Why Mayor de Blasio's Broadband Push Needs to Go Further—and Faster

Aug 27, 2015Matt LazoRobert Godfried

On July 16, Mayor Bill de Blasio announced a new initiative to bring free broadband service to 16,000 New Yorkers living in five public housing developments in the boroughs of Brooklyn, Queens, and the Bronx.

On July 16, Mayor Bill de Blasio announced a new initiative to bring free broadband service to 16,000 New Yorkers living in five public housing developments in the boroughs of Brooklyn, Queens, and the Bronx. In partnership with President Obama’s ConnectHome initiative, the de Blasio administration has committed an investment of up to $10 million dollars for five New York City Housing Authority (NYCHA) developments. Earlier this year they pledged $70 million to provide free and low-cost internet service for low-income communities. They will start with a demonstration project in the NYCHA’s Queensbridge North and South Houses, which together make up the largest public housing development in the nation.

This is a groundbreaking and forward-thinking policy and one for which Moustafa  Elshaabiny and I advocated in 10 Ideas for Equal Justice, an undergraduate policy journal published by the Roosevelt Institute. We found that low-income New Yorkers find it difficult to access job opportunities, information resources, and vital social communications such as email and Facebook. They rely on public services such as libraries or a number of NYCHA- and nonprofit-run programs, such as Broadband Technology Opportunities Program and Digital Vans, to obtain Internet access. However, these services are usually time-limited or temporary and are often only available from 10 a.m. to 4 p.m, directly conflicting with the less-than-flexible work schedules of low-income residents. Therefore we called on the NYCHA to mandate that Internet service be provided for all residents of NYCHA Housing Developments via the Housing Quality Standards being implemented by the de Blasio administration.

De Blasio’s policy aims to bring “Internet service of at least 25 Mbps [Megabits per second] for all residents” to the five targeted developments. His administration is setting the minimum according to the FCC Broadband Speed Benchmark. While this is an ambitious goal for a community that previously had no broadband access, it is not enough. It is important to note that there is no clarification as to whether the 25 Mbps is per resident or per household. Furthermore, this minimum service is far below the city’s average of 56 Mbps. While de Blasio stated that residents can pay for faster speeds, this undermines his goal of promoting internet equity at a minimum or free cost to low-income residents. In fact, de Blasio has emphasized that low-income residents cannot afford even a basic home broadband plan, hence his plan to provide it for free. It seems counterintuitive to suggest they can choose to pay for an upgrade.

In my 10 Ideas entry, we called on the NYCHA to collaborate with the New York City Department of Information Technology and Telecommunications to determine the appropriate bandwidth requirement.Tenants would have the opportunity to directly communicate their digital needs, such as daily hours needed for online homework, to NYCHA. NYCHA can also hold open forums or conduct surveys to better understand tenant’s broadband width need.  This method would be superior to that currently being used by the de Blasio administration, as it would allow residents to determine what bandwidth actually meets their needs.

Another concern with the plan laid out by the de Blasio administration is that although Sprint is named as the provider, the specifics of the contract have not yet been made clear. As a result, we don’t know how the city plans to finance the continuous service cost, or how it will insure that Sprint maintains the broadband infrastructure and services. The contract should incorporate safeguards against broadband service deterioration and regulations that encourage keeping up to date with the latest broadband services demand.

In the modern age, internet access is the great equalizer. Yet the Department of Information Technology and Telecommunications reported that 36 percent of households below the poverty line do not have Internet access at home. Our city leaders now recognize that this contributes to a “homework gap” and economic immobility, as low-income residents rely on limited public services for job searches and educational resources. In other words, the internet is a critical service, not a luxury. We must recognize as a society that we cannot address inequality without first bridging this digital divide.

Matt Lazo is the Policy Change coordinator for Roosevelt @ CCNY and a 10 Ideas author. Robert Godfried is a member of Roosevelt @ Columbia and Roosevelt's 2015 Summer Institute.

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Planned Parenthood Vote Highlights the GOP's Broken Moral Compass

Aug 4, 2015Andrea Flynn

Senate Republicans failed yesterday to advance a bill that would have defunded Planned Parenthood, but their crusade against the organization and others like it is far from over.

Senate Republicans failed yesterday to advance a bill that would have defunded Planned Parenthood, but their crusade against the organization and others like it is far from over. Speaking in support of the legislation she sponsored, Iowa Senator Joni Ernst said the Planned Parenthood videos have “shaken the moral compass of our country." But given that members of the “pro-life” party are willing to shut down the government over reproductive health access even as they ignore and exacerbate the actual crises that threaten our families and communities, we must question the alignment of the compass they’re following.

The video saga has now been proven to be complete nonsense. Two state investigations have cleared Planned Parenthood of any wrongdoing. Planned Parenthood is not, as the video’s editors portrayed, harvesting fetal tissue for profit, and their donation of such tissue and their compensation for related costs is, it turns out, perfectly legal. In fact, some of the senators leading this crusade (including Mitch McConnell) signed the very piece of 1993 legislation that legalized tissue donation. There are a number of issues shaking the moral compass of this country, but Planned Parenthood is not one of them.

Child poverty should shake our moral compass. Today, 22 percent of all children live in poverty, including 40 percent of Black children, and almost half live in low-income families. The U.S. child poverty rate is higher than all but one other OECD country. Poor children are more likely to drop out and perform poorly in school, to have developmental delays, and to experience behavioral, physical, and socioemotional problems. Yet conservatives still love to hate on the safety net programs that help keep these kids and their families afloat. In recent years, they have threated to cut funding for SNAP (food stamps) and WIC (the supplemental nutrition program that serves nearly 10 million low-income women and children) and have opposed legislation that would make it more affordable for low-income kids to go to college.

