Archives for category: Economy

Some of us are old enough to remember a different America. We remember neighborhoods and communities where the shopkeepers knew our names and called to tell our mothers if we got into trouble. Then the big chains moved in and put those shops out of business. Then the big box stores moved in and killed off the chains. The people who used to run the mom-and-pop stores became greeters at the big box stores. Then Walmart moved in, and we lost most of the big box stores. Now Internet businesses are squeezing out the big box stores.

A reader had similar thoughts:

“Growing up, there was a little convenience store in my home town. It was “Chris’s Sack and Save”. It’s where my friends and I would buy our soda’s, chocolate, and chips to energize us to ride our bikes back to our homes, or to our “wherevers”.

When I was around my 11th or 12th grade year, this little convenience store got sold. Not only did the name change (to what, I really do not recall – it’s been changed quite a bit throughout the years), but I no longer got to see the smiling face of the owner, greeting me when I paid for my goodies (nor him giving me the extra change to pay for my mom’s cigarettes). It just didn’t feel the same. It was kinda sad.

This is what happens when charter schools, education management companies, and any other capitalistic change enters our community-owned, public school system. The names are not the only things that change. The people change. The values change. Who is served changes.

The school no longer belongs to the community. There is a new line of segregation: “us” and “them”. The ballpark is renamed. Corporate sponsors come in and the teachers and administrators behave differently: Maw-Maw called it, “putting on airs”. Even the teachers we saw as second mothers or grandmothers or uncles are gone.

The heart and soul is gone.

What made that school ours is gone.

Sure, there is money to be made with change. But does it help us as human souls to nurture that sense of “belonging” Maslow told us was so important in development of the self?

Sometimes the more things change, the less they stay the same.”

President Obama has often said that American workers are the most productive in the world. In his 2011 State of the Union address, he said: “Remember -– for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world.  (Applause.)  No workers — no workers are more productive than ours.  No country has more successful companies, or grants more patents to inventors and entrepreneurs.

Others agree: This came from a UN organization in 2009:

American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year.

They also get more done per hour than everyone but the Norwegians, according to a U.N. report released Monday, which said the United States “leads the world in labor productivity.” Norway’s productivity is based on its vast oil wealth extracted from the sea.

Each U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, ahead of Luxembourg, $55,641; Belgium, $55,235; and France, $54,609.

Yet the OECD put out a report saying that our population is actually quite dumb and is losing ground to other nations. The OECD report garnered headlines across the nation, because it reinforced the common but erroneous narrative that we as a nation are entering into a steep economic decline, all of which can be blamed on our faltering public schools.

Let me point out that this is the same refrain we have heard since the days of the Puritans. The younger generation is no good, we are going to hell and damnation, and soon comes the apocalypse, all the result of our sins (or in modern terms, our public schools). Since neither voucher schools nor charter schools outperform our public schools, this refrain is getting tiresome yet it persists.

It is also false.

As I explain in “Reign of Error,” these scare reports are wrong. First, they say that our college graduation rates are falling behind those of other nations, and we should be very, very upset. They never point out that our college graduation rate is almost double the college graduation rate of Germany, which is the most dynamic economy in Europe.

Then, they say that the jobs of the future will demand a huge increase in college graduates, but that is not what our own Bureau of Labor Statistics projects. The BLS projected that two-thirds of the jobs available between 2008 and 2018 would not need any post-secondary training. Most would require on-the-job training. Jobs for computer engineers and nurses require college degrees. But the larger number of jobs for home health aides, customer service agents, fast-food workers, retail salesclerks, construction workers, and truck drivers do not require college diplomas. (See pp. 88-89 of “Reign of Error” for citations.)

If we really want more college graduates, we should make all community colleges free to students. Our society, if it truly cares, should shoulder the burden of college costs so that more students can get the education they want but can’t afford. Colleges won’t get cheaper for students by producing data about cost and outcomes. They will get cheaper if more of the cost of attending college is assumed by government, not students.

For many years, there were free community colleges. Now there are few. Why?

Don’t complain about the college graduation rate unless you are willing to make the cost far, far lower to students.

And don’t believe for a minute that standardized tests are accurate measures of productivity. In 1964, our students scored last on the world’s first international test of mathematics, and we went on to outperform the other 11 nations that took the same test.

