Daily Digest - June 18: Is High CEO Pay a Reward for Failure?

Jun 18, 2014Rachel Goldfarb

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Study: The Higher the Pay, the Worse the CEO (Vocativ)

Daniel Edward Rosen looks at a study from the University of Utah, which shows that companies that pay CEOs more than $20 million a year have average annual losses over $1 billion.

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Study: The Higher the Pay, the Worse the CEO (Vocativ)

Daniel Edward Rosen looks at a study from the University of Utah, which shows that companies that pay CEOs more than $20 million a year have average annual losses over $1 billion.

  • Roosevelt Take: Roosevelt Institute Fellow and Director of Research Susan Holmberg and Campus Network alumna Lydia Austin look at additional ways high CEO pay distorts the economy.

Chicago Aldermen Want a $15 Minimum Wage in Their City, Too (In These Times)

Progressives in Chicago are pushing their own minimum wage increase, reports Ethan Corey, and the popular measure would be implemented much more quickly than Seattle's.

  • Roosevelt Take: Roosevelt Institute President and CEO Felicia Wong says increasing the minimum wage is a powerful step to promote democracy.

A Small Increase in Inflation Squeezes U.S. Workers (NYT)

Neil Irwin reports that average wages have fallen 0.1 percent in the past year when inflation is taken into account, so while the economy may be improving, workers are still struggling.

The Big Freeze on Hiring (WaPo)

Companies are taking longer than ever to fill open jobs, and Catherine Rampell suspects their reluctance is due to continued uncertainty about the health of the economy.

Domestic Workers, Domestic Cargo (The Baffler)

Ned Resnikoff reviews Sheila Bapat's new book on domestic workers' rights and ties their struggle to other low-wage service jobs that are similarly disparaged as not "real jobs."

Critics Warn Starbucks Employees to Read the Fine Print of New Tuition Plan (ThinkProgress)

Alan Pyke speaks to education experts, who critique the Starbucks program for restricting tuition assistance to a single online university, with no options for in-person classes.

U.S. Reaches $968 Million Mortgage Settlement With SunTrust (WSJ)

Alan Zibel and Andrew R. Johnson report on SunTrust's settlement, the latest attempt to penalize banks for abusive mortgage practices. $500 million is reserved to help underwater homeowners.

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Daily Digest - June 13: With Soaring Pay, CEOs Rise to the Top of the 1 Percent

Jun 13, 2014Rachel Goldfarb

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CEO Pay Up by 937% Since 1978. That of the Typical Worker? 10.2% (AJAM)

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CEO Pay Up by 937% Since 1978. That of the Typical Worker? 10.2% (AJAM)

Peter Moskowitz looks at a new study from the Economic Policy Institute, which finds that CEO pay is even outstripping the earnings of other members of the top 0.1 percent.

  • Roosevelt Take: In his new white paper, William Lazonick explains how the explosive growth of CEO pay destabilizes the economy.

U.S. Struggles to Draw Young, Savvy Staff (WSJ)

Officials worry about government's ability to succeed in a digital world when the percentage of its employees younger than 30 has hit an eight-year low, writes Rachel Feintzeig.

How Justice Scalia Could Become the Savior of Public Employee Unions (LA Times)

Michael Hiltzik says the reliably conservative Supreme Court Justice's past statements on public sector unions show that he could be the key vote for unions in Harris v. Quinn.

The Damage of Poverty is Visible as Early as Kindergarten (Vox)

Danielle Kurtzleben writes about new research that shows an achievement gap between poor, near-poor, and middle-class kindergarteners, which can have lifelong consequences.

How Women Are Shaping the Labor Movement and Winning Big (The Nation)

Dani McClain speaks to Sheila Bapat about her new book on the rise of organizing among domestic workers, who are excluded from many basic labor protections.

Remember the Problems With Mortgage Defaults? They’re Coming Back With Student Loans (NYT)

Susan Dynarski draws parallels between the mortgage crisis and student debt, with particular concerns about loan servicers who have little incentive to prevent default.

