a case of not wanting to run against Hillary rather than just not being interested in the presidency.  While she may well make it a spirited battle, Warren is a political neophyte having never held political office before her run for the Senate.  In addition, her inexperience in foreign affairs compared to someone who was recently the Secretary of State would be ruthlessly exploited in a political campaign. 

 

But if Hillary decides not to run, all bets are off!  Warren, who will be 67 years old in 2016 may decide that it’s now or never if she indeed has any ambitions to be president. 

 

And let’s not forget VP Joe Biden who I’m sure would love to take another crack at the presidency if Hillary doesn’t run – or maybe even if she does run for all we know!  Biden gets an unfair rap as a buffoon because of the number of gaffes he has made in his public appearances.  But Biden has always been one to speak from the heart and not from a TelePrompTer.  I’ll take that over someone whose words are always programmed for political correctness.  In addition, he served as Chairman of the Senate Foreign Relations Committee who was widely respected for his expertise there.  Had President Obama not picked him as his VP, he would have been a fine choice as his Secretary of State.   Instead, Biden has worked as a loyal team player behind the scenes on behalf of the president to make up for his relative lack of experience with inside Washington politics. And best yet, he is a true liberal from a modest background who truly cares about the working person and others who are struggling to get by in these difficult times.  But in 2016, he will be 74 – perhaps too old to be seriously considered by the electorate. 

 

If Hillary does run and get the nomination, she may well decide that Elizabeth Warren can make a valued contribution to her presidency if she wins just like Joe Biden has done for President Obama.  Maybe this means a cabinet spot or – wait for it! – the VP slot.  Warren’s strong following among liberals may prove to be a help in mobilizing this group to support and vote for Hillary instead of sitting on the sidelines.  A woman at the top of the ticket would be historic.  Two on the ticket...why not?

Stopping Government by Extortion

ex·tor·tion  [ik stáwrsh'n ]

getting something by force: the acquisition of something through the use of force or threats

NYT op-ed columnist Paul Krugman had this humorous take on the nature of extortion and how it drove the latest budget and debt ceiling negotiations.

So you have this neighbor who has been making your life hell. First he tied you up with a spurious lawsuit; you’re both suffering from huge legal bills. Then he threatened bodily harm to your family. Now, however, he says he’s willing to compromise: He’ll call off the lawsuit, which is to his advantage as well as yours. But in return you must give him your car. Oh, and he’ll stop threatening your family — but only for a week, after which the threats will resume. 

Not much of an offer, is it? But here’s the kicker: Your neighbor’s relatives, who have been egging him on, are furious that he didn’t also demand that you kill your dog.   

And now you understand the current state of budget negotiations.

Anybody who doesn’t see the similarity to the Tea Party tactics, threatening the nation with default if we didn’t comply with their demands just isn’t paying attention.  It is easy to dwell on which side’s position we may think is right.  Important as that is, it pales next to the Tea Party’s use of extortion to get what they couldn’t attain through the democratic process.  This is unforgivable and must be stopped in the future! 

Let’s be clear.  As a liberal, I am strongly opposed to Tea Party political positions.  But I ask the reader to believe me when I say that if a liberal group with positions I agreed with used the same extortion tactics, I would condemn them just as strongly. 

Most economists agree that if the US had gone into default, the results would have been catastrophic.   But the President in not negotiating with the Tea party rightly saw that preserving our democratic process was even more important that keeping us from going into default if we were forced under duress to choose one or the other. 

So under the terms of the last agreement, we now have new budget and debt ceiling deadlines.  Will the extortion card be played once again?  The Congressional leadership says no, especially with the Republican brand taking a beating according to polls like this one.   

But interviews with Tea Party stalwarts after the shutdown and debt ceiling crises were postponed show that they remain just as defiant as ever.  What comes across is not that they were sorry for the tactics they used; they are simply sorry that they lost!  What crazy things will Ted Cruz do next time?  It’s not a pleasant thought! 

But there is a way out of this mess!  It is something called the McConnell Provision originally proposed by Republican Senate Minority Leader Mitch McConnell back in 2011.

The McConnell Provision received broad bipartisan support last year. In fact, it was one of those rare policy proposals that received support from both the Wall Street Journal and New York Times editorial boards. 

And for good reason. Extension of the McConnell Provision would lift the periodic threat of default from the U.S. economy and remove politics from future debt limit debates, while preserving Congress’ essential role in spending, revenue and borrowing decisions.

But we would be deluding ourselves if we think this will be an easy sell for Republicans, especially those like McConnell himself who are facing primary challenges from the Tea Party. 