Maternal mortality should shake our moral compass. Today, more U.S. women die in childbirth and from pregnancy-related causes than at almost any point in the last 25 years, and the U.S. is one of only seven countries to see its maternal mortality rate increase over the last decade. Black women are three to four times more likely to die from pregnancy-related causes than white women, and in some communities experience a maternal mortality rate equal to that in some Sub-Saharan African countries. But instead of expanding access to quality, affordable, and comprehensive health care, conservatives are busy closing clinics that predominantly serve women of color, low-income women, and young women. They remain steadfast in their refusal to participate in Medicaid expansion under the Affordable Care Act (ACA), which would extend coverage and care to millions more low-income women. And they are still intent on repealing the ACA in its entirety, despite the fact that it has brought coverage to more than 16 million individuals.

Structural racism should shake our moral compass. The conservatives accusing Planned Parenthood of devaluing human life have been pretty quiet on the systemic violence and discrimination against communities of color. Where’s the outrage over Sandra Bland, Freddie Gray, Trayvon Martin, and the countless others who have died at the hands of law enforcement? Where’s the outrage from the supposed “pro-family” party over the school-to-prison pipeline that has torn apart families and communities across the country? Where’s the outrage over our imbalanced and unjust criminal justice system? Where is the space for these lives under the conservative pro-life umbrella?

Pay inequity should shake our moral compass. The gender pay gap in the United States is alive and well, with women still making 78 percent of the earnings of white men (Black and Latina women make 64 and 56 percent, respectively). This gap results in a significant loss of income for women and their families over the life cycle and contributes to the high rates of poverty among women and single mothers as well as children. If equal pay were realized, it would mean a raise for nearly 60 percent of U.S. women and two-thirds of single mothers. The increase in earnings would expand access to health care, food and housing security, and educational opportunities, and would have countless long-term benefits for children. But GOP senators have voted four times since 2012 to block the Paycheck Fairness Act, which would make it easier for employees to identify and address pay inequities. They are also consistently opposed to raising the minimum wage, a move that would benefit more than one-fifth of all children in the United States.

Income inequality—today greater than at any point since the Great Depression—should shake our moral compass. Thanks to our broken economic rules, the incomes of the top 1 percent increased by as much as 200 percent over the past 30 years while the net worth of the poorest Americans has decreased and stagnant wages and increased debt have pushed more middle-class families into poverty. After the 2008 recession, millions of Americans lost their homes, their jobs and their health care, and they are still struggling to regain their footing. The vast majority of Americans now believe a middle-class lifestyle is well beyond their reach. Yet conservatives continue to support the very policies that got us here in the first place: tax cuts for the wealthy; the erosion of unions and labor protections; and corporate structures that encourage a short-term focus on stock prices instead of long-term investments in growth and innovation.

The inability of individuals to access basic health services should shake our moral compass. Conservatives insist their efforts would not actually impact health access, because Planned Parenthood’s funding would simply be reallocated to other providers. But there are not actually enough providers to fill the void that would be left by Planned Parenthood. As Senator Patty Murray said, “you can’t pour a bucket of water into a cup.” Even with Planned Parenthood and the gains of the ACA, conservative laws have left women across this country reeling. We need more Planned Parenthoods and more of their sister clinics, not fewer.

Conservatives insist they care about the health of women and their families, but their actions indicate otherwise. They have proposed the elimination of Title X, the nation’s only program dedicated to providing family planning care and services. They are threatening—for the third time in four years—to shut down the federal government over reproductive health funding. They continue to support legislation that is closing clinics across the country, cutting access not only to abortion but also to basic preventive health services. The list goes on. This party is more interested in advancing its antiquated, harmful agenda than it is in the health of women—and men, young people, immigrants, trans folks, and low-income families—who rely on Planned Parenthood and other such providers. Their moral compass needs a good shaking up. 

Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter at @dreaflynn.

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Introducing Our Latest Report: Defining Financialization

Jul 27, 2015Mike Konczal

We’re releasing a new report today as part of the Roosevelt Institute’s Financialization Project: Definining Financialization.

Following the well-received Disgorge The Cash, this is really the foundational paper that outlines a working definition of financialization, some of the leading concerns, worries, and research topics in each area, and a plan for future research and action. Since this is what we are building from, we’d love feedback.

Prior to this, I couldn’t find a definition of financialization broad enough to account for several different trends and accessible enough for a general, nonacademic audience. So we set out to create our own solid definition of financialization that can serve as the foundation for future research and policy. That definition includes four core elements: savings, power, wealth, and society. Put another way, financialization is the growth of the financial sector, its increased power over the real economy, the explosion in the power of wealth, and the reduction of all of society to the realm of finance.

Each of these four elements is essential, and together they tell a story about the way the economy has worked, and how it hasn’t, over the past 35 years. This enables us to understand the daunting challenges involved in reforming the financial sector, document the influence of finance over society and the economy as a whole, and clarify how finance has compounded inequality and insecurity while creating an economy that works for fewer people.

Savings: The financial sector is responsible for taking our savings and putting it toward economically productive uses. However, this sector has grown larger, more profitable, and less efficient over the past 35 years. Its goal of providing needed capital to citizens and businesses has been forgotten amid an explosion of toxic mortgage deals and the predatory pursuit of excessive fees. Beyond wasting financial resources, the sector also draws talent and energy away from more productive fields. These changes constitute the first part of our definition of financialization.

Power: Perhaps more importantly, financialization is also about the increasing control and power of finance over our productive economy and traditional businesses. The recent intellectual, ideological, and legal revolutions that have pushed CEOs to prioritize the transfer of cash to shareholders over regular, important investment in productive expansion need to be understood as part of the expansion of finance.

