Download Strategies for Helping People Make a Living

Strategies for Helping People Make a Living
August 26, 2015
NCAP Annual Conference-San Francisco
Jim Masters: CCAP, NCRT. [email protected]
Allen Stansbury, Senior Associate. [email protected]
Center for Community Futures
Strategies for Helping People Make a Living
To expand opportunity and enhance economic security, we
must change the rules under which the economy operates.
This workshop will present findings from the White paper
about how to bring this about.
1. Strategies proposed by think tanks and national advocacy
organizations to expand opportunity (demand side)
2. Strategies for Human Development (supply side)
3. Alternatives to “Making it" in the Mainstream Economy
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Strategies proposed by think tanks and national
advocacy organizations to expand opportunity
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Expand Number of Jobs
Increase the Amount of Money that Workers Earn
Expand Access to Education and Expand Work Supports
Expand Household Income from Other Sources
Support Banking and Corporate Financial Reforms
Alternative Economics
What kind of economy are we trying to create?
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Piketty, Reich, Stiglitz, Bernstein and others
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Thomas Piketty’s “solution” to inequality
• Describes evolution of inequality since the beginning of the industrial
revolution to present
• As a general rule wealth grows faster than economic output, captured in the
expression r>g, rate of return to capital (r), growth rate of world output (g)
• No natural forces pushing against the steady concentration of wealth.
• Only rapid growth (from technological progress or rising population) or
government intervention can be counted on to keep economies from
returning to the “patrimonial capitalism” such as a global wealth tax:
– Inherited wealth
– Top incomes
– Capital gains
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http://www.economist.com/node/21601642/print
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Stiglitz: Consequences-Instability
“We are paying a high price for our inequality — an economic
system that is less stable and less efficient, with less growth,”
• According to Stiglitz studies have shown conclusively that
inequality leads to political instability that may hamper
countries’ effectiveness in responding to external shocks.
• In turn the result can be both economic shocks leading
towards political instability
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Robert Reich – Income Distribution 1928 vs 2007
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Jared Bernstein
Factors most commonly cited
as driving poverty in America:
• Education,
• Family structure, Race and
more
• Number-one factor by far is
the growth in inequality,
which added 7% to the
poverty rate since the late
1970s.
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Expand Number of Jobs
• Energy Conservation – Weatherization, etc
• The Sharing Economy
• National and Regional Capital Investment – maintaining and
improving our infrastructure: roads, environment, utilities
• Advocate for Tax Reform
• Cap and Trade
• Microbusinesses and self-employment
• Social Enterprises
• Expand Labor Unions
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“Half in Ten” Campaign
Success Stories:
• Child Care
• Food and Nutrition
• Education
• Health
• Housing
• Income Assistance
• Jobs training
• Low-income tax credits
• WIC
• Unemployment Insurance
• Minimum wage
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Call to Action July 21, 2014 Re:
New House Child Tax Credit Bill Leaves
Behind Millions of Low-Income Working
Families
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While it permanently extends the Child Tax Credit
higher up the income scale so more families with sixfigure incomes will benefit.
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It fails to make permanent the 2009 reduction
in the CTC’s earnings threshold, set to expire
at the end of 2017.
If this provision expires, a single mother with
two children who works full time throughout
the year at the minimum wage and earns
$14,500 would lose her full CTC of $1,725 in
2018.
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It indexes the current maximum credit of $1,000
per child to inflation. This provision would not
help most working families with low or moderate
incomes, because it benefits only those with
incomes high enough to receive the maximum
credit.
Economic Policy Institute (www.EPI.org)
Issues Focus:
• Labor Laws – Examples
– Extend Unemployment Benefits - State Cuts to Jobless
Benefits
– Tipped Workers and Minimum Wage (by the end of
2015 29 states will have increased their minimum wage)
• Tax Credits –Examples
– The Earned Income Tax Credit
– Child Tax Credit
• Immigration reform - Example
– Overloaded Immigration Courts
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Other EPI Recommendations
• Enact the Surface Transportation Act, if enacted will increase
employment by an average of 117,000 jobs annually over the next
three years, or 350,000 jobs total, with larger job gains in later years.
• Renewable energy and energy efficiency improvements (WHEEL and
PACE) potential 2.1 million jobs.
• FAST - a direct job creation program to renovate 16,000 schools
nationwide
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http://www.epi.org/publication/putting_america_back_to_work_policies_for_job_creation_and_stronger_economi/
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New American Foundation
Asset Building Program: issues and papers
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Children's Savings Accounts
Solving the Retirement Puzzle
Rebalancing the Scales
The Financial Health Check
Connecting Tax Time to Financial Security
California Civic Innovation Project technology to influence local government
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“Public Pathways: A Guide to Online Engagement Tools for Local Governments
Economic Growth Program research papers such as:
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The Wizard of Jobs a US labor status report on the first 6 months of 2014 and its continued
jobs slump.
America's Debt Problem discusses the impact on middle and low income classes due to
excessive private debt and its consequences.