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Teachers and Tutors Can't Fix All of Low-Income Students' Problems

Summer Academy Fellow Casey McQuillan explains how public policy failures that held back the students he tutored led him to the Campus Network.

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Daily Digest - June 11: Sprint's Big Deal Leaves Customers With Little Choice

Jun 11, 2014Rachel Goldfarb

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Don't Let Sprint Buy T-Mobile (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford says that allowing Sprint to buy its way to a higher share of the cell phone market won't improve service for customers.

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Don't Let Sprint Buy T-Mobile (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford says that allowing Sprint to buy its way to a higher share of the cell phone market won't improve service for customers.

Goldman Sachs CEO: “Income Inequality Is A Very Destabilizing Thing In The Country” (Buzzfeed)

Matthew Zeitlin reports on Lloyd Blankfein's CBS interview, in which he said that too much growth has gone to too few people. Zeitlin notes that Blankfein was paid $23 million in 2013.

  • Roosevelt Take: In his white paper for the Roosevelt Institute, William Lazonick looks at how high executive pay destabilizes the economy.

Markets Are Less Volatile. Should We Worry? (NYT)

Even if more stable markets are encouraging investors to take on more risk, Neil Irwin says that the Federal Reserve should stay on its slow-and-steady path.

Cities Are Passing Higher Minimum Wages – and Leaving the Suburbs Further Behind (WaPo)

Emily Badger looks at current debates about cities and suburbs with different minimum wages: how many workers will bring their higher wages home to the suburbs, and will the jobs move out?

Wall Street's Virus Has Infected Your College Debt, and Obama's Doing Zero (The Guardian)

Heidi Moore asks why the President isn't doing anything about private student debt, which has little regulation and could pose a greater threat to the economy than public loans.

The Mental-Health Consequences of Unemployment (The Atlantic)

A new Gallup poll shows that the unemployed have much higher rates of depression than those with jobs, reports Rebecca J. Rosen, and it's easy to see how depression could affect a job search.

New on Next New Deal

Healing the Medical Field: How A Push Against Careers in Medicine Could Push Back on Burnout

Roosevelt Institute | Campus Network Senior Fellow for Health Care Anisha Hegde writes that by speaking out about burnout in their jobs, doctors can create an opportunity for sustainable change.

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Daily Digest - June 9: The Middle Class Needs a Better Tax Code

Jun 8, 2014Rachel Goldfarb

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How Tax Reform Can Save the Middle Class (Moyers & Company)

Click here to subscribe to Roosevelt First, our Monday through Friday morning email featuring the Daily Digest.

How Tax Reform Can Save the Middle Class (Moyers & Company)

Roosevelt Institute Chief Economist Joseph Stiglitz and Bill Moyers continue their discussion of Stiglitz's new white paper on how tax reform can reduce inequality and promote prosperity.

For Poverty Solutions, Looking Beyond Congress (The Hill)

As Rep. Paul Ryan prepares for another hearing on the War on Poverty, Roosevelt Institute Fellow Andrea Flynn and Nell Abernathy look at ways to strengthen the safety net to fight child poverty.

Lawsuit Claims Thin Red Line in Discriminatory Lending Practices (MSNBC)

Roosevelt Institute Fellow Dorian Warren speaks to the mayor of Providence, RI, who says that Satander Bank is discriminating against people of color seeking mortgages in his city.

Everything You Need to Know About Walmart, in Nine Charts (Vox)

Danielle Kurtzleben references William Lazonick's Roosevelt Institute white paper on CEO pay to explain how Walmart could give its workers raises without cutting into profits.

Taxi Driver Solidarity (NYT)

Taxi drivers across the country are seeking to form a national union, reports Steven Greenhouse. Beyond shared grievances about pay and costs, many are concerned about ride-share apps.

The Fault in our Starry-Eyed 'Recovery': 2014 Looks Like We're Going Bust Again (The Guardian)

Heidi Moore says the recovery of the last five years was only for corporations and Wall Street, and hasn't helped average Americans, who still face rising costs and high unemployment.

Wall Street Fights for Our Right to Pay 5% Fund Fees (Bloomberg News)

Wall Street is pushing back against a strong fiduciary rule that would require financial advisors to put clients' interests first, writes Ben Steverman, because it would cut into profits.

