Bryce Covert: Lack of Ambition Isn't to Blame for the Gender Wage Gap

Aug 28, 2012

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to National Review's Ramesh Ponnuru about what's behind the gender wage gap.

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to National Review's Ramesh Ponnuru about what's behind the gender wage gap. Their discussion began with a recent Bloomberg View column in which Ramesh argued that there may be factors other than discrimination, such as career choices, that account for women receiving lower pay. Bryce responded at The Nation by citing studies that show discrimination is a real problem, and Ramesh followed up with her at The Corner. In the video below, the two finally come face to face (sort of) to get to the bottom of what's keeping women down.

Responding to Ramesh's suggestion that women may be paid less at least partly because they are "not as aggressive as men in asking for salaries," Bryce concedes that "the idea that women aren't ambitious enough is not one that you find only on one side" and that "society does tend to shape men to be more aggressive and women to be more cooperative, for lack of a better word." But she notes that studies have found that "even if there is some sort of ambition gap," women who are just as ambitious as their male peers are "still not getting the money. The ones that ask still are not rewarded for asking." She also cites a study that shows managers are likely to offer men more as a baseline in salary negotiations, which means that "if a woman's going to go in and try to negotiate and be aggressive and ask for the money, she's already at a disadvantage before she even gets there." Given that the same behavior has been observed in female managers, Bryce argues that this "is not just the patriarchy keeping women down," but an "unconscious bias" shared by both men and women in the workplace.

For more on this debate, including our employers' Leave It to Beaver mindset and why fair pay laws alone aren't enough, check out the full video below:

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Single Women Voters Need One Voice, But Not One Issue

Aug 27, 2012Suzanne Kahn

Not so long ago, single women weren't just an important voting bloc  they were an organized group that made specific political demands.

Not so long ago, single women weren't just an important voting bloc  they were an organized group that made specific political demands.

This political season, single women keep finding themselves at the center of political firestorms. Both parties and the media have recognized that single women are one of the country’s fastest growing demographics and a potentially crucial voting bloc. As the New York Times recently wrote, single women lean strongly toward Obama in polls, but they are not reliable voters, often feeling like politics don’t address their everyday concerns.

Democrats hope to turn single women out by reminding them of the party’s defense of reproductive rights—a job Republicans like Todd Akin make easy. Republicans, in turn, claim that women should and do care about more than their reproductive rights and will turn to the GOP when they consider the bad economy. Absent from this debate is any sense that single women might have some very specific demands beyond reproductive freedom that are not addressed in either party’s appeals.

In the 1970s and 1980s, the number of single women in this country also grew dramatically. A rising number of divorces and increasing economic opportunities for women outside of marriage created new constituencies. Finding their access to economic resources—from credit to pensions—severely limited in a political economy built around the assumed norm of a nuclear family, these women organized. They formed groups like the Older Women’s League and the Alliance for Displaced Homemakers, which demanded legal reform to give single women access to badly needed resources. They proposed creative solutions to the problems single women faced on a day-to-day basis – for example, new ways of calculating Social Security benefits based on a couple’s shared earnings.

These women organized for a number of reasons. Looser divorce laws meant that women who never expected or wanted to be single found themselves suddenly without partners after a lifetime of dependency on their husbands. In this new position, they ran up against laws and customary practices that blatantly discriminated against women. Divorced women, who had paid family credit card bills for years, could not get cards on their own. Women who divorced after less than 20 years of marriage lost access to Social Security benefits. Health insurance companies actively discriminated against women without husbands by charging them far more to purchase an insurance plan. Newly divorced women discovered institutions putting up roadblock after roadblock as they tried to put their lives back together. So they organized—not only within existing women’s organizations, but also by creating their own.

It was, of course, a political moment that fostered identity politics. The burgeoning women’s movement created spaces for single women to meet and discover their shared problems. It also provided organizational support for single women to organize. The National Organization for Women, for example, created special committees to address the problems facing divorced women, widowed women, and never-married women.

Single women identified equal access to credit, affordable health insurance, pension rights, affordable childcare, Social Security reforms, and much more as single women’s issues. They approached these issues not in a general way, but with very concrete demands to address the specific challenges they faced. They proposed specific laws to give women credit access, to reform the Social Security system so that married women were not treated exclusively as dependents, and to provide affordable childcare so that women could work. These organizations won important victories, like the Equal Credit Opportunity Act, but they also left unfinished work, such as the fight for quality, affordable childcare.

Many commentators have pointed out that reproductive rights are deeply tied to economic rights for women, and they are. But a real appeal to single women as voters would recognize the many other ways to improve single women’s economic fate, like paid maternity leave and labor laws that protect the many women who work in the service economy.

Single women today, like those in the 1970s and 1980s, are strapped for time as well as money. Asking that single women create brand new organizations is a tall order. But our absence from the political scene as vocal, self-organized participants has allowed the parties to adopt a severely limited vision of women’s demands.  

Suzanne Kahn is a Roosevelt Institute | Pipeline Fellow and a Ph.D. student in history at Columbia University.

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The Republicans’ Medicaid Cruelty

Jul 30, 2012Jeff Madrick

This piece originally appeared in The New York Review of Books.

“The essential American soul,” claimed D.H. Lawrence, “is hard, isolate, stoic, and a killer.” While the rejection by five state governments of the Affordable Care Act’s Medicaid expansion may not precisely illustrate Lawrence’s heated observation, it does suggest a contemporary vein of cruelty in America that is deeply disturbing.

This piece originally appeared in The New York Review of Books.

“The essential American soul,” claimed D.H. Lawrence, “is hard, isolate, stoic, and a killer.” While the rejection by five state governments of the Affordable Care Act’s Medicaid expansion may not precisely illustrate Lawrence’s heated observation, it does suggest a contemporary vein of cruelty in America that is deeply disturbing.

A new study published in The New England Journal of Medicine shows that providing greater medical insurance coverage for the poor has saved lives. Moreover, the ACA’s expansion of Medicaid requires little state money, since the federal government will pick up more than 90 percent of the costs over time, and 100 percent of the costs for the first few years. Yet Texas, Florida, Louisiana, South Carolina, and Mississippi—which together account for more than a sixth of the overall US population—have already rejected the plan, and as many as twenty other states, including New Jersey, Missouri, Iowa, Nebraska, and Nevada, have indicated they may follow suit.

