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Sequestration

Feb 28, 2013
Tomorrow sequestration begins, and today the market flirted briefly with closing at an all-time high. Go figure. Apparently Wall Street loves the chaos, the upwardly mobile unemployment rate, the accelerated deterioration of our infrastructure, and the thousands of laid-off teachers who will shortly join the 300,000 who have been laid off since June 2008.

As always, the coming economic storm will hit the poor the hardest, and more of us hanging onto the middle class by our fingernails will be joining them. The inequality gap will increase even more, if that is possible.

Will this benighted country ever find its way back to its ideals? Can our world do without the beacon of our example? Have we become incapable of producing a man, a woman, or an idea that can bring us together in common cause to save our own souls?

Stay tuned.

tags: Poverty

My January Rant

Jan 31, 2013
Lest a month go by in my neglected blog without an entry, allow these few rants on its last day:

  • I've been assiduously at work on bookaworld, making contact with Ethiopian writers and booksellers, and working on the Ethiopian/English volume of Aesop's Fables. I cannot say the same for the IRS which has sat on our application for 501c3 status for over four months. A recent phone call to them resulted in my learning they think there is something wrong with my meticulously prepared application. They won't tell me what. They won't even tell me when they will tell me what, though it looks like it will be around the end of the year! I'd ask for my $400 back, but you know where that would get me.
  • Guns. Don't look for substantive changes in gun laws. The Supreme Court has held that the second amendment guarantees individuals the right to own military weaponry. And it will take a constitutional amendment or a new and very different Supreme Court before that changes. And is it my imagination, or am I reading about a fatal shooting just about every day now?
  • Syria. Bashar al-Assad has now killed upwards of 60,000 of his own people, making his old man, at a measly 25K or so, look like a wuss. There is a little doctrine called the Responsibility to Protect that frowns on a nation slaughtering its own, and calls upon the international community to do something about it. Is anyone listening?
  • The Economy. A very good friend lost his job this week. Don't be fooled by the current bull market. Poverty is increasing. The middle class has shrunk to an all-time (that's ALL-TIME) low. The wealth gap is growing, with most of us stretched thin while a very few enjoy wealth that would embarrass Louis XVI. I say, let the ridiculous sports figures, Hollywood stars and, yes, even the hedge fund managers make their quadrillions a year, if they can get away with it. But there is no excuse for any American to be without the guarantee of a job at a living wage.
  • Education, etc. Where to start? When I think of the American lives that we are wasting, when I think of the world's lives that we are wasting (as many as 18 million people, mostly children, die of hunger every year), when I think of all the brain power that goes to waste through preventable wars, hunger, disease, meteorological disasters, and lack of education. This world could be a paradise, if we only saw to the basic needs of one another—clean water, sanitation, nutrition, an education, and a job that pays the bills. Is that so much to ask? Does anyone doubt there is enough to go around?

tags: Poverty

Noted with Interest, October 2012

Oct 27, 2012

Chart of the Day: The Price of Inequality
By Adam Frost, et al. Why are we in last place? From New Statesman, Oct 26, 2012. Accessed Oct 27, 2012.

The Self-Destruction of the 1 Percent
by Christia Freeland. Forgetting the past, and condemned to repeat it. From New York Times, Oct 13, 2012. Accessed October 15, 2012.

tags: Poverty

A Living Wage, Part 2

Sep 06, 2010
It is immoral to take an adult’s full-time labor and pay that adult less than a living wage. It is immoral, and it should be illegal.

Given that premise, what should we do? In our previous post on this issue, we noted that the Living Wage Calculator at Pennsylvania State University1 provides a living wage (LW) for a variety of households throughout the 50 states and D.C. What a single-person household requires for an LW is obviously going to be less than a household containing two adults and two children. Furthermore, a four-person family living in rural Vermont is going to require a lower LW ($25.38 in my county) than one living in midtown Manhattan ($30.30).

Geographic variation may be taken into account in establishing an LW without fearing everyone will move to regions where a higher one is available. There are simply too many other factors involved. However, to set an LW on the basis of household size is to risk both employers and employees attemping to “game the system” to their advantage. Just as the current federal minimum wage ($7.25 per hour) is a one-size-fits-all figure, so should the estabishment of an LW. The question is, what level do we set it at? My recommendation is to set it at the level provided by the Living Wage Calculator for a household with one adult and one child.

This is something of a compromise. I grew up in the classic American family, where one breadwinner supported himself, a spouse, and two children. The average family size still hovers around that figure. From a social policy perspective, we can argue that the LW should encourage this size of a family unit. Practically speaking, however, we can never hope to raise the minimum wage from $7.25 to over $25 per hour, at least until we can demonstrate the feasibility—and desirability—of a significant, if lesser, increase.

In the real world today, most intact households contain two working adults. If we set the minimum wage at a level sufficent to support one adult and one child, we may have a reachable goal which is still a desirable one from a social policy perspective. In my rural Vermont setting, this means raising the federal minimum wage from $7.25 per hour to $15.47. As the people at Pennsylvania State University say, this figure supports “a minimum estimate of the cost of living for low wage families.” No frills here. No European vacations, and little left over for college or retirement nest eggs. This is still bare bones living and still it is over twice what we require employers to pay their full-time workers today. And if that is not a national disgrace on par with waging endless war for the sole purpose of enriching a handful of multibillionaires, I don’t know what is.

The very idea, of course, will set up a great wailing and gnashing of teeth. It will be attacked as the last socialist nail in the coffin of American freedom and capitalism. It will be hooted down as pie in the sky. However, others, more thoughtful and aware of the extent of the peril we face if we maintain the status quo, will begin to take up this cause (and you will hear about them in this column).

Now it is time to turn our attention to the other great change we must bring about—guaranteed employment for all. And with that new civil right will come new civil responsibilities. More about that in our next posting.
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1 Living Wage Calculator, from Pennsylvania State University, accessed September 6, 2010.
tags: Poverty

Ending the Great Recession

Sep 04, 2010
Another respected voice has been raised in opposition to the growing income inequality in our country.1 On the eve of another disappointing jobs report, when the official unemployment rate rose another tenth of a percent (to 9.6), former Secretary of Labor Robert Reich warns that “None of the standard [economic] booster rockets are working,” not low interest rates, cheap money, the stimulus, or tax credits for new hires.

The real problem, says Reich, is “the structure of the economy.” Consumers have run out of buying power, having seen flat wage increases since the exalted Reagan Revolution: “The median male worker earns less today, adjusted for inflation, than he did 30 years ago.” They can only make a car, a handbag, a basket of apples, so cheap, and you will still not be in a position to buy them if you are earning at a 1980 level, you have maxed out your charge cards, and your house, which you borrowed on during the years they convinced you its value would never decrease, is now underwater.

Meanwhile, no power on earth seems capable of slowing the transfer of wealth in the U.S. from the poor and middle class to the super-rich top one percent, who have gone from earning 9 percent of the nation’s total income in the late 1970s to 23.5 percent in 2007. Yes, that is one percent of the population earning nearly a quarter of all national income.

Reich takes his lesson from the Great Depression and its aftermath: “[T]here is only one way back to full recovery: through more widely shared prosperity.” In other words, through a redistribution of wealth, the sort of thing made possible in the 30s and 40s by the New Deal programs, a healthy labor movement, the G.I. Bill, and social legislation that attacked inequities in civil and voting rights. However, most of these and other such programs are still in place, and yet our wealth continues to flow up to the very few, abetted by a bought-and-paid-for political establishment.

The problem with Reich is that his recipes for relief seem paltry and all-too-easily belittled, besieged, and dismissed in the present political climate: Increasing the income tax credit, raising the ceiling on Social Security contributions, extending educational opportunities at both ends of the school career, compensating the underemployed with something he calls “earnings insurance.”

Like the stimulus and other measures floated to little or no effect so far, these ideas seem doomed to failure. In my view, we need a recall to democracy, where all for one and one for all is recognized as the only way for all to thrive.

A two-plank platform can get us there: 1) Guaranteed employment at 2) a living wage. Next time, I will get back to what I think that living wage should be.