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Daily Digest - June 6: What It's Like to Make a Living

Jun 6, 2014Rachel Goldfarb

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What Happens When Low Wage Workers Suddenly Get a Living Wage? (Gothamist)

Christopher Robbins speaks to workers at a successful casino in Queens, New York, whose wages nearly doubled last October when they unionized.

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What Happens When Low Wage Workers Suddenly Get a Living Wage? (Gothamist)

Christopher Robbins speaks to workers at a successful casino in Queens, New York, whose wages nearly doubled last October when they unionized.

Stay-At-Home Dads On The Rise, And Many Of Them Are Poor (NPR)

A new study of stay-at-home dads reveals some bad news, writes Jennifer Ludden: more than half live in poverty, with many staying home due to illness, disability, or inability to find work.

What to Watch on Jobs Day: An All-Time High of an Indicator That is Almost Always Rising (Working Economics)

Heidi Shierholz warns that while today's jobs report will likely show total employment at an all-time high, that's actually a meaningless benchmark due to constant population growth.

How Seattle Passed the Highest Minimum Wage In America (Vice)

The fight for $15 an hour in Seattle combined a number of unusual factors, says Arun Gupta, so it's unclear if the same kind of effort will work elsewhere.

GOP’s Little-Noticed Unemployment Sham: The Quiet Death of Extended Benefits (Salon)

Simon Maloy argues that the House GOP's quiet obstruction of extended unemployment insurance has thwarted supporters and left the long-term unemployed worse off than ever.

Artisanal Union-Busting (In These Times)

Chris Lehmann looks at union organizing efforts at Whole Foods stores in Chicago, and the company's pushback against collective bargaining.

To Protect Service Members, Defense Department Plans Broad Ban on High-Cost Loans (ProPublica)

Because too many soldiers are targeted by high-cost lenders, the Department of Defense may ban all loans above 36 percent APR. Paul Kiel says it's not so simple to protect civilians.

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Taking Stock: Why Executive Pay Results in an Unstable and Inequitable Economy

Jun 4, 2014

Download the paper by William Lazonick.

Download the paper by William Lazonick.

Over the past three decades, U.S. executive pay has exploded. In 2012, the 500 highest paid executives in Standard and Poor’s ExecuComp database (drawn from company proxy statements) averaged $30.3 million in total compensation, with 42 percent from stock options and 41 percent from stock awards. This amount of compensation is almost three times the level of inflation-adjusted compensation in the early 1990s, when executive pay was already excessive. Market forces did not bestow these riches on top executives; their boards of directors did. Dominated by CEOs of other companies who have a common interest in increasing executive pay, boards have stuffed senior executive pay packages with stock options and stock awards. These same boards have approved multibillion stock buyback programs that enable executives to benefit from the manipulation of their companies’ stock prices.

Key Arguments

  • The American public has long been aware of the excessive compensation of top executives, but insufficient attention has been focused on how the stock-based components of this pay have encouraged CEOs to distribute cash to shareholders at the expense of investment in innovation and provision of secure, well-paid jobs.
  • The estimated $3.6 trillion that Standard and Poor’s 500 companies have spent on buybacks since 2001, in addition to $2.4 trillion in dividends, is a major reason for the ongoing erosion of middle-class employment opportunities in the U.S.
  • Since the early 1980s, the Securities and Exchange Commission (SEC), which is supposed to protect against the manipulation of financial markets, has legalized the use of stock buybacks to manipulate the stock market.
  • The SEC must regulate rather than encourage stock-market manipulation, and boards of directors, which have permitted excessive executive pay and massive distributions to shareholders, instead must represent all economic interests – including taxpayers and workers – whose investments are at risk in the business corporation.

Read: "Taking Stock: Why Executive Pay Results in an Unstable and Inequitable Economy," by William Lazonick.

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Daily Digest - June 4: Will Fifteen Be the New Floor in Wage Fights?