The only hope is that saner heads in the Republican Party will decide they don’t want to go through more beatings that will further erode their approval ratings if they try stunts like this again.  But you truly never know with the Tea Party who may well in their perverse logic subscribe to the mindset that The Beatings Will Continue Until Morale Improves! 

No Longer the Land of Opportunity

mer·i·toc·ra·cy [ mèrri tókrəssee ]  

system based on ability: a social system that gives opportunities and advantages to people on the basis of their ability rather than, e.g. their wealth or seniority

 

A number of years ago at work, my boss decided to have some chit-chat with his minions.  The conversation eventually centered on how he thought that pro athletes were way overpaid and didn’t deserve it.

I then said, “At least the sports world is more of a meritocracy than this place.”  He then laughed at the funny word that he thought I made up and walked away.  If I had the chance to explain what I meant, I would have said that anyone who showed enough talent and hard work could get a job just like those “overpaid” stars.  On the other hand, opportunity in the corporate world is often dictated by politics instead of hard work and ability.

Speaking of what we call the land of opportunity, I am reminded of a song that first came out in 1963 by Jay and the Americans called Only in America whose lyrics include:

Only in America
Can a guy from anywhere
Go to sleep a pauper and wake up a millionaire

Only in America
Can a kid without a cent
Get a break and maybe grow up to be President

Only in America
Land of opportunity, yeah

Back then, maybe there was something to all of this.  So most of us didn’t get rich but we all had the chance for jobs to put us in the middle class and for those going to college, maybe do better.  But not today where many of the so-called working class are trying to get by on at or near minimum wage.  And as many as 45% of college graduates are living with their families because they cannot make enough to support themselves.  Some opportunity! 

 

Some say that our biggest crisis is our growing wealth and income inequality.  But I think that our chronic scarcity of well-paying jobs is one of the biggest contributors to the growing inequality.  When there aren’t enough jobs for qualified applicants, too many able people can’t put their skills and talents to use so they can better themselves. 

And while the above song lyrics dream about a kid without a cent growing up to be president, looking at our recent presidents along with our Supreme Court justices, it sure as hell helps if you went to either Harvard or Yale.

It’s an interesting subject of debate whether the Ivys and other selective colleges provide a better education than other less expensive schools.  But what is undeniable is that graduates of the most prestigious schools have access to more open doors than others, not just due to the prestige of the institution but also likely due to the quality of the networking contacts between graduates and alumni at these schools.

In addition to the cost of getting into the more selective colleges, a top notch preparatory education is also necessary to have a fighting chance of getting admitted.  Those who can afford to live in more affluent areas with fine school districts (or the means to go to private schools) are way ahead of those in poorer school districts where their limited tax base often results in their cutting courses to be able to stay above water.

And while a college and high school education is known to be important for the opportunities available to our children, it is easy to dismiss the value of preschool education which poorer children often don’t have access to.  This is far more than glorified babysitting!  Those with access to Early Learning programs are in more of a position to thrive upon entering school while those without access to these programs are playing catch-up from the start.

In addition, with the scarcity of well-paying jobs out there, more corporations actually have the chutzpah to require graduates to serve in unpaid internships to gain a foothold in a company they are interested in working for.  Less affluent graduates who are worried about paying off college loans don’t have the luxury of working for free.

So simply put, those of means have the best crack at the best jobs while others are often left on the outside looking in.  And this can’t help but make the gap between the haves and have nots greater.

It’s easier to dismiss all of this by saying that opportunity in America is a whole lot better than in some third world country.  That’s true enough but this is comparing apples and oranges.  Studies have shown that America has less social mobility than, say Canada or most of the countries in Europe.  Children in this country born into poverty are actually more likely to stay there than in other countries.  It is estimated that about 22% of American children overall are living in poverty (with blacks and Hispanics at a much higher rate) which for the wealthiest nation in the world should be unacceptable.  But instead, there are some in Congress who would cut Food Stamps that would help these children. Only in America!

Our Media For Sale

One of the more interesting stories last month was the agreement to sell one of America’s most prestigious newspapers, The Washington Post to Jeff Bezos, the billionaire founder of Amazon.com.  Many were stunned by this news. But the newspaper along with so many others have fallen on financial hard times with many people now getting their news online instead of buying newspapers which used to generate much more advertising revenue. 

Although the Graham family that owned it truly loved their paper, red ink year after year meant that the bleeding had to stop sometime.  And in Bezos, they were confident that his expertise with online enterprises would perhaps be enough to save the paper over the long run.   In addition, Bezos has not been known to have a strong political agenda so there was probably some comfort that the newspaper under him would not carry a partisan agenda.  

