Quick Thoughts on Ryan's Poverty Plan: What Are the Risks?

Jul 25, 2014Mike Konczal

Paul Ryan released his anti-poverty plan yesterday, and lots of people have written about it. Bob Greenstein has a great overview of the block-granting portion of the plan.

Paul Ryan released his anti-poverty plan yesterday, and lots of people have written about it. Bob Greenstein has a great overview of the block-granting portion of the plan. I'm still reading and thinking about it, but in the interest of answering the call for constructive criticism, a few points jump out that I haven't seen others make yet.

How did we get here?

Republicans obviously have an interest in branding themselves as a "party of ideas." And many liberals and Democrats also have an interest in trying to make the GOP seem like it's been devoid of any ideas in the past several years.

But it's worth noting that within a year of Democrats and liberal thinkers getting actively behind a serious increase in the minimum wage, and many activists making strides toward it on the local level, Paul Ryan just wholesale adopted President Obama's EITC expansion program. That demonstrates the value of pushing the envelope.

Complexity and the EITC

Ryan's plan, correctly, makes a big deal out of the complexity of receiving the EITC. The difficulty of navigating the system, the large number of improper payments, people not receiving what they should, people having to use tax-prep services to get the credit, and so on.

This is why I'm a huge fan of higher minimum wages as a complement to the EITC. Instead of 40 pages of rules and a dozen potential forms to fill out, you just put a sign that reads "$10.10 an hour" on the wall. Bosses and workers can't trick each other or get confused about this, and nobody has to pay a tax-prep service to figure it out. Easy peasy.

Ryan wants to "direct the Treasury Department to investigate further" how to fix this, but in practice Treasury just turns around and yells at the IRS. And if the IRS knew how to fix it, they'd probably be on it.

There is also a simpler plan to fix this issue: just have the government mail people their tax forms already filled out, for them to either sign or correct. When a trial version of this, "Ready Return," was tried in California, people immediately saw the potential for this to fix EITC delivery issues. Perhaps anti-poverty advocates can help provide momentum on this front.

Bosses and the EITC

Both Ryan and Marco Rubio have referred to putting the ETIC credit directly into workers' paychecks. Ryan: "[A]nother potential area of reform should focus upon EITC simplicity and delivery. If families received the credit with their paychecks, the link between work and the EITC would be that much clearer."

I'd be worried if employers were the ones responsible for adding this wage subsidy. I don't think there's a convincing argument that the EITC or food stamps lower wages directly (though there is one indirectly for the EITC), but if employers got a wage subsidy themselves to pass to their workers, it's easy to imagine them pocketing part of it through lower wages, especially in the monopsony of low-wage labor markets.

A discussion of welfare reform

Rather than a "welfare reform -- yay or nay?" conversation, it would be really useful if people arguing for the block-granting of the entire anti-poverty agenda would point out what they do and do not like about what happened in the 1990s. Especially as proponents hold up welfare reform as the model.

As Matt Bruenig notes, the work requirements and other restrictions go against the concept of subsidiarity. Greenstein writes, "the block grant would afford state and local officials tantalizing opportunities to use some block grant funds to replace state and local funds now going for similar services...That’s what happened under the Temporary Assistance for Needy Families (TANF) block grant." In retrospect, TANF didn't survive the business cycle, and it clearly has cut spending by cutting the rolls. Is that what people want to accomplish with food stamps, which have done wonders to boost childhood life outcomes? If not, what can be done other than assert that this time will be different?

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White House Summit Speakers: Look Beyond Congress for Action on Working Families

Jul 24, 2014Julius Goldberg-Lewis

The White House Summit on Working Families showed paths to creating change that work around a gridlocked Congress.

The White House Summit on Working Families showed paths to creating change that work around a gridlocked Congress.

On Monday, June 23, Roosevelt Institute Fellows and Campus Network members attended the White House Summit on Working Families in Washington, DC. The Summit, which was the culmination of months of town halls across the United States, presented the audience with the stark reality that in order to truly help working families, there must be a dramatic culture shift. The day was filled with speakers like the President, the Vice President, and both their wives, and the CEOs of multibillion-dollar companies and startups alike, all of whom shared anecdotes about their experiences as the breadwinners of working families.