These historically high payouts drain resources away from productive investment. But beyond investment, there are broader worries about firms that are too dominated by the short-term interests of shareholders. These dynamics increase inequality and have a negative impact on innovation. Firms only interested in shareholder returns may be less inclined to take on the long-term, risky investment in innovation that is crucial to growth. This has spillover effects on growth and wages that can create serious long-term problems for our economy. This also makes full employment more difficult to achieve, as the delinking of corporate investment from financing has posed a serious challenge for monetary policy.

Wealth: Wealth inequality has increased dramatically in the past 35 years, and financialization includes the ways in which our laws and regulations have been overhauled to protect and expand the interests of those earning income from their wealth at the expense of everyone else. Together, these factors dramatically redistribute power and wealth upward. They also put the less wealthy at a significant disadvantage.

More important than simply creating and expanding wealth claims, policy has prioritized wealth claims over competing claims on the economy, from labor to debtors to the public. This isn’t just about increasing the power of wealth; it’s about rewriting the rules of the economy to decrease the power of everyone else.

Society: Finally, following the business professor Gerald Davis, we focus on how financialization has brought about a “portfolio society,” one in which “entire categories of social life have been securitized, turned into a kind of capital” or an investment to be managed. We now view our education and labor as “human capital,” and we imagine every person as a little corporation set to manage his or her own investments. In this view, public functions and responsibilities are mere services that should be run for profit or privatized, or both.

This way of thinking results in a radical reworking of society. Social insurance once provided across society is now deemphasized in favor of individual market solutions; for example, students take on an ever-increasing amount of debt to educate themselves. Public functions are increasingly privatized and paid for through fees, creating potential rent-seeking enterprises and further redistributing income and wealth upward. This inequality spiral saps our democracy and our ability to collectively address the nation’s greatest problems.

We have a lot of future work coming from this set of definitions, including a policy agenda and FAQ on short-termism in the near future. I hope you check this out!

Follow or contact the Rortybomb blog:
 
  

 

We’re releasing a new report today as part of the Roosevelt Institute’s Financialization Project: Definining Financialization.

Following the well-received Disgorge The Cash, this is really the foundational paper that outlines a working definition of financialization, some of the leading concerns, worries, and research topics in each area, and a plan for future research and action. Since this is what we are building from, we’d love feedback.

Prior to this, I couldn’t find a definition of financialization broad enough to account for several different trends and accessible enough for a general, nonacademic audience. So we set out to create our own solid definition of financialization that can serve as the foundation for future research and policy. That definition includes four core elements: savings, power, wealth, and society. Put another way, financialization is the growth of the financial sector, its increased power over the real economy, the explosion in the power of wealth, and the reduction of all of society to the realm of finance.

Each of these four elements is essential, and together they tell a story about the way the economy has worked, and how it hasn’t, over the past 35 years. This enables us to understand the daunting challenges involved in reforming the financial sector, document the influence of finance over society and the economy as a whole, and clarify how finance has compounded inequality and insecurity while creating an economy that works for fewer people.

Savings: The financial sector is responsible for taking our savings and putting it toward economically productive uses. However, this sector has grown larger, more profitable, and less efficient over the past 35 years. Its goal of providing needed capital to citizens and businesses has been forgotten amid an explosion of toxic mortgage deals and the predatory pursuit of excessive fees. Beyond wasting financial resources, the sector also draws talent and energy away from more productive fields. These changes constitute the first part of our definition of financialization.

Power: Perhaps more importantly, financialization is also about the increasing control and power of finance over our productive economy and traditional businesses. The recent intellectual, ideological, and legal revolutions that have pushed CEOs to prioritize the transfer of cash to shareholders over regular, important investment in productive expansion need to be understood as part of the expansion of finance.

These historically high payouts drain resources away from productive investment. But beyond investment, there are broader worries about firms that are too dominated by the short-term interests of shareholders. These dynamics increase inequality and have a negative impact on innovation. Firms only interested in shareholder returns may be less inclined to take on the long-term, risky investment in innovation that is crucial to growth. This has spillover effects on growth and wages that can create serious long-term problems for our economy. This also makes full employment more difficult to achieve, as the delinking of corporate investment from financing has posed a serious challenge for monetary policy.

Wealth: Wealth inequality has increased dramatically in the past 35 years, and financialization includes the ways in which our laws and regulations have been overhauled to protect and expand the interests of those earning income from their wealth at the expense of everyone else. Together, these factors dramatically redistribute power and wealth upward. They also put the less wealthy at a significant disadvantage.

More important than simply creating and expanding wealth claims, policy has prioritized wealth claims over competing claims on the economy, from labor to debtors to the public. This isn’t just about increasing the power of wealth; it’s about rewriting the rules of the economy to decrease the power of everyone else.

Society: Finally, following the business professor Gerald Davis, we focus on how financialization has brought about a “portfolio society,” one in which “entire categories of social life have been securitized, turned into a kind of capital” or an investment to be managed. We now view our education and labor as “human capital,” and we imagine every person as a little corporation set to manage his or her own investments. In this view, public functions and responsibilities are mere services that should be run for profit or privatized, or both.

This way of thinking results in a radical reworking of society. Social insurance once provided across society is now deemphasized in favor of individual market solutions; for example, students take on an ever-increasing amount of debt to educate themselves. Public functions are increasingly privatized and paid for through fees, creating potential rent-seeking enterprises and further redistributing income and wealth upward. This inequality spiral saps our democracy and our ability to collectively address the nation’s greatest problems.

We have a lot of future work coming from this set of definitions, including a policy agenda and FAQ on short-termism in the near future. I hope you check this out!

Follow or contact the Rortybomb blog:
 
  

 

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Hillary Clinton's Economic Agenda is Good for Women, But Should Be Even Bolder

Jul 16, 2015Andrea Flynn

Hillary Clinton gave her first major economic policy address earlier this week and outlined her goals for lifting wages for the middle class, expanding social services, and addressing growing economic inequality. She said that an important ingredient to strong economic growth is women’s workforce participation, and promised to knock down many of the barriers that hold women—and our economy—back.