Jun 4, 2014Rachel Goldfarb

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$15 Is the New $10.10 (U.S. News & World Report)

Paul K. Sonn argues a nationwide $15-per-hour minimum wage is both feasible and necessary in order to generate enough spending power to sustain the economy.

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$15 Is the New $10.10 (U.S. News & World Report)

Paul K. Sonn argues a nationwide $15-per-hour minimum wage is both feasible and necessary in order to generate enough spending power to sustain the economy.

Just How Big Are CEOs’ Packages? (In These Times)

Leo Gerard says the purpose of calculating the pay ratio between CEOs and median workers isn't to shame CEOs, but to emphasize the need to pay workers better.

Fed Officials Growing Wary of Market Complacency (WSJ)

Jon Hilsenrath says the Fed is growing concerned that calm markets will increase investors' tolerance for risk too much, and lead to further problems down the road.

What Drives Credit Card Debt? (TAP)

Credit card debt has almost nothing to do with household spending habits, writes Amy Traub. Lack of health insurance, education, and assets are far stronger indicators of high consumer debt.

How Privatizing Government Hollowed Out the Middle Class (MSNBC)

A new report on government contracting shows that the massive shift to privatization in the 1990s cut costs by turning middle-class jobs into low-wage jobs, writes Timothy Noah.

Toward a Progressive Tax Policy (Bloomberg View)

Peter Orszag considers two options for taxing wealth in the U.S. that he thinks are more viable than Piketty's global wealth tax: a progressive consumption tax and an inheritance tax.

  • Roosevelt Take: Roosevelt Institute Chief Economist Joseph Stiglitz will appear on Moyers & Company again this weekend to continue discussing his new white paper on reforming our tax code.

Republicans Are Claiming the New Climate Rules Will Wreck the Economy. They're Wrong. (MoJo)

Chris Mooney says the economic costs of new environmental rules are consistently overstated, when in fact studies show the benefits from these regulations far exceed the costs.

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Working Families Party Endorsement of Cuomo Shows Progressive Political Power

Jun 3, 2014Richard Kirsch

If the goal is to achieve real progressive change that improves lives, then New York Governor Cuomo's deal with the Working Families Party is on the right track.

It would be a mistake to think that the New York Working Families Party's endorsement of a Wall Street, austerity Democrat – Andrew Cuomo – is a defeat for the surging progressive wing of the Democratic Party. In fact, just the opposite is true. The endorsement was a demonstration of how to build power to do what progressive politics is ultimately about: delivering real improvements in people’s lives.

If the goal is to achieve real progressive change that improves lives, then New York Governor Cuomo's deal with the Working Families Party is on the right track.

It would be a mistake to think that the New York Working Families Party's endorsement of a Wall Street, austerity Democrat – Andrew Cuomo – is a defeat for the surging progressive wing of the Democratic Party. In fact, just the opposite is true. The endorsement was a demonstration of how to build power to do what progressive politics is ultimately about: delivering real improvements in people’s lives.

Up to 24 hours before the WFP’s Saturday convention, it looked like the Party would nominate Zephyr Teachout, a law professor and activist leader in the fight to reverse Citizens United and enact robust public campaign financing, who ran Howard Dean’s breakthrough online organizing and fundraising campaign for president. Public opinion polls taken earlier in May showed that a progressive WFP candidate could get more than 20% of the popular vote, radically shrinking Cuomo’s victory margin and his quest to demonstrate nationally that he would be a credible candidate for president.

That threat forced Cuomo to agree to make a u-turn in the way he has dealt with the New York State Senate and to agree to push for the passage of six very important progressive priorities in the legislature. After Cuomo, looking to me like a cornered man, made those pledges by video and phone to the WFP convention, a majority of delegates (58 percent), including me – I’m a member of the WFP State Committee – approved his endorsement.

Cuomo’s key concession was to end his support for the coalition between Republican state senators and a handful of breakaway Democratic state senators, which effectively had maintained Republican control of the State Senate. With the exception of a brief period four years ago, Republicans have controlled the New York’s State Senate for decades, blocking an Empire State Building-high pile of progressive bills passed by the State Assembly.

