Leadership Wanted: Governor Cuomo, Homeless Students Need College Support

Nov 20, 2014Kevin Stump

For homeless youth to make it through college, they need extra support, best provided through a government program of homeless liaisons.

For homeless youth to make it through college, they need extra support, best provided through a government program of homeless liaisons.

New York has been among the top 10 states with unaccompanied homeless youth (UHY) filing for federal financial aid for the last three years. In a private report to the National Association for the Education of Homeless Children and Youth, the United States Department of Education, reports that there were 2,215 college students applying for financial aid in New York who indicated on their Free Application for Federal Student Aid that they were homeless last year. This number does not include undocumented youth who are not eligible to apply for federal or state aid.

Unfortunately, these students are often left behind. It wasn’t until last year that New York changed an extremely outdated component of its $1 billion Tuition Assistance Program (TAP) that updated this 40-year-old in-state need-based financial aid program. The change made it so UHY are now eligible for the maximum TAP award of $5,165 that Dependent students are eligible for, versus the maximum TAP award of $3,025 available to Independent students.

In addition to outdated laws that limit the amount of aid they can receive, UHY face a number of other challenges including food insecurity, a lack of adult guidance and support, failure to access available support systems, lack of access to parental financial information, limited housing options, and a lack of financial means to live independently and safely.

New York should create a policy that models the federal McKinney-Vento Act on a college level. This landmark piece of legislation successfully creates safety nets and institutional support structures for K-12 students. By law, every school district in the country, and every school building in New York City, is required to have a liaison who is responsible for coordinating support and resources for homeless and unaccompanied youth. Every year, liaisons are required to undergo training to stay current on best practices to support and assist homeless students. Furthermore, their work has given lawmakers data and information on the best ways to support these communities.

There are more than 130,000 K-12 homeless students in New York. Among those students, nearly 11,000 11th and 12th graders approaching the end of their high school careers. These are only the numbers that are reported and do not account for the possibility of additional students who are in need.

Given the number of colleges and universities, the number of community based organizations and support networks that exist, and the high-level of poverty in New York, the state has the potential to become a leader in creating a framework of how states should build support systems for unaccompanied homeless youth to access and succeed in college.

Governor Cuomo should initiate the policy process to develop a law requiring a homeless liaison at every brick-and-mortar college and university in the state, to ensure that all former McKinney-Vento students are supported during their transition into college and throughout their tenure until graduation. The homeless liaison would be the first point of contact for professionals working with these young people and for the students who experience, or who are at risk of experiencing, homelessness while at college. The liaison would also be charged with coordinating all needed services. In addition, the liaison would be responsible for tracking and reporting all relevant data to help inform future policy regarding homeless college students and develop greater support services.

This kind of support and data-gathering could potentially exist without legislation. However, this issue is a prime example of where the state could do it better and more comprehensibly. With legislative protections and teeth to ensure sustainable and uniformed support is given, as well as appropriate resources for service delivery, training, technology, data collection, and future statewide policy initiatives, the liaisons will be able to provide better support to UHY in college. A statewide policy setting up liaisons would establish an infrastructure that can be used to easily implement future policy.

As economic inequality and homelessness rates remain high, and college attainment continues to be so crucial, it’s critical that New York take action to protect our most at-need college students to ensure that those who are pursuing their dreams don’t slip through the cracks.

Kevin Stump is the Roosevelt Institute | Campus Network Leadership Director.

 

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A Dem Who Can Explain that Fairness is Prosperity Will Sweep in 2016

Nov 19, 2014Richard Kirsch

The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.

The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.

The familiar debate within the Democratic Party – move left or right – is on. In a memo to a “limited number of Democratic leaders,” Third Way, the leading organization for corporate Democrats, lays down the gauntlet: “Democrats are offering economic fairness, but voters want economic growth and prosperity.” And for good measure, Third Way declares, “And it has to be meaningful; Democrats can’t simply stick a 'growth' label on the old bottle of 'fairness' policies.”

The folks at Third Way are right about one thing; voters do want economic growth and prosperity. Where they are wrong is in their assumption that fairness can't be a part of that growth. The policies that do the most to bolster fairness are in fact the most powerful policies to move the economy forward and create broadly shared prosperity.

Progressives and Democrats don’t always make that clear. Most of the time they talk about fairness as separate from broadly-shared prosperity. The Democrat who bases his or her campaign on that crucial link will sweep into the presidency in 2016.