Pay More, Get Less that takes a look at the cost of health, medical, education, basic financial
services and communications
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TAX AND BANKING REFORM MEASURES
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Tax Reform - Background
• Last overhauled of the federal tax code: 1986
• Tax Cuts, i.e. lowering of capital gains to 15% have
benefited the wealthy, however,
• Middle and Low Income have been hit by increased
“payroll” taxes
• Tax reform is the best way to tackle “income inequality”
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Tax Reform and Simplification
Recommendations for reform and simplification:
• One tax reform strategy: raising taxes on high-income earners and
corporations to pay for expanded benefits to low-income Americans
• “Broaden the base, lower the rates”
Three Strategies to consider:
• National Commission on Fiscal Responsibility and Reform Simpson-Bowles 6
Part Budget Plan
• Urban and Brookings Institute Tax Policy Center
• US Senate Committee on Finance Tax Reform List
• Reform of The Distribution of Major Tax Expenditures in the Individual
Income Tax System
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Support Banking and Corporate Financial Reforms
• Since 2007, 1,400 smaller banks have completely disappeared from
the banking industry.
• Our economic system is now more dependent on the 6 “too big to fail”
banks than ever - JPMorgan Chase, Citibank, Goldman Sachs, Bank of
America, Morgan Stanley and Wells Fargo
• 5 of these account for approximately 42% of all loans, all 6 account for
approximately 67 percent of all assets in our financial system.
• Together have accumulated $278 Trillion Of exposure to
derivatives
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Strategies for Bank Reform
• Enforce Dodd-Frank - continue writing bank
and corporate financial regulations
• Support the Consumer Finance Protection
Bureau
– Laying the groundwork for rules to end debt-trap
loans of Pay Day lending
– Ended deceptive and predatory mortgages
– Ended credit card deceptive and fraudulent add
on products
• Re-enact Glass-Steagall Banking Act of 1933
- prohibits banks using deposits that put the
bank or the economy at undue risk (Joint
Warren-McCain amendment pending)
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INCREASE THE AMOUNT OF MONEY THAT
WORKERS EARN
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Ways to Increase the Amount of Money that
Workers Earn
Increase minimum wage levels at national, state and local level
Enact Fair Pay Legislation – equal pay for male and female workers (NEW)
End “Perma-Temp” positions – temporary positions that are permenant
End misclassification of workers to avoid paying benefits (workman comp,
social security, health insurance) such as:
– Hire through 3rd party personnel agencies that are employed as contractors
– Classify workers as supervisors to avoid paying overtime ($23,000 limit)
– Use only part time and temp. employees 30 hr max to avoid ACA
• Enact paid sick leave, required vacation time legislation
• Support the development of Employee Stock Ownership Plans (ESOP)
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Wage Theft and Misclassification in America
• Unpaid overtime,
• “Off-the clock” work
violations, (clock out, but
don’t clock in),
• Outright wage forfeiting
(illegals), or
• Through bankruptcy avoid
required benefits and wage
payment
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Example: Perma - Temp
• Temporary workers — and not employees — pick crops, sew
garments, clean hotel rooms, flip burgers and toil in a range of
low-wage industries either direct hire or 3rd party contractor
• No sick days, vacation days, health insurance benefits, no
pregnancy leave
• Legislation is required to make both the labor contractor and its
client company, jointly liable for payment of wages, accurate
reporting of hours worked, wages, benefits, tax deductions and
insurance coverage for victims of on-the-job injuries (Illinois)
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EXPAND WORK SUPPORTS
EXPAND ACCESS TO HIGHER EDUCATION
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Expand Work Supports to Include:
Increase or expand work supports for:
• Child care, off-site and on-site
• Family leave and pregnancy leave,
• On the job training,
• Dislocation services and skills training
• Employers providing or paying for educational upgrading
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Expanding Work Support Strategies:
Streamlining Access, Strengthening Families
• WSS - A five-year 6 state initiative to help low-income families get and keep work
supports (Colorado, Idaho, Illinois, N. Carolina, Rhode Island, and S.Carolina)
• Supports states in their efforts to reform and align the systems delivering work support
programs intended to increase families’ well-being and stability—particularly SNAP,
Medicaid and CHIP, and child care assistance.
• States work to streamline and integrate service delivery, using e-technology to improve
administrative efficiency to reduce burden on states and working families.
• Directed by the Center for Law and Social Policy (CLASP) in partnership with the Urban
Institute (and the Center on Budget and Policy Priorities (CBPP) (technical assistance
lead).
• Funded by the Ford Foundation, the Open Society Foundations, The Annie E. Casey
Foundation, The Kresge Foundation, and J.P. Morgan Chase & Co.
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Expand Household Income from Other Sources
The Center on Budget and Policy Priorities (CBPP)
A few examples:
• EITC and Child Tax Credit Promote Work, Reduce Poverty, and
Support Children’s Development - (April 3, 2015 Report)
• WIC Works: Addressing the Nutrition and Health Needs of LowIncome Families for 40 Years (MAY 6, 2015)
• Social Security Keeps 22 Million Americans Out Of Poverty
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College Student Loan Debt
• Currently $1.3 Trillion outstanding in student loans,
• Average debt of a graduate with a BA is now $27,000,
average BA graduate salary $53,000
• 6.6 million jobs created since 2010, 2.9 million were
good jobs, 100,000 of those jobs were filled by
people with less than a Bachelor’s degree.