What we need more of is independent thinking, divergent thinking, innovation, ingenuity, responsibility, dedication, creativity–none of which is measured by the ability to check the right box on a standardized test.

Wendy Lecker is an attorney for the Campaign for Fiscal Equity project at the Education Law Center.

In this article, she argues that the STEM crisis is overblown because there are more STEM graduates than there are jobs for STEM graduates.

She does not argue against teaching math, science, and engineering. She worries that our undue emphasis on standardized testing is crushing the spirit of inquiry and the innovative thinking that our future scientists and engineers need.

She concludes:

Yet our policies in recent years are moving us away from that creative culture of learning toward a system that produces compliant, conventional thinkers seeking the one right answer. Our leaders are singularly focused on increasing test scores as a measure of student, teacher and school success. This obsession has forced schools across the country to eliminate arts, music and physical education and drastically reduce subjects like social studies. It has forced teachers to teach from a pacing guide or script and use rubrics. And it has ignored the importance of diversity, so that more and more children are attending highly segregated schools.

Experienced teachers see the change in our children. My son’s fifth-grade teacher once said that by the time they got to her, after several years of CMTs and an increasing barrage of district-wide assessments, students were following her around, asking if they had the right answer. She saw that as a habit of which she needed to gently break them. In her class, free-flowing ideas led to creative connections. One morning the class was studying equilateral triangles. In the afternoon, their social studies textbook showed a diagram of a triangle with the three branches of government on each side. All she had to do was ask the class what an equilateral triangle meant and the children embarked on a robust discussion of the balance of powers.

Epiphanies do not exist inside rubrics and scripts. It is in the spaces in between subjects that innovation occurs. Therefore, if our leaders are truly trying to create the next generation of creative thinkers who will restore vitality to our stagnant democracy and economy, they must allow the “messiness” of learning back into our schools.

 

Mayor Bloomberg responded to the latest reports about rising poverty in New York City with a plea for more billionaires to move to the city. Presumably that would create new jobs for chauffeurs, maids, gardeners, personal chefs, butlers, and others to serve the needs of the powerful and wealthy. They might even endow some more of the charter schools that are on the drawing boards in the waning days of the Bloomberg administration.

Remember the poem by Emma Lazarus that is mounted on a plaque inside the Statue of Liberty. It is called “The New Colossus,” and it says, in part,

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”

Bloomberg thinks that Lazarus got it wrong. Send us the billionaires!

Here is the article as it appears in the Wall Street Journal:

  •  
  • September 20, 2013, 9:26 p.m. ET

Mayor Says More Billionaires Would Ease City’s Economic Situation

Mayor Says Increase in Wealthy Residents Provides Tax Revenue to Benefit the Poor

Billionaire Mayor Michael Bloomberg said Friday it would be a “godsend” if every other billionaire around the globe moved to New York City, a clarion call for the rich just days after new U.S. Census figures showed an increase in the city’s poverty rate and a wide gap between the wealthy and poor.

On his weekly radio show, Mr. Bloomberg, who has been accused over the years of being out of touch, suggested New Yorkers would benefit if the income gap were even wider because the wealthy pay for a big portion of city services.

ReutersMichael Bloomberg said billionaires in the city are why there is such a sizable gap between the rich and poor.

Related

 

Mr. Bloomberg said his administration has spent most of the past 12 years trying to help decrease poverty in the city. But he suggested New York could benefit if the income gap grew even more, saying the problem isn’t at the low-end.

“The reason it’s so big is at the higher end we’ve been able to do something that none of these other cities can do, and that is attract a lot of the very wealthy from around the country and around the world,” Mr. Bloomberg said.

“They are the ones that pay a lot of the taxes. They’re the ones that spend a lot of money in the stores and restaurants and create a big chunk of our economy,” he said. “And we take tax revenues from those people to help people throughout the entire rest of the spectrum.”

Mr. Bloomberg said billionaires in the city are why there is such a sizable gap between the rich and poor. But “if we could get every billionaire around the world to move here it would be a godsend—that would create a much bigger income gap.”

Forbes recently estimated Mr. Bloomberg’s net worth at $31 billion. Mr. Bloomberg’s 12-year tenure at City Hall ends Dec. 31.

According to new Census figures, the city’s poverty rate rose to 21.2% last year, up from 20.9% in 2011 and 20.1% in 2010. The figures also showed the mean household income of the lowest fifth at $8,993, compared with $222,871 for the highest fifth.