See also two enlightened columns2,3 from yesterday’s Huffington Post.
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1 How to End the Great Recession, by Robert Reich, from the NY Times, September 2, 2010, accessed September 3, 2010.
2 Neo-Progressives, by Lawrence Lessig, from the Huffington Post, September 3, 2010, accessed September 4, 2010.
3 Why the Big Lie about the Job Crisis?, by Les Leopold, from the Huffington Post, September 3, 2010, accessed September 4, 2010.
tags: Poverty

A Living Wage, Part 1

Aug 28, 2010
So what is a living wage (LW)? I am happy to let anyone establish that figure, if they are willing to live on it for the next two years. Hands? Well, all right, we will have to arrive at an LW by a different path.

Pennsylvania State University has developed a Living Wage Calculator1 which is probably as good a place to start as any. They provide living wages for a single adult, an adult with one dependent, two adults, two adults with one dependent, and two adults with two dependents. In a drastically overpopulated world, I would argue that we need not go beyond these numbers in our guaranteed LW. If you want to burden the world with six children, you had better be prepared to pay the price.

In my neck of the woods (Windsor County, Vermont), the LW for a single adult is $8.38, $1.13 more than the federal minimum wage and $.32 more than Vermont’s more generous minimum wage. An LW for an adult supporting a spouse and two children is $25.38 per hour, $18.13 more than the federal minimum wage and $17.70 more than Vermont’s minimum. At that level, the difference in the shortfall between the two is negligible.

Which brings us to our first practical problem. What is to keep employers from favoring hiring single adults without children if we establish these living wages based on marital and dependent status? What employer would not rather spend $8.38 than $25.38 per hour on an employee? And from the other point of view, would not the prospect of a significantly higher wage motivate many to have children who would otherwise not want them and who, consequently, probably shouldn’t have them?

I will propose one solution to this conundrum in my next posting. Follow me on Twitter to find out when that will be.
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1 Living Wage Calculator, from Pennsylvania State University, accessed Aug 28, 2010.
tags: Poverty

A Modest Proposal

Aug 22, 2010
Among thoughtful observers, a consensus seems to be forming regarding the only way out of the nasty mess(es) we are in, and that consensus is jobs. We need to put people back to work, and fast. Read the essays by Bob Herbert and Bob Burnett linked on this month’s Noted with Interest for starters, then search "jobs" in Google News for the past 24 hours and read many more.

Employment, in my view, should be a right, embodied in a constitutional amendment, along with the other rights we hold so dear.

The right of all adults to have a job and to be free from the vicissitudes of unemployment can and should be realized in this country, though to do so will require a sea change in our attitudes and a huge shift in priorities, away from a government of, by, and for corporations and back to a government of, by, and for the people—that is, back to a democracy instead of the corporatocracy which now controls our nation, our state and federal governments, and you and me.

We are a rich nation only at the very top of income levels. Otherwise, we are a poor country that is getting poorer under the thumb of the corporatocracy. Over thirteen percent of Americans—39.8 million of us—lived in poverty in 2008 and that number has gone up since then.1 This includes nearly one in five children, the highest rate of childhood poverty—by far—in the industrialized world.2

An essential step before guaranteeing employment for every American adult is to ensure that those jobs will pay a living wage.3 The federal minimum wage, forty years ago, was not even close to a living wage and today it is significantly further from one. It is past time to acknowledge that it is immoral to accept an adult worker’s full-time labor and pay that worker less than a living wage. It is immoral, and it ought to be illegal. So this is step one on the road to full employment—every job in America must pay a living wage.

In my next post, I consider what should be included in computing a living wage. Meanwhile, click on footnote #3 to find out what a living wage is in your state (according to one university’s calculations), and footnote #4 to find out your state’s current minimum wage.4 The federal minimum wage, below which states are not allowed to fall, is $7.25 per hour.
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1 U.S. Census Bureau, accessed Aug 22, 2010.
2 Safety nets for children are weakest in US, from UNICEF, accessed Aug 22, 2010.
3 Living Wage Calculator, from Pennsylvania State University, accessed Aug 22, 2010.
4 List of U.S. minimum wages, from Wikipedia, accessed Aug 22, 2010.
tags: Poverty

Up from Slavery

May 12, 2010

A recent daily quotation from the upper right-hand corner of this page was from FDR, and it read:

The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have too little.

This is, in a way, the only message of All Together Now. We are an advanced society, with wealth to spare and all the comforts of modern life, yet we are confronted with challenges that cannot be overcome without wide agreement and cooperation on many issues. Our first imperative, indeed, our only imperative, is to arrange our society in such a way that everyone who today has too little has enough. Instead, we are hellbent in the opposite direction, with fewer and fewer hoarding more and more, and with more Americans falling into poverty every year.

Make no mistake, the plutocrats have their hands in your pockets bigtime. What started with the Reagan Revolution thirty years ago has accelerated into a massive transfer of wealth from the middle class to a tiny plutocracy at the top, where in 2007 one percent of the American population owned 35% of the nation’s wealth, and the top 20 percent owned 85 percent of it, leaving 15% for the bottom 80 percent. And in terms of strictly financial wealth, which leaves out home equity values, the bottom 80 percent have only a seven percent share in the pie. And those numbers have gotten consistently worse since 1980, except for a brief respite during the Clinton administration.1

How has it happened? Primarily through the exploitation of disaster capitalism, so brilliantly explicated by Naomi Klein in The Shock Doctrine: The Rise of Disaster Capitalism. The Asian tsunami, Katrina, 9/11, the world economic collapse of 2008 now wending its crippling way through Europe, all have been grist for the mill of the disaster capitalists. They have used every tragedy to press forward with the neo-liberal agenda of privatization, warmaking, and an all-out assault on social equity programs.

It would be one thing if the 2008 global collapse lowered all boats in anything like equal measure. It did not. It is estimated that there has been an astounding 36.1 percent drop in the wealth of the median household since the peak of the housing bubble in 2007, while the wealth of the top 1 percent of households dropped by just 11.1 percent.1 In other words, the economic collapse was just another disaster in aid of a huge transfer of wealth to the top.

Two more sobering statistics: 94 percent of the wealth created between 1983 and 2004 went to the top 20 percent of the population, the bottom 80 percent receiving only six percent. And in Europe, the ratio of executive/CEO pay to factory worker pay is about 25:1. In 1960 in the U.S., that ratio was 42:1; in 2000 it reached its high of 531:1. That is $531 paid to a CEO for every dollar earned by the one doing the actual work. This is not social injustice; this is brigandage.

Read the front page tomorrow, and see if more than half the stories there don’t, in the end, come down to some scheme that will end up diminishing the wealth of the poor and middle class while enriching the multi-billionaires who are destroying our world and our society. The Wall Street “crash,” that brought windfall profits and obscene bonuses to the executives who caused it; the oil spill in the Gulf that has destroyed thousands of small businesses, wreaked havoc on a large chunk of the American environment, and brought the company that built the rig $270 million in insurance profits2; the euro crisis in Greece that is being used to justify an assault on poor and middle class wages, pensions, and social services3,4; endless wars that empty the public coffers, bankrupting our children and grandchildren while filling the pockets of private enterprise profiteers with our hard-earned treasure. The list goes on and on.

It will end. It will end at the ballot box or it will end in the streets. But it will end. Let us hope it ends at the ballot box where, indeed, it still can end, our current crop of despicable politicians notwithstanding. We still have the power. We must wake up, organize, and take back our country. There are worthy organizations working toward that end, many of which have been mentioned on this site. However, our work starts with the neighbor next door, down our street, in our communities. Find your kindred spirits. Meet, discuss, plan, and act. You have nothing to lose but your chains.

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1 Who Rules America?, by Professor G. William Domhoff, Sociology Department, University of California at Santa Cruz, September 2005, updated April 2010, accessed May 10, 2010.
2 Rig firm’s $270m profit from deadly spill, by Danny Fortson, from the TimesOnline (UK), May 9, 2010, accessed May 12, 2010.
3 Greek cabinet discusses pension and wage reform as civil service strike looms, from the AP, Feb 9, 2010, accessed May 12, 2010
4 Euro-Bankers Demand of Greece, by Michael Hudson, from Eurasia Review, May 11, 2010, accessed May 12, 2010.
tags: Poverty

The Way We Live Today

Feb 27, 2010
Update (Feb 27, 2010): As reported in the Pakistan Daily Times,2 a number of lawyers have allegedly threatened to “burn alive” any lawyer who would dare to defend the family of Shazia Masih. Leaving for the moment why the family should need defending more than the man in whose custody Shazia died, the article points up the hypocrisy emanating from a body which only recently gained worldwide admiration for their brave stand for justice.