Policies that increase fairness are key to driving the economy forward.

Raising the minimum wage is not just about basic fairness for low-wage workers. Raising wages is about creating economy boosting jobs, not economy busting jobs. When wages are raised, workers have more money to spend, essential when 70 percent of the economy is made up of consumer spending.

An economy boosting job pays enough to cover the basics, which is why the fight for a $15 per hour minimum wage mobilizes people to action. It is about working at that wage for enough hours, with predictable schedules, so that the wages add up to a decent paycheck. It is about getting paid when you are out sick and having paid family leave, so you can care for and support your family. It is about women getting paid as much as men. It is about being able to afford your health care, so you have money to spend on other essentials and don’t end up bankrupt because of a high-cost illness. It is about increasing Social Security benefits and bolstering retirement savings, so you can keep supporting yourself and keep the economy moving well into your retirement.

These measures reward people fairly for work and are essential to rebuilding the middle class engine of the economy, as shown by the evidence collected in the Center for American Progress’s middle-out economics project.

The flip side of creating economy boosting jobs is reversing the soaring concentration of wealth. It’s not just unfair that the rich are grabbing more and more of the wealth we all create, it’s a big reason that the economy remains sluggish. When the top 1 percent capture virtually all of the economic progress, it's impossible for them to spend much of it. When corporations sit on trillions of dollars of cash because there aren’t markets for their goods, that money doesn’t go to higher wages or investment in creating jobs or other things that would boost productivity throughout the economy.

Even Wall Street is beginning to get it. In a report that is stunning only for its source, Standard & Poor's found this summer that “Our review of the data, as well as a wealth of research on this matter, leads us to conclude that the current level of income inequality in the U.S. is dampening GDP growth, at a time when the world's biggest economy is struggling to recover from the Great Recession and the government is in need of funds to support an aging population.”

A big goal of Third Way’s memo is to justify policies that they admit “may not be the most politically popular.” While some of the Third Way proposals are worthwhile, like millions of teachers for pre-K, much of their agenda is that of corporate America and in some cases would actually be bad for the economic growth they claim to seek.

Using coded language in an attempt to dilute the political poison, Third Way pushes for cutting Social Security benefits, lowering corporate tax rates rather than stopping corporate tax evasion, and agreeing to new trade deals which would drive the race to the bottom and allow corporations to challenge environmental and health and safety laws, instead of bolstering American workers' already hard-pressed incomes.

Instead, what the country needs and what Democrats should push are bold policies which drive the economy forward and create broadly shared prosperity: fairness.

We can start by putting Americans to work with a massive investment in core productive infrastructure in three areas: transportation, from roads and bridges to high speed rail; clean, renewable energy, which will simultaneously tackle climate disruption; and high-speed Internet for every home and business in America. Everyone who does this work should be paid enough, with good benefits, to support and care for their families, and be given the flexibility needed to care for those families.  In doing so, we doubly boost the economy: through the investment in infrastructure and through the good jobs.

It is both fair and essential for our economic future to ensure that every child has a quality education and the opportunity to succeed in school, career, and life. We need to modernize and replace dilapidated schools and assure that every child has a well-prepared and supported teacher in a small enough class to learn. We need to transform schools, particularly those that teach children in low-income neighborhoods, into community centers. We should make high-quality child care and pre-K universal, employing millions more providers and teachers.

We need to provide career training for the high-skilled jobs that don’t require traditional college. We need to make college affordable, by dramatically lowering the cost of public colleges and universities, providing much more tuition assistance, and tying the payment of student loans to earnings.

And as in infrastructure, all these jobs – from day-care providers to teachers to college professors (no more adjuncts) – should be good jobs, with good pay, benefits, and the flexibility to care and support families.

The only reason that Democrats would consider an agenda that Third Way admits is politically unpopular is to please corporate campaign donors and elites. But with President Obama pushing for new trade deals, advocating revenue-neutral corporate tax reform and having supported cuts in Social Security benefits, that agenda is as alive as the billions in campaign contributions that pour into both political parties.

Americans are right about two things. One, the system is rigged to favor the wealthy and powerful. Two, unless we change course, the future will not be better for our children. Those are the core reasons we saw historically low voter turn out this month and why minimum wage hikes passed at the same time voters decided to give Republicans their turn in the continuing roller-coaster of Congressional control over the past decade.

