Breaking the Cycle of Poverty: Expanding Access to Family Planning

Mar 31, 2014

Download the paper by Ellen Chesler and Andrea Flynn.

Download the paper by Ellen Chesler and Andrea Flynn.

Poverty shapes the lives of an increasing number of American women and their families and has many consequences, including high rates of unintended pregnancy. Conservatives, eager to further dismantle federal programs and defeat the new Affordable Care Act (ACA), have recently rekindled the idea that marriage promotion will reverse rising rates of poverty, unintended pregnancy, and single parenthood. To the contrary, addressing the root causes of poverty requires multiple interventions and far more generous government programs across a range of issues, particularly the expansion of reproductive health and family planning information, care, and services. This paper reviews the recent literature on women’s poverty and health and argues that accessible and high quality family planning services for poor women remain an essential component of poverty reduction. It also looks back at the history of policy debates over this question in the hope of finding a path toward renewed bi-partisan consensus.
 
Key Arguments:
  • Family planning is a fundamental right of women and the foundation of human security.
  • Single women in poverty head a growing percentage of U. S.  households. Addressing their needs requires multiple policy interventions, but none can work if women are denied the agency to make – and act on – well-informed reproductive health decisions.
  • U.S. subsidized family planning programs meet only 54 percent of national need. The ACA will help bridge the gap, although its promise is threatened by legal challenges to the contraceptive mandate. Women deserve insurance coverage for the contraceptive method of their choice, without qualification. 
  • Many low-income women will fall through insurance gaps. Every state should expand Medicaid. The federal government should lift Medicaid’s five-year eligibility requirement for documented immigrants and increase Title X funding to address increased demand for services.
  • We can learn from history. Research since the 1970 adoption of Title X illustrates that access to improved family planning methods promotes responsible decision-making and reduces unwanted pregnancy and abortion. By contrast, abstinence-until marriage and marriage promotion programs advanced by conservatives have failed and been discredited. 

Read "Breaking the Cycle of Poverty: Expanding Access to Family Planning," by Roosevelt Institute Senior Fellow Ellen Chesler and Fellow Andrea Flynn.

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The Contraceptive Mandate Finally Leads America Out of the Victorian Era

Mar 31, 2014Ellen CheslerAndrea Flynn

The Affordable Care Act demonstrates an affirmative, proactive step from government for women's access to reproductive health care, but conservatives are bent on moving backwards.

The Affordable Care Act demonstrates an affirmative, proactive step from government for women's access to reproductive health care, but conservatives are bent on moving backwards.

Contraception should be understood as a fundamental right of American women and a necessary foundation of human security. If that seems controversial, consider this: 99 percent of American women approve of birth control and the vast majority use it over many years of their lives. These women deserve and must continue to demand insurance coverage for the method of their choice, without qualification. That’s why the contraceptive mandate in the Affordable Care Act (ACA) is so important and potentially transformative. For the first time ever, all health insurance plans, whether paid for privately or with public subsidies, are required to cover all FDA approved contraceptives at no additional cost.

Family planning is essential to securing the health and rights of women, but it is also the foundation of sound economic and social policy. Tragically, however, U.S. subsidized family planning programs currently serve just over half of those in need.

The stakes are especially high for poor women, who cannot afford the high costs of the most reliable and desirable methods and experience much higher rates of early and unwanted pregnancy as a result. Single women in poverty head a growing percentage of U.S. households. In “Breaking the Cycle of Poverty: Expanding Access to Family Planning,” a new white paper released today by the Roosevelt Institute, we argue that addressing their needs, and opening up opportunities to them and their children, will require multiple policy interventions, but none can work if women are denied the right and the agency to make, and act on, well-informed decisions about their own bodies.