Originally published Feb 6, 2010.
She is about 6 in the picture here. She was 12 when she died, probably of a combination of a skin disease, torture, and poverty. She was earning $8 a month—minus the employment agency’s commission—working 12 hours a day cleaning floors, cars, and toilets for a fatcat lawyer, to help her family pay off its debts. Her employer claimed that her 17 injuries “caused by blunt means” were the result of a fall down stairs. The case is pending.

This is how we live today, and if the world can’t manage a massive attitude adjustment, things are going to get worse and worse. Pakistan may “seethe”1 all it wants at the death of Shazia Masih, but Pakistan killed that little girl as surely as if her execution had been inscribed in its nation’s statutes.

All over the world, nations are abusing and exploiting and terrorizing their own. The U.S. not only does it at home, but exports their terror to the entire globe. A small global contingent of fabulously wealthy individuals have co-opted their body politic, and are destroying the golden goose in a headlong dash for more and ever more lucre.

That this world was made for all; that each life is precious and must be nurtured and given every opportunity to make its unique contribution to the future; that poverty, want, and ignorance are eradicable; that vast inequities in income breed violence on a scale the world can no longer afford to contemplate; these are attitudes which the world must adopt or we are doomed.

How far we are from adopting these attitudes is starkly clear in the Times story, the horror of which is repeated millions of times over across the world every day.
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1 Bruised Maid Dies at 12, and Pakistan Seethes, by Sabrina Tavernise, from the New York Times, Feb 5, 2010, accessed Feb 6, 2010.
2 View: Reassessing the lawyers’s movement, by Ayesha Ijaz Khan, Feb 26, 2010, accessed Feb 26, 2010.
tags: Poverty

Compare and Contrast

Oct 14, 2009
Two stories in the NY Times caught my eye today. They brought back the feeling of those old English classes in high school and college where we were invited to “compare and contrast” a pair of literary entities, such as characters in a Dickens novel or the way Fitzgerald and Dos Passos envisioned American in the 1920s.

These stories, by implication, compared and contrasted two modes of contemporary life in the U.S., and without belaboring you with my own two cents’ worth regarding their messages, I will simply link them and encourage you to read them both:

U.S. Pay Czar Tries Again to Trim A.I.G. Bonuses
and
Still on the Job, but at Half the Pay

tags: Poverty

Worlds and Music

NPP Plank 1: A Living Wage

May 31, 2009
It is the lack of money, not the love of it, which is the root of all evil.

In this land of plenty, tens of millions of working adults and their children—possibly as many as one in three or four of us,1 have less than enough for the bare necessities, let alone the “plenty” enjoyed by fewer and fewer of us as time goes by.2 The lives of the poor, like the lives of the most miserable sub-Saharan African, are spent scrambling for subsistence, working harder than the rest of us work,3 and exploited and further impoverished by an economic system that preys on them.4 The poor are an unending burden on the body politic; our health care system; our criminal justice system; and our local, state, and federal social welfare systems.

The first plank in the platform of a new political party (NPP) must address this issue, calling for a minimum wage which is a living wage, realistically indexed by place of residence.1 Until all working Americans are freed from what is essentially a modern serfdom, all our other social and economic ills will continue to plague us.

A more equitable distribution of the existing economic pie will, of necessity, result in less income for those in the top brackets, at least in the short term. Given the enormous gap between rich and poor which has been allowed to develop over the past thirty years,5 this may be looked upon as a correction rather than an attempt to “soak the rich.” In the medium and long term, economic justice and equity will act as a rising tide, lifting all boats to higher levels of fiscal well being.
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1 Poor and Poorer, All Together Now (ATN), Apr 28, 2009.
2 Wage Slave, ATN, Jan 29, 2009.
3 Poor No More; No More Poor!, ATN, Nov 19, 2008.
4 Soaking the Poor, ATN, Sep 4, 2008.
5 Gap between rich, poor seen growing, from CNNMoney.com, Oct 12, 2007, accessed May 31, 2009.
tags: Poverty

Guest Editorial: Alex Tabarrok

May 08, 2009
Perhaps the central theme of All Together Now is our belief that the way to future progress in the world—and away from the divisiveness, animosities, and looming social, political, and environmental disasters we face on so many fronts—is to optimize our human capital. We must free humanity from the shackles of poverty, ignorance, and oppression, not out of altruistic motives but as a survival tactic. We are going to need all the help we can get in the 21st century if our species is to survive, let alone to thrive. As we are now able to end poverty and ignorance and oppression, so we must work tirelessly to do so, liberating billions of minds and bodies to join in our common struggle for survival.

This TED Talk by economist Alex Tabarrok, entitled How ideas trump economic crises—a surprising lesson from 1929, supports and advances our thesis from an economic perspective.
tags: Poverty

Poor and Poorer

Apr 28, 2009
The method our nation uses to define and identify families living in poverty is flawed and obsolete, and, because it radically underestimates the income necessary to purchase basic necessities, it provides misleading intelligence regarding the numbers of our fellow citizens who are without those basic necessities.

A three-page report from the National Center for Children in Poverty (NCCP), entitled Measuring Poverty in the United States, admirably summarizes what’s wrong with the way we measure poverty:

  • The official measure is the same across the continental U.S., even though cost of living varies considerably among the 48 states and between urban and rural communities.
  • The official measure is based on outdated assumptions, one being that families spend about a third of their income on food. Today, that proportion has dropped to around one-seventh.
  • Income is counted before subtracting payroll, income, and other taxes, overstating income for some families.
  • On the other hand, the federal Earned Income Tax Credit is not counted either, underestimating income for other families.
  • In-kind assistance such as food stamps and Medicaid is not counted.
  • Work-related expenses, such as child care and transportation, are not included in the list of basic necessities upon which the poverty levels are based.
NCCP, with guidance from other entities, has produced very conservative budgets which provide more realistic estimates of the needs of families. These budgets assume provision of employer-sponsored health care even though most employers of the poor do not provide health care, and they do not include investments in the future, such as savings to purchase a home or send a child to college. Even without these expenses, which most Americans would consider essential, these budgets indicate that a family requires anywhere from two to three times the amount the federal government says is required to meet basic needs.

The federal poverty threshold for a family of four in 2008 is $21,200. The NCCP figures range from $43,376 for a family of four living in rural Iowa to $67,692 for a family living in New York City.

According to the U.S. Census, almost 24 million Americans in 2006 subsisted on family incomes under $15,0001 (the current federal minimum wage of $6.55 per hour provides $13,624 in gross income to a full-time American worker). Extrapolation from these 2006 Census Bureau figures indicates that over 40 million Americans were then subsisting on less than the conservative NCCP minimum. This was before millions lost their homes and their jobs and everyone saw a significant decline in family wealth after the onset of the recession in December 2007.

It is not unreasonable to estimate from these figures that nearly one in three Americans are, or will soon be, living below an income level necessary to provide basic necessities. Only systemic change, wrought by an attitude adjustment of historic proportions, restoring the people to the center of American governance, can save us.
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1 Income, Expenditures, Poverty & Wealth: Household Income, from the U.S. Census Bureau, accessed Apr 25, 2009.
tags: Poverty

The Least Among Us

Apr 07, 2009

And the King shall answer and say unto them, Verily I say unto you, Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me.
Matthew 25:40 (King James Version)

Arguably, the least of our brethren are our nation’s undocumented immigrants. We currently hold over 30,000 of them in jails, prisons, and other confinement structures, more than three times the number held just 10 years ago.1 They may languish there for months or even years without judicial review, in violation of international human rights standards.

Though every story is different, these people have fled from hopelessness in search of promise. They have braved perilous waters in unseaworthy ships or suffocation in closed vehicles traveling thousands of miles. Once here, they are forced to work for criminal employers at the lowest of wages, live in constant fear of harrassment and arrest without rights or public services, and survive at the mercy of a few friends and dumb luck.