Cuomo agreed to join New York City Mayor Bill de Blasio and New York unions active in the WFP – including SEIU, New York City’s United Federation of Teachers, CWA, and UAW – to create a well-funded campaign to elect Democrats and to run primaries against any Democrats who do not agree to fully support Democratic control of the state senate.

But what swayed my vote and the vote of other delegates is the specific package of legislation that Cuomo agreed to push for, should the campaign be successful in putting Democrats in control of the Senate.

One is immediately raising the minimum wage in New York to $10.10, indexed to inflation, and agreeing to allow local governments to raise wages 30% higher. Cuomo has been strongly opposed to giving local governments the authority to do that. This alone is a huge victory for the fast-food workers’ movement, which originated in the city, as there is little doubt that Mayor de Blasio and the progressive City Council majority elected with him will quickly take advantage of their new power if given the opportunity.

A second bill would decriminalize marijuana. New York would become the first state to do so legislatively, rather than by referendum. Given the huge racial imbalance of pot arrests in the city, which continues to ruin the futures of generations of young Black and Latino men, this is an enormous step forward for racial justice and against mass incarceration.

The New York Dream Act is on the list, which would provide tuition assistance to DREAM kids, aspiring immigrant college students who were brought to the United States as children. The Governor also committed to support funding of 100 community schools in low-income communities outside of NYS, which provide social, health and emotional services and act as community centers. Mayor de Blasio will support funding another 100 in New York City.

Another bill is the Women’s Equality Act, with ten provisions including one that the Republican controlled State Senate has opposed – codifying the right for women to determine whether to have an abortion. The Act would includes measures on promoting pay equity, stopping sexual harassment, preventing pregnancy discrimination in all workplaces, strengthening human trafficking laws, bolstering protections for domestic violence victims, and ending family status discrimination.

Last but absolutely not least is finally a robust small-donor public financing bill for statewide and legislative races. In the long run, if this becomes law, it will be the most significant part of the agreement. As Mayor de Blasio pointed out in his speech urging the WFP delegates to give Cuomo their votes in return with this agreement, he could not have been elected mayor without the New York City public financing law, which is the model for the state bill.

De Blasio began his remarks reminding the WFP delegates that he had been a founder of the Party. De Blasio brokered the deal between the WFP and the Governor, saying that he could not deliver on a progressive agenda in New York City unless Democrats gained control of the state senate.

The delegates who voted for Teachout were motivated by two factors, which were shared by almost everyone who attended the convention. One is a strong distaste and distrust for Cuomo. The second is the heartfelt pull to vote for Teachout as a candidate who shares our values and worldview. Particularly in the context of the national debate within the Democratic Party over whether it will become the Party of Elizabeth Warren and Bill de Blasio, this was a powerful attraction for Teachout’s candidacy.

As those of you who follow my writing know, I work a lot on helping progressives promote our ideology, our worldview. As such, you might have expected me to decide that Teachout’s campaign – which would have given voice to that worldview – would have been where I stood. But for me, the reason I focus on changing worldviews is not just because I want people to agree with us. It is because when people share our worldview, they are much more likely to support candidates and policies that deliver on our core beliefs.

For me, this is the ultimate purpose of politics: to enact laws that deliver concrete improvements in people’s lives, that help them care for and support their families and live in dignity, that protect us and our planet.

 

On Saturday, WFP used its political muscle – built through a 16 year process of organizing, coalition building, and electing progressives to higher and higher offices – to take what could be a game-changing step in New York to winning real improvements in people’s lives and making it possible for candidates in New York to win office without relying on big campaign contributions. That’s what political power should be used for. And like any muscle, using it just makes it – and in this case progressive political power – stronger.

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 - June 2: Building a Better Tax Code

Jun 2, 2014Rachel Goldfarb

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Joseph E. Stiglitz Calls for Fair Taxes for All (Moyers & Company)

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Joseph E. Stiglitz Calls for Fair Taxes for All (Moyers & Company)

Roosevelt Institute Chief Economist Joseph Stiglitz discusses his paper on overhauling the tax system to combat inequality and strengthen the U.S. economy.