The Democrat who champions bold policies to build an America that works for all of us, not just the wealthy, and policies that create broadly shared, sustainable prosperity, will triumph in 2016.

The key, as Franklin Delano Roosevelt did (and as great organizers do), is to tap into anger and lift up hope. FDR railed against the “economic royalists” and experimented with bold policies that reigned in financial speculation and put Americans to work building the foundations for the 20th Century economy. 

The next FDR will name the villains who are rigging the system: Wall Street speculators and corporations that cut wages and benefits and ship jobs overseas. The next FDR will reveal the truth that “we all do better when we all do better.” That when we all earn enough to care and support our families, when we can shop in our neighborhoods, give our kids a great education, afford our health care, retire with security, we drive the economy forward.

Mamby-pamby won’t cut it. Americans are crying for bold leadership, a way out of a narrowing world towards a better world for our children.

The Democrat who leads a political party that stands up against the rich and powerful and stands up for working families and the middle class, who declares that Americans have done this before and that together we can do it again, will triumph in 2016. A Democratic party that relentlessly presses that agenda into action will meet the great challenge of our time. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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Daily Digest - November 19: Why Do So Few Workers Get Overtime Pay Today?

Nov 19, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Whatever Happened to Overtime? (Politico Magazine)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Whatever Happened to Overtime? (Politico Magazine)

Nick Hanauer says that raising the earnings threshold for mandatory overtime pay would kickstart the economy by either ensuring workers have more money or forcing companies to hire more workers.

Can Republicans Shut Down the Government Without Actually Shutting Down the Government? (WaPo)

Paul Waldman explains the GOP plan to stop any executive action on immigration without shutting down the government. The strategy: to pass spending bills that exclude the offices that would work on that issue.

Over Bentley's Objections, Golden Dragon Plant Votes for Union (Montgomery Advisor)

The Republican governor of Alabama urged workers at a copper plant to vote against unionizing with a letter distributed directly to the plant workers shortly before they voted in favor of their union.

Republicans Sure Love to Hate Unions (NYT)

Thomas Edsall points out that while Republicans demonize unions, and public sector unions in particular, the Democrats aren't doing much of anything to push back on labor's behalf.

When Mega Corporations Get Mega Tax Breaks, We All Pay (The Nation)

Katrina vanden Heuvel, a member of the Roosevelt Institute's board of directors, says that closing corporate income tax loopholes could fund incredible projects, like national universal pre-K.

Here's Why Conservatives Will Never Give Up Their War on Obamacare (TNR)

The "partisan incomprehension" that follows the Affordable Care Act around in the news is primarily based in the fact that Republicans lost a highly partisan fight, writes Brian Beutler.

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Dirty Deals: How Wall Street's Predatory Deals Hurt Taxpayers and What We Can Do About It

Nov 18, 2014

Download the report by Saqib Bhatti.

Download the report by Saqib Bhatti.

The financialization of the United States economy has distorted our social, economic, and political priorities. Cities and states across the country are forced to cut essential community services because they are trapped in predatory municipal finance deals that cost them millions of dollars every year. Wall Street and other big corporations engaged in a systematic effort to suppress taxes, making it difficult for cities and states to advance progressive revenue solutions to properly fund public services. Banks take advantage of this crisis that they helped create by targeting state and local governments with predatory municipal finance deals, just like they targeted cash-strapped homeowners with predatory mortgages during the housing boom. Predatory financing deals prey upon the weaknesses of borrowers, are characterized by high costs and high risks, are typically overly complex, and are often designed to fail.

Predatory municipal finance has a real human cost. Every dollar that cities and states send to Wall Street does not go towards essential community services. Across the country, cuts to public services and other austerity measures have a disparate impact on the working class communities of color that were also targeted for predatory mortgages and payday loans, further exacerbating their suffering.

The primary goal of government is to provide residents with the services they need, not to provide bankers with the profits they seek. We need to renegotiate our communities’ relationship with Wall Street. We can do this by implementing common sense reforms to safeguard our public dollars, make our public finance system more efficient, and ensure that our money is used to provide fully-funded services to our communities. Taxpayers do trillions of dollars of business with Wall Street every year. It is time we start making our money work for us.