And woe unto them if they are caught. Tossed into a legal gulag of Kafkaesque proportions, they may languish for years without access to representation or the judicial system, far from family and friends, and deprived of the simple due process guarantees we afford any petty criminal. Read Edwidge Danticat’s Brother, I’m Dying for an eloquent and detailed account of the hapless fate of just one of these individuals.2 Read Amnesty International’s report, Jailed Without Justice (.pdf, 662Kb, 56 pp.), to gain a fuller picture of just how far short we as a nation fall that prides itself on welcoming the downtrodden, in our treatment of “the least among our brethren.”
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1 Immigrant Detention, from Amnesty International, undated, accessed Apr 4, 2009.
2 Brother, I’m Dying, by Edwidge Danticat, at Amazon.com, accessed Apr 4, 2009
tags: Poverty

Enlightening Our Self-Interest

Feb 10, 2009

Myth: we have to save the earth. Frankly, the earth doesn’t need to be saved. Nature doesn’t give a hoot if human beings are here or not. The planet has survived cataclysmic and catastrophic changes for millions upon millions of years. Over that time, it is widely believed, 99 percent of all species have come and gone while the planet has remained. Saving the environment is really about saving our environment—making it safe for ourselves, our children, and the world as we know it. If more people saw the issue as one of saving themselves, we would probably see increased motivation and commitment to actually do so.
—Robert M. Lilienfeld, management consultant and author (b. 1953), and William L. Rathje, archaeologist and author (b. 1945).
This self-evident reminder is apparently not so self-evident to many. Or perhaps the real problem lies in perspective. We live our individual lives in the short term, whereas the life of our species is lived in the long term. And what satisfies exigent needs is often—possibly even usually—harmful in the long run.

The first farmers who planted a crop certainly found it preferable to going after a sabre-tooth tiger with a sharp stick for their dinner. Little did they know that introducing agriculture would lead to overpopulation, green revolutions, and factory farms that led to more overpopulation, genetically modified seed that led to yet more overpopulation, until, facing, by midcentury, the prospect of 9 billion human souls sharing a fragile planet with a rapidly diminishing host of fellow creatures, things began to seriously fall apart.

Understanding the ramifications of the long term should help us adjust our actions for the short term. And this will bring us to the understanding that our self-interest lies in maximizing the well-being of all human beings who share this overburdened globe with us.

Improved circumstances lead to fewer children, and overpopulation remains the prime challenge which the human species must overcome, and one which by itself is responsible for most of the other crises we face. Now that the western world has conquered the basics—clean water, safe food, decent education and health care, and a consensus on the need for a sustainable economy—it is time to extend these benefits worldwide, for the sake of our own survival.

If we focus only on our individual short-term well-being, we will fail to acknowledge the gathering tsunami of ignorance and want which in time will overwhelm us.
tags: Poverty

Wage Slaves

Jan 29, 2009
“Slow or negative economic growth, combined with highly volatile prices, will erode the real wages of many workers, particularly the low-wage and poorer households. In many countries, the middle classes will also be seriously affected.” So concludes the International Labour Organization, the U.N. body that “is devoted to advancing opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity.”

Their first Global Wage Report 2008/09, Executive Summary (.pdf, 4 pp., 63Kb) paints a bleak world picture for us wage slaves, and one which we would do well to anticipate and struggle against by lobbying our governments to establish living minimum wages and to secure and extend our rights to collective bargaining. Among the report’s conclusions and recommendations:

  • 2009 wages will decline by .5 percent in industrial countries.
  • Levels of minimum wage should be increased wherever possible.
  • Between 2001 and 2007, real wages grew close to 0 percent in the U.S.
  • Wage growth has trailed GDP growth and is continuing to decline (i.e., the profits are going elsewhere).
  • Wage inequality (the difference between the highest and lowest wages) is growing most rapidly in the U.S., Germany, and Poland.
  • In most countries, women’s wages still amount to only 70 to 90 percent of men’s and the gap is closing very slowly, if at all.
Inequity in anything—education, income, health care—can only lead to trouble. And raging, enormous, inhumane inequity, as practiced in the U.S., wastes our most valuable capital, our human capital, and can only lead to social cataclysm.
tags: Poverty

Poverty Redux—America’s Children

Dec 29, 2008
Yesterday, we addressed poverty in America in general terms. When we focus on children, the situation is considerably more bleak.

The Children’s Defense Fund, in its State of America’s Children 2008 Report (.pdf, 80 pp., 807Kb), provides a damning indictment of our treatment of our children. Its Highlights (.pdf, 2 pp., 139Kb) provide numbers which ought to enrage and awaken every American to action:

  • America lags behind almost all other industrialized countries on key child indicators.
  • We are the worst among industrialized nations in relative child poverty, the gap between rich and poor, teen birth rates, child gun violence, and the number of imprisoned persons.
  • An American child is born into poverty every 33 second, and 5.8 million live in extreme poverty.
  • 8.9 million children are uninsured and every 18 minutes a child dies before its first birthday.
  • The average cost of child care in two-thirds of the states is greater than the annual tuition at a four-year public college.
  • Head Start and Early Head Start enroll only a fraction of eligible children (50 to 66 percent and three percent respectively).
  • Though white and black teens are about equally likely to use drugs, black juveniles are arrested twice as frequently for these offenses and are incarcerated at five times the rate of whites.
We may have more billionaires than anyone else, but we are 25th in infant mortality and in 15-year-olds’ math scores. Sixty percent of our high school graduates do not read at grade level, and only the U.S. and Somalia—Somalia!—have failed to sign the U.N. Convention on the Rights of the Child.

“Give me the child for seven years,” the Jesuits have been quoted as saying, “and I will give you the man.” Give up a child to hunger, poverty, ignorance, and violence during its formative years, and at 18 what sort of emancipated adult can we expect to unleash upon the public?
tags: Poverty

Table of Contents

Poverty in America

Dec 28, 2008

Because it is likely politically infeasible to revise the current poverty measure in a way that results in substantially higher poverty thresholds or rates, the first criticism should be addressed by adopting a new basic income adequacy standard, one that is not labeled a poverty measure.1
In other words, since it is politically inconvenient to call a spade a spade, let’s call it a manual fill relocation instrument instead. If we adopt enough euphemisms, we might be able to eliminate poverty altogether in this country.

Perhaps we are being too hard on a report just published by the Center for Economic and Policy Research (CEPR) entitled Measuring Poverty and Economic Inclusion: The Current Poverty Measure, the NAS [National Academy of Sciences] Alternative, and the Case for a Truly New Approach (.pdf, 47 pp., 918Kb), by Shawn Fremstad.

However, the report does seem to come up with some odd conclusions out of the blue, e.g., “To be consistent with public opinion, an at-risk-of-poverty or economic-inclusion standard should be set at roughly 60 percent of median income.”2 Why 60 percent? Why not 55 or 65 percent? How can this method be justified in a period (such as the present) when median income is arguably decreasing, with members of the middle class falling into poverty every day? And why should a poverty threshold be set relative to others’ median income rather than to a precise figure, adjusted for geographic differences, below which an income is inadequate to provide the necessities of life?

The report is nonetheless worth reading, if only to understand how poverty has been measured over the years, and to appreciate the agonizing contortions our government has gone through over the years to minimize the number of poor we acknowledge in our society. The bottom third of workers in the U.S. fall below poverty—excuse us, economic-inclusion—levels. That is one out of three, not one out of ten or one out of fifty—numbers which a fabulously wealthy country might actually be proud of.

And the report’s “bottom line” is stark and unambiguous: “[B]oth the current and [proposed] poverty measures are set far below the minimum amount that most Americans believe is needed to ‘get along’ in their local communities.”3 In other words, things are even worse than we have acknowledged.
____________________
1 Measuring Poverty and Economic Inclusion, p. 3
2 Ibid.
3 Op. cit., p. 4
tags: Poverty

Table of Contents

No Child Left Hungry

Dec 06, 2008
One of the themes emerging from All Together Now is the pragmatic basis of the Golden Rule. It is to our advantage that we treat others as we would be treated. To treat them less well, to refrain from relieving them of their poverty, ignorance, or disease when it is within our power to do so, works to our immediate, ongoing, and serious disadvantage.