Time will tell, but there is still some reason to worry about all of the acquisitions and mergers in the various media outlets, whether it is the newspapers, radio, TV or others. What are they trying to accomplish?  Is it about making money or is it about promoting a political agenda or maybe both?

For somebody like Rupert Murdoch, it is clearly about both.  His Fox News along with his more recent acquisition of The Wall Street Journal which both have a strongly Republican/conservative editorial slant are ample evidence. 

Another more recent example is the Koch Brothers who expressed interest in buying the Tribune Company chain of newspapers including the Los Angeles Times.  The Koch Brothers have spent countless millions to finance conservative/libertarian causes so there can be no doubt what they are up to in wanting to buy newspapers.  Although recent reports now say that they are no longer interested in buying the newspapers, the report of their interest caused significant anxiety as written about in this LA Times opinion piece.

Having fallen short of their objective of crushing Democrats and liberalism, they now apparently believe a necessary component in their strategy is ownership of a few major newspapers. It is doubtful they want to merely have a voice on the editorial pages, as has always been a publisher’s prerogative. It is far more likely they hope to create print versions of Fox News.

The importance of media that is free of government and corporate control to ask the tough questions and keep people honest cannot be overstated in its value to a functional and thriving democracy.  (Perhaps the most notable example was The Washington Post investigation of Watergate.)  One of the first things that a totalitarian government will do to preserve its power is to seize control of the media to spread its propaganda and quell dissent.  A strong democracy needs to have an informed electorate so it can make choices that will benefit its own interests instead of those in power. 

It then follows that to have an informed electorate, it is necessary to have at least a reasonable amount of balance in the information it receives from the media.  Getting all of one’s information from one political viewpoint may be good for those who are putting out the information but it cannot lead to informed decisions at the ballot box.  So how do we go about achieving this balance?

There have been traditionally two ways to try and accomplish this balance.  One was the so-called Fairness Doctrine that the Federal Communications Commission (FCC) once imposed on broadcast outlets.  The stations essentially had to provide equal time to differing sides of current issues.  The thinking was that with the limited number of media outlets back in the days before cable and the Internet, it was necessary to keep tabs on them to ensure some reasonable standard of balance and fairness. 

The second way was to regulate how many media outlets in a certain market could be owned by one individual or corporation.  The idea was to make sure that nobody could corner the market on choices of news or entertainment. 

But with the 1980s and the election of Ronald Reagan, came the era of deregulation.  One of the casualties was the Fairness Doctrine which was repealed in 1987 based on what was believed to be an attack on First Amendment rights.  While I believe the motives of the Fairness Doctrine were good, I agree that we don’t have any right to tell Murdoch or any other owner what he can run on his own networks or put in his newspapers.  After all, there was enough real competition at that time which gave us enough choices to hopefully ensure enough of that elusive fairness and balance.

But then the second shoe of deregulation dropped.  With passage of the Telecommunications Act of 1996, the FCC then started to relax the regulations on how many and which types of media outlets could be owned by individuals or corporations in each market.  Since then, the merger and acquisition frenzy has continued unabated and has led to concentrations of media ownership that may well be threatening the health of our democratic process.

For example, let’s take the Pittsburgh market where I live.  We are fortunate enough to have both the Pittsburgh Post-Gazette which has a liberal editorial slant along with the Tribune-Review which is strongly conservative so I have a choice of which paper to read.  But with many newspapers going belly up, more and more cities are becoming one newspaper towns.

Clear Channel Communications now owns 6 radio stations in the Pittsburgh area and just about as many in smaller cities where they effectively dominate their markets.  Their stable of talk show hosts (through their subsidiary Premier Networks) includes conservative stars Rush Limbaugh, Sean Hannity, and Glenn Beck.  Indeed, because in part of efforts by Clear Channel, there are far fewer liberal/progressive talk stations on the radio dial despite the claims of those on the right about the liberal media.  And with the last two presidential elections won by a Democrat, surely there must be more of an audience for liberal talk than is being served – but the people who own the stations are reluctant to provide it.  Don’t you wonder why?

Even more ominous is that the increasing concentration of media ownership with a formidable share now owned by six large corporations known as The "Big Six" (which doesn’t even include Clear Channel!).  And with these large corporations buying up more and more of the media, whose interests would we expect them to promote?

It is perhaps unfair to say that every media owner exerts undue influence on its editorial content.  But that influence is certainly there and often, it is insidious. It falls under the category of not biting the hand that feeds you.  If for example, a particular corporation or industry is a major advertiser, is it unreasonable to be concerned that they will be treated with kid gloves by a media owner, even if public criticism is warranted? 