Decades of social science research demonstrate that access to reliable and affordable family planning methods promotes responsible decision-making and reduces unwanted pregnancy and abortion. It allows women to pursue educational and employment opportunities that strengthen their families and their communities. A majority of women who participated in a recent study by the Guttmacher Institute, for example, report that birth control enables them to support themselves financially, complete their education, and get or keep a job. Other recent studies also show that providing family planning services at no cost results in more effective contraceptive use, decreased rates of unintended pregnancy, and dramatic declines in abortion rates.

Many American conservatives, however, reject these claims. They blame single mothers for America’s rising tide of poverty and inequality, not the other way around. They insist that access to sexual and reproductive health information and services exacerbates social problems by promoting promiscuity and unintended pregnancy, when in fact, the exact opposite is true. They promote abstinence-education and marriage promotion programs that have been tried before and been discredited, because they simply do not work.

This conflict was front and center last week as the U.S. Supreme Court heard 90 riveting minutes of argument in Sebelius v Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v Sebelius, a pair of cases brought by two privately held corporations owned by Christian conservatives. The owners claim that the ACA violates the religious freedom of employers forced to cover the costs of contraception. Much of the testimony turned on technical questions of whether corporations, as opposed to the individuals who own them, legitimately have rights to assert in this instance, and whether they may impose those rights on employees who don’t share their views. There were also important matters of scientific integrity at stake, with the plaintiffs claiming that Intrauterine Devices (IUDs) and morning-after pills constitute methods of abortion, despite overwhelming medical agreement and numerous reputable scientific studies showing that, like everyday birth control pills, they only act to prevent conception.

All but lost in the court’s conversation were larger concerns about the health and well-being of women and families – and of our society as a whole. The Supreme Court hearing comes in the wake of more than three years of persistent attacks by extreme conservative lawmakers who have already decimated publicly subsidized services in states across the country and left many low-income women without access to basic family planning and to other critical reproductive and maternal health care services.

As legal scholar and policy analyst Dorothy Roberts observed, “when access to health care is denied, it’s the most marginalized women in this country and around the world who suffer the most—women of color, poor and low-wage workers, lesbian and trans women, women with disabilities... And this case has far-reaching consequences for their equal rights. Birth control is good health care, period.”

Today, by government estimates, more than 27 million American women already benefit from the ACA’s contraceptive mandate, and 20 million more will enjoy expanded coverage when the law is fully implemented. Yet even by these optimistic assessments, many low-income women will continue to fall through insurance gaps, partly thanks to a 2012 Supreme Court ruling that enables states to opt-out of Medicaid expansion mandated by the ACA. More than 3.5 million – two-thirds of poor black and single mothers, and more than half of low-wage workers – will be left without insurance in those states.

Conservative opposition to contraception is not new. As we observe in our paper, the U.S. controversy over family planning dates back to Victorian-era laws that first defined contraception as obscene and outlawed its use. Those laws carried the name of Anthony Comstock, an evangelical Christian who led a nearly 50-year crusade to root out sin and rid the country of pornography, contraceptives, and other allegedly “vile” materials that he believed promoted immorality. Sound familiar?

It took nearly a century for the U.S. Supreme Court to reverse course and guarantee American women the right to use contraception under the constitutional doctrine of privacy first enunciated in 1965. The ACA promises us even more. It places an affirmative, positive obligation on government to provide women the resources to realize our rights. The question before us is simple: Do we turn back the clock and allow a new Comstockery to prevail, or do we move ahead into the 21st century by defending the full promise of the Affordable Care Act’s contraceptive mandate?

Read Ellen and Andrea's paper, "Breaking the Cycle of Poverty: Expanding Access to Family Planning," here.

Ellen Chesler is a Senior Fellow at the Roosevelt Institute and author of Woman of Valor: Margaret Sanger and the Birth Control Movement in America.

Andrea Flynn is a Fellow at the Roosevelt Institute. She researches and writes about access to reproductive health care in the United States. You can follow her on Twitter @dreaflynn.

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Insurance Pays for Health Care. Who’s Providing It?