• 12 % are unable to save for their retirement or their
children’s education and feel less secure
• 20% unable to purchase home, average home
purchase before 2007 was 27, now age 35
(Zillow.com)
• Causing longer live with parents, delay home
purchase and even marriage
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Strategy on Lowering Student Debt
Two Part Strategy: 1) Reform Student Loan program 2) Increase
Education Subsidy
• Lower current interest rate of 5-6+%
• End prohibition of bankruptcy protection
• Free 2 year college tuition
• Increase state budget allocation to off-set college/university
overhead
• Hold to 4 year BA degree by increasing facility and class-rooms
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WHAT KIND OF ECONOMY ARE
WE TRYING TO CREATE?
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Otto Scharmers: 8 innovations to update the economic system
1. Nature- Consider the natural world as an eco-system that we need to cultivate.
2. Entrepreneurship- Think about “jobs” as passion-led entrepreneurship.
3. Money - Instead of extractive, capital should be intentional, serving rather than harming the real
economy.
4. Technology - Empower people to be makers and creators rather than passive recipients.
5. Leadership - Build the capacity to co-sense and co-shape the future on the level of the whole
system.
6. Consumption - Move towards sharing and collaborative consumption
7. Governance - Move toward complementing the three older mechanisms (hierarchies, markets, and
special interest groups) through a fourth mechanism: acting from shared awareness, from seeing the
whole.
8. Ownership - Create a new category of ownership rights: commons-based ownership that better
protects the interests of future generations.
http://www.theguardian.com/sustainable-business/2014/sep/26/8-innovations-economic-system-capitalism
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David Korten: Change the Story, Change the Future
Sacred Money and Markets story is the corporate message, serves as the basis for the US
economy, as it defines our future
• Use as the framework for every news report and political debate,
• Basis of their legal arguments
• Taught in our schools and universities
The counter-story: Sacred Life and Living Earth story to advance justice, sustainability, peace,
and democratic governance campaign organize around individual issues
• Focal point of discussions in our living rooms, schools, churches, and civic centers
• The frame of our social media exchanges, community initiatives, and political advocacy.
• Introduce it into academic curricula
• Compel the champions of money to make their case within a sacred life and living earth
frame
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Reframing
• Professor George Lakoff
• Dr. Meg Bostrom. Cultural universals
• Center for Community Change
• Partnership discussion with The Frameworks
Institute
http://www.frameworksinstitute.org/
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Strategies for Human Development
• The pursuit of human development and expansion of economic
opportunity
• Moving to Opportunity - moving people to new geographic areas
mostly to middle-class suburbs
• Adverse Childhood Experiences (ACEs) or “good parenting”
• Child Care Development block grants, (CLASP)
• Gates Foundation -supports kindergarten readiness and elementary
school achievement
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Issues for CAAs to Think About –Part 1
• Support expansion of early childhood development
• How Much Could We Improve Children’s Life Chances by
Intervening Early and Often?
• The Future of Education.
• The Human Development Capability Approach
• Two Generation Strategies
• Nurse-Family Partnership
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Issues for CAAs to Think About –Part 2
• Conditional Cash Transfers
• Health Issue. The Unbelievable Rise of Single Motherhood
• Health Issue: Use of Long Acting Removable
Contraceptives (LARCs)
• Work to keep youth “at risk” from going further downhill
• Social Capital
• Work to prevent people from killing each other
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Issues for CAAs to Think About –Part 3
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Support criminal justice reform
All kids must have high-school skills
Support the Affordable Care Act
BE INCREDIBLY CAREFUL about use of Social Impact
Bonds
• Final thoughts on human development – the effects of
credentialism
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Alternatives to “Making It” in the Mainstream
Economy Part 1
• Reduce or redirect the human desire for to expand
consumption
• Explore sustainable, alternative approaches like
“Transition Towns”
• HOW TO “reform capitalism”
• Reducing Consumption
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Alternatives to “Making It” in the Mainstream
Economy Part 2
• The Sharing Economy and the On-Demand Economy
• The Informal Economy
• Turn citizens into shareholders of the countries natural
resources
• Utopian Movements
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New ways of thinking about how people can
“make a living”
Community supported agriculture,
Co-housing,
Makerspaces,
Reducing consumption
Artisanal work in metals and wood,
Producing culture (400,000 hours of
YouTube videos and 350 million
photos are posted to Facebook
EVERY DAY, Kindle books)
• 3-d printing,
• Tiny homes,
• New contests in sports and video
games,
• Reducing consumption,
• Trading services,
• Transition towns, and
• Various forms of “citizen’s income.”
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Remember
• The Office of Economic Opportunity ran several Guaranteed
Annual Income (GAI) experiments in the late 1960’s and early
1970’s,
• President Nixon was in favor of a GAI.
• Nine other countries are exploring ways to do citizen’s
incomes, and
• So should the U.S.
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Questions and Answers
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Thank You
For more detailed information
Please check our website
America’s New Working PoorIts Middle Class
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