This is not just limited to commercial media.  The aforementioned Koch Brothers are contributors to PBS and according to this link, were successful in getting PBS to pull a documentary that was critical of them.  And while many media owners profess that they give free editorial reign to their news staff, how many workers want to take a chance of angering their owners and risk getting fired or being put on the fast track to nowhere?  And this doesn’t even include other areas of influence like the censorship of people and views the management may not agree with.

Other than rolling back some of the deregulation that has caused so much concentrated ownership of the media, the only real antidote is more use of our critical thinking skills.  It doesn’t bother me at all when somebody has a passionate opinion that differs from mine.  But what does bother me is when upon questioning, that person has precious little understanding of the objective facts behind his or her opinion.  It seems to me that this is a person who just accepts what he or she hears without asking any of the tough questions. 

Whether one watches or reads either liberal or conservative opinion, it is up to the viewer to be skeptical and insist that what are submitted as facts are not instead, distortions of reality.  (By the way, the hyperlinks I always insert in my postings are to help verify to the reader what I believe to be facts.) 

As a regular viewer of the Sunday morning political talk shows, it annoys me to no end that people are constantly allowed to get away with falsehoods and not get called on it by the moderators (as in asking the tough questions?) because they stubbornly cling to a misguided attempt at neutrality  even when the facts may all be on one side of the argument.

What happens when public officials don’t tell the truth? Traditionally it’s been the role of the media to point this out. It is the role of the media to not only to uncover hidden deceit, but also to point out deceit in plain sight. The media should not and cannot hide behind the phony gauze of neutrality. As Daniel Patrick Moynihan famously quipped, “Everyone is entitled to their own opinion, but not their own facts.”

While those of a conservative bent worry about the influence of Big Government, the rest of us worry far more about the growing influence of Big Money and Big Corporations on our lives.  They now apparently have the best government money can buy.  So why not the media too? 

A Living Wage for Americans

I think a good way to find out whether someone thinks more as a liberal or as a conservative it to ask him or her how they feel about minimum wage laws. 
 

In general, a liberal will side with the worker saying that minimum wage laws are necessary to prevent lower skilled people from having to work for starvation wages. 

 

On the other hand, conservatives will generally side with the employer by saying that the free market should decide wages and that the government should stay out of deciding how much people are paid for their work. In addition, there is the argument that is repeatedly made that if the minimum wage were to be increased, companies would hire fewer workers which would raise unemployment. 

 

Readers of my blog know that I am decidedly liberal.  I think much of the reason for this comes from being raised in a household where my dad made a modest living supporting us by laboring on his hands and knees all day long as a unionized cement mason.  So it shouldn’t be surprising that I root for the interests of the working stiff over the interests of big business. 

 

Several weeks ago, liberal commentator (and former LBJ Press Secretary) Bill Moyers was on Charlie Rose promoting his upcoming PBS Frontline documentary about how a pair of middle class families (one black and one white) he followed fared over a 20 year span.  Needless to say, I watched it and as a bleeding heart liberal, was deeply touched by what became their endless struggles on the edge of poverty that took an enormous toll on their lives.  It’s easy for some to say that people like these are where they are because they are lazy.  But these were hard working full-time workers in economically struggling Milwaukee who through an endless series of layoffs were bounced from one low paying job to another. In essence, they were trapped into an impoverished lifestyle with no way out despite their best efforts.  For those who haven’t seen this 90 minute Frontline documentary and are interested, it is available online in its entirety through this link.   I defy even the most hard-edged conservative to watch this without feeling some sadness and compassion for these people.

 

When Moyers was asked by Charlie Rose what needs to be done, his response was that we need to raise the minimum wage.  But the battle to raise the minimum wage by perhaps a dollar or two per hour doesn’t really address the problems of full-time workers who at best are on the edge of poverty and at worst are homeless.  The only way to address this is to fight for a living wage for these people – more on that later. 

 

Before returning to the living wage discussion, I want to address a couple of points made by those on the conservative side of the argument over minimum wage laws.   

 

First, it is reasonable to say that workers and employers should be able to negotiate a suitable wage that satisfies both sides without the government intruding.  But in an economic environment where too many workers are chasing too few job openings along with the systematic destruction of unions over the last several decades, the worker is in a fight where he just doesn’t have a fair chance.  And with a steady trend of overall corporate profits improving while (or more accurately because) workers’ wages are flat or falling over the same period, the workers are clearly getting the worst of the deal.   