The focus of the conference was the need to change the outdated laws and culture that govern the modern-day workforce. Today, women make up 47% of the labor force, and 60% of children grow up in a family where both parents work. The status quo, however, leaves most Americans without access to any form of guaranteed leave, and even fewer with basic necessities such as paid maternity leave. Everyone has endured challenges finding a work/life balance, and as Vice President Biden explained in his own experience, not all employers are as forgiving as the people of Delaware when one needs to miss work to take care of a child. He pointed out that in his first years in the Senate he had the lowest attendance rate — but that his constituents gave him a chance. The summit challenged its participants to bring that kind of culture of flexibility and empathy to the workplace.

The Summit illuminated the two mutually reinforcing paths that are necessary to ensure that working families have the ability to support themselves and care for their children and elderly parents. On a policy front, there is already the Family and Medical Leave Act, which stands as one of the few policy solutions in place to alleviate the burden on working families. However, this only covers 60% of workers and only guarantees unpaid leave, which is often an unworkable option for families that rely on a daily wage. The United States is alone among OECD countries in that we do not guarantee paid parental leave. Paid leave is necessary not only to soften the financial burden associated with having children, but also, as was repeated throughout breakout groups and panels, because parents who take maternity/paternity leave are far more likely to reenter the workforce than those who don’t. There also need to be long-term policy solutions that will ensure that a working family can earn a living wage. The Summit reiterated the push for a $10.10 minimum wage, and invited several business owners who pay a living wage and provide paid leave to share their success stories.

Legislative change is not the only means of tackling this issue, and the Summit pointed out that as long as Congress remains gridlocked, it is up to businesses to implement higher wages and better leave policies on their own. Change at the business level requires that companies change both their explicit policies and their workplace cultures. Both in multinational companies and small businesses, it’s just as important for managers to offer paid leave as it is for them to take it themselves. While many workers in the US do, in fact, have access to some form of leave, workers often do not take full advantage of these benefits because of stigma or because no one else in the office uses all of their leave. The private sector must lead by proving that businesses can provide paid leave without hurting their bottom line (and sometimes even helping it), and by ensuring that people feel comfortable using that leave.

Working families in the United States face numerous challenges, from providing care to their families when they need it to having the resources to do so, but if there was one message that was repeated throughout the Summit it was that there is a tremendous amount of energy to work with. On the legislative front, vast majorities of voters support a higher minimum wage and family leave. While Congress has not taken up the call to action, cities like New York and Seattle have taken it upon themselves to raise wages and ensure time off. The energy around this issue must be channeled in every way possible: by pressuring elected officials to pass laws, by encouraging business to raise their wages, and by fostering a culture where everyone feels comfortable putting their family first. 

Julius Goldberg-Lewis is the Roosevelt Institute | Campus Network Regional Coordinator for the Midwest and a Summer Academy Fellow in Washington, DC.

Photo by Pete Souza.

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David Autor: Why Technological Innovation Could Increase Inequality

Jul 21, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. Their goal: not to provide a researched analysis, but to stimulate debate on critical questions.In the debut entry in our new video speculation series, MIT economist David Autor talks about the future of economic polarization.

There is a long-running debate between those who worry robots are taking our jobs and those who scoff at that “lump of labor fallacy” as just another version of Luddite thinking. In the video below, Professor David Autor, the MIT economist famous for his description of how technology has helped hollow out the middle class, outlines the debate and describes how it might be possible that both sides are right.

Professor Autor discusses a scenario in which technological innovation continues to reduce the need for low-skilled labor while increasing the demand for higher-skilled workers, thus increasing wages at the top while reducing wages at the bottom.

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Daily Digest - July 15: Privatization Gets Marked 'Return to Sender'

Jul 15, 2014Rachel Goldfarb

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Staples, Postal Service to End Plan for Mini Post Offices in Stores (WSJ)

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Staples, Postal Service to End Plan for Mini Post Offices in Stores (WSJ)

Kris Maher, Drew Fitzgerald, and Tom Gara report on the decision to end this pilot program, which the postal workers' union and other labor groups had denounced as privatization.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch explains how the Postal Service and Staples plan was exacerbating the low-wage economy.

Another Week, Another Settlement (The Economist)

The Economist examines the controversy over Citigroup's $7 billion settlement announced yesterday, which continues the trend of placing blame on companies instead of individuals.