Hillary Clinton gave her first major economic policy address earlier this week and outlined her goals for lifting wages for the middle class, expanding social services, and addressing growing economic inequality. She said that an important ingredient to strong economic growth is women’s workforce participation, and promised to knock down many of the barriers that hold women—and our economy—back. But she failed to mention one issue that is critical to the economic wellbeing of women and their families: access to reproductive health care. 

It was encouraging to hear Clinton acknowledge the important role that women play in the U.S. economy. After all, women’s entrance into the workforce in the 1970s and 1980s is credited with driving a fifth of GDP growth. But over the past 15 years, their participation in the labor market has declined from 60 to 57 percent, not a major decline but certainly a trend in the wrong direction. The U.S. now ranks 19th out of 24 advanced countries on this measure. America’s dismal status can be blamed in large part on the lack of generous and sensible work and family polices we see in other OECD countries. These include paid sick leave, paid family leave, and affordable child care. Another factor is the stubborn wage gap that disadvantages women—and particularly women of color—throughout their working lives and beyond. Clinton indicated that addressing these inequities is a primary focus of her economic agenda. Doing so would significantly improve the lives millions of women and their families. 

But we must do all that and more. Without access to comprehensive, quality, and affordable health care, including the full spectrum of reproductive health care—maternal health care, family planning, and abortion care—women and their families will not be able to take full advantage of the economic opportunities available to them.

I’m not worried that Hillary isn’t going to be a strong supporter of reproductive rights. In her Roosevelt Island campaign launch, she called out Republicans who “shame and blame women, rather than respect our right to make our own reproductive health decisions.” Her campaign sharply criticized House Republicans for passing a 20-week abortion ban earlier this year, saying, "Politicians should not interfere with personal medical decisions, which should be left to a woman, her family and her faith, in consultation with her doctor or health care provider." Historically, she has been an advocate for reproductive rights in both domestic and international policy.

But it would be powerful if she could also articulate reproductive health as a critical component of economic security, as we at the Roosevelt Institute did in our recent blueprint for reversing economic inequality. Voters understand reproductive health as an economic issue. New polling from Virginia shows that 64 percent of voters there believe that a woman’s financial stability is dependent on her ability to control whether and when she has children, and 68 percent believe laws that make it harder to access abortion can have a negative impact on woman’s financial security. Polling conducted in New York and Pennsylvania showed similar results.

This isn’t just a matter of opinion; the evidence illustrates that reproductive health access has economic benefits for families. Studies have shown links between family planning access and greater educational and professional opportunities for women, as well as increased earnings over women’s lifetimes. Women report that using birth control has allowed them to better take care of themselves and their families, to stay in school, to support themselves financially, and to get or keep a job and pursue a career. And when women don’t have access to reproductive health care, they are economically disadvantaged. Take the results of the recent Turnaway Study, which has shown that women who seek but are denied an abortion are three times as likely as those who access the procedure to end up below the federal poverty line two years later.

In light of these findings, a progressive economic agenda will be incomplete if it does not include access to comprehensive reproductive health care. Lack of access to those services has significant health and economic costs. Women of color, immigrant women, and poor women all experience higher rates of chronic disease, unintended pregnancy, and lower life expectancy than women with higher incomes. U.S. women of color are 3–4 times more likely than white women to die of pregnancy-related causes, and infants born to those women are 2.4 times more likely than those born to white women to die in their first year of life. In some regions of the United States, the maternal mortality rate among Black women is comparable to that in some Sub-Saharan African countries. These disparities impact women’s quality of life. They inhibit these women’s ability to care for themselves and their families, to play an active role in their communities, and to participate in the workforce and achieve economic security. There is no more important time than now to advocate for a broader progressive agenda. Attacks on reproductive health access are at an all-time high and access to basic health services is being rolled back at a rapid rate.

The right and ability to make decisions about our bodies is a fundamental building block of our social and economic wellbeing. We can’t expect people to separate the physical, social, and economic demands and stresses they experience. Are women supposed to worry about their need for an abortion without worrying about the job they might lose if they take a day off to get one? Do they stress over needing to put food on the table for their kids without also worrying about how they will pay for birth control, student loans, and rent? No. For the vast majority of people in this country, life is messy and complicated and overwhelming, and everyday families have no choice but to juggle each of these issues simultaneously.

Progressives know that. Now is the time for them to put forth an economic agenda that will address all aspects of our economic wellbeing—not just those that have historically been politically palatable. 

Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter at @dreaflynn.

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Beyond Fairness: Skyrocketing CEO Pay Is Bad for Our Economy

Jul 16, 2015Susan Holmberg

Next week marks the 5th anniversary of the Dodd-Frank Wall Street Reform and Protection Act. While the law has made some solid strides toward regulating Wall Street (with the creation of the Consumer Financial Protection Bureau arguably the most potent and popular), there is still much work to be done, particularly in the realm of CEO pay reform.

Next week marks the 5th anniversary of the Dodd-Frank Wall Street Reform and Protection Act. While the law has made some solid strides toward regulating Wall Street (with the creation of the Consumer Financial Protection Bureau arguably the most potent and popular), there is still much work to be done, particularly in the realm of CEO pay reform.

From 1978 to 2014, executive compensation at American firms rose 997 percent, compared with a sluggish 10.9 percent growth in worker compensation over the same period.

While CEO pay continues its determined ascent up a seemingly limitless mountain of stock options and other performance pay, the SEC has yet to implement all of the Dodd-Frank rules designed to reform CEO pay practices. The Say-on-Pay provision, which allows shareholders an advisory vote on proposed executive compensation packages, has been in effect since 2011, and Section 954—the clawbacks provision—should soon be finalized. But the SEC continues to delay the disclosure rule on CEO–worker pay gaps, as well as a few other key provisions.