Key Recommendations
  • Transparency: Officials should disclose all payments for financial services and conduct an independent investigation of all financial deals to identify predatory features.
  • Accountability: Cities and states should take all steps to recover taxpayer dollars when bank deal unfairly with them, including taking legal action, renegotiating bad deals, and refusing future business.
  • Reducing Fees: Officials should identify financial fees that bear no reasonable relationship to the costs of providing the service and use their leverage as customers to negotiate better deals.
  • Collective Bargaining with Wall Street: Cities and states should agree to a common set of guidelines for an efficient municipal finance system and refuse business with any bank that does not abide by them, creating a new industry standard.
  • Creating Public Options for Financial Services: Cities and states should determine which services they could do themselves more cheaply if they hired the right staff, and make a plan to insource those functions.
  • Establishing Public Banks: Cities and states should establish public banks that are owned by taxpayers, can deliver a range of services, including municipal finance, and provide capital for local investment.

Read: "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It," by Saqib Bhatti.

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Daily Digest - November 18: Rotten Bank Deals in the Windy City and Beyond

Nov 18, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How the Banks Bamboozled Chicago (Chicago Sun Times)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How the Banks Bamboozled Chicago (Chicago Sun Times)

Roosevelt Institute Fellow Saqib Bhatti explains how banks broke their contracts with the city of Chicago, and how Mayor Emanuel should respond to get that money back.

  • Roosevelt Take: Today, Bhatti releases a new report, "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It," which examines this issue on a broader scale.

Good Data Make Better Cities (Boston Globe)

Roosevelt Institute Fellow Susan Crawford and Stephen Goldsmith argue in favor of a revamping of data-sharing laws within government, so they protect without limiting collaboration.

Long-Term Unemployment a Sign of Slack, NY Fed Economists Say (WSJ)

The New York Federal Reserve is calling on policymakers to account for the long-term unemployed in their assessment of the economy, writes Pedro da Costa.

That Silence You Hear Is the Sound of Healthcare.gov Working Just Fine (TNR)

Jonathan Cohn says the disparate headlines about how Obamacare is working are all correct: in general, premiums are increasing slowly, but what that means for individual plans will vary.

Number of Homeless Children in America Surges to All-Time High: Report (HuffPo)

A new report calculates that nearly 2.5 million children were homeless at some point in 2013. Lack of affordable housing plays a major role, report David Crary and Lisa Leff.

How Badly Do Republicans Want Tax Reform? (Maybe Not That Badly) (TAP)

Paul Waldman says that if Republicans – or their campaign funders – really wanted tax reform, they'd start writing a proposal regardless of the president's actions on other issues.

And Now the Richest .01 Percent (Robert Reich)

The richest .01 percent of the U.S. now hold a higher percentage of the country's wealth than in 1929, and Robert Reich says they've used it to buy off American democracy.

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Daily Digest - November 17: Getting Married Won't Solve Inequality

Nov 17, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Why You Shouldn’t Marry for Money (The Nation)

Roosevelt Institute Fellow Mike Konczal and Bryce Covert explain why the conservative idea of reducing poverty and inequality by promoting marriage won't actually work.

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Why You Shouldn’t Marry for Money (The Nation)

Roosevelt Institute Fellow Mike Konczal and Bryce Covert explain why the conservative idea of reducing poverty and inequality by promoting marriage won't actually work.

Nobel Prize-Winning Economist Reveals Why Robots Really Are Coming For Your Job (Business Insider)

Tomas Hirst reports on a new paper by Roosevelt Institute Chief Economist Joseph Stiglitz, which argues that left unchecked, innovation can create market failures that increase inequality.

Why Screwing Unions Screws the Entire Middle Class (MoJo)

Kevin Drum argues that the Democrats' split from organized labor in the 1960s and labor's subsequent loss of power helped to create the pro-business political climate we have today.

Kansas Revenues Will Fall $1 Billion Short of 2015 and 2016 Expenses, Fiscal Experts Say (Kansas City Star)

Following massive income tax cuts, Kansas faces severe shortages, and critics of the tax cuts worry the results will be cuts for schools, roads, and social services, writes Brad Cooper.

Inequality, Unbelievably, Gets Worse (NYT)

Steven Rattner points to new data from the Federal Reserve showing increased inequality. He emphasizes government transfer programs as a way to ease the problem.

Arkansas’s Blue Collar Social Conservatives Don’t Know What’s Coming (Daily Beast)

200,000 Akansans gained health insurance through a hybrid "private option," but Monica Potts writes that with newly elected officials focused on money over people, that could disappear.