The Progressive Policy Institute knows whereof we speak. In one of their latest “Memos to the President,” Ending Child Hunger in America (.pdf), by Joel Berg and Tom Freedman, their recommendations are firmly grounded in the logic of our first paragraph. The bad news:

  • One in six children in America live below the poverty line.
  • Food prices increased four percent in 2007, over one and one-half times the annual average in the previous 15 years.
  • Eighty-four percent of food banks were unable to meet demand in 2007, with increases in clientele as high as 20 percent.
  • Food insecurity costs us $90 billion a year in lost productivity, health care costs, and substandard educational performance.
Their five recommendations to end child hunger in America:
Provide all children with a free school breakfast
Only one in five children eligible for free school breakfasts actually receive them, for a variety of reasons. Feed all the children instead. The benefits are many and the results (already tried in some districts) are astounding.
Improve program efficiency and accountability
There is a plethora of food-related federal programs that could be combined, resulting in a more efficient and inexpensive system that would reach more eligible families.
Support working families
“One of the best ways government can help working families is to make sure that work pays a decent wage.” Hear, hear!!
Reward best practices in the states
Reward these testing grounds with cash bonuses for the most effective programs to reduce child hunger, prompting a competition across all 50 of them.
Provide real ammo to the armies of compassion
They are out there, in the trenches, and in touch with where the need is highest. Partner with these secular and religious-based groups; they will be the soldiers who will win your war against childhood hunger.
An admirable goal: No hungry child in America ever again following an Obama administration.

Admirable and eminently achievable.
tags: Poverty

Poor No More; No More Poor!

Nov 19, 2008
We’re sorry, but we’re going to keep harping on poor people until we get rid of them.

Poor people cost us money. When they get sick, they jack up our health insurance premiums with their uninsured visits to emergency rooms; when desperation drives them to crime, they fill our overfull prisons; they are responsible for scores of expensive local, state, and federal safety-net-type programs, from food stamps to SCHIP to WIC to you-name-it; and too many of them vote Republican which, as we know, costs us all real money.

A short report from the Working Poor Families Project entitled Still Working Hard, Still Falling Short explodes many of the myths surrounding working poor families, and reports how their numbers have skyrocketed during a period of solid economic growth.

A low-income working family (LIWF) is defined as a married-couple or single-parent family with at least one child under the age of 18 earning less than 200 percent of the poverty income threshold as defined by the U.S. Census Bureau. In 2006, that was $41,228 for a family of four. It is worthwhile to remember that the poverty income threshold is higher than a full-time job earns at the federal minimum wage, never mind 200 percent of that threshold. And 22 percent of all jobs, more than one in five, pay less than the poverty income threshold.

  • The number of LIWFs increased by 350,000 between 2002 and 2006.
  • During that period, the economy added 4.7 million jobs paying at the poverty-threshold level.
  • Almost half of all jobs require more than a high school education, and 88 million adult workers are not ready for these positions.
  • Myth: LIWFs are slackers. Truth: The average annual work effort of LIWFs is the equivalent of 1.25 full-time jobs.
  • Myth: LIWFs are headed by single parents. Truth: 52 percent of LIWFs are headed by married couples.
  • Myth: LIWFs are headed by immigrants. Truth: 69 percent of LIWFs have only American-born parents.
  • As a Vermonter, we are proud to see that Vermont ranks number 1 in income equality between the top and bottom income quintiles.
Although many states are implementing innovative policies involving skills training and financial aid, we believe the federal government should cut to the chase, end poverty among working Americans overnight, and save us all a ton of money. See our November 15, 2008, item, Double Up and Win for the magic formula.

And once we have money in American pockets and at least a high school diploma on every wall, the Republicans will have to stop relying on the ignorant poor to win elections; return to the core values of the party of Lincoln, T.R., and Eisenhower; and perhaps reclaim a degree of respect within the framework of American politics.
tags: Poverty

Double Up and Win

Nov 15, 2008
Do the math.

$6.55 x 40 hours x 52 weeks = $13,624.

If Obama wants to stimulate the economy, he can do a far better job of it than by sending middle class Americans another rebate check, lowering their taxes, raising taxes on the rich, freezing mortgage foreclosures, paying businesses $3,000 for every new domestic hire, or bailing out General Motors. These are all ideas that have been floated recently and it is not to say that some of them aren’t excellent ideas that should be implemented on January 21, if possible (others aren’t and shouldn’t). However, we have an even better idea. On top of immediately infusing a big percentage of the work force with some disposable income, our idea will right a long-standing wrong and eliminate working class poverty in America overnight:

Double the federal minimum wage.

It is immoral to pay a full-time worker less than a living wage. This is the meaning of 1 Timothy 5:18: “For the Scripture says, ... ‘The laborer is worthy of his wages.’”1

For additional statistics regarding the minimum wage, poverty thresholds, and a living wage, click the Poverty or Economics tags in the left-hand column.

We can fiddle with the obscene wealth of the top one percent and fuss with bailouts and middle class tax cuts until the cows come home. But if we want to take a giant step toward redistributing wealth appropriately in this country, we should start by respecting the value of our labor. It matters not whether you flip burgers, clean toilets, or manage a hedge fund. Full-time labor is worthy of a living wage, and the 25 percent of the population currently earning less than that—yes, one out of every four workers!—should demand it, and those of us earning more should stand in solidarity with them.

Anything less in the richest country in the world is bad politics, bad governance, and just plain wrong.
____________________
1 Parallel Translations, at Biblos.com, quoting the New American Standard Bible. See also Matthew 10:10 and Luke 10:7.
tags: Poverty

Cities on the Hill

Oct 15, 2008
Our salvation, if we are to be saved, will rise up from the people, and will not trickle down from above. With a new administration on the horizon—whoever wins—that will retain the old links to their corporate masters, that will mortgage our future to its stubborn tunnel vision of dependence on military might, that will continue to erode constitutional rights in the name of national security, the time has come to begin the restructuring of our political system from the ground up.

It is therefore heartening to discover that lower levels of our governance structures—our state houses and municipal offices—are keenly aware of the problems we face and of their responsibility to take part in their amelioration. The National League of Cities, a lobbying organization representing 19,000 cities, villages, and towns, has published a report, Poverty and Economic Insecurity: Views from City Hall, revealing “that ninety percent of municipal leaders surveyed said that poverty has either increased or stayed the same in their cities over the past decade.”

The famous “War on Poverty” declared in the mid-sixties has been lost, as have our other wars launched since then. With a current poverty rate (12.3 percent) scarcely two points lower than at the “war’s” beginning (14.2 percent), and that based on outmoded calculation parameters which, if modernized, would almost surely indicate higher levels of poverty today, action needs to be taken on all levels to end this national disgrace. Happily, city leaders are taking responsibility:

  • Eight in ten municipal officals (81%) believe taking action to reduce poverty is a responsibility of city government.
  • Three in four city officials (75%) express interest in becoming a municipal leader on poverty.
  • Unhappily, three in four officials think poverty levels in their city will increase (43%) or stay the same (33%) over the next decade.
  • Over 70 percent say the Federal Poverty Threshold (which sets $17,170 as the threshold for a family of three) is higher in their cities, 30 percent saying it is $30,000 or higher.
  • Poverty, say most officials, is concentrated in single-parent families (73%) and confined to certain neighborhoods (65%).
  • When asked what strategies could work to alleviate poverty in their cities, and which of those strategies were their cities in a good position to implement, it is interesting to note the the most popular strategy (91%) was creating better lives for the next generation by improving schools, although only 57 percent felt this strategy was within their city’s capacity.
  • Effective strategies that were within their cities’ capacities were economic development to bring more jobs (89%/89%) and improving neighborhoods by making them safer, enhancing services, and improving infrastructure (86%/88%).
  • “While only three percent say the city has a comprehensive strategic, municipal plan to address poverty, a much larger proportion (28%) says this would be the most effective approach for their city.
Regarding their chances for re-election, only one percent of elected officials felt reducing poverty was the most important factor, while 68 percent felt that bringing about economic development was. To us, they are inextricably linked, together with a determination to see an end to the myriad social inequities that have stalled the war on poverty from its very inception.
tags: Poverty

The End of Poverty

Oct 04, 2008
First things first. For adults in America, that means a living wage for full-time work.

The Department of Health and Human Services (HHS) says that in 2008 if a family of four earns less than $21,200 they fall below the poverty threshold.1 Twenty-five percent of American workers earn less than that. So the first thing we need to do is raise the minimum wage for the primary wage earner in a household containing up to four members to at least $10.50, increasing it automatically each year by an amount reflected in the Consumer Price Index or the HHS’s Poverty Threshold, whichever is higher.

The minimum wage for secondary and tertiary wage earners in the household (the spouse and a teenage child, perhaps) can then be set at a lower rate, the tertiary perhaps as low as the current minimum wage of $6.55 per hour ($13,624 per year).