Furthermore, these states already have among the highest numbers of citizens with no health insurance. Twenty-five percent of non-elderly Texans have no health insurance, for example, compared to the national average of about 18 percent. If the Obama Medicaid reforms were fully implemented, 15 to 17 million of the nation’s 50 million without health insurance would be covered. In a report just issued in late July, however, the non-partisan Congressional Budget Office estimates that the Medicaid expansion will only cover some ten million more, or a full third fewer than anticipated, because of the rejection of the plan by large states like Florida and Texas and others who have not yet formally announced their intentions.

This is particularly troubling in view of how important the Medicaid expansion is to low-income Americans. The two Harvard economists who authored the NEJMstudy have found that there are 6 percent fewer deaths in several states that had expanded Medicaid in earlier years compared to nearly contiguous states that did not. Fortunately, according to the recent CBO report, three million of those who will not be covered in states that reject the Medicaid expansion will qualify for and probably buy insurance through another provision in the ACA—a program that provides subsidies to buy insurance for those who earn between 100 and 400 percent of the federal poverty level, which is $22,350 for a family of four.

What has enabled states to reject the expansion is the curveball thrown by the Supreme Court in its decision in June to uphold President Obama’s Affordable Care Act: not only did the court argue that the states need not participate in the new expansion, which the Obama administration had intended to be mandatory; it also said that the federal government could not withhold Medicaid payments for states that decide not to participate. Thus, the court created a way to undermine one of the most admirable achievements of the ACA, a sweeping expansion of a medical safety net for the neediest.

Read the full article here. 

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What Policy Agenda Follows From "You Didn't Build That?"

Jul 20, 2012Mike Konczal

(Note: There's a previous post on this subject of "you didn't build that," taking apart the conservative agenda around "job creators," which you can read here.)

(Note: There's a previous post on this subject of "you didn't build that," taking apart the conservative agenda around "job creators," which you can read here.)

The right is freaking out about President Obama's "you didn't build that" comment. Well, let's hope the conservatives in the audience have their fainting couches nearby and pearls sufficiently clutched, because I am going to start by kicking out two jams by my man, Franklin Delano Roosevelt, from back from when he was on the campaign trail:

"Our Republican leaders tell us economic laws--sacred, inviolable, unchangeable--cause panics which no one could prevent. But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings." (Nomination Address, July 2nd, 1932, Chicago, IL)

"To insure the first set of rights, a Government must so order its functions as not to interfere with the individual. But even Jefferson realized that the exercise of the property rights might so interfere with the rights of the individual that the Government, without whose assistance the property rights could not exist, must intervene, not to destroy individualism, but to protect it." (Commonwealth Club Address, September 23, 1932, San Francisco, CA)

Now as long as people are guessing as to what the true, deeper, esoteric meaning is of President Obama saying, "Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that," let throw something out there. It may be less a legal argument for how all property is the creation of the state - or as Roosvelt said, "the Government, without whose assistance...property rights could not exist" - and more a genuine call for actually building roads and bridges, something Congress is no longer capable of doing in these times. The current House went to war over whether or not to fund transportation infrastructure. It barely passed in a last-minute bill that left many issues still on the table. Former Republican congressman and now Transportation Secretary Ray LaHood told Politico that the original proposal was “the worst transportation bill I’ve ever seen during 35 years of public service.” Given that capital markets are willing to lose money to loan to us for 20 years and there's lots of unemployed people around, this should be a no-brainer.

There's two responses I've seen on the right to this topic that I'd like to address on the "you didn't build that" point, and both come up in Julian Sanchez's post "What Follows from 'You Didn't Build That'?" One is that President Obama is addressing a strawman, and that unless you are speaking to an anarcho-capitalist nobody would disagree with this. "Even we minarchist libertarians are already on board with" basic public goods, he writes, and President Obama's vision of the role of the state is much more expansive than that. I disagree that there is no disagreement. I think that the current vision animating conservatism broadly and GOP policy narrowly is one of an economy in which value is created top-down by "job creators," which I outlined at length here. Rather than "Social Darwinist," as the president refers to it, I think it is clearer to say that the current GOP policy, centered around the Ryan Budget, is "Randian." Now, that doesn't mean the opposition believes every part of Ayn Rand's theories; it just means that their political compass is orientated towards her vision, and if you step in that direction you are getting closer to your goal.

The other response is that what Obama says is largely true, but there's no actual politics that falls out of it. Sanchez writes, "It’s not that the 'you didn’t build that' argument is wrong as a factual matter—it’s that it’s true about everything, and therefore doesn’t get you much of anything."

That's a good point. What does a "you didn't build that" agenda look like? Here's what I think it should include broadly, and what matters it should be concerned with, at least on all things related to economics. (Noting in advance that I'm pretty sure the mainstream Democratic Party and President Obama aren't going to sign up for most of this.)

The first step is what President Obama was calling for in the speech, which is progressive taxation. This doesn't require the state to do more than what it does now, or less than what it does now, but instead changes how we pay for those things. And here the idea would be that those who have benefitted the most have an obligation to contribute the most. This has historically been a controversial policy - when the French economist and statesman Turgot was presented with a project for progressive taxation he responded "we must execute the author, not the project" - and I think it is useful to consider the Ryan Plan as ending progressive taxation. There's a lot of ways to argue for progressive taxation, including shared sacrifice of marginal utility, and this is another.

Another would be emphasizing that public goods are actually that: publically provided and shared. There's been a move to both privatize large parts of the government and to emphasize putting costs for the use of publically provided infrastructure directly on end users instead of making them paid for broadly. Higher education, for instance, is now less a conscious set of planning the government does to make sure all who need education can receive it, which is paid for broadly through taxes, but instead of a series of coupons -- grants, loans, tax subsidies -- to subsidize individuals purchasing a self-investment by and for themselves, with the assumption that the "for-profit" sector and innovation broadly will expand in size and quality to pick up the slack of decreasing public provisioning. A broader question is what is treated as a commodity, and under what terms. Fighting back against both of these issues would be part of the agenda.