Income inequality in the city has become a flashpoint in the race to succeed Mr. Bloomberg. Bill de Blasio, the presumptive Democratic nominee, has said addressing the gap will be a centerpiece of his administration. He’s repeatedly described New York as a “tale of two cities.” Mr. Bloomberg and GOP mayoral nominee Joe Lhota have accused Mr. de Blasio of engaging in class warfare.

Mr. de Blasio said the city welcomes “everyone” but that city government needs “to focus not on the few but on the many.”

“The mayor needs to understand that beyond his social circle are millions of New Yorkers who are struggling and are looking to contribute to this economy if they could only get a job to contribute to it with,” he said.

Mr. Lhota said the conversation needs to be about creating jobs. “Jobs are the only way known to mankind that will deal with income inequality,” he said.

City Comptroller John Liu—who ran for the Democratic nomination for mayor and lost to Mr. de Blasio—said it would “only be a godsend” if the city’s wealthiest residents paid an equitable income tax rate. He pointed out that families making $50,000 are paying the same rate as a family making nearly $50 million.

“The mayor’s comment shows once again just how out of touch he is with the average New Yorker,” Mr. Liu said.

—Andrew Grossman and Joe Jackson contributed to this article.Write to Michael Howard Saul at michael.saul@wsj.com

It is not often that you see a juxtaposition between these two concepts: income inequality and school reform.

But I would like to argue here that they are related and they matter.

In a recent column, Paul Krugman reviews the evidence about income inequality.

The rich have grown dramatically richer, while the poor have gained nothing from the economic recovery.

Here are the basic facts, as he describes them:

The data in question have been compiled for the past decade by the economists Thomas Piketty and Emmanuel Saez, who use I.R.S. numbers to estimate the concentration of income in America’s upper strata. According to their estimates, top income shares took a hit during the Great Recession, as things like capital gains and Wall Street bonuses temporarily dried up. But the rich have come roaring back, to such an extent that 95 percent of the gains from economic recovery since 2009 have gone to the famous 1 percent. In fact, more than 60 percent of the gains went to the top 0.1 percent, people with annual incomes of more than $1.9 million.

Basically, while the great majority of Americans are still living in a depressed economy, the rich have recovered just about all their losses and are powering ahead.

The people at the top–that is, the ones who think the current distribution of income is just fine and is the result of meritocracy–like to assure us that if we just test kids more often, raise standards higher, adopt the Common Core, fire more teachers, and open more charter schools, then we can heal the divisions in our society.

But of course this is nonsense. As Krugman points out, even college graduates are having a hard time in this economy, many burdened by college debt and unable to find jobs that pay what they expected and hoped for.

These numbers should (but probably won’t) finally kill claims that rising inequality is all about the highly educated doing better than those with less training. Only a small fraction of college graduates make it into the charmed circle of the 1 percent. Meanwhile, many, even most, highly educated young people are having a very rough time. They have their degrees, often acquired at the cost of heavy debts, but many remain unemployed or underemployed, while many more find that they are employed in jobs that make no use of their expensive educations. The college graduate serving lattes at Starbucks is a cliché, but he reflects a very real situation.

What’s driving these huge income gains at the top? There’s intense debate on that point, with some economists still claiming that incredibly high incomes reflect comparably incredible contributions to the economy. I guess I’d note that a large proportion of those superhigh incomes come from the financial industry, which is, as you may remember, the industry that taxpayers had to bail out after its looming collapse threatened to take down the whole economy.

In any case, however, whatever is causing the growing concentration of income at the top, the effect of that concentration is to undermine all the values that define America. Year by year, we’re diverging from our ideals. Inherited privilege is crowding out equality of opportunity; the power of money is crowding out effective democracy.

Another story in the New York Times showed just how stark the current income inequality is. It says:

The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.

The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.

The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.

The wizards of the financial industry, who have benefited so handsomely in the past few years, are the biggest boosters of charter schools. That is supposedly the way to open the path to opportunity for the lucky few, and perhaps it will.

But wouldn’t it make more sense to change our tax structure, so that the gap between the haves and the have-nots was not so outrageous?

I recall reading a book a few years ago called The Spirit Level: Why Greater Equality Makes Societies Stronger by Kate Pickett and Richard Wilkinson, which argued that societies that are more equal are happier, less violent, heathier, and better on almost every measure one can imagine.