Equal Opportunity Employment Officials Take New Aim at Pregnancy Bias (NYT)

Due to an increase in pregnancy discrimination complaints, the Equal Employment Opportunity Commission has issued new enforcement guidelines, reports Steven Greenhouse.

Restaurant CEOs Make More Money in Half a Day Than Their Employees Make in a Year (MoJo)

Jaeah Lee reports on a new analysis of top restaurant CEO pay, which shows that the CEOs take home an average of 721 times the amount that minimum wage workers are paid.

When You're Poor, Money Is Expensive (The Atlantic)

Derek Thompson explains why accessing money becomes more difficult without bank accounts and credit, and says the financial tech sector could make things easier for the poor.

Labor Organizing Is a Civil Right (Blog of the Century)

The National Labor Relations Act provides only negligible penalties for firing labor organizers, so Imhotep Royster suggests extending Civil Rights Act protections to those organizers.

New on Next New Deal

In Defense of Public Service: Roosevelt Honors Commitment to Common Good

Roosevelt Institute Communications Manager Tim Price reflects on the vindication felt by the life-long public servants honored at last week's Distinguished Public Service Awards.

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Where Does $2 Trillion in Subsidies for the Wealthiest Hide in Plain Sight? Capital Gains Tax Breaks.

Jul 6, 2014Harry Stein

Research shows that government subsidies for the 1 percent are creating greater inequality. A new white paper by Roosevelt Institute Chief Economist Joseph Stiglitz offers solutions.

Research shows that government subsidies for the 1 percent are creating greater inequality. A new white paper by Roosevelt Institute Chief Economist Joseph Stiglitz offers solutions.

“What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything.” Mitt Romney made national news with that statement during the 2012 presidential election, since it meant he paid a lower effective tax rate than many middle-class Americans. The simple reason for his low tax bill?  The tax code’s special treatment of investment income.

In a recent report published by the Center for American Progress, I examine how government subsidies for investment income are making economic inequality worse. The merits of subsidizing investment income are particularly questionable in light of new research published by renowned French economist Thomas Piketty in Capital in the Twenty-First Century. Piketty finds that economic inequality has increased dramatically in recent decades, and will get even worse as the rate of return on capital from investments largely owned by the wealthy exceeds the overall growth rate of the economy.

Nobel-winning economist Joseph Stiglitz, Chief Economist at the Roosevelt Institute, takes a hard look at subsidies for investment income in a new white paper on tax reform. Stiglitz advocates taxing capital gains and dividends at the same rates as ordinary income. Under current law, the federal government will deliver an estimated $1.34 trillion in subsidies to investors over the next 10 years in the form of reduced tax rates for capital gains and dividends. Sixty-eight percent of that money will go to the top 1 percent. Stiglitz argues that there is “no justification for taxing those who work hard to earn a living at a higher rate than those who derive their income from speculation.”

Stiglitz would also eliminate an expensive, but little-known, provision called “step-up in basis,” which subsidizes inherited wealth. By taking a step-up in basis, heirs selling inherited assets only have to pay taxes on the capital gain that took place since they received the asset – gains that accrued during the previous owner’s lifetime are never subject to income taxes. This tax break will cost about $644 billion over 10 years, with 21 percent of that subsidy going to the top 1 percent. For the wealthiest families, the benefits are staggering: 55 percent of the wealth in estates worth over $100 million is in the form of unrealized capital gains, meaning that these families will never pay income taxes on the majority of their earnings since the heirs will benefit from step-up in basis.

Defenders of tax breaks for investment income argue that these subsidies encourage savings and grow the economy, but over the past 60 years there has been no obvious relationship between economic growth and the top capital gains tax rate. Our economic problems are rooted in a lack of aggregate demand, but tax subsidies for investment income reduce demand even further for two reasons. First, they encourage investors to hold onto their wealth and consume less. Second, these subsidies increase economic inequality by primarily benefiting the rich, who tend to consume a much smaller share of their income than poor or middle-class individuals.

The assumption underlying subsidies for investment income is that wealthy investors are “job creators,” but Stiglitz points out that “much of the income of the top arises from rent seeking (wealth appropriation) – and thus impedes growth and efficiency.” Stiglitz is using the term “rent seeking” in a broad sense to mean income from ownership, monopolies, or special treatment from the government. Rent seeking does not grow the economy; it only redistributes wealth from within the economy to rent seekers. For example, landowners get their income from rents paid by tenants. Stiglitz points out that land is an ideal target for taxation, since taxes cannot possibly reduce the supply of land. Yet the United States is taking the opposite approach by allowing landowners to fully benefit from step-up in basis and reduced tax rates for capital gains.