Continuing the inter-generational pact of the welfare state is another part. David Frum recently described the current GOP as "a going-out-of-business sale for the baby-boom generation." Not wrecking the entire social safety net and the mechanisms of the goverment on the way out the door, and instead thinking of the government as a pact through time, is another important point to emphasize.

Now for property. Conn Carroll at the Washington Examiner brings up Robert Hale and the progressive, legal realist attack on laissez faire, and Sanchez brings up the similar arguments of the Nagel/Murphy book “Myth of Ownership.” These arguments are partially inherited from people like Jeremy Bentham, who argued that “property is entirely the creature of the law.”

One of the critiques that comes out of these arguments is that the picture of property rights as a vertical relationship between a person and an object, one where the issue at play is whether the person's right over the object is “deserved all the way down,” is flawed, or at least insufficient. Property is really a horizontal set of relationships between people; it isn't just your control of an object but your control over others with respect to that object. The fundamental right of private property, of course, has always been the power to exclude others. But in the 1910s, a law professor named Wesley Hohfeld formalized property "rights" into a series of four capacities: "right," "privilege," "power," and "immunity." They contrast with four incapacities: "duty," "no-right," "liability," and "disability" (see here or here for more). Each type of property right is predicated on being able to force others to respond a certain way -- you have certain immunities while others have disabilities in response, certain powers while others have liabilities, and so on.

And so "liberty" for one comes at an expense of "liberty" for another. Since there's no neutral way for the government to set these rules, certainly no abstraction like "economic liberty" to guide the path, the question over social control of property, as Leonard Trelawny Hobhouse put it, is "not of increasing or diminishing, but of reorganizing, restraints." The issue here isn't that everything is up for grabs - it's that there is no "neutral," and appealing to higher abstractions as "rights" or "ownership" don't get you anywhere.

Perhaps you find that objectionable or maybe you don't, so let's build out the You Didn't Build That Agenda in regards to property. The first stop is that there needs to be a democratic element and accountability in setting up these rules. If only because trying to back out a system of rules from vague appeals to "liberty" (especially as interpreted by courts) don't actually get us anywhere. The second issue would be acknowledging and confronting the issue that the current set up of the rules of property and economic exchange are important in creating our current economic inequality, from the runaway wealth of the top 1% to the stagnating wages of everyone else.

The way we set up the rules creates a lot of winners. The top 1% consists mostly of corporate CEOs and financial wealth. The former are influenced by the way we structure corporations through law -- read Demos' Anthony Kammer on "Reimagining the Corporate Form: Toward a More Democratic System of Corporate Governance" -- and compensation packages through tax law. The latter has a clear link with financial deregulation and much of the system exists in a way where finance's failure can pose huge externalities on other market actors and the macroeconomy as a whole. Another example is patent law which, as many note, provides large windfalls for owners. Over half of the windfall that comes from the fact that we privledge income from capital over income from labor in taxation goes to the top 0.1%. Dean Baker’s e-book, "The End of Loser Liberalism: Making Markets Progressive," is great on these points.

The way we set up the rules also creates a lot of losers. Bankruptcy law has become tougher on regular people while corporations do fine under it, something Robert Kuttner writes about as an important double standard. It is harder to unionize, and simple measures to allow for card check have failed in Congress. Inequality at the low end can be largely attributed to decreased unionization (for men) and a stagnant minimum wage (for women), both of which reduce bargaining power for their respective parties.

There's also macroeconomic policy, something the government does (or doesn't do) that has significant impact on economic outcomes but that impacts all kinds of claims to property. As Ryan Avent notes, commenting on the You Didn't Build That issue, the "operating monetary principle over the past generation—price and financial stability at all costs, help for the unemployed if we get around to it and only to the extent that the first priorities aren't endangered—has facilitated the creation of an enormous amount of financial wealth," as well as stagnating wages for everyone else. Full employment for all is a great start, though there's no way to appeal to it by referencing abstractions of economic liberty.

What else needs to be part of the agenda?

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The Conservative War on Single Mothers Like Jessica Schairer

Jul 19, 2012June CarboneNaomi Cahn

Conservatives want to have their cake and eat it too: decry the rise in nonmarital births but make life even harder for women facing single motherhood.

Conservatives want to have their cake and eat it too: decry the rise in nonmarital births but make life even harder for women facing single motherhood.

Ever wonder what the “war on women” is really about? An article in the New York Times, “Two Classes, Divided by ‘I Do’: For Richer Marriage, for Poorer, Single Motherhood,” provides some clues. The article documents the growing class divide in family form. College graduates like Chris and Kevin Faulkner, who were profiled in the article, postpone starting families, produce marriages with lower divorce rates than a generation ago, and reap the rewards in terms of greater time and resources to invest in children. In the meantime, women like Jessica Schairer who do not graduate from college, also profiled in the article, are increasingly raising children on their own. These women often give up on the men in their lives and struggle to balance the demands of low-paying jobs with the attention their children need.

The article presents a compelling portrait of the causes and the effects, but not of the partisan divide over the potential solutions. That divide can be summed up by a struggle over a simple question: are women like the single mother, Jessica Schairer, the victims of our economy or the problem? Those who see them as the problem are setting forth proposals to make their lives (and their children’s lives) worse. Those of us who see Jessica Schairer as a victim of increasing economic inequality recognize that supporting her ability to care for her children is critical to the strength of the country’s next generation. The political war for the future of Jessica Schairer is under way.

The change in family structure is a consequence of growing economic inequality that further increases inequality in the next generation of children. The most startling change is the increase in non-marital births. In 1990, just 10 percent of white women with some college education had a birth outside of marriage; today the figure is 30 percent, compared to 8 percent of whites with a college degree and 40 percent for the country as a whole. Meanwhile, 86 percent of black high school dropouts have children outside of marriage. The likelihood that a child will be raised in a two-parent family has become a marker of class.

The Times article documents the consequences of this change, as it describes the limited ability of single parents to pay for sports participation, attend school events, stay on top of homework, and provide adequate role models. Harvard’s Robert Putnam adds that the growing class gap in childrearing affects everything from the time parents spend playing patty-cake with their pre-schoolers to the likelihood that a high school senior will be the captain of a sports team.