I am not making a plea here for socialism or for onerous taxation, but for the kind of society I remember from my childhood, when the distribution of wealth was not as unequal as it is today. We had people who were rich, but they were not billionaires; they did not have private jets or own half a dozen houses or employ a fleet of servants.

Unless we do something in our political economy to bring up those who struggle for daily subsistence, this will not be a society of equality of opportunity, but one where inherited wealth determines one’s fate in life.

And no school reform will be strong enough to overcome those basic economic facts.

As states cut the budget for public schools, lay off teachers, increase class sizes, fire librarians and social workers, guidance counselors and teacher aides, we hear the same refrain: Sorry, the money’s all gone.

But is it? Read this article and you will find where the money went.

We hear repeatedly about the shortage of qualified
engineers and the need for more science, technology, and
mathematics majors. I am all for that. I would also like to see
more majors in the arts, philosophy, history, government,
literature, and world languages. This reader–who signs as
“Democracy”–offers thoughts about “the STEM crisis”–and examines
the role of Lockheed Martin’s Norman Augustine, who has been
outspoken on this and other educational subjects. (See his defense
of standardized
testing here.
). And more on “the STEM crisis” here.
But Augustine and the president of Cornell wrote an article
stressing the importance of the humanities and foreign languages
here,
while making a case for the Common Core. All seem to be about jobs
and national competitiveness, the aims of the day. . “Democracy”
writes: It seems that former Lockeed CEO Norm Augustine was invited
to tour Charlottesville-area public schools, where
he touted his brand of corporate “reform
” and lauded
schools for their STEM (science, technology, engineering, math)
focus, which goes under the rubric of “21st-century education.” As
CEO at Martin Marietta, Augustine brokered the merger of that
company with Lockheed to produce Lockheed Martin and got taxpayers
to subsidize nearly a billion dollars of the merger cost, including
tens of millions in bonuses for executives (Augustine netted over
$8 million). And then the merged company laid off thousands of
workers. The promised efficiencies and cost savings to the
government (and taxpayers) have yet to materialize. Lockheed Martin
is is now the largest of the big defense contractors, yet its
government contracts are hardly limited to weapons systems. While
Lockheed has broadened its services, it is dependent on the
government and the taxpayers for its profits. It’s also #1 on the ”
‘contractor misconduct’ database” which tracks contract abuse and
misconduct. Meanwhile, while Norm Augustine touts the need for more
STEM graduates (Science, Technology, Engineering and Math) and STEM
teachers for public schools, Lockheed is laying off thousands of
engineers. Research studies show there is no STEM shortage, but
Augustine says (absurdly) that it’s critical to American economic
“competitiveness.” A 2004 RAND study “found no consistent and
convincing evidence that the federal government faces current or
impending shortages of STEM workers…there is little evidence of
such shortages in the past decade or on the horizon.” The RAND
study concluded “if the number of STEM positions or their
attractiveness is not also increasing” –– and both are not –– then
“measures to increase the number of STEM workers may create
surpluses, manifested in unemployment and underemployment.” A 2007
study by Lowell and Salzman found no STEM shortage (see:
http://www.urban.org/publications/411562.html ). Indeed, Lowell and
Salzman found that “the supply of S&E-qualified graduates
is large and ranks among the best internationally. Further, the
number of undergraduates completing S&E studies has grown,
and the number of S&E graduates remains high by historical
standards.” The “education system produces qualified graduates far
in excess of demand.” Lowell and Salzman concluded that “purported
labor market shortages for scientists and engineers are anecdotal
and also not supported by the available evidence…The assumption
that difficulties in hiring is just due to supply can have
counterproductive consequences: an increase in supply that leads to
high unemployment, lowered wages, and decline in working conditions
will have the long-term effect of weakening future supply.” Lowell
and Salzman noted that “available evidence indicates an ample
supply of students whose preparation and performance has been
increasing over the past decades.”

Bloomberg News reports that the city’s corporate leaders and super-wealthy are offended by mayoral candidate Bill de Blasio’s plan to raise taxes on those earning over $500,000 a year to fund universal pre-K and after school programs for middle school kids.