This raises a few obvious questions: Why is it so important to urge the SEC to implement these CEO pay reform rules? Does it really matter how much CEOs are paid? Isn’t this debate really just about people being jealous of, for example, former Oracle chief Larry Ellison and his Hawaiian island?

Hardly. We have to stop talking about the CEO pay issue in terms of fairness, which usually leads to accusations of envy. This conversation just doesn’t get us very far. The truth is that skyrocketing CEO pay is terrible for our economy for two reasons, as we explain in the infographic below.

To elaborate, the problems are as follows:

1. How CEOs Are Paid

The current trend in how CEOs are paid, particularly with stock options, creates a range of economic problems. Several studies show that equity-heavy pay, because it makes executives very wealthy very quickly, distorts CEOs’ incentives, inducing them to take on too much risk. Instead of bearing this risk themselves, they shift it onto the rest of society, as we saw during the financial crisis. This model also encourages executives to behave fraudulently, as in the backdating scandals of a decade ago, and lessens their motivation to invest in their businesses. In addition, according to economist William Lazonick, in order to issue stock options to top executives while avoiding the dilution of their stock, corporations often divert funds to stock buybacks rather than spending on research and development, capital investment, increased wages, or new hiring. To top it all off, these pay packages cost taxpayers billions of dollars due to the performance pay tax loophole instituted by President Clinton.

2. How Much CEOs Are Paid

In addition to its problematic structure, the sheer volume of CEO pay creates an array of economic problems. A handful of high-profile economists—Thomas Piketty, Joseph Stiglitz, and Robert Reich, to name a few—have begun to make the case that a high degree of economic inequality precipitates financial instability because it leads to, for example, a decline in consumer demand, which has tremendous spillover effects in terms of investment, job creation, and tax revenue, not to mention social instability.

The growth of executive pay is a core driver of America’s rising economic inequality. According to the Economic Policy Institute, “[e]xecutives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.” Another calculation by economists Ian Dew-Becker and Robert Gordon finds that the large increase in the share of the top .01 percent is mostly explained by the incomes of superstars and CEOs.

Dodd-Frank’s anniversary should remind us that we still have a long way to go to rein in ever-increasing CEO pay, including instituting key provisions like the CEO–worker pay gap. If we move the CEO pay debate beyond the rhetoric of fairness and envy to a conversation about its costs, we could galvanize the public around this issue. The evidence is clear: skyrocketing CEO pay is not just an ethical problem; it’s also simply bad economics.

Susan Holmberg is Director of Research and a Fellow at the Roosevelt Institute.

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Inequality Isn't Just Bad for the Economy—It's Toxic for the Environment

Jul 6, 2015Susan Holmberg

Cross-posted from Grist

Tackling economic inequality is good climate change policy.

Cross-posted from Grist

Tackling economic inequality is good climate change policy.

The pope’s encyclical on climate change was received with both enormous enthusiasm and criticism, reactions that will only intensify as he continues to lead efforts to solve our climate crisis and generate momentum for the UN Climate Conference later this year. His latest move? Inviting Naomi Klein, author most recently of This Changes Everything, to help lead last week’s Vatican conference on climate change.

The most consistent and profound message threaded throughout Pope Francis’s text is how disproportionately vulnerable the poor are to the escalating effects of climate change. Poor communities are on the front lines, particularly susceptible to induced mega-storms, droughts, flooding, and other conditions that make life even more difficult. Because of their economic instability, impoverished communities are also more easily affected by a storm that in itself is not deadly. In 1998, when Hurricane Mitch hit Honduras, the poor were disproportionately devastated; impoverished households lost 15–20 percent of their assets as a result of the storm, while the rich lost only 3 percent. This is why the environmental justice (EJ) movement has long spotlighted the role of structural racism in coercing people of color and the poor into living in vulnerable areas and near the most polluted environments (landfills, industrial plants, etc.) and consequently experiencing worse health and quality of life outcomes.

Yet, to build on the Pope and EJ movement’s message that economic inequality and environmental quality are linked, it is important to point out that the relationship between the economy and environment goes both ways. We’ve become more aware that environmental damage can be especially bad for poor people and people of color. What is less obvious is that high economic inequality—in the case of the United States, we’re almost at pre-Great Depression levels—is also bad for our environment.

Economist James Boyce argues that, because wealth ultimately converts into political power, a society with high levels of wealth and income inequality leaves those at the bottom less able to resist the powerful interests that benefit from pollution. That’s consistent with the EJ movement’s message, but Boyce takes it further by arguing, “the total magnitude of environmental harm depends on the extent of inequality. Societies with wider inequalities of wealth and power tend to have more environmental harm.”

Boyce provides two compelling pieces of evidence for his argument. The first is his study, with colleagues from the Political Economy Research Institute, comparing industrial air pollution across U.S. metro areas. The authors look at the distribution of air pollution impacts across income levels and racial groups and find that in cities where the gaps in pollution exposure between people of color and whites are larger, there tends to be much more pollution in general.

The second study Boyce conducted, with another group of colleagues, looked at environmental quality across the 50 states and asked why it’s better in some states than others. It again turns out that these variations have much to do with differences in wealth and power. “Where income inequalities were greater, where educational inequalities were greater, where the fairness of fiscal policy in terms of both the tax system and access to services like Medicaid was better, you tended to find differences in environmental degradation.” More equal distributions of wealth and power were associated with better environmental outcomes.

Boyce’s results are supported by complementary studies. Economist Jungho Baek and his co-authors also find that more equal income distribution in the U.S. results in better environmental quality in both the short- and long-run. Australian researchers identify similar impacts on the “stability of major systems including the social, terrestrial, water and mineral industry.”