In considering the causes of class divergence, the Times articles documents a negative spiral. It observes that economic woes speed marital decline “as women see fewer marriageable men.” Women do not commit to men without steady employment, and a shortage of “good men” encourages the employed to play the field. A long list of academic studies demonstrates that when marriageable women outnumber the men, everyone’s norms change and marriage rates decline. For single mom Jessica Schairer, as for many other women today, there was no point to marrying the father of her three children. Instead, for her the issue is “why she stayed so long with a man who she said earned so little, berated her often and did no parenting.” On the other hand, marriage also encourages men to shape up. Kevin Faulkner, the married father in the story, explained that he returned to college because he wanted to get married. Other studies show that not only has the premium for college graduates increased over the last generation, but the job stability of less educated men has fallen more than for other parts of the population and male layoffs often break up relationships and discourage marriage.

While the documentation of these differences is now well established, the solutions are not. Yet there are two obvious ones, rarely discussed in explicit terms. The first recreates the links between stable jobs and stable families. This requires greater economic equality, more opportunities for blue-collar men, more family-friendly workplaces, greater support for higher education and job training, and better access to contraception and other supports for delaying family formation. A growing literature suggests that greater equality itself creates virtuous cycles that deter teen births and encourage longer lasting family relationships.

The alternative? Bring back patriarchy. Conservatives like Charles Murray blame changing values, charging that the men have gotten lazy because women no longer depend on them or fail to sleep with them until they shape up. The secret to bringing back female dependence and male virtue? Make the women desperate. Murray has made a career of blaming government programs such as welfare for the destruction of the American family because such programs cushion the impact of single parenthood. For conservatives who see single mothers like Jessica Schairer as the problem and who refuse to see inequality itself as the explanation, the result is a war on women.

Virtually every conservative Republican, from Paul Ryan’s budget to Mitt Romney’s platform, would cut the benefits on which single mothers like Jessica Schairer currently depend. Indeed, shortly after Romney’s NAACP speech, he commented, “Remind them of this: If they want more free stuff from government, tell them to go vote for the other guy.” What could Romney have meant by “free stuff?”

First, start with food stamps. They are an important part of Jessica Schairer’s ability to feed three children on an income of $25,000 a year. Romney’s proposals would either force 13 million people off of food stamps entirely or cut benefits by $2000 per year per family.

Second, Romney’s budget would produce massive cuts in Medicaid programs that serve as the most important source of health care for working mothers without adequate benefits. 

Third, Romney’s tax proposals would raise Jessica Schairer’s taxes while providing for massive cuts for those with high incomes. 

Whether or not Romney specifically intends to make the lives of single mothers more perilous, his policies would do exactly that.

Social conservatives, in the meantime, have taken aim at the reproductive rights that make it possible for women to avoid inopportune births. The class divide in access to contraception and abortion is wide and growing. The Guttmacher Institute reports that between 1994 and 2006, the unintended pregnancy rate grew by 50 percent for women below the poverty line. During the same period, it fell by 29 percent for higher income women. Yet those who share Charles Murray’s sentiments about single mothers have done their best to make it worse.

For many of us, this is the most perplexing part of the war on Jessica Schairer, and it rests on conservatives’ analysis that the key to reforming the family is to deny men sex rather than prevent births. Indeed, Republican candidate Rick Santorum linked the increase in non-marital births to the “dangers of contraception,” which he categorized as "a license to do things in a sexual realm that is counter to how things are supposed to be."

We noted in Red Families v. Blue Families that most conservatives do not oppose contraception per se, but they remain resolutely against the implied approval of non-marital sex that would accompany explicit support and the government subsidies necessary to make access more universal. In the name of religious liberty, they accordingly raised a furor over President Obama’s recent proposal to mandate employer coverage of contraception as preventive health care. With less publicity, they blocked inclusion of proposals to increase contraceptive access in the stimulus bill. And they defeated efforts to include contraception in any form as part of the health care package. Yet poor women’s lack of health care coverage is a major factor in the unplanned pregnancy rate.

If contraceptive access is controversial, abortion is off the table. Ms. Schairer considered one in response to the unplanned pregnancy that derailed her college education, but the father of her children opposed it. The Guttmacher Institute notes that the women most likely to end an unintended pregnancy by abortion are those who, like Ms. Schairer, are in college at the time of the pregnancy. Had Ms. Schairer not given birth when she did, she would have been much more likely to graduate, to avoid a non-marital birth, and to be able to secure a better job. But at the same time conservatives work to make life more difficult for mothers like Jessica Schairer, they argue that having the child is the only acceptable moral option.

For a generation now, Murray, the editorial pages of the Wall Street Journal, and many other conservatives have denied that inequality has anything to do with the changing family. Romney has joined the chorus, dismissing any discussion of inequality as “envy” and “class warfare.” It is time to recognize the truth. The policies they have championed are responsible for the class-based division in family form. The war on Jessica Schairer is claiming an increasing number of victims. 

June Carbone is the Edward A. Smith/Missouri Chair of Law, the Constitution and Society at the University of Missouri-Kansas City.

Naomi Cahn is the John Theodore Fey Research Professor of Law at George Washington University Law School. She is the author of numerous books and law review articles on gender and family law.

Cahn and Carbone are the co-authors of Red Families v. Blue Families.

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Investing In and Invigorating Head Start

Jul 11, 2012Amy Baral

Head Start is a good start to revitalizing national education but there is still room for improvement. 

Head Start is a 8 billion dollar federal grant program that provides preschool and other early childhood learning opportunities to about 1 million 3 and 4-year-old children that meet federal poverty guidelines.  When Head Start was first created, as part of President Johnson’s War on Poverty, the program was designed to help improve the child development and developmental needs of disadvantaged children.

Head Start is a good start to revitalizing national education but there is still room for improvement. 

Head Start is a 8 billion dollar federal grant program that provides preschool and other early childhood learning opportunities to about 1 million 3 and 4-year-old children that meet federal poverty guidelines.  When Head Start was first created, as part of President Johnson’s War on Poverty, the program was designed to help improve the child development and developmental needs of disadvantaged children.