The head of the business leaders’ group was astonished by de Blasio’s indifference to the needs of corporate executives. ““It shows lack of sensitivity to the city’s biggest revenue providers and job creators,” said Kathryn Wylde, president of the Partnership for New York City, a network of 200 chief executive officers, including co-Chairman Laurence Fink of BlackRock Inc. (BLK), the world’s biggest money manager.”

Some predicted an exodus of rich people from the city.

What has de Blasio proposed?

“De Blasio’s plan would raise the marginal tax rate on incomes above $500,000 to 4.4 percent from almost 3.9 percent. For the 27,300 city taxpayers earning $500,000 to $1 million, the average increase would be $973 a year, according to the Independent Budget Office, a municipal agency.

“For those making $1 million to $5 million, the average extra bite would rise to $7,793, the budget office said. At incomes of $5 million to $10 million, it would climb to $33,518, and for those earning more than $10 million, it would mean paying $182,893 more.”

Here is the reaction of one hedge fund manager: “E.E. “Buzzy” Geduld, who runs the hedge fund Cougar Capital LLC in the city and is a trustee of Manhattan’s Dalton School, where annual tuition tops $40,000, said de Blasio’s plan “is the most absurd thing I’ve ever heard” and “not a smart thing to do.”

Think of the billions that Bloomberg squandered on technology projects that fizzled (like the $600 million Citytime project), the failed merit pay plan ($53 million wasted), the failed plan to pay students to get higher test scores, etc.

The business executives said nothing because no one suggested that they would be taxed to pay for it.

De Blasio is proposing research-based programs. Those who care about education and kids should be cheering and should gladly pay an extra $973 (or more if their income is higher) to do what is right for kids.

Oh, and one more thing. The article says:

“The city’s richest 1 percent took home 39 percent of all earnings in 2012, up from 12 percent in 1980, according to the Fiscal Policy Institute, a nonprofit research group in New York.”

Don’t cry for me, Argentina.

Economist Robert Samuelson describes the relationship between labor and business as three eras.

He says that over the past century, there were three broad labor regimes.

“The first, in the early 1900s, featured “unfettered labor markets,” as economic historian Price Fishback of the University of Arizona puts it. Competition set wages and working conditions. There was no federal unemployment insurance or union protection. Workers were fired if they offended bosses or the economy slumped; they quit if they thought they could do better. Turnover was high: Fewer than a third of manufacturing workers in 1913 had been at their current jobs for more than five years.” (Sound familiar?)

Then:

“After World War II, labor relations became more regulated and administered — the second regime. The Wagner Act of 1935 gave workers the right to organize; decisions of the National War Labor Board also favored unions. By 1945, unions represented about a third of private workers, up from 10 percent in 1929. Health insurance, pensions and job protections proliferated. Factory workers laid off during recessions could expect to be recalled when the economy recovered. Job security improved. By 1973, half of manufacturing workers had been at the same job for more than five years.

“To avoid unionization and retain skilled workers, large nonunion companies emulated these practices. Career jobs were often the norm. If you went to work for IBM at 25, you could expect to retire from IBM at 65. Fringe benefits expanded. Corporate America, unionized or not, created a private welfare state to protect millions from job and income loss.”

After the recession of the early 1980s, after President Reagan broke the air traffic controllers’ strike, things changed.

“Now comes the third labor regime: a confusing mix of old and new. The private safety net is shredding, though the public safety net (unemployment insurance, Social Security, anti-poverty programs, anti-discrimination laws) remains. Economist Fishback suggests we may be drifting back toward “unfettered labor markets” with greater personal instability, insecurity — and responsibility. Workers are often referred to as “free agents.” An article in the Harvard Business Review argues that lifetime employment at one company is dead and proposes the following compact: Companies invest in workers’ skills to make them more employable when they inevitably leave; workers reciprocate by devoting those skills to improving corporate profitability.”

Surely ALEC, funded by major corporations, deserves some credit here for rolling back state laws that protect collective bargaining.

A reader posted this comment about Labor Day:

“Because my father, a lineman at the local electric company, was able to collectively bargain a contract, my sister, brother & I were able to live a middle class existence. My dad was able to send three kids to public universities in Indiana without acquiring debt. Did we all work to make it happen? Absolutely! The State of Indiana also helped by supporting its public universities which made college affordable for middle class & poor families.

“If he were alive today, he’d be heartsick by the way Democrats have turned their backs on working people.”