We can imagine a variety of mechanisms for how wider disparities in economic inequality would lead to higher “quantities” of environmental degradation. One is how we make environmental policy decisions. The Reagan administration mandated that cost-benefit analysis (CBAs) would be the primary tool for making these decisions, like allowable use of pesticides and levels of resource extraction. The belief was, and still is, that cost-benefit analysis is always the most objective, transparent, and efficient method.

But in addition to the fact that CBAs are often criticized for being widely inaccurate and politically motivated, benefits are often valued by the willingness to pay for environmental improvements, which is problematic. When surveyed, the rich say they are willing to pay more than the poor for keeping a landfill incinerator out of their communities. Thus, despite the fact that common sense tells us impoverished and disempowered communities would just as much like to live in a clean and safe environment as the more wealthy and powerful, cost-benefit analyses typically say otherwise. The end result is that a CBA survey might recommend a higher level of allowable pollution than if the survey results were based on a more equitable population.

Precipitated by the 2008 global financial crisis, we are finally having a lively debate about economic inequality in the U.S., which, after decades of stability, has been rising for the past 30 years or so. Yet our urgent conversation about climate change and environmental quality is siloed from this broader debate. As we confront the realities of our changing climate, we must recognize that environmental devastation is a distinct byproduct of economic inequality. We need to blend these conversations and also understand that the host of policy ideas coming out of the inequality debate could play an important role in solving our current environmental crisis.

Susan Holmberg is a Fellow and Director of Research at the Roosevelt Institute.

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Shared Security: A New Deal for the New Century

Jul 6, 2015Richard Kirsch

If Social Security, the minimum wage, unemployment insurance, and the 40-hour workweek laid the foundation for the middle class in the 20th century, what would be the equivalent for the 21st century? The odd couple of a billionaire entrepreneur and a labor leader have come up with what could be a breakthrough proposal for rebuilding the middle class.

If Social Security, the minimum wage, unemployment insurance, and the 40-hour workweek laid the foundation for the middle class in the 20th century, what would be the equivalent for the 21st century? The odd couple of a billionaire entrepreneur and a labor leader have come up with what could be a breakthrough proposal for rebuilding the middle class.

Nick Hanauer, who made his fortune as an early Amazon investor, and David Rolf, the head of an SEIU local that has successfully organized tens of thousands of home care workers, detailed their plan for Shared Security in Democracy Journal.  The proposal aims to restore the foundation of the middle class: economic security.

Hanauer and Rolf create a fictional young worker named Zoe to personify how working people in the new economy live in constant economic insecurity. Zoe works part-time as a hotel manager and supplements her income driving for Uber, working as a gardener, and renting her apartment on Airbnb. Still, she has no benefits and struggles to pay the rent and keep her car running. She doesn’t have the time or money to finish her college degree and wonders whether it would be worth the loans even if she did. When Zoe rents out her apartment, she stays with her parents, who also did not go to college. But her parents, who have had regular full-time employment over the course of their lives, look forward to a retirement made secure by a modest pension, some savings, Social Security, and Medicare.

As Hanauer and Rolf write, “Zoe’s parents entered the workforce with the expectation that hard work would be rewarded with decent pay, improving prospects, and a comfortable retirement…This was the social contract of the 1950s, ’60s, and ’70s…But for Zoe’s generation, this contract no longer exists.”

The new 21st century social contract they propose is based on giving Zoe’s generation middle class security, which they emphasize is the engine of our economy.  Hanauer and Rolf write, “the middle class is the source of all growth and prosperity in a modern, technological economy and economic security is the essential feature of what it means to be included in the middle class.”

Just as FDR’s New Deal was founded on raising labor standards and providing social insurance, Hanauer and Rolf’s plan is based on Shared Security Standards and a Shared Security Account. The two combine to modernize basic labor standards and to extend existing and new social insurance to all workers, including part-time employees and those who employers consider independent contractors.

The new labor standards would include: a livable wage (a higher minimum wage) and guarantees of overtime pay; pay equity; fair scheduling of work; and the right to use paid sick time, family leave, and vacations, which would be financed from each employee’s Shared Security Account.

The breakthrough innovation in the proposal is establishing a Shared Security Account for every worker. Each employer would pay the share of benefits earned by each worker into those workers’ accounts based on a 40-hour week. In other words, an employer would pay all the benefits for a full-time employee while paying half the benefits for someone who works for that employer 20 hours a week.

Each employer would pay its share of existing benefits required by the federal government or states, including Social Security, Medicare, an employer contribution toward health care, unemployment insurance, workers’ compensation, and disability. In addition, the employer would be required to pay for new benefits, including paid sick days, family leave and vacation, and a contribution to a 401(k)-type retirement account.

The authors rightly celebrate the positive impact of their proposal for American workers. It would turn the trend toward contingent, part-time, temporary, and shared work from a recipe for continuous financial insecurity to a foundation for middle-class security.

What they don’t explore is how their Shared Security system would significantly slow down the work trends that their proposal addresses. Looking again at Zoe, the hotel management company keeps her at 29 hours a week to avoid paying benefits. But when that financial advantage is taken away, or reduced significantly if the company voluntarily offers a higher benefit level to full-time employees, the company would be much more likely to employ Zoe full-time. In doing so, the company would gain the advantages that come with a full-time employee: less need for training, lower turnover, a better work attitude, and company loyalty.

As The New York Times reported last month, we are already seeing some startup tech companies, which Hanauer and Rolf say use the contingent model to support innovation, realizing that it makes better business sense to hire full-time employees. For both low-wage employers and startups, Shared Security will lead firms to use the contingent work model more when it makes sense for delivering a better product and less as a way to cut labor costs.