Tax breaks for investment income are massive in scope, but often overlooked in discussions about the proper size and role of the federal government. These subsidies are part of what Suzanne Mettler calls the “submerged state,” government programs that deliver benefits indirectly, with recipients often not even recognizing that they are benefitting from public assistance.

But government programs administered through the tax code are still government programs. It makes no meaningful difference to the government or to beneficiaries whether a subsidy is delivered in the form of a check from the government, or as a reduction in taxes the beneficiary would otherwise owe (which often takes the form of a higher tax refund check from the government). The nonpartisan Joint Committee on Taxation explains that tax breaks “are similar to direct spending programs that function as entitlements to those who meet the established statutory criteria.”

The reaction Mitt Romney’s comments may be the best example of just how invisible government subsidies for investment income are for most Americans. Watching Romney deliver the full statement and explain that most of his income comes from investments, it was clear that he did not think he was making news. And he was right – Romney’s statement that day should not have been news. We already knew that he made most of his money from earlier investments, and the tax rate at the time on capital gains and dividends was 15 percent. The only reason Romney’s statement made headlines was that most Americans were either unaware of preferential tax rates for investment income, or did not realize the staggering benefits this subsidy delivers to extremely wealthy individuals.

It is no coincidence that government subsidies for investment income are delivered through the submerged state. These programs are not popular when the American people can clearly see their impact, and they add to the sense that the economic game is rigged for those at the top.

Harry Stein is the Associate Director for Fiscal Policy at the Center for American Progress. Follow him on Twitter @HarrySteinDC.

Image via Thinkstock

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Daily Digest - July 3: America's Workforce is Still Segregated After All These Years

Jul 3, 2014Tim Price

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On the Civil Rights Act's 50th, Workplaces Remain Segregated (Colorlines)

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On the Civil Rights Act's 50th, Workplaces Remain Segregated (Colorlines)

Though the Civil Rights Act brought legal segregation to an end decades ago, people of color are still being pushed into lower-paying occupations, writes Rinku Sen.

  • Roosevelt Take: A new infographic from the Roosevelt Institute's Future of Work initiative outlines five policy proposals that would promote an inclusive workforce.

Domestic Care for Family Members Isn't Valued If Its Givers Are Exploited (Truthout)

In a book excerpt, Sheila Bapat cites research from Roosevelt Fellow Annette Bernhardt and others to show how domestic workers are shut out from standard labor protections.

We Know We Work Too Much. Now How Do We Stop It? (New Republic)

Bryce Covert looks at paid leave and vacation laws, health care reform, work-sharing programs, and other potential statutory solutions to America's oversized workweek.

Porsches, Potholes and Patriots (NYT)

The Fourth of July should prompt a celebration of America's great public investments -- and an acknowledgment that they depended on taxes, writes Nicholas Kristof.

Census: One-Quarter of Americans Now Live in "Poverty Areas" (Slate)

Data from 2010 shows that a growing number of Americans live in areas where more than 20 percent of the population is below the poverty line, notes Jordan Weissmann.

Yellen Drives Wedge Between Monetary Policy, Financial Bubbles (Reuters)

Fed chair Janet Yellen says monetary policy is the wrong tool to curb financial risk, report Michael Flaherty and Howard Schneider. She sees no need to raise rates at present. 

New on Next New Deal

Graduated and Living With Your Parents? You May Be Luckier Than You Think.

Millennials forced to move home may have their economic futures determined by where they were born, writes Roosevelt Campus Network Operations Director Lydia Bowers.

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Graduated and Living With Your Parents? You May Be Luckier Than You Think.

Jul 3, 2014Lydia Bowers

Millennials who are being forced to move back home may have their economic futures determined by the affluence of their birthplace rather than their own ability.

Millennials who are being forced to move back home may have their economic futures determined by the affluence of their birthplace rather than their own ability.

If you could live in Westchester County, NY or Logan County, OH, which would you choose? What if you were young, college-educated, and just entering the workforce? Recent articles about the return of college-educated Millennials, “the boomerang generation," to their parents' homes focus on how income inequality has contributed to the phenomenon overall. But what is critically overlooked is how this situation stratifies inequality within the Millennial generation and reinforces generational economic privilege.