Adjustments in the minimum wage for smaller households could also be made. Whether higher minimum wages should be allowed for larger households would be a matter for debate. We believe no one should have more than two children at a time when the world is suffering from the strains of serious overpopulation. Consequently, we would not favor setting a higher minimum wage for households containing three or more children. Adjustments might be made for households containing adopted children or ones where elderly relatives are being cared for.

By setting a “living” minimum wage, most government programs supporting the poor (food stamps, Medicaid, SSI, WIC, school lunch, etc.) could be significantly reduced or suspended altogether, saving enough to perhaps provide some tax relief to employers faced with higher wage requirements.

Many of these statistics may be found in Low-Wage Workers in the United States: Status and Prospects, a September 2008 report from the Urban Institute.

The recommendations above would end poverty in America, at least for working Americans. We owe them—we owe ourselves—no less.
____________________
1 The 2008 HHS Poverty Guidelines (Accessed September 28, 2008)
tags: Poverty

2015? 2050? Ever?

Sep 20, 2008
In a unique and heartening display of unanimity and cooperation, the nations of the world came together in 2000 and signed the United Nations Millennium Declaration, pledging to “spare no effort to free our fellow men, women, and children from the abject and dehumanizing conditions of extreme poverty.”1 Their blueprint for ending world poverty by 2015 consisted of eight goals:

  • Eradicate extreme poverty and hunger
  • Achieve universal primary education
  • Promote gender equality and empower women
  • Reduce child mortality
  • Improve maternal health
  • Combat HIV/AIDS, malaria, & other diseases
  • Ensure environmental sustainability
  • Develop a global partnership for development
Stunning successes have been met with in some countries for some of the goals, and they are all laid out in the Millennium Development Goals Report 2008. Progress is shown in almost all areas, though most often not enough to reach the target levels set for 2015. Poverty is down; the numbers of children enjoying at least a primary education are way up; childhood deaths from measles were reduced by two-thirds between 2000 to 2006; and some 1.6 billion people have gained access to safe drinking water since 1990. In the less dramatic, although perhaps even more important, economic sphere, the share of developing countries’ export earnings devoted to servicing external debt fell from 12.5 percent in 2000 to 6.6 percent in 2006, and mobile phone technology has spread rapidly throughout the developing world.

Predictably, the least progress has been shown in areas affecting women. Half a million prospective mothers die annually in childbirth or of complications from pregnancy. Women are drastically underrepresented in government. Most employed women are in vulnerable jobs or are unpaid family workers. Additionally, sub-Saharan Africa is a virtual basket case, where the primary goal of reducing poverty by one-half by 2015 will almost surely not be met. The area also shows much slower progress meeting the other seven goals. And carbon dioxide emissions have continued to increase, despite the clear and present danger they pose.

“The single most important success to date has been the unprecedented breadth and depth of the commitment to the [Millennium Development Goals (MDGs)].”2 Therein lies our greatest hope. The MDGs are a framework around which we can coordinate a full-court assault on the perils that face life on earth. Increasingly, governments, foundations, NGOS, and civil societies are rallying around that framework. Perhaps by 2015, even if those goals are not met, we will have crafted an alliance which—all together now—can meet those goals in a generation or two.
____________________
1 Millennium Development Goals Report 2008, pg. 3
2 Op cit., p. 4
tags: Poverty

Soaking the Poor

Sep 04, 2008
Do you want to know what it’s like being poor in America? It’s borrowing on the value of your next paycheck, and paying a 36 percent annual interest rate on the loan, if you’re lucky, and 500 percent and up if you’re not. It’s hocking title to your car for thirty days on the same handsome terms and losing it if you miss a payment, even if your vehicle is worth twice what you borrowed on it.

A recent study from the Consumers Union, the National Consumer Law Center, and the Consumer Federation of America lays it all out for us. They graded the 50 states on their laws regarding four “Short Term Loan Products,” which is what poor people live on from paycheck to paycheck. The states are left alone by the federal government in setting interest rates and other terms for these loans, which typically vary from $250 to $1,000.

The annual percentage rate (APR) on many of these loans is 36 percent, a cap common in state law and one recently endorsed by Congress for certain loan products extended to active-duty service members. However, many states have significantly higher APR caps or no cap at all. The Scorecard1 produced by the consortium of consumer groups gives a Pass or a Fail to four products: A two-week, $250 loan (often called a “payday” loan); a one-month, $300 auto-title loan; a six-month, $500 installment loan; and a one-year, $1,000 installment loan. If the states have a criminal usury law, the Scorecard also graded that law. The criterion used for grading these loans was whether the APR caps were 36 percent or below (Pass) or above 36 percent (Fail).

I live in Vermont and work in New Hampshire, so those two states were of particular interest to me. Vermont receives a passing grade in all five areas; it prohibits the first two types of loans and caps interest on the installment loans at 24 percent. New Hampshire, the “Live Free or Die” state, is a different matter. They fail all four loan categories, which have no APR caps at all, and were not graded on their criminal usury law because they don’t have one. This is arguably better than Missouri, where the cap on a $250 payday loan is 1,955 percent.

The “Show Me” State? They should call it the “Screw Me” State.

Find out at the link below the extent to which your state punishes the poor for being broke.
____________________
1The Scorecard (.pdf). (Accessed August 30, 2008)
tags: Poverty

Let Us Now Praise ... Paul Farmer

Aug 31, 2008
You can read about him on Wikipedia, but you’d do better to pick up a copy of Tracy Kidder’s book, Mountains Beyond Mountains.

Forty-nine-year-old Paul Farmer is the co-founder, and moving spirit behind Partners in Health (PIH), a worldwide movement dedicated to providing health care for the poor. From hands-on labor as a physician in Haiti, providing care to the poorest citizens of the poorest country in the western hemisphere, Dr. Farmer developed a model for effectively providing care to the poor around the world. PIH now works in Haiti, Peru, Russia, the U.S., Rwanda, Lesotho, Malawi, Mexico, and Guatemala.

Their vision statement is quite remarkable all by itself:

At its root, our mission is both medical and moral. It is based on solidarity, rather than charity alone. When a person in Peru, or Siberia, or rural Haiti falls ill, PIH uses all of the means at our disposal to make them well—from pressuring drug manufacturers, to lobbying policy makers, to providing medical care and social services. Whatever it takes. Just as we would do if a member of our own family—or we ourselves—were ill.
From one man living in the mountains of Haiti and bringing aid to sufferers who would otherwise die unnoticed and unmourned, PIH has grown into a $50 million miracle that is showing the world how to deliver world-class health care to its most abject and needy citizens. They do it by working together, forging partnerships with local community health workers, nurses, doctors, administrators, sister organizations, NGOs, local and national governments, and funders.

For his instinctive compassion for his fellow human beings, for the bravery and generosity which has led him to dedicate his life to the neediest, for the brilliance with which he has built a global enterprise and peopled it with individuals as committed, capable, and dedicated as he is, we award Paul Farmer our third “Golden A” for Achievement.
tags: Poverty

Read the History of Partners In Health

A Half a Million Cheers for Peru!

Aug 21, 2008
That’s how many computers Peru is purchasing, then distributing to the poorest of their poor children throughout the country. They’re the first, biggest, and most important testing ground for Nicholas Negroponte’s One Laptop Per Child (OLPC) program. Peru will spend about $80 million on these systems, each of which will contain a rich variety of application programs, books, games, wireless connectivity to other OLPC’s and Internet connectivity as well.

Before the Luddites remind us how it takes more than technology to improve education, be aware that the children who will receive these computers hardly even have schools. They have no books or other equipment, their teachers are not much better educated than they are, and their lives have little or no scope beyond the confines of their remote villages. The world holds its breath in anticipation of what may be wrought by this effort.

The government of Peru is to be highly commended for its vision, its generosity, and its daring. Success is by no means guaranteed, and the Luddites are right when they say that throwing technology at a problem does not solve it. But “the Internet Changes Everything,” and computers hold the potential to revolutionize the education of the masses to the same degree as did the invention of the printing press, and perhaps to an even greater degree.

So let the games begin!
tags: Poverty

Read the Full Story in Technology Review (free registration required)

The Trouble with Kiva

Aug 12, 2008
Kiva is an organization that manages a web site for soliciting donations from “social investors” to third-world entrepreneurs, and funnels those donations to the microfinance institutions (MFIs) which disburse the funds and receive the payments back from the entrepreneurs. Kiva’s mission is “to connect people through lending for the sake of alleviating poverty.” They currently list 101 MFIs, which they call “Field Partners,” on their site.