All of which reinforces the authors’ potent economic and political analysis, which is that assuring that every job is a good job is not only fair, it is the driver of economic growth. Raising wages, providing time to care for yourself and your family, and having affordable health insurance and retirement security is not just about being fair, and it’s not just about rewarding workers for their contributions to a business. It’s the exact opposite of conservative economic theory. At its root, it recognizes that people with the security of a good, middle-class job drive our economy forward. 

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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Once Again, the ACA Survived SCOTUS -- But the Fight Isn't Over Yet

Jun 25, 2015Andrea Flynn

Today the Supreme Court decided in favor of the government and the more than 6 million individuals who now have health coverage thanks to the Affordable Care Act’s subsidies. The 6–3 King v. Burwell decision—which determined that individuals in all states, not just those that established their own health exchanges, could be eligible for federal subsidies—is a win for President Obama, for the law more broadly, and for the health and economic security of millions of women and their families.

Today the Supreme Court decided in favor of the government and the more than 6 million individuals who now have health coverage thanks to the Affordable Care Act’s subsidies. The 6–3 King v. Burwell decision—which determined that individuals in all states, not just those that established their own health exchanges, could be eligible for federal subsidies—is a win for President Obama, for the law more broadly, and for the health and economic security of millions of women and their families. As I described in my recent policy note, the ACA has expanded women’s access to care, improved the quality of their coverage, and in the process increased women’s economic security. Today’s decision ensures that—for the time being—the law will continue to do all of those things and more.

The ACA expanded coverage to 16.5 million people and elevated the floor of coverage for women. Since 2010, 8.7 million women have gained maternity coverage; 48.5 million women with private insurance can access preventive services with no cost-sharing; and as many as 65 million women are no longer charged higher premiums based on pre-existing conditions. In 2013, the number of women who filled their birth control prescriptions without co-pays grew from 1.3 million to 5.1 million, and the share of women who had access to birth control with no out-of-pocket costs grew from 14 percent to 56 percent. This has been a significant improvement over the pre-ACA system in which women had to pay out of pocket for preventive services like pap smears and breast exams, were routinely charged more than men, and many couldn’t afford maternity coverage during pregnancy.

Over the past five years the ACA has begun to ease the financial burdens of health coverage and care for women, who are more likely than men to live in poverty. Today more than two-thirds of low-wage workers are women—half of them women of color—and many work long hours with no health benefits. Wage inequality causes Black and Latina women to lose approximately $19,000 and $23,279 a year, respectively. A loss of subsidies would have been especially harmful to women of color, who represent nearly half of all uninsured women eligible for tax credits in states using the federal exchange. Those subsidies are the only path to insurance for 1.1 million Black women, approximately 2 million Latinas, nearly a quarter-million Asian women, and more than 100,000 Native American women. Many of those women live in one of three states: Florida, Georgia, or Texas.

When women have good coverage and access to care, they are better able to make decisions about the timing and size of their families. They are able to prevent illnesses that cause them to miss work force them to lose a paycheck, and threaten their employment. They have healthier babies and children. Fewer out-of-pocket medical costs free up more money for food, childcare, education, housing, transportation, and savings. Health coverage won’t singlehandedly solve the serious challenges facing low-income women and families. Indeed, our country’s soaring inequality and persistent injustices demand sweeping social and economic reforms. But without the very basic ability to care for their bodies, visit a doctor, plan the timing and size of their families, and make independent reproductive health decisions, women will never be able to take full advantage of other economic opportunities.

Today’s decision is especially important for women considering conservative lawmakers’ relentless attempts to roll back access to reproductive health care. Consider that just yesterday House Republicans voted to completely eliminate Title X (the federal family planning program), to expand religious exemptions allowing employers and insurers to opt out of covering anything they find morally or religiously objectionable, to implement new abortion restrictions with no exception for the life or health of pregnant women, and to renew the Hyde Amendment, which prohibits Medicaid coverage of abortion.

So the ACA is safe for now, and the Supreme Court’s ruling will allow the law to become even more ingrained in our social and political fabric. However, we can be sure the vitriolic political opposition is not over. The GOP presidential hopefuls didn’t waste any time letting their constituents know today’s decision wouldn’t stop their attempts to undermine the law. And conservative lawmakers on the Hill will continue to push budget proposals that would unravel the law’s most important components and reduce funding for social programs critical to the wellbeing of low-income families. We should celebrate the King v. Burwell decision, but we must not stop making the case that for women and families, comprehensive, affordable health coverage—and by extension, care—is as much a matter of health as it is economic security.

Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter at @dreaflynn.

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King v. Burwell Could Turn Back the Clock for Women's Health

Jun 23, 2015Andrea Flynn

In the coming days the Supreme Court will decide King v. Burwell, a case on which the health coverage of more than 6 million individuals—and in some ways the future of the Affordable Care Act (ACA)—hinges. As we anticipate that ruling, and as conservative lawmakers propose potential solutions to the crisis that will ensue should they “win,” we should pause and remember that the ACA has profoundly improved the quality of women’s health coverage, expanded women’s access to care, and increased women’s economic security.

In the coming days the Supreme Court will decide King v. Burwell, a case on which the health coverage of more than 6 million individuals—and in some ways the future of the Affordable Care Act (ACA)—hinges. As we anticipate that ruling, and as conservative lawmakers propose potential solutions to the crisis that will ensue should they “win,” we should pause and remember that the ACA has profoundly improved the quality of women’s health coverage, expanded women’s access to care, and increased women’s economic security. As I describe in a policy note released today by the Roosevelt Institute, if policymakers are serious about the health and financial wellbeing of women and families, they should expand and strengthen the ACA, not reverse or repeal it.