Compare Sarah and Jess. Both graduated from Notre Dame University in 2013 with degrees in English. Both have similar GPAs and campus activities, and as graduation neared, neither was able to find a job. But what makes them different is that after graduation, Sarah moved back in with her parents in Westchester County while Jess moved home to Logan County.  Westchester County has a per capita income of $48,385, an opportunity score (an aggregated score measuring the educational attainment, economic strength, and community health of a town or county) of A-, and is located within easy commuting distance of New York City – a major metropolitan hub with over 8 million residents that provides ample opportunity for job-hunting. Logan County has a significantly lower per capita income of $22,993, and an opportunity score of C+. The nearest metropolitan hub, Columbus, is over an hour away, requiring a burdensome commute for job-hunting. These two women, who were nearly indistinguishable on paper at graduation, have profoundly different economic outlooks after moving home.

Let's imagine both women have the national average amount of student loan debt, $24,301, averaging out to payments of $279.66 a month for the next 10 years. And let's be generous and assume both women are lucky enough to find jobs in their fields at the median per capita income for their respective towns. Sarah, with almost twice the income of Jess, is able to double her monthly loan payments, becoming debt-free five years earlier than Jess and saving over $4,000 in interest. This puts Sarah on the path to financial stability much sooner.

A college degree used to be a ticket out of a predetermined economic destiny based on your location of birth. In a country where the likelihood that a child raised in the bottom fifth income level will rise to the top fifth can range from 4 percent to 25 percent depending on county of residence, college was traditionally viewed as the equalizer – a chance to escape the economic limitations of your hometown. But, for the one-in-five people in their 20s and early 30s currently living with parents, this is no longer the case. With the rising costs of rent in almost every major metropolitan area, many unemployed or underemployed college graduates will find moving home their only option. And if they are fortunate to have a home in an economically robust area, they will have leverage over their counterparts elsewhere. And as most children who come from economically robust areas come from financially privileged families, this is an example of income inequality growing starker through generational privilege.

College graduates aren’t looking for special treatment, but simply the chance to define their own economic destiny. Policies that work in tandem to address the rise in student loan debt, the affordability of housing in urban areas, and the economic growth needed to create jobs for young graduates are part of the solution. But ultimately, we need to address inequality and acknowledge that for some graduates opportunity is not based on potential but hometown. And that a familial zip code matters more than personal ability should be a rallying cry for anyone concerned about the future of a country once viewed as the "land of opportunity” for all.

Lydia Bowers is Operations Director for the Roosevelt Institute | Campus Network.

Image via Thinkstock

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The Supreme Court's One-Two Punch Against Women's Health: McCullen and Hobby Lobby

Jul 2, 2014Andrea Flynn

The Court's rulings place more barriers, both physical and financial, between U.S. women and basic health care.

The Court's rulings place more barriers, both physical and financial, between U.S. women and basic health care.

In the last week the Supreme Court announced two decisions that could dramatically change the landscape of women’s health access in the United States. It will be some time before we know the full impact of McCullen v. Coakley and Burwell v. Hobby Lobby, but in the short term two things are for sure. The decisions will make it more difficult and less safe for many women to get the care they need, and they will undoubtedly embolden a conservative movement that hardly needs fortification.

The last three years brought record setbacks to women’s health and rights. More abortion restrictions were enacted between 2011-2013 (205) than in the entire previous decade (189). Today nearly 90 percent of U.S. counties do not have an abortion provider and more than 56 percent of U.S. women live in a state hostile to abortion. In many states the procedure has essentially been regulated out of existence. But it’s not just abortion rights that are under attack. The days of conservatives being “anti-abortion” but pro-family planning are long behind us. Today’s conservatives view birth control as the gateway drug to abortion, and regulate it with the same zeal they once saved for abortion.

Restrictions to Title X funding are closing publicly funded clinics around the country. Those clinics serve to provide reproductive health services to low-income and young women, and the majority do not even provide abortions. There is reason to fear that other conservative states are following the lead of Texas, where thousands of women are dealing with the consequences of a complete lack of access to basic health care thanks to lawmakers who have closed a record number of clinics. 

Making matters worse, today 24 states are not participating in the Medicaid expansion originally mandated by the Affordable Care Act (ACA), leaving two-thirds of poor blacks and single mothers and more than half of low-wage workers uninsured.