The site is full of information regarding donors and the individuals seeking loans to start or support small, often family-run, businesses, and Kiva makes it easy for donors to find and fund entrepreneurs they wish to support. The extent of activity on the site is made clear by statistics Kiva provides. In one recent week, $631,600 was lent out; 1,479 entrepreneurs were funded; 2,766 new “lenders” joined Kiva; 8,295 “lenders” made a loan; and 555 loans were repaid. Though not as world-shattering as one might hope, this level of activity is nonetheless admirable. We have been a member of Kiva, and regular donor, since April 2007.

We use the word “donor” and put the word “lender” in quotation marks because that is one of the problems with Kiva. Those of us whom Kiva calls “lenders” aren’t, because lenders expect a return on their loan and we don’t get one. If a borrower pays back a loan which we helped with (and a remarkably high number—99.7 percent to date—do), all we get is the amount of our contribution back, which we are then encouraged to contribute to someone else. This, of course, is contrary to the point of making loans, which is to risk capital in the expectation of improving upon it. The MFIs receive the interest on the loans—the average rate, according to Kiva, is 21 percent—but the lenders do not (nor does Kiva). Furthermore, our donations are not tax-deductible. We therefore become what Kiva calls “social investors,” people who support this initiative for altruistic motives.

This fact is not made very clear on Kiva, another problem with the site. The “About Lending” section of the Help Center doesn’t mention it, and one would expect it would be there. It is found toward the bottom of the “How Kiva Works” section, where, in answer to the question, “Do I get interest on my loan?,” Kiva simply says by way of explanation, “No, loans made through Kiva’s website do not earn any interest ... Providing interest to our lenders is legally complex. However, we may provide this option in the future in accordance with U.S. law and regulations.” We hope they do, and soon. The repayment rate is high enough to make these extremely attractive investments, and we would increase ours in Kiva severalfold if we had the opportunity to earn as much as we could get on a 12-month CD.

Although Kiva claims it “will not partner with an organization that charges exorbitant interest rates,” 21 percent (as an average rate) seems high to us. It does to Mohammad Yunus as well. He is the man who made micro-lending famous (and won a Nobel Prize for it). He has been quoted as saying that MFIs should charge for the cost of borrowing funds plus 10 to 15 percent for operating expenses. His Grameen Bank charges 20 percent interest to borrowers.1 That’s problem #2.

Problem #3 is more intractable. Many borrowers on Kiva are women, and many lenders, acknowledging the dismal, often criminal, treatment of women around the world in general and in the countries Kiva serves in particular, are careful to select female entrepreneurs for their donations. Unfortunately, as we have discovered (Kiva is admirably frank about disclosing borrowers’ stories as they become known to them), the female borrowers are often no more than “fronts” for a male behind the scenes (often a husband or other family member) who actually receives the funds and uses them for purposes other than the stated ones.

Kiva has attempted to gloss over this fact. In a private correspondence in late June 2008, a Kiva Customer Service Manager made the following argument to me regarding this situation:

“It’s important to note that many microfinance institutions will not lend to men, per their mission, and, in instances where women participate in the family business, women will often act as the business manager and point of contact for loans to fund family businesses that they receive through their local MFI. In this capacity they are the ones who complete the loan applications, have the funds disbursed to them, make scheduled repayments, and otherwise administer the loan. Far from a position of indignity, this gives the women in the family significant power over the family business and a level of participation that some may not ordinarily have. It also helps them to establish relationships with their MFI so that, if they so choose, down the road they can take out a loan to start their own independent business.”
We will quote our response to this in some detail, followed by my conclusions:
I ... discover from your response to my query that such arrangements are common—the woman applies for the loan and is the figurehead recipient, but the funds go directly to the husband. And this is because many MFI[s] will not lend to men! Logic worthy of Lewis Carroll, and a cynical Lewis Carroll at that. And, of course, the people you are relying upon to provide the capital for these loans are not informed of this arrangement.

I want to reiterate a point I made, and a point which I believe many of your [field] partners—who loan only to women—are trying to make: This world is ruled—badly—by men. Women are routinely exploited, oppressed, beaten, raped, and killed by men, and with impunity. Microfinance provides a way out for these women, a means to procure some independence, self-esteem, and empowerment. Many of us believe that liberating and empowering the world’s women provides one possible means of saving a world which is otherwise lost. If our support of these women is to be undermined by deceptive advertising, whether initiated by Kiva or your [field] partners, then we may need to take our money, our hopes, and our ideals elsewhere.

A rather extreme position, you will probably say. And no doubt there are many instances where the woman plays the part you describe in your note and does, indeed, win a measure of respect, value, and independence in playing that part. I suspect there are many more instances, however, where she is simply being used by the males in her family and, in these instances, so are we and, I would think, so is Kiva.

I admire the operation you have put together, and the beauty, comprehensiveness, and utility of your web site. I even admire the frankness which is evident in much of the informational material on the site. However, the problem at issue is not a trivial one, and I am sincerely sorry to say your response has not adequately addressed it.
HOWEVER, let me conclude with the following:

We will continue to support Kiva, to make new loans with the money we have invested to date as our outstanding loans get paid off, and to consider a significant increase in our investment in Kiva if and when they begin to pay interest to investors. And we encourage you to do the same. Warts and all, Kiva is still an admirable service and one which we believe is key to lifting the one billion of the world’s people who live in dire poverty into self-sufficiency and a decent life.

And raising that tide will lift us all.
____________________
1“On Microfinance and Microcredit Investment,” by Greg Casey, on microcapital.org (Accessed August 3, 2008)
tags: Poverty

Read More about Kiva

Who Needs Poverty?1

Jul 26, 2008
Human capital is our most precious resource, and we waste it at our peril. Human capital will solve the energy crisis, cure disease, end global warming, and establish universal justice and peace. And if human capital doesn’t do these things, some other force will, to the everlasting regret of the few of us who survive.

This is why we must end poverty and ignorance throughout the world. Not because it is good or even right to do so—although it surely is both. But because it is essential that we liberate as much human capital as possible, to take on these species-threatening challenges.

So, how do we do it? The United Nations Development Programme has some sound suggestions for ways to begin eradicating poverty. In their report, “Creating Value for All: Strategies for Doing Business with the Poor,” they summarize the product of research based on 50 case studies involving efforts to engage the world’s poor in economic activity, as clients and customers on the demand side, and as employees, producers, entrepreneurs, and business owners on the supply side. Their argument:

[T]he poor harbour a potential for consumption, production, innovation and entrepreneurial activity that is largely untapped. This report ... gives many examples of firms that—by doing business with the poor—are generating profits, creating new growth potential and improving poor people’s lives. The report’s main message: Business with the poor can create value for all.
As a rising tide lifts all boats, finding ways and means to bring the poor into the global economic marketplace will not only raise them from the devastations of extreme poverty, but will benefit the “first world” with new markets, new partners, and newly liberated minds. Freed from the daily exigencies of want, those minds will turn to learning and labor, becoming active contributors to the pool of human capital upon which all our futures depend.

See also the TED Talk with Eleni Gabri-Madhin.
____________________
1Our illustration is taken from the Sydney Morning Herald, July 1, 2005 (Accessed July 23, 2008)
tags: Poverty

Read the Summary and Download the Report

Food Fight

Jul 19, 2008
Forget space. Food is the final frontier.

I picture the last cornfield in Kansas. In its center, the last stalk of corn stands forlornly bearing its last shrunken cob. From the south comes a four-year-old sub-Saharan African, due, in 3.6 seconds, to be the next statistic to die of starvation. From the west comes Dick Cheney’s chauffeur. If he can get his hands on that cob and get it over to the Halliburton Ethanol Refinery in Dubai he’ll be able to transport his boss another 30 yards before they have to abandon their stretch limo. From the east come the billion people who have gone to sleep hungry every night of their lives and who will never enjoy an 18-course meal such as the G-8 “leaders” had on the last night of their recent junket. And from the north, on a tall hill, sit I, sit you, as in our dreams of apocalypse we are the only ones spared, so now we recline on a woolen blanket, a chicken leg in one hand and a cold brewski in the other, witnessing the gala scene playing out below.