While Head Start has grown slowly since its inception in the 1960s, critics have never been far behind to challenge the programs successes and budget.  Most recently, TIME’s Joe Klein challenged Head Start as a failing to “yield results” and called for the end of the program.  Klein opined that because some studies show that children in Head Start do not see sustained academic and developmental growth after they have finished the program, that the program itself was a failure and a waste of money.  Klein raises some interesting points. First, is $8 billion a year for poor preschoolers a valuable use of the federal government’s money?  Second, does Head Start actually improve academic outcomes long-term? And finally, is there a way to improve the Head Start program or should it just be scrapped as wasteful government spending?

First, is the federal government justified in spending $8 billion a year on preschool education for American’s poorest children?

America provides a system of free public education, usually Kindergarten through Grade 12.  However, most young children often attend a series of private preschool programs before starting Kindergarten.  In contrast, most European countries provide about 2 years of pre-school or early childhood development programs for all young children before the kids begin primary school.  Instead, in America, mostly all preschools are privately run, with average costs of about $3,000 - $12,000 per child per year. 

America does provide limited subsidized preschools at the state and federal levels, usually based on poverty level, and Head Start is one of these programs. But, Head Start only serves about 1 million children a year and in 2010, there were 6.3 million children in poverty.  So maybe the question is not whether the federal government is justified in spending $8 billion a year on preschool programs for poor children, but whether $8 billion is enough to serve the needs of these children.  With potentially 5.3 million children going without adequate access to preschool services every year, it is clear that America’s early childhood education programs benefit those that have the means to access these private programs and harm those without similar access.

But, America is in a recession and the federal government is struggling to allocate money for even well supported government programs, like subsidized student loans.  Before one advocates for expanding a program such as Head Start, it is important to ensure that the program actually works.  This leads to the second question, is Head Start achieving educational and development success among the children it serves?

Head Start’s successes in early childhood development and long-term academic and social outcomes for poor children are disputed.  While there are some studies that highlight the successes of Head Start in terms of keeping people out of prison and leading to higher education rates, other studies, like the Head Start Impact Study show only minimal long-term effects.

Still, many of these minimal long-term effects can be attributed to the weak schools that Head Start graduates will attend upon program completion.  Faced with failing schools, a lack of resources, overcrowded classrooms, and even bad teachers, it is of no surprise that the students targeted for Head Start programs cannot maintain their academic improvements over time because the odds are simply against them.

It’s clear that America has many poor children who go without access to quality preschool programs due to their poverty level and the limited reach of the Head Start program.  Further, poor children who do have access to Head Start often do not see sustained academic outcomes throughout their time in public education. Maybe the true issue is that early childhood education through Head Start is only one part of the process to improve educational and life outcomes for poor children in the United States.  This leads into the third question, can Head Start be improved to ensure effective program performance and long-term benefits or should the program just be scrapped?

Obviously, Head Start should not be scrapped unless the federal government and the states figure out a better way to provide access to high-quality preschool programs for our nation’s poorest preschoolers.  There are too many preschoolers in this country who go without access to early childhood development programs, and while Head Start is just one option, it’s an option that is helping 1 million of these preschoolers.

Still, as with any government program, it is necessary to ensure that federal money is being spent correctly.  In 2007, Congress passed “Improving Head Start for School Readiness,” an act that allows the government to take a stronger federal oversight role of Head Start programs and requires teachers in Head Start programs to hold associates and bachelors degrees.  The Obama Administration has already used its power under this bill to close unsuccessful Head Start programs and provide more funding for programs that were succeeding.  To ensure that federal money is being spent correctly and that children are receiving high-quality preschool education, it is essential that federal oversight of Head Start programs continue.

Finally, the federal government should work to expand access to free and reduced preschool programs for poor children.  Preschool has a profound impact on the educational attainment and development of children.  Further, because most middle-class children have the ability to attend preschool, expanding access to preschool programs for poor children could help close socioeconomic achievement gaps.  Most importantly though, gains made in preschool need to be sustained overtime through strong primary and secondary public education for all students.  American needs to work towards improving its K-12 educational opportunities for all students to ensure that all children have access to high quality education from preschool to college.

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Amy Baral is a Roosevelt Institute Pipeline Fellow.

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38 Million Missing Quits, the Battle to Quit and Replacing Government with a UBI: Three Points on Workplace Coercion

Jul 7, 2012Mike Konczal

There's a lot of discussion on the workplace as a site for private coercion building out of the epic Crooked Timber post Let It Bleed: Libertarianism and the Workplace, by Chris Bertram, Corey Robin and Alex Gourevitch (BRG). They are responding to the worldview of the Bleeding Heart Libertarians (BHL).

There's a lot of discussion on the workplace as a site for private coercion building out of the epic Crooked Timber post Let It Bleed: Libertarianism and the Workplace, by Chris Bertram, Corey Robin and Alex Gourevitch (BRG). They are responding to the worldview of the Bleeding Heart Libertarians (BHL). Corey has two posts (I, II) collecting a wide variety of great responses. I'd like to make three quick points I haven't seen others mention.

I - Over 38 Million Quits Missing

If we view individuals quitting their job as a check on private coercion, which I believe the BHL crew thinks, then there's been a massive increase in private forms of coercion in the past several years. Here's JOLTS data from the Bureau of Labor Statistics on the number of quits that are happening in the labor force:

There are, roughly, 38.4 million quits that should have occurred that didn't since the economy went into recession. I'm assuming nobody believes that employers decided to become very nice all of a sudden in December 2007, but that instead the economy went into a deep recession. As a result of this recession, where the number of unemployed versus job openings has skyrocketed (because both the unemployed have increased and job openings shrunk), it is very difficult to find a job. This translates into declining labor share of income, as workers are left with little bargaining power in the Great Recession. If one assumes that labor management techniques are sticky, or that hysteresis creates the conditions where people who have lived through bad economic times have weaker bargaining power, this coercion is likely to cement and be long-lasting.