It’s against this backdrop that we have McCullen and Hobby Lobby, two decisions that are effectively a one-two punch to U.S. women. They allow employers to erect financial barriers to contraceptive choice and embolden protesters to serve as physical and emotional barriers to women’s basic health care. 

In McCullen, the Court struck down as a violation of free speech a Massachusetts law that provided a 35-foot “buffer zone” around clinics that provide abortion. The law was created to protect patients entering clinics, and many states have similar regulations in place. It’s unclear what will happen to those other buffer zones. It’s also more than slightly ironic that the Supreme Court, the very body responsible for upholding freedom of speech, has a 100-foot buffer zone that is still intact.

Protesters will feel vindicated in their attempt to persuade, intimidate, threaten, and terrorize women from accessing care to which they are constitutionally guaranteed. Last weekend the Boston clinic at the heart of the McCullen case saw a threefold increase in protesters. That’s just in Massachusetts. Clinics in more conservative states regularly see hundreds of protesters on a given day.

Hobby Lobby was just one of more than 50 companies (supported by organizations like the Beckett Fund for Religious Liberty) that took issue with the ACA’s “contraceptive mandate,” the requirement that all employer-based health plans fully cover, without cost sharing, all FDA-approved methods of contraception. These companies filed claims against the mandate, arguing that intra-uterine devices (IUDs) and emergency contraception (EC) constitute abortion and therefore being required to provide coverage for those methods was a violation of their religious liberty. Never mind that by all accepted medical standards those methods prevent, not terminate, pregnancy. The Court ruled in favor of Hobby Lobby, allowing “closely held” companies – generally understood to be those having more than 50 percent of the value of their stock owned by five or fewer individuals – to refuse coverage of certain contraceptive methods.

So, what happens now? Well, most women who work for Hobby Lobby and other such companies will no longer have access to the contraceptive method of their choice. They will have to decide if they want to pay for those methods out of pocket or go to a clinic where they can receive subsidized care, if they are lucky enough to have access to one. This will place additional and unnecessary pressure on an already embattled public health infrastructure.

The majority claimed the Hobby Lobby ruling was narrow and would not have the sweeping consequences suggested in Justice Ginsburg’s scathing and on-point dissent. I’m not convinced. According to Harvard Business Review, 90 percent of U.S. companies are considered closely held, and those companies employ more than 51 percent of U.S. workers. There are already at least 80 other cases waiting to follow in Hobby Lobby’s footsteps. Given conservatives’ strategic organizing and employers’ willingness to carry the anti-reproductive rights, anti-Obama, anti-ACA banner, others will surely join the cause.

For the time being, the ACA – and the mandate – remain intact, even if somewhat fractured. We should continue to fight for the full implementation of the ACA, a historic – and by all measures successful – piece of legislation that is advancing the vision FDR articulated more than 70 years ago when he called for a Second Bill of Rights. That vision included medical care to allow all Americans to achieve and enjoy good health.

In falsely pitting freedom of speech and religion against women’s rights – as if women don’t also have rights to those same freedoms – the Supreme Court has given momentum to an already fast-moving train. Conservatives will only have more resolve to continue tearing down the building blocks of women’s health and rights. It’s going to take a lot to stop them. A lot of outrage, a lot of action, and a lot of engaged voters committed to standing up for women’s rights. Here’s hoping we can make that happen.

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

Image via Thinkstock

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Daily Digest - June 30: Inequality is a Choice We Can Stop Making

Jun 30, 2014Tim Price

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Inequality Is Not Inevitable (NYT)

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz argues that policies and politics have created America's economic divide, and only engaged citizens can fix it.

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

Inequality Is Not Inevitable (NYT)

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz argues that policies and politics have created America's economic divide, and only engaged citizens can fix it.

  • Roosevelt Take: For more on Stiglitz's plan to address inequality, read his Roosevelt Institute white paper on tax reform.

How Cities Can Take on Big Cable (Bloomberg View)

The Federal Communications Commission should preempt state laws that ban cities from building competitive fiber networks, writes Roosevelt Institute Fellow Susan Crawford.

Public Sector Unions Could Radically Change This Week (WaPo)

Today's Supreme Court decision on Harris v. Quinn could seriously weaken public employee unions if their compulsory dues are ruled unconstitutional, notes Lydia DePillis.