The Real Winner of the Midterms: Wall Street (In These Times)

David Sirota ties Wall Street's funding of gubernatorial campaigns to its profits: many of these candidates support "pension reform" that will increase Wall Street's fees.

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Daily Digest - November 14: Strikes on Capitol Hill, the Post Office, and Walmart

Nov 13, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Take 5: CTU's Fight Against Risky Financial Deals, Ed Policy Under Rauner (Catalyst Chicago)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Take 5: CTU's Fight Against Risky Financial Deals, Ed Policy Under Rauner (Catalyst Chicago)

Roosevelt Institute Fellow Saqib Bhatti criticizes the Chicago Public Schools for diving deeper into overly risky financial deals, which he says were misrepresented by the banks.

Capitol Workers Ask Obama for Pay 'More Like Costco and Less Like Walmart' (The Guardian)

Workers who serve meals in the Capitol's dining facilities went on strike Wednesday to protest their poverty-level wages, writes Jana Kasperkevic. This is the first strike of federally contracted workers to include Capitol workers.

Postal Workers to Address Service Cuts at National Rallies (AJAM)

Ned Resnikoff reports on the demonstrations planned for Friday by the American Postal Workers Union, which is protesting cuts that would eliminate jobs and lead to slower delivery.

Walmart Workers Stage Sit-In At California Store Ahead Of Black Friday (Buzzfeed)

Yesterday's first-of-it's-kind protest involved about 25 Walmart workers in Southern California, reports Claudia Koemer, who draws parallels to retail strikes of the 1930s.

The Number of Unemployed Exceeds the Number of Available Jobs Across All Sectors (Working Economics)

Elise Gould says that since unemployed workers outnumber job openings across all sectors, the problem in the labor market must be a broad lack of demand, not a skills gap.

Great News: Lots of Americans Just Quit Their Jobs (Vox)

Danielle Kurtzleben says the sharp increase in the quits rate in September is a sign of economic health, since people don't leave jobs without expecting to find another.

Why Women Should Get the Rest of the Year Off (The Nation)

Bryce Covert quips that since women make only 78 percent of what men make, it's time for women to take a vacation – not just from their jobs, but from the second shift at home as well.

New on Next New Deal

The UNC Coup and the Second Limit of Economic Liberalism

Roosevelt Institute Fellow Mike Konczal says the University of North Carolina's financial aid rules demonstrate how current liberal policy pits the middle class against the poor for access to goods and services.

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The UNC Coup and the Second Limit of Economic Liberalism

Nov 13, 2014Mike Konczal

There was a quiet revolution in the University of North Carolina higher education system in August, one that shows an important limit of current liberal thought. In the aftermath of the 2014 election, there’s been a significant amount of discussion over whether liberals have an economic agenda designed for the working and middle classes. This discussion has primarily been about wages in the middle of the income distribution, which are the first major limit of liberal thought; however, it is also tied to a second limit, which is the way that liberals want to provide public goods and services.

So what happened? The UNC System Board of Governors voted unanimously to cap the amount of tuition that may be used for financial aid for need-based students at no more than 15 percent. With tuition going up rapidly at public universities as the result of public disinvestment, administrators have recently begun using general tuition to supplement their ability to provide aid. This cross-subsidization has been heralded as a solution to the problem of high college costs. Sticker price is high, but the net price for poorer students will be low.

This system works as long as there is sufficient middle-class buy-in, but it’s now capped at UNC. As a board member told the local press, the burden of providing need-based aid “has become unfairly apportioned to working North Carolinians,” and this new policy helps prevent that. Iowa implemented a similar approach back in 2013. And as Kevin Kiley has reported for IHE, similar proposals have been floated in Arizona and Virginia. This trend is likely to gain strength as states continue to disinvest.

The problem for liberals isn’t just that there’s no way for them to win this argument with middle-class wages stagnating, though that is a problem. The far bigger issue for liberals is that this is a false choice, a real class antagonism that has been created entirely by the process of state disinvestment, privatization, cost-shifting of tuitions away from general revenues to individuals, and the subsequent explosion in student debt. As long as liberals continue to play this game, they’ll be undermining their chances.