The academic unemployment literature goes far beyond the Economics 101 idea that wages are simply equal to contribution (marginal product). That literature now looks to bargaining over surpluses/rents that come out of the labor contract as the crucial issue for how wages are determined. If you look to Chris Pissarides' Equilibrium Unemployment Theory (a textbook summarizing the work that just won him the Nobel Prize), you see arguments such as, "We assume that the monopoly rent is shared according to the Nash solution to a bargaining problem...The way that market tightness enters the wage equation in our model is through the bargaining power that each party has...The worker's bargaining strength is then higher and the firm's lower, and this leads to a higher wage rate." Tight labor markets mean more of the surplus is captured by labor through wages. If you view workplace conditions as an extension of the wage equation, then full employment makes a giant difference even under neoclassical economic assumptions.

BHL is not an economics blog, but I find it weird that they aren't ringing the alarm as much as possible on this. They should be willing to go to some great lengths to keep the labor market at full employment as a "free market" way of mitigating abuses, which would involve accepting mass job creation programs, larger government deficits, unorthodox monetary policy, putting losses on creditors instead of debtors, and so on. For many libertarians these solutions are the real "abuses."

Macroeconomic stability, everyone having a right to employment, and labor capturing their fair share of the pie aren't the passive results of "economic liberty" or of economic contracting. They are the result of an interventionist government focused on managing the macroeconomy, one whose political compass is set by groups organized to protect the interests of workers, of which organized labor are the leaders.

II - Freedom to Quit Was Forged in Political Battle, Not Markets

Alex Tabarrok at Marginal Revolutions wrote this: "If you think that the freedom to quit is without value bear in mind that under feudalism and into the early 19th century in the U.S. and a bit later in Britain employers and even potential employers could prevent workers from quitting and from moving. The freedom to quit was hard won. We should not disparage the liberation brought by a free market in labor."

Early 19th century? British Master and Servant law made employee contract breach a criminal offense until 1875. Anti-enticement laws, where employers would be fined if they hired someone who was currently under contract, were popular in the sharecropping American south into the early 20th century, and upheld in courts as late as 1923.

Tabarrok draws on Robert Steinfeld's excellent work in that link, but a crucial thing to draw from that literature is that laissez-faire "economic liberty" and "freedom of contract" movements were the enemies to building the modern freedom to quit one's job. Employees faced criminal penalties for quitting and the loss of back pay if they did quit, and the common law of the time made it impossible for workers to end this. Laissez-faire advocates fought for this and against organized labor's efforts to dismantle it.

It seems like people are discussing the right to quit as if was something that just emerged out of our rich society, and something that "naturally" came out of extensive, individual, economic bargaining, when that couldn't be further from the truth. Only through the concentrated efforts of organized labor, a bloody, ugly fight, was this modern freedom able to be built. Karen Orren's book Belated Feudalism places the end of this old regime Tabarrok alludes to at the New Deal's 1935 Wagner Act, which comes after decades of union organizing and battling. Who will build the next set of contractual labor frameworks we'll take for granted, given that the freedom to quit was a political battle that never emerged from the labor market on its own?

III - How Much Does a UBI Cost, and Should We Replace the Government With Cash?

There's also a question of how much a Universal Basic Income (UBI) would cost. BRG suggested it would be 20 percent of GDP, added to the roughly 20 percent baseline of taxation that already exists to provide current government services, for a total of 40 percent. This is correct. Our GDP per capita is roughly $50,000. If you want to give everyone $10,000, that will require taxing 20 percent of GDP.

A lot of people suggested that was too high. Those people are usually, almost by definition, doing one of a few things. They are excluding some populations from the UBI (such as giving children nothing or much less), they are really discussing a negative income tax (a means-tested UBI done through the tax code), they are also removing current government services (such as unemployment insurance, or food stamps), or they are redefining "cost" to just focus on the redistribution element (associated with the negative income tax). Changing those numbers would change the final result.

Some means-test the UBI as a negative income tax, which would have significantly less cost. This has the normal "submerged state" problems any tax code program has, where people wouldn't see it as a government program. The means-tested part makes it not universal in basic sense. The negative income tax wouldn't avoid stigmatization as not everyone would receive it, and could still create poverty traps, two issues the UBI is meant to overcome. Indeed a negative income tax with a work requirement, the EITC, is ground zero for the accusation that too many people pay nothing in taxes but receive government services.

Charles Murray essentially dismantles the welfare state and the government and replaces it with a UBI in his argument. He segments 30 percent or so of the UBI to be mandated (!) for purchasing catastrophic health insurance though.

If one is going to dismantle the government to provide a UBI what parts will be left should be discussed. As many have pointed out (Anderson, Scanlon), just because you would prefer X over something Y that we believe everyone should have doesn't obligate us to provide X. If you are a rational person who would prefer to trade in your right to a fair trial for $100 to buy a fancy hat, that doesn't mean society owes you the hat over the trial, even if that right to a fair trial costs society over $100.

There are also goods where the needs are disproportionately varied and we actually need the insurance component of social insurance for risk-sharing (e.g. health care). And there are also a variety of functions through which the government can make sure a baseline of demand is met for all who need them, if the private market is unable to provide or will insufficiently allocate them (e.g. education). It's not clear that disbanding these functions and giving away a coupon is a smart idea.

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Why Obama’s New Immigration Policy is Good for the Economy

Jun 21, 2012Tim Price

Protecting undocumented workers doesn't mean they'll "steal" American jobs. Quite the opposite.

Protecting undocumented workers doesn't mean they'll "steal" American jobs. Quite the opposite.

Last Friday, the Obama administration announced that it would halt the deportation of young undocumented immigrants who would qualify for the DREAM Act and grant them work permits. The usual suspects leaped into action with shouts of “amnesty!” and charges that President Obama was once again selling out his country to serve his cosmopolitan principles. One reporter from the right-wing Daily Caller was so irate that he started heckling Obama during the statement announcing the new policy, asking whether it was “good for the American people.” But this move will in fact benefit Americans, and anyone concerned about America’s workers and the health of its economy should be pushing the administration and Congress to go even farther.

