Economy: September 2009 Archives

by Ben Jealous, President and CEO of the NAACP.
Originally published at theGrio.com.

Over the weekend I had the opportunity to share the stage with America's legendary television dad, Bill Cosby. In a town hall forum titled "About Our Children," Cosby and I, along with comedian Paul Rodriguez and University of Wisconsin Professor Maria Cancian, discussed poverty, parenting and the American dream in front of a national audience, broadcast live on MSNBC.

I spoke about my childhood education, as a kid growing up in California. I explained that my county had multiple schools. One, across the county, had resources I needed, while the school closer to my home did not. Because of local zoning law I was assigned to the school closer to home. Even as a child, I knew that I needed to be at the better school. I put up such a fight about it that my parents simply found a way to put me on the bus to the other school. They bent the rules so that I could have a better education.

I shared this story because it is an important example of my family taking responsibility for my education. It is a lesson that I will never forget, and it most certainly put me on the path to where I am today. But the other reason that I chose this anecdote is that it underscores another important reality, one often lost in these discussions of individual responsibility. In order to take control of my education, my family actually had to defy the law. Families often face enormous structural barriers to success, barriers that can impede even the most conscientious, tenacious and, yes, responsible parents.

Here is one example: today black teen unemployment sits at a staggering 35 percent. Think about that figure for a minute. We are not talking about a "jobless" rate here - unemployment figures count only the number of African-American teenagers actively looking for work. In other words, when an involved, responsible parent pushes Junior to go out and find a job, more than one third of the time there is simply no job to be found. This situation is not only discouraging - not to mention financially problematic - but it can actually undermine the parents' authority in the home, because they are promoting a path that doesn't exist. Personal responsibility alone cannot overcome structural impediments.

In American households, the divide between the home and the workplace is always evolving, and immigrants are shaping that evolution more than we know.

Immigrant women workers today form a pillar of the middle-class family. As nannies, housekeepers and other domestic workers, their status is defined by the strangely intimate nature of their work combined with structural discrimination. A new study presents their hidden plight in a new light: as a driver of the advancement of the mothers they serve.

An economic study by Heinrich Hock of Florida State University and Delia Furtado of the University of Connecticut analyzes the immigrant labor market in household services (primarily child care, cooking, and housekeeping) and its impact on college-educated non-immigrant women. Predictably, they found that when privileged women have a cheap source of help at home, they gain freedom in other aspects of their lives.

One reason the government has spent nearly half a century fighting, and losing, the war on poverty, is that it doesn't know where to draw the battle line.

The Center for American Progress recently analyzed the inadequacy of the official poverty line as a gauge for who is really poor in America. Among the biggest problems:

• The thresholds are low.... The poverty line represented nearly 50 percent of median income for a family of four in the early 1960s, but now represents only about 28 percent of median income. So the level at which a family is considered poor has fallen further and further outside the mainstream.
• The thresholds are essentially arbitrary because they simply represent a number calculated more than 40 years ago and then adjusted for inflation, and they no longer represent anything in relation to family incomes or costs.
• The resource-counting rules both understate and overstate resources. They fail to reflect the effects of policies such as refundable tax credits, near-cash benefits such as Supplemental Nutrition Assistance Program (formerly food stamps) or subsidized housing assistance. At the same time, they also do not consider the impact for family budgets of tax liabilities, work expenses, or health care costs.
• The rules make no adjustment for geographical variation despite the large variations in costs across areas and regions of the country.

Philadelphia Mayor Michael Nutter announced that the city is taking out a short-term loan of $250 million from JP Morgan Chase. The loan has a 3% interest rate until December 1st and will go up to 8% thereafter. Nutter is nuts if he thinks that JP Morgan Chase is going to allow him to re-finance the interest rate on this loan before December 1st. Sorry to be the bearer of bad news, but bailed out banks aren't interested in bailing out cities out of the goodness of their hearts.

The loan is going to those vendors that have gone without pay since July. It doesn't cover all of Philly's needs; the city may be forced to close libraries and recreation centers, and reduce trash collections. Now that just stinks!

State lawmakers will be voting on the budget changes on September 8th. Will Philly face a “doomsday budget” if it's not approved? The answer is yes. Philadelphia will have to make $700 million worth of cuts, including 3,000 job losses, the closure of some whole departments, and the reduction of many city services. The current budget crisis has already caused a lot of strain for Philadelphia families currently looking for employment, housing and adequate education. In other words, it's the people that need help the most that will be hurt the most.

Should Philly take out this loan? Is there another option? Oakland extended its parking meters until 8PM, and Chicago sold off its parking meters to a private company; neither plan has been without its downsides. What are your thoughts on cities dealing with debt?