The ACA expanded coverage to 16.5 million people and elevated the floor of coverage for women. In the pre-ACA system, women were routinely charged more than men, had to pay out of pocket for preventive services like pap smears and breast exams, and many couldn’t afford maternity coverage while they were pregnant. But since President Obama signed the ACA into law, 8.7 million women have gained maternity coverage; 48.5 million women with private insurance can access preventive services with no cost-sharing; and as many as 65 million women are no longer charged higher premiums based on pre-existing conditions. In 2013, the number of women who filled their birth control prescriptions without co-pays grew from 1.3 million to 5.1 million, and the share of women who had access to birth control with no out-of-pocket costs grew from 14 percent to 56 percent .

For millions of women, the ACA has begun to ease the financial burdens of health coverage and care. Before the ACA, women were far more likely than men to have to forgo care because of cost concerns, and for all women—but especially those without coverage—cost was a major barrier to care. Many women had difficulties paying their medical bills (52 percent of uninsured women and 44 percent of low-income women, compared to 28 percent of women overall). This should be no surprise, given that it’s more likely for women—particularly women of color—to live in poverty. Today more than two-thirds of low-wage workers are women—half of them women of color—and many work long hours with no health benefits. Wage inequality causes Black and Latina women to lose approximately $19,000 and $23,279 a year, respectively.

A loss of subsidies would be especially harmful to women of color. In states that are using the federal exchange, women of color represent nearly half of uninsured women eligible for tax credits. Those subsidies are the only path to insurance for 1.1 million Black women, approximately 2 million Latinas, nearly a quarter-million Asian women, and more than 100,000 Native American women. Many of those women live in one of three states: Florida, Georgia, or Texas.

Comprehensive, affordable coverage—and by extension, care—is as much a matter of health as it is economic security. When women have good coverage and access to care, they are able to prevent illnesses that take them out of work, threaten their employment, and force them to lose a paycheck. They are better able to make decisions about the timing and size of their families. They have healthier babies and children, fewer out-of-pocket medical costs, and more money for food, childcare, education, housing, transportation, and savings. Health coverage won’t singlehandedly solve the myriad challenges facing low-income women and families; indeed, the United States’ soaring inequality demands sweeping social and economic reforms. But without the very basic ability to care for their bodies, visit a doctor, plan the timing and size of their families, and make independent reproductive health decisions, women will never be able to take full advantage of other economic opportunities.

The political vitriol of the past five years has blurred our collective memory of just how badly we needed health reform before we got it. Opponents of the ACA argue that we cannot afford for the law to prevail. But the truth is we can’t afford for it not to. In most other countries families are not driven into poverty because they seek needed care, and they don’t avoid seeking care out of fear that doing so will drive them into bankruptcy. The United States is unfortunately exceptional in this regard. For too long the right to health has been unfulfilled in the United States, and the ACA has begun to change that for millions. Neither the Supreme Court nor conservative lawmakers should turn back the clock now.

Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter at @dreaflynn.

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Bail Reform is Key to Addressing Inequality in the Justice System

Jun 18, 2015Jessica Morris

On June 9, 2015, Campus Network Senior Fellow Jessica Morris testified before the Joint Committee on the Judiciary of the Massachusetts General Court on an act reforming pretrial process (H. 1584/S. 802). Her written testimony is reproduced below.

Good afternoon Joint Committee on the Judiciary. My name is Jessica Morris and I am the Senior Fellow for Equal Justice at the Roosevelt Institute Campus Network. I am also a recent graduate of Mount Holyoke College in South Hadley of Western Massachusetts.

On June 9, 2015, Campus Network Senior Fellow Jessica Morris testified before the Joint Committee on the Judiciary of the Massachusetts General Court on an act reforming pretrial process (H. 1584/S. 802). Her written testimony is reproduced below.

Good afternoon Joint Committee on the Judiciary. My name is Jessica Morris and I am the Senior Fellow for Equal Justice at the Roosevelt Institute Campus Network. I am also a recent graduate of Mount Holyoke College in South Hadley of Western Massachusetts.

The Roosevelt Institute Campus Network is a progressive think tank that empowers young people across over 120 college campuses and 38 states to civically engage with policy. As a Senior Fellow, my focus has been devoted to the issues with the money bail system in Massachusetts. I have compiled research on pretrial and bail reform in a white paper, which you can find attached. Thank you for offering the opportunity to consider alternatives to the state’s current criminal justice system, including pretrial and bail reform.

As of January 1, 2015, 606 men and women are awaiting trial in Massachusetts. They have not been convicted, but often because they could not afford the cost of their set bail, they are detained. There are serious consequences to this system. There is risk of losing custody, public housing, drug treatment, and jobs. Nationally recidivism rates are six times higher than those incarcerated during the pretrial period. Even when the defendant is held for only two or three days, they are nearly 40 percent more likely to commit new crimes before their trial compared to those held for just one day. In Massachusetts, pretrial detention is costly to taxpayers. The average cost per year to house an inmate last year is $53,040.87. Additionally, the overcrowding of DOC facilities is at 130%.

This legislation proposes a solution that ensures the Massachusetts justice system remains just. By shifting the otherwise wealth-based bail system into a risk-based system and including a Pretrial Services Division, there are more opportunities for people to transform their lives. Defendants should be assessed for their level of risk and not be disadvantaged if they cannot afford their freedom. The court must maintain the principle of innocent until proven guilty, for Massachusetts people’s lives and well-being are dependent on it.

Last Saturday, 22-year-old Kalief Browder committed suicide in his home in the Bronx. Kalief was an inmate at Rikers Island prison who waited for three years without trial. He was accused of stealing a backpack, which he denied. Because he could not afford his set bail of $10,000, he was detained at the prison. Kalief's tragic death teaches us that as a country we still have a long way to go. Massachusetts must lead the way toward a more just justice system with reasonable risk-based bail reform.

I urge you to pass bill H.1584 as a step toward a more effective and community-driven criminal justice system. Thank you for your time.

Jessica Morris is the Roosevelt Institute | Campus Network Senior Fellow for Equal Justice.

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