Seven Key Takeaways From Joseph E. Stiglitz’s Tax Plan for Growth and Equality (Moyers & Company)

The Moyers team provides an overview of Stiglitz's plan for corporate tax reform, which would encourage domestic job creation, rein in the financial sector, and more.

How Local Governments Are Using Their Purchasing Power to End Sweatshop Labor (The Nation)

Michelle Chen looks at how cities can use "sweatfree" contract guidelines for purchases like police uniforms to push for fair labor standards around the world.

Stay-at-Home Parenting Is on the Rise Because Mothers Can’t Find Work (Pacific Standard)

When mothers can't find work that covers the cost of child care, they may be forced to stay at home rather than choosing for themselves, says Erin Hoekstra.

Opportunity's Knocks (WaPo)

Eli Salsow profiles Tereza Sedgwick as she studies to become a nursing aide, and looks at why the fastest-growing job in the country doesn't offer a clear route out of poverty.

New on Next New Deal

Summer Academy Fellows Come Together for the Fight Against Inequality

Roosevelt Institute | Campus Network Training Director Etana Jacobi explains how the Summer Academy program prepares students to engage in the biggest policy debates of the day.

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Summer Academy Fellows Come Together for the Fight Against Inequality

May 30, 2014Etana Jacobi
The Roosevelt Institute | Campus Network's 2014 Summer Academy Fellows have gathered for a summer of learning and growing together to solve today's most pressing issues.
 
Inequality well may be the issue of our generation. The research, commentary, and policy debates are building across the country, from the depths of the ivory tower to the streets of Seattle.
 
The Roosevelt Institute | Campus Network's 2014 Summer Academy Fellows have gathered for a summer of learning and growing together to solve today's most pressing issues.
 
Inequality well may be the issue of our generation. The research, commentary, and policy debates are building across the country, from the depths of the ivory tower to the streets of Seattle.
 
But how are we preparing this generation – the group that will inherit the outcomes of the policy choices we make today? Are we equipping them with the knowledge to engage, the skills to act, and the community capable of coming together to create change?
 
Today, the Roosevelt Institute | Campus Network welcomes 36 students representing over 19 colleges and universities to kick off the 2014 DC and New York City Summer Academies. Curious, brilliant, and diverse in experience, this group is ready to take on the issues in their own backyards, exploring how they address both economic and democratic inequality on the ground. Over half of our new fellows are from the New York City area, while others come from geographically diverse regions of the United States: Alabama, California, and Illinois to name a few home states.
 
Over the course of the next nine weeks, Summer Academy Fellows will be placed in full-time internships with a partner organization, including city governments, community-based organizations, advocacy groups, and think tanks. Concurrently, Fellows participate in a rigorous curriculum composed of workshops, a team-based challenge, field visits, and a speaker series to develop key skills necessary to generate and implement concrete policy change.
 
Together they will tackle the problems of runaway inequality in New York City and a broken political system in Washington, DC. With the challenge frame provided by the Center for Social Inclusion and Fund for the Republic, respectively, students will jump right in to the current debates supported by leading experts and thoughts leaders – and their ideas and contributions will be taken seriously by these leading organizations.
 
Why are we doing this? We believe that policy matters – from City Hall to the community center, from the White House to the social innovation hub. How people and resources come together to solve problems can determine the direction of communities and institutions. It is imperative that we develop a group of young people who capable of tackling complex problems and systems with the power of ideas-inspired action.
 
Interested in what emerges? Students will present their research and ideas at policy expos at the end of the summer in Washington, DC and New York City, as well as the Bay area and Chicago, where Summer Academies will launch in June.
 
In the context of a stagnant public dialogue and increasing disillusionment with a political system incapable of tackling our complex collective challenges, it is more important than ever to invest in a generation of leaders committed to active problem-solving and concrete change in the public sphere. As it enters its seventh year, the Summer Academy boasts 200 alumni now serving as leaders in the non-profit, public, and social innovation sectors. We are overjoyed to welcome a new class of students to this great tradition of leadership.
 
Etana Jacobi is Training Director for the Roosevelt Institute | Campus Network. 

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