Will the Government Finally Regulate the Most Predatory Industry in America? (The Nation)

The Consumer Financial Protection Bureau is considering new rules to protect the 12 million Americans a year who rely on high-interest payday lenders, reports Zoe Carpenter.

Why This Company Decided to Make Its Salaries Public to All Employees (Think Progress)

The CEO of data analytics company SumAll tells Bryce Covert that increased pay transparency has led to greater productivity and trust and less stress over compensation.

What Americans Think of the Poor (Prospect)

A new Pew poll shows that even many conservatives who agree that "poor people have it easy" also believe the economic system is unfair, writes Paul Waldman.

New on Next New Deal

Summer Vacation is Feeding the Achievement Gap

Students from low-income families face substantial setbacks without access to summer learning programs, write Roosevelt Institute Director of Operations Sarah Pfeifer Vandekerckhove and policy intern Candace Richardson.

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Summer Vacation is Feeding the Achievement Gap

Jun 27, 2014Sarah Pfeifer VandekerckhoveCandace Richardson

Learning loss during summer vacation is far worse for students of lower socioeconomic status, making low-cost and free educational summer programming essential.

Learning loss during summer vacation is far worse for students of lower socioeconomic status, making low-cost and free educational summer programming essential.

New York City public schools begin summer break today. For many students, summer is a time to rest, travel and play, and a recent study even demonstrates the critical role of play in a student’s future academic and financial success. But extensive research shows that these few months away from the structured activities of school are particularly detrimental to the academic achievement of students of low SES (socioeconomic status) families. Without access and exposure to educational enrichment opportunities during the summer months, these students face substantial setbacks in their academic development.

Of course, all students experience some learning loss during the summer months. Research on the “summer slide” phenomenon shows that nearly all students perform worse on standardized tests taken at the end of summer vacation than the same test taken at the end of the previous school year and lose two months of math skills over the summer months.

For low SES students, however, summer slide does even greater damage to their academic achievement year over year, increasing the achievement gap as well as the likelihood that such students will drop out of high school or not attend college. Summer slide occurring during elementary school alone contributes to at least half of the SES achievement gap by the time students reach 9th grade.  In fact, low SES high school students are eight times less likely to attend a four-year college, compared with their high SES peers.

While only about 20% of students from low-income families participate in summer learning programs, high-income families can afford to expose their children to a variety of enrichment activities, including summer camp. In February, TimeOut published a list of upcoming academic summer camps in New York City that offer exciting sessions on robots, chemistry, reading, and math along with many educational field trips to museums and zoos, with the average cost of these camps totaling $2,176 per month.  For the seventy-eight percent of New York City’s 1.1 million students who qualify for free or reduced-price lunch ($43,568 annually for a family of four) that’s nearly 60 percent of their family’s monthly income, meaning these academic summer camps are out of the question for the families whose kids need them the most.

Cost is only one of many barriers to summer program participation for low SES families. Accessibility plays a big role. For instance, the New York City Department of Education’s Summer Quest, a free, five-week enrichment program to combat summer slide, is only available at 22 of the city’s 1700 public schools. And while NYC Mayor Bill De Blasio and NYC Schools Chancellor Carmen Fariña have strongly encouraged participation in summer enrichment programs, only about 55,000 low SES students will receive free programming this summer.

Despite the efforts to engage students in summer enrichment programs, New York City still has a long way to go.

About one-third of the achievement gap can be attributed to a child’s SES before they even enter kindergarten. Combatting the 31.4% child poverty rate in New York City through expansion of Home Visiting programs can go along way in getting students off on the right foot. This is just one of many policy solutions that arose at the Roosevelt Institute’s recent conference, Inequality Begins at Birth.

Of the 55,000 New York City students receiving free summer programming, De Blasio anticipates that 34,000 of those will be middle-schoolers. Increasing the engagement of elementary school children will mitigate substantial growth in the achievement gap, as early academic setbacks compound over time. The DOE can start by expanding NYC Summer Quest and other programs to target younger students, and over time the focus should be on engaging even more of the 850,000+ low SES students in New York City public schools.

Sarah Pfeifer Vandekerckhove is the Roosevelt Institute's Director of Operations.

Candace Richardson is a Policy Intern for the Four Freedoms Center.

Chart from the Campaign for Grade-Level Reading.

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