First Limit: Middle-Class Wages

There’s been a wave of commentary about how the Democrats don’t have a middle-class wage agenda. David Leonhardt wrote the core essay, “The Great Wage Slowdown, Looming Over Politics,” with its opening line: “How does the Democratic Party plan to lift stagnant middle-class incomes?” Josh Marshall made the same argument as well. The Democrats have many smart ideas on the essential agenda of reducing poverty, most of which derive from pegging the low-end wage at a higher level and then adding cash or cash-like transfers to fill in the rest. But what about the middle class?

One obvious answer is “full employment.” Running the economy at full steam is the most straightforward way of boosting overall wages and perhaps reversing the growth in the capital-share of income. However, that approach hasn’t been adopted by the President, strategically or even rhetorically. Part of it might be that if the economy is terrible because of vague forces, technological changes and necessary pain following a financial crisis, then the Democrats can’t really be blamed for stagnation. That strategy will not work out for them.

The Democrats (and even many liberals in general) also haven’t developed a story about why inequality matters so much for the middle class. There are such stories, of course: the collapse of high progressive taxation creates incentives to rent seek, financialization makes the economy focused less on innovation and more on disgorging the cash, and new platform monopolies are deploying forms of market power that are increasingly worrisome.

Second Limit: Public Provisioning

A similar dynamic is in play with social goods. The liberal strategy is increasingly to leave the provisioning of social goods to the market, while providing coupons for the poorest to afford those goods. By definition, means-testing this way puts high implicit taxes on poorer people in a way that decommodification does not. But beyond that simple point, this leaves middle-class people in a bind, as the ability of the state to provide access and contain costs efficiently through its scale doesn’t benefit them, and stagnating incomes put even more pressure on them.

As noted, antagonisms between the middle class and the poor in higher education are entirely a function of public disinvestment. The moment higher education is designed to put massive costs onto individual students, suddenly individuals are forced to look out only for themselves. If college tuition was largely free, paid for by all people and income sources, then there’d be no need for a working-class or middle-class student to view poorer student as a direct threat to their economic stability. And there's no better way to prematurely destroy a broader liberal agenda by designing a system that creates these conflicts.

These worries are real. The incomes of recent graduates are stagnating as well. The average length of time people are taking to pay off their student loans is up 80 percent, to over 13 years. Meanwhile, as Janet Yellen recently showed in the graphic below, student debt is rising as a percentage of income for everyone below the bottom 5 percent. It’s not surprising that studies find student debt impacting family formation and small business creation, and that people are increasingly looking out for just themselves.

You could imagine committing to lowering costs broadly across the system, say through the proposal by Sara Goldrick-Rab and Nancy Kendall to make the first two years free. But Democrats aren't doing this. Instead, President Obama’s solution is to try and make students better consumers on the front-end with more disclosures and outcome surveys for schools, and to make the lowest-income graduates better debtors on the back-end with caps on how burdensome student debt can be. These solutions by the President are not designed to contain the costs of higher education in a substantial way and, crucially, they don’t increase the public buy-in and interest in public higher education.

The Relevance for the ACA

I brought up higher education because I think it’s relevant, but I think it also can help explain the lack of political payout for the Affordable Care Act. It’s here! The ACA is not only meeting expectations, it’s even exceeding them in major ways. Yet it still remains unpopular, even as millions of people are using the exchanges. There is no political payout for the Democrats.

Liberals chalk this up to the right-wing noise machine, and no doubt that hurts. But part of the problem is that middle-class individuals still end up facing an individual product they are purchasing in a market, except without any subsidies. Though the insurance is better regulated, serious cost controls so far have not been part of the discussion. Polling shows half of the users of the exchange are unsure if they can make their payments and are worried about being able to afford getting sick. This, in turn, blocks the formation of a broad-based coalition capable of defending, sustaining, and expanding the ACA in the same way those have formed for Social Security and Medicare.

Any serious populist agenda will have to have a broader agenda for wages, with full employment as the central idea. But it will also need to include social programs that are broader based and focused on cost controls; here, luckily, the public option is a perfect organizing metaphor.

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There was a quiet revolution in the University of North Carolina higher education system in August, one that shows an important limit of current liberal thought. In the aftermath of the 2014 election, there’s been a significant amount of discussion over whether liberals have an economic agenda designed for the working and middle classes. This discussion has primarily been about wages in the middle of the income distribution, which are the first major limit of liberal thought; however, it is also tied to a second limit, which is the way that liberals want to provide public goods and services.