In the ongoing battle between the 1 percent and the 99 percent, undocumented immigrants undoubtedly fall into the latter category. According to Pew research, 62 percent of undocumented workers are employed in construction, hospitality, manufacturing, or wholesale and retail trade, and “in specific occupations like cooking, painting, washing cars, packaging by hand and installation of carpets and floors, they may make up 20 percent or more” of the total workforce. Although the same study finds that many of these workers make at least minimum wage, the Urban Institute reports, “About two-thirds of undocumented workers earn less than twice the minimum wage, compared with only one-third of all workers.” Moreover, research from the Dallas Fed notes that although they are covered by minimum wage laws, “undocumented workers paid less than the minimum wage are probably unlikely to seek legal redress for fear of revealing their undocumented status.”

In short, these workers perform lousy jobs for lousy pay, with little bargaining power, limited legal recourse if they’re mistreated by their employers, and no safety net to catch them if they get sick or lose their jobs. Dirt cheap, easily exploited, and readily disposable, they represent the model American worker for elites who rail against organized labor, social programs, and business regulations.

Bringing undocumented immigrants out of the shadows and acknowledging them as full and active participants in the workforce is essential, not just to improve their own economic standing but to increase economic justice for all workers. Conservatives often cast this as an us-versus-them conflict, warning that undocumented workers are out to “steal” our jobs and that granting them legal status will only create more competition for low-income Americans. But they're already here whether we choose to acknowledge them or not, and as Cristina Jimenez writes at The American Prospect (h/t Travis Waldron), “As long as a cheap, compliant pool of undocumented labor is available, employers have every reason to take advantage of the situation, keeping wages as low as possible.” No one’s out picking fruit under the hot California sun because of the great dental benefits; they’re doing what they need to get by, and their employers have them over a barrel. To put it another way, Terence O’Sullivan of the Laborers’ International Union of North America says, “Workers don’t depress wages. Unscrupulous employers do.”

The alternative to granting undocumented workers the legal protection they need to combat this exploitation is mass deportation, but rounding up and expelling 11 million people at a cost of $23,480 a head would be both inhumane and totally unaffordable. On the other hand, allowing them to stay and granting them legal status would actually help to reduce the deficit. According to a report from the National Council of La Raza, undocumented workers already contribute about $8.5 billion into Social Security and Medicare each year in addition to paying sales and property taxes. Far from being freeloaders, they pay $80,000 more in taxes per capita during their working lives than they take in from government services. But even if some of these workers were to achieve legal status through the DREAM Act and begin receiving the full benefits they deserve, the CBO and the Joint Committee on Taxation estimate that factors including their newly reportable income and decreased Homeland Security costs would generate $1.7 billion in new revenue and reduce the deficit by $2.2 billion over the next 10 years. The question of “Which do I loathe more, deficits or immigrants?” may represent a real Sophie’s Choice for some on the right, but it’s clear that deficit hawkery is incompatible with opposition to immigration reform.

Even if you’re not one of those people who wakes up in a cold sweat thinking about the debt-to-GDP ratio, there’s reason to believe the American economy has holes these undocumented immigrants could fill. (Not literally, though they do that too.) As President Obama has emphasized, the U.S. is falling behind other developed countries in college completion rates, which could soon lead to a shortfall in high-skilled workers. Luckily for us, among the undocumented immigrant population there are millions of young men and women who grew up in America, identify as American, and want to go to college and pursue their careers here. We just need to stop giving them reasons to be afraid to do so.

The DREAM Act, if it were ever passed, would give undocumented immigrants who arrived in the U.S. before age 16 a path to citizenship if they meet certain criteria, including the completion of a college degree or military service. It’s been introduced several times in Congress (originally by Republican Orrin Hatch) but blocked by the GOP on the grounds that it would grant amnesty to those who entered the country illegally – an idea so radical only a bleeding heart liberal like Ronald Reagan could support it. President Obama’s new plan doesn’t even go that far. It will allow some undocumented immigrants to work here legally, but it provides no clear path to citizenship or the rights and privileges that come with it. They won’t be able to vote, for instance, although taxation without representation has been something of a sore spot in American history.

As the president himself admitted in his Rose Garden address on Friday, this new policy is only “a temporary stopgap measure” until Congress can pass a comprehensive immigration reform plan. And while the politics of setting the age limit for the policy at 30 are clear, since the “crime” of immigrating here as children is harder to hold against them, it’s cold comfort for the millions of older undocumented workers who need and deserve some relief. But it’s still an important step forward, and not just on the moral grounds that, as the president stated, “We are a better nation than one that expels innocent young kids.”

Instead of blaming undocumented workers for taking American jobs (and casually referring to them as “illegal aliens,” which criminalizes their existence and makes them sound like something that’s going to abduct and probe us in the middle of the night), we should recognize them as victims of the same exploitative system that Occupy protesters have been grappling with since last fall. Is giving legal recognition to undocumented workers good for the American people? It’s a step toward acknowledging that there’s no such thing as a second-class citizen and that all working men and women deserve fair compensation. What could be more American than that?

Tim Price is Deputy Editor of Next New Deal.

Immigration services image via Shutterstock.com.



 

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A Note on Free Market Fairness: Is "Economic Liberty" Incoherent?

Jun 20, 2012Mike Konczal

There's a fantastic symposium on the book Free Market Fairness going on over at the Bleeding Heart Libertarian website. Make sure to check out Sam Freeman and Elizabeth Anderson, as well as Tomasi's replies to both.

There's a fantastic symposium on the book Free Market Fairness going on over at the Bleeding Heart Libertarian website. Make sure to check out Sam Freeman and Elizabeth Anderson, as well as Tomasi's replies to both. I'm going to add my thoughts on reading the book; note that I'm an amateur when it comes to many of these political theory debates but something strikes me as missing.

One of the core parts of Free Market Fairness' theory of "market democracy" is enshrining economic liberty at the level of basic liberties protected by the constitution, like free speech, the right to a trial or political participation.

In Rawls' formulation, it means that economic liberties would be protected by the first principle of justice. This is the principle that each "person has an equal claim to a fully adequate scheme of equal basic rights and liberties, which scheme is compatible with the same scheme for all." These basic liberties are “inalienable,” and “any undertakings to waive or to infringe them are void ab initio [to be treated as invalid from the outset].” Citizens cannot bargain or trade their basic liberties away.