 

Secondly, there is the argument that if the minimum wage were to be raised, workers would be laid off and thus making unemployment worse.   But as the many workers who are now doing the work that two or more other workers used to do can tell you – employers in general are already hiring the least number of employees they can get away with.  And with the millions of dollars in lobbying money that business groups spend to fight any minimum wage increases, do you think they are really concerned with the possible consequences to workers instead of just trying to maximize their bottom lines by keeping wages as low as possible?  I didn’t think so! 

 

The concept of a so-called living wage means that somebody who works at least a 40 hour week should be able to afford modest housing and have enough money left over to avoid living at or near poverty.

 

As unfamiliar as this may be to some, the US already has de facto living wage laws in the form of government safety net programs such as Food Stamps, the Earned Income Tax Credit and Medicaid among others to try and keep the lowest wage full-time workers out of poverty.  But critics have (rightly, in my view) charged that government programs such as these are little more than corporate welfare that subsidizes their miserly stinginess towards workers at the bottom of the economic food chain.  At least there are publicly funded projects that require the bidding contractors to pay a living wage as a part of doing business in this sector – and that’s a good start! 

 

While many have advocated the concept of a living wage, an organization called Universal Living Wage through its website universallivingwage.org fleshes out the concept in detail along with addressing some of the facts and myths about how a living wage program would work.  As part of my research on the subject for this posting, I had the pleasure of briefly corresponding with the organization’s National Chairman, Richard Troxell who at one time was himself a homeless Vietnam Veteran and now fights for living wage laws and against homelessness.  

 

I hope the reader will visit this interesting site to learn more.  But two important points should be mentioned here.  One is that Mr. Troxell does not believe in a one size fits all wage.  He believes in tying the living wage to the local costs of basic housing so that its cost is limited to 30% of a worker’s gross income to allow enough money for other necessities (along with perhaps a few small pleasures) of life. And while the living wage is based on a 40 hour work week, those who work less than a 40 hour week also need to be paid the same hourly rate as those who work full time to keep employers from gaming the system by making more and more people into part-time workers – something many employers already do to avoid paying benefits.   

 

I don’t harbor any false illusions here.  As much as I believe in the need for a living wage, there has always been tremendous resistance being waged by the corporate world.  Most notable is the battle between Wal-Mart who wants to start up at least 3 stores in Washington D.C. and the local government who wants to require Wal-Mart (and other similar sized businesses) to pay a living wage to its employees there.  Wal-Mart says they will not build the stores if forced to pay a wage rate not of their choosing and that jobs would be lost – a claim that some find to be debatable. More importantly, when a giant employer like Wal-Mart is allowed to relentlessly drive down wages and benefits, its competitors will likely feel that they have no choice but to follow suit. 

 

But the award for corporate chutzpah goes to McDonald’s who in a campaign aimed towards its workers, tries to convince them that it is possible to work a minimum wage McJob and still live comfortably – if only they would budget their money properly!  They support this by a sample budget that apparently assumes a worker has a second job along with Food Stamps to pay for food and almost no expense for health insurance.  Unbelievable! 

 

You would think that the anti-government Tea Party types in Congress would want to eliminate much of the need for these government programs by making corporations pay their full share of a living wage.  But perversely, many of those same people are instead fighting to cut Food Stamps.   

 

But perhaps there is a little light at the end of the tunnel.  Long ago, there was the well-known story of Henry Ford who gave his assembly line workers a large raise, supposedly so they could afford to buy the cars they helped to make.  While this may have some truth to it, there is another account that says that the real motivation behind Ford’s apparent generosity grew from the frustration he was having with his high employee turnover rate and resulting cost of constantly retraining replacement workers.  Once he decided to pay a living wage to his workers, he was rewarded with loyalty to the company by the workers along with a far lower turnover rate.  Henry still got filthy rich, but his workers also enjoyed a better standard of living.  It doesn’t have to be one or the other! 

 

A modern day example is Costco, a warehouse club competitor to Sam’s Club.  While Sam’s Club adopts the Wal-Mart philosophy that has been derided as “Always Low Wages”, Costco despite competing in a business that requires deep discounting does just fine while paying its employees a living wage. 

 

So instead of having to pass a law that forces companies to pay a living wage, perhaps a simple attitude adjustment by the business community would work just as well.  One that instead of “work for us – we’ll pay you the very least we can get away with but you have no choice” to “work for us – we will reward your loyalty and hard work by paying you a living wage”. 

 

And best of all, workers who are paid a living wage will then have more money to spend which will help to grow our economy instead of forcing companies like McDonald’s to apologize for their weak earnings because of a chronically weak economy.  Paying a living wage is a win-win for everybody!