The U.S. Department of Agriculture has released its latest report on world hunger, “Food Security Assessment, 2007.” The food and fuel price hikes we’ve experienced lately are the worst of bad news for the 70 lower income countries, where the number of “food insecure” people—those consuming less than the nutritional target of 2,100 calories a day—rose from 849 million in 2006 to 982 million. It is expected that the next decade will bring even worse news.

Largely owing to the U.S.’s efforts, through its surrogate “international” bodies, the World Bank and the International Monetary Fund, indigenous agriculture in many developing countries has been radically altered, and all capacity for self-sustaining food growth subsumed in an economy devoted to mining or the cultivation of one or a few luxury exportables. Expensive imports of basics, especially grain, must then be purchased merely to feed the people in a substandard manner.

From January 2007 to January 2008, global food prices increased 33% and petroleum 70%. Meanwhile the price of minerals—often the principal export of developing countries—actually went down a few percentage points.

We’re looking at massive starvation worldwide in the next ten years, with the accompanying social unrest—even here—that it will bring. We can sit on our hilltops and watch the show, or we can find it in our hearts, and in our self-interest, to do something about it.
tags: Poverty

Read the Summary and Download the Report

Getting Your Goat

Jul 10, 2008
In his July 3, 2008, New York Times column, Nicholas Kristof (one of my heroes) related the wonderful tale of Ugandan Beatrice Biira. Her family received a goat from an international aid group and her life, and the lives of many around her, were thereby transformed. Says Kristof:

Beatrice’s story helps address two of the most commonly asked questions about foreign assistance: “Does aid work?” and “What can I do?”
His column answers the first question, and he expands on an answer to the second in his blog, where he lists a number of organizations and specific projects worthy of our attention and support. I excerpt that list here and recommend you consider doing what Kristof, his parents, and too few of the rest of us do: forego one or two of those Christmas presents this year in favor of supporting the work done by these organizations. The ripple effect could save more lives than the fortunate folks who are the direct recipients of this aid. It could, in time, save us all.

Organizations
Heifer International
This is the organization that supplied Beatrice with her goat. Buy anything from honeybees to heifers for impoverished families abroad.
Plan USA
Sponsor a child for a few dollars a month and help develop the communities in which your sponsored child lives.
Women for Women International
Helps women in war-torn regions rebuild their lives by providing financial and emotional support, job skills training, rights awareness and leadership education and access to business skills, capital and markets. Sponsorships of individuals available, or general donations gratefully received.
Care
Kristof has “enormous respect” for this and the other old and established organizations listed below.
Mercy Corp
“[W]orks amid disasters, conflicts, chronic poverty and instability to unleash the potential of people who can win against nearly impossible odds.
Save the Children
“[W]orking with families to define and solve the problems their children and communities face and utilizing a broad array of strategies to ensure self-sufficiency is the cornerstone of all Save the Children's programs.”
International Rescue Committee
“[A] global leader in emergency relief, rehabilitation, protection of human rights, post-conflict development, resettlement services and advocacy for those uprooted or affected by conflict and oppression.”
BRAC
Kristof: “[A] Bangladeshi-based group that is one of the most successful development organizations in the world and is now taking its approach to Africa.”
GlobalGiving
A aggregator that “connects you to over 450 pre-screened grassroots charity projects around the world. It's an efficient, transparent way to make an impact with your giving.”
World Vision
“[A] Christian relief and development organization dedicated to helping children and their communities worldwide reach their full potential by tackling the causes of poverty.”
Catholic Relief Services
“[T]he official international humanitarian agency of the U.S. Catholic community. We alleviate suffering and provide assistance to people in need in more than 100 countries, without regard to race, religion or nationality.”
American Jewish World Services
“[D]edicated to alleviating poverty, hunger and disease among the people of the developing world regardless of race, religion or nationality. Through grants to grassroots organizations, volunteer service, advocacy and education, AJWS fosters civil society, sustainable development and human rights for all people”
Specific Projects
Edna Hospital of Somaliland
“[S]eeks to fill not only the urgent need for health care but also to provide - in collaboration with the Ministry of Health, UNICEF, and WHO - training for a new generation of nurses and midwives qualified to provide Reproductive Health Care throughout Somaliland.”
The Worldwide Fistula Fund
“[A] public charity organized for the purpose of supporting international medical education and research on the problem of obstetrical trauma in the developing world.”
Heal Africa
“Our mission is to provide holistic care for the people of the Democratic Republic of Congo: training health professionals, strengthening social activists, and providing physical, spiritual, and social healing.”
Apne Aap Women Worldwide
This group in India works in aid of those trapped in the sex industry and to “create awareness in society on discrimination against women and girls, particularly on issues related to sex trafficking, prostitution, sex, sexuality and violence against women and girls.”
Orphans of Rwanda
A guest blogger on Kristof's site, Josh Ruxin, works with this organization that sends Rwandan orphans to university.
There are many other organizations out there doing similar good work to bring health, education, and justice to the world's oppressed and poor. Stay tuned to All Together Now to learn about them. However, this was Kristof's list, and, as he is one of my heroes, I wanted to bring it along to you in one piece and as soon as possible. Sit down with your spouse or significant other tonight, and find one worthy cause to which you can contribute. You know how much better you'll feel when you do.

Still, with all these wonderful organizations hard at work around the world, why is life still so harsh, short, and brutal for the mass of humanity and so full of surfeit for so few? Could these groups leverage their efforts by working more closely together? We think they could.
tags: Poverty

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The High Cost of Poverty

Jun 16, 2008
The Population Reference Bureau (PRB) "informs people around the world about population, health, and the environment, and empowers them to use that information to advance the well-being of current and future generations."

Poor people are expensive. A child growing up in poverty (and there are 13.3 million of them in the U.S. right now) is more likely to be less healthy, have lower educational achievement, and be more prone to get involved in the criminal justice system. This may cost the U.S. economy as much as half a trillion dollars annually. The map in the PRB's page shows "State-by-State Costs of Child Poverty in the U.S." and was assembled by the KIDS COUNT project of the University of Washington's Human Services Poverty Center. See how your state stacks up, and how allowing poverty to flourish in this country is costing you a bundle.
tags: Poverty

Read the Map

Getting the Job Done. Not.

Jun 15, 2008
In 1996, the U.S. and more than 180 world leaders pledged to cut hunger in half in sub-Saharan Africa by 2015. The U.S. Government Accountability Office (GAO), which "supports the Congress in meeting its constitutional responsibilities and helps improve the performance and accountability of the federal government for the benefit of the American people," reports that the 170 million suffering from hunger there in 1990 grew to over 200 million by 2003. The reasons are many, some of which are noted in the Highlights (.pdf) of the GAO’s report, and some of which, including the U.S./World Bank/International Monetary Fund’s predatory practices that are destroying indigenous agriculture the world over, are not.

Whatever the reasons, it would seem 180 world leaders are insufficient to get the job done. Which doesn’t surprise me. They’re all very well fed, and probably haven’t the capacity to imagine what it feels like to miss a meal. Nor have I, for that matter. However, I am told that starving to death is one of the worst ways to go, and we visit it upon the little children of the world with a crassness and an obliviousness that is incredible to behold in a sentient species. Someone starves to death every 3.6 seconds, and three-quarters of them are children under the age of five. Who can say that one of the ten who died while I was writing that last sentence did not harbor in her young brain the secret to unlocking cheap, clean energy that could electrify the world; did not possess the special combination of knowledge, skill, and intuition to finally develop a cure for cancer; or was not blessed with the voice of a Shakespeare, the eye and hand of a Michelangelo, or the compassion of Christ. We cannot afford to do without these people. We cannot afford to waste one young human life. They are our salvation. We must—somehow—become theirs.
tags: Poverty

Read the Full Report (.pdf)

Soldier in the War on Poverty

Jun 08, 2008
The Center on Budget and Policy Priorities is a 501(c)(3) nonprofit organization founded in 1981. They analyze proposed federal and state-level budget and tax policies to ensure that the needs of low- and moderate-income families and individuals are considered in these debates. They design improvements to programs (e.g., Food Stamps, S-CHIP, WIC) to make them more accessible to eligible populations. They manage two programs that help eligible low-income people gain access to two key benefits, the Earned Income Tax Credit/Child Tax Credit, and health insurance for children.

In 1998, the Center was identified as the single most influential non-profit organization in Washington on federal budget policy. Their reports are an invaluable resource for information on federal and state fiscal programs that affect all of us, whether already enacted or under consideration.
tags: Poverty

Go to CBPP's Reports

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