Many on the left point out how economic liberty isn't true liberty unless it is a fair value liberty, or a liberty that isn't just formally equal but also is substantively equal. To see examples using Rawls' framework, political equality is of the substantive variety, as it matters whether you can actually vote and participate, but religion is only formally equal, as you don't have a right to an expensive church for your personal, elaborate religious ceremonies. The left says economic liberty isn't really liberty unless there's substantive equal ability to participate in the economy.

I'm all for that critique as far as it goes, but I think it is important to go a step further and argue that formulating economic liberty as a basic liberty is, practically speaking, incoherent.

The Department of Stabilization

Rawls described a stabilization branch of the state in Theory of Justice, tasked with bringing about full employment. In practice a lot of our economic debates are focused on what to do about mass unemployment in this crisis.  Let's do a quick map of economic agents in our current Great Recession and how the downturn has impacted them:

There are workers, many of whom are unemployment, and they have sluggish wage growth and low quit rates. Incumbent managers and owners are experiencing big profits and large bargaining power over their workforce. Capital owners have benefitted from disinflationary trends. Entrepreneurs find it difficult to start new businesses amidst mass unemployment. The government could lean against all these trends by doing stimulus, but taxpayers would be on the line if it didn't work out.

Now here's what I mean by incoherent: treating economic issues as a basic liberty tells us nothing about how to address stabilization one way or the other and substantially confuses our intuitions about how to approach the problem - which is one of tradeoffs. The first principle would only allows certain breaches of inalienable economic liberty in order to make the most extensive set of liberties, compatible with similar liberty for others. Now I understand that the regulation of basic liberties (like free speech) is problematic for Rawls, but it dissolves into nothingness here under market democracy.

Basic liberties can't guide us, because liberty for one comes at the expense of liberty for others. Which economic liberties are we to preserve? The one of the unemployed to work, the entrepreneur to have customers, bosses to their profits or rentiers to their capital income? All of these liberties are part of the economic realities of each agent, and these are fundamentally in tension with each other. There's no way to view them as "compatible" with each other as a sufficient condition to animate decision-making.

The only way to address them as a matter of policy is to balance them against each other according to some principle. Full employment? Price stability? Deflation and the Gold Standard? Bringing in the concept of liberty prevents the ability to discuss these in terms of tradeoffs, as the whole point of basic liberties is that groups of citizens can't have their basic liberties traded off each other.

One could say that the only system is thus one of no stabilization. But this is a policy choice, no different than emphasizing full employment at all costs. There's nothing about mass unemployment that must contain more inalienable liberty than full employment - it is just a different set of actors who benefit. And this would look suspiciously like bringing in one set of arguments for how the economy should work and whom it should work for through the courts, rather than democratically through argument in the public sphere.

This incoherence exists more broadly. For instance, uses of basic liberties aren't up for being traded. I can't sell you my vote, and I can't ask the government to enforce a contract where you've sold me your right to a fair trial. Yet economic transactions are all about trading off economic rights. When I sell you my labor I'm accepting serious limitations on what I can do with my labor - it now belongs to you.

Thus economic liberty is often, at any moment, zero-sum: a more extensive liberty for the boss comes at limiting the liberty of the worker. The same for the creditor and the debtor. One of the first big "liberty of contract" cases was Pennsylvania's state court's 1886 Godcharles v. Wigeman, which struck down a state act prohibiting payment of wages in scrip. Here the benefit of the boss (and the company) came at the expense of the worker in the form of the means of payment. This may be a pareto-optimal trade when it happens - market democracy would presume that it must be by definition of it happening - but assuming I'm giving away a liberty for my ultimate long-term benefit, as well as the benefit of the economy as a whole, is way off the reservation of how we consider the other basic liberties.

The best way to conceptualizing it is within a framework of justifying inequalities, which is what Rawls' second principle tries to do. The second principle's difference principle could be the wrong approach - we might want to maximize growth regardless of its impact on the poor - but it is the right spot on the lexical framework to approach such a question. Pushing these questions into the highest lexical position leaves us with nothing coherent to say on the matters, it disrupts our normal thinking about liberty and stops our ability to see these issues as what they fundamentally are, which is balancing private forms of power and providing rules that bend them towards the greater good of the economy. Rules that are, I'd argue, best constructed through democratic argument; but rules that are in no way clarified by referring to more abstract notions of liberty.

 

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Mike Konczal and Sarah Leonard on the Myth of American Meritocracy

Jun 11, 2012

On the latest episode of "Fireside Chats," Roosevelt Institute Fellow Mike Konczal brings in Sarah Leonard, editor at Dissent and The New Inquiry, to discuss the ways that student debt and unpaid internships have completely skewed the labor market.

On the latest episode of "Fireside Chats," Roosevelt Institute Fellow Mike Konczal brings in Sarah Leonard, editor at Dissent and The New Inquiry, to discuss the ways that student debt and unpaid internships have completely skewed the labor market. Mike used to think of internships as an equal opportunity mechanism, but then realized "you have to be able to feed yourself, you have to be able to survive," something that's hard to pull off when you're deep in debt and not making any money.

As Sarah bluntly puts it, "American meritocracy has always been a myth," but now these two forces have conspired even more to allow "people who make it to the top" to consolidate power there and "consolidate it for their children." Not only does a young person need money to take an unpaid position, but those who go into debt to get through college have an even harder time doing so if they need to work to pay off those loans. "Internships are absolutely a reinforcer of privilege," she concludes.

Mike compares student debt to the indenture system that brought Europeans to America's shores: it was set up "to solve an economic problem, a problem of travel," and now we have a similar problem in which we need to "get people who have significant talents to grow the economy to the spaces where they have their talents fully developed and they’re capable of exercising those talents." The biggest question? "How do we pay for it?" In other words, how do we make it affordable for everyone to have people get the education they need to best contribute to the economy?

Compounding this, Sarah notes that the language around student debt is about "investing in yourself," but in reality the need to take on massive amounts of debt to get an education isn't a way to open up opportunities at all. "It restricts your freedom after college," she says.

Watch the full segment below for their discussion of precarious work, the future of organized labor, and "Sex in the City" feminism:

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