So what happened? The UNC System Board of Governors voted unanimously to cap the amount of tuition that may be used for financial aid for need-based students at no more than 15 percent. With tuition going up rapidly at public universities as the result of public disinvestment, administrators have recently begun using general tuition to supplement their ability to provide aid. This cross-subsidization has been heralded as a solution to the problem of high college costs. Sticker price is high, but the net price for poorer students will be low.

This system works as long as there is sufficient middle-class buy-in, but it’s now capped at UNC. As a board member told the local press, the burden of providing need-based aid “has become unfairly apportioned to working North Carolinians,” and this new policy helps prevent that. Iowa implemented a similar approach back in 2013. And as Kevin Kiley has reported for IHE, similar proposals have been floated in Arizona and Virginia. This trend is likely to gain strength as states continue to disinvest.

The problem for liberals isn’t just that there’s no way for them to win this argument with middle-class wages stagnating, though that is a problem. The far bigger issue for liberals is that this is a false choice, a real class antagonism that has been created entirely by the process of state disinvestment, privatization, cost-shifting of tuitions away from general revenues to individuals, and the subsequent explosion in student debt. As long as liberals continue to play this game, they’ll be undermining their chances.

First Limit: Middle-Class Wages

There’s been a wave of commentary about how the Democrats don’t have a middle-class wage agenda. David Leonhardt wrote the core essay, “The Great Wage Slowdown, Looming Over Politics,” with its opening line: “How does the Democratic Party plan to lift stagnant middle-class incomes?” Josh Marshall made the same argument as well. The Democrats have many smart ideas on the essential agenda of reducing poverty, most of which derive from pegging the low-end wage at a higher level and then adding cash or cash-like transfers to fill in the rest. But what about the middle class?

One obvious answer is “full employment.” Running the economy at full steam is the most straightforward way of boosting overall wages and perhaps reversing the growth in the capital-share of income. However, that approach hasn’t been adopted by the President, strategically or even rhetorically. Part of it might be that if the economy is terrible because of vague forces, technological changes and necessary pain following a financial crisis, then the Democrats can’t really be blamed for stagnation. That strategy will not work out for them.

The Democrats (and even many liberals in general) also haven’t developed a story about why inequality matters so much for the middle class. There are such stories, of course: the collapse of high progressive taxation creates incentives to rent seek, financialization makes the economy focused less on innovation and more on disgorging the cash, and new platform monopolies are deploying forms of market power that are increasingly worrisome.

Second Limit: Public Provisioning

A similar dynamic is in play with social goods. The liberal strategy is increasingly to leave the provisioning of social goods to the market, while providing coupons for the poorest to afford those goods. By definition, means-testing this way puts high implicit taxes on poorer people in a way that decommodification does not. But beyond that simple point, this leaves middle-class people in a bind, as the ability of the state to provide access and contain costs efficiently through its scale doesn’t benefit them, and stagnating incomes put even more pressure on them.

As noted, antagonisms between the middle class and the poor in higher education are entirely a function of public disinvestment. The moment higher education is designed to put massive costs onto individual students, suddenly individuals are forced to look out only for themselves. If college tuition was largely free, paid for by all people and income sources, then there’d be no need for a working-class or middle-class student to view poorer student as a direct threat to their economic stability. And there's no better way to prematurely destroy a broader liberal agenda by designing a system that creates these conflicts.

These worries are real. The incomes of recent graduates are stagnating as well. The average length of time people are taking to pay off their student loans is up 80 percent, to over 13 years. Meanwhile, as Janet Yellen recently showed in the graphic below, student debt is rising as a percentage of income for everyone below the bottom 5 percent. It’s not surprising that studies find student debt impacting family formation and small business creation, and that people are increasingly looking out for just themselves.

You could imagine committing to lowering costs broadly across the system, say through the proposal by Sara Goldrick-Rab and Nancy Kendall to make the first two years free. But Democrats aren't doing this. Instead, President Obama’s solution is to try and make students better consumers on the front-end with more disclosures and outcome surveys for schools, and to make the lowest-income graduates better debtors on the back-end with caps on how burdensome student debt can be. These solutions by the President are not designed to contain the costs of higher education in a substantial way and, crucially, they don’t increase the public buy-in and interest in public higher education.

The Relevance for the ACA

I brought up higher education because I think it’s relevant, but I think it also can help explain the lack of political payout for the Affordable Care Act. It’s here! The ACA is not only meeting expectations, it’s even exceeding them in major ways. Yet it still remains unpopular, even as millions of people are using the exchanges. There is no political payout for the Democrats.

Liberals chalk this up to the right-wing noise machine, and no doubt that hurts. But part of the problem is that middle-class individuals still end up facing an individual product they are purchasing in a market, except without any subsidies. Though the insurance is better regulated, serious cost controls so far have not been part of the discussion. Polling shows half of the users of the exchange are unsure if they can make their payments and are worried about being able to afford getting sick. This, in turn, blocks the formation of a broad-based coalition capable of defending, sustaining, and expanding the ACA in the same way those have formed for Social Security and Medicare.

Any serious populist agenda will have to have a broader agenda for wages, with full employment as the central idea. But it will also need to include social programs that are broader based and focused on cost controls; here, luckily, the public option is a perfect organizing metaphor.

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Daily Digest - November 13: When Government Intervention is the Best Remedy for a Health Crisis?

Nov 12, 2014Rachel Goldfarb

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Ebola and Inequality (Liberian Observer)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Ebola and Inequality (Liberian Observer)

Roosevelt Institute Chief Economist Joseph Stiglitz says the Ebola crisis reveals the absolute need for a government role in health care. Drug companies aren't creating cures for diseases that primarily impact the poor.

Don't Forget the Kinda Unemployed (U.S. News & World Report)

Mike Cassidy points out the workers who are missed by the traditional unemployment rate: involuntary part-timers and marginally attached workers. While unemployment has improved, underemployment is still elevated.

Is Wage Stagnation Killing the Democratic Party? (Vox)

While Ezra Klein agrees that wage stagnation is a major issue today, he doesn't think it impacted the midterms as much as the difference between midterm and presidential year electorates.

VW to Allow Labor Groups to Represent Workers at Chattanooga Plant (NYT)

Steven Greenhouse reports on Volkswagen's new policy, which will create formal structures for groups representing at least 15 percent of plant workers to meet with company officials.

If Democrats Want to be the Party of the People, They Need to Go Full Populist (The Week)

It's time to reject neoliberal commitment to markets and convince the American people of the power of economic populism and income transfer programs, writes Ryan Cooper.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch points out that the populist narrative was key in Democratic midterm wins.

Did Obama Shoot Himself in the Foot on Net Neutrality? (MoJo)

Erika Eichelberger suggests that the president may have lost the fight on net neutrality back in 2013, by appointing a Federal Communication Commission chairman who is so friendly to the industry.

Study: Social Welfare Programs Help Fight Poverty in America (The Guardian)

Jana Kasperkevic looks at a new study showing just how important social safety net programs are in reducing poverty; without food stamps, another 8 million Americans would be in poverty.

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On Public and Profits at Boston Review

Nov 12, 2014Mike Konczal

Did you know that prosecutors were paid based on how many cases they tried in the 19th century? Or that Adam Smith argued for judges running on the profit motive in the Wealth of Nations? I have a new piece discussion the rise and fall of disinterested public service as a response to the abuses of the profit motive in government service, or how we got away from that system and how we are now going back to it, at Boston Review. It's called Selling Fast: Public Goods, Profits, and State Legitimacy.

It's a review of Against the Profit Motive: The Salary Revolution in American Government, 1780–1940 by Yale legal historian Nicholas R. Parrillo, The Teacher Wars by Dana Goldstein, and Rise of the Warrior Cop by Radley Balko. There's a lot of interesting threads through all three, and I really enjoyed working on this review. I hope you check it out.

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Did you know that prosecutors were paid based on how many cases they tried in the 19th century? Or that Adam Smith argued for judges running on the profit motive in the Wealth of Nations? I have a new piece discussion the rise and fall of disinterested public service as a response to the abuses of the profit motive in government service, or how we got away from that system and how we are now going back to it, at Boston Review. It's called Selling Fast: Public Goods, Profits, and State Legitimacy.

It's a review of Against the Profit Motive: The Salary Revolution in American Government, 1780–1940 by Yale legal historian Nicholas R. Parrillo, The Teacher Wars by Dana Goldstein, and Rise of the Warrior Cop by Radley Balko. There's a lot of interesting threads through all three, and I really enjoyed working on this review. I hope you check it out.

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