Mar 28, 2014Rachel Goldfarb

Public funds for family planning services are essential to ensuring people have somewhere to access health care, not just the insurance to pay for it.

Public funds for family planning services are essential to ensuring people have somewhere to access health care, not just the insurance to pay for it.

As if somehow the case still needs to be made that family planning deserves federal funding (and apparently the case does need to be made), last week a panel of researchers, advocates, and family planning providers spoke at a Congressional briefing on the topic “The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment.” Among the panelists was Roosevelt Institute Fellow Andrea Flynn. She and the others explained how Title X, the only federally funded family planning program, fits into the health care landscape now so dramatically changed by the Affordable Care Act. On the heels of Flynn’s white paper on this topic, last Thursday’s panel marked the next step in Roosevelt’s approach to research and policy discussions – namely, to get ideas up and out to those, like the Congressional staffers who attended the briefing, that can convert them into action.

Some background: when Title X was signed into law in 1970, it was intended to ensure that more Americans had access to family planning services, including birth control, because of rising concerns about population growth and poverty. Title X funds patient services, staff salaries, infrastructure, and supplies at clinics across the country. The law had strong bipartisan support – Democrats worked alongside Congressman George H. W. Bush and President Richard Nixon to pass it. And it is pretty effective: according to Flynn, the program today provides care to 4.7 million individuals annually. From 1980 to 2000, Title X-funded clinics provided women with 54.4 million breast exams and 57.3 million Pap tests and prevented an estimated 20 million unintended pregnancies. It’s also cost effective: Flynn notes that in 2008 alone, services provided at Title X-supported clinics accounted for $3.4 billion in savings.

Opponents of federal family planning clinics argue that with full implementation of the Affordable Care Act, the need for funding will drop off. No, said Clare Coleman, President and CEO of the National Family Planning and Reproductive Health Association. Insurance, she pointed out, isn’t the same as access to care. Patients still need providers. Amanda Dennis of Ibis Reproductive Health, based in Cambridge, highlighted an Ibis study conducted after health care reform went into effect in Massachusetts, that found many women took their new insurance straight to Title X-funded clinics for family planning services. Patient numbers actually increased at these clinics and so did the number of insured patients. Women like the care they get at Title X clinics; having insurance doesn’t mean they want to switch providers.

The panel confirmed Flynn’s major conclusions on Title X: the Affordable Care Act doesn’t guarantee every American will be insured at all times, so there remains a need for publicly funded care providers. More federal funding for the Title X family planning network will be essential to ensure women can access reproductive health care. And Coleman drove home another invaluable point as we work on health care access: the Affordable Care Act creates a massive shift in the way many Americans actually go about getting their health care. As a child growing up with insurance, I had an annual physical that was scheduled months in advance, and my mom picked up our prescriptions at the pharmacy. Americans who grow up uninsured have a different experience. They go to public clinics, where they can expect long waits, and when they leave, they go with prescribed medication in hand, obtained at the on-site dispensary.

In other words, signing up for health insurance on healthcare.gov won’t on its own teach anyone how to use insurance. That will take a generational shift. Besides which, you don’t get health care from your insurance – you get health care from your doctor, and cover the costs with insurance. That’s why Title X clinics must remain an option. Public funding for family planning does increase access to providers. Advocates: keep driving this point home to legislators!

Rachel Goldfarb is the Communications Associate at the Roosevelt Institute.

 

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The Role of Labor Market Regulation in Rebuilding Economic Opportunity in the U.S.

Mar 25, 2014

Download the paper (PDF) by Annette Bernhardt

Download the paper (PDF) by Annette Bernhardt

At the start of the 21st century, millions of Americans face a daunting labor market that, absent coherent and sustained policy intervention, will very likely provide them with fewer career opportunities and less economic security than their parents enjoyed. While globalization is often blamed for the deterioration in labor standards, it is domestic service industries where the low-wage problem is most acute. One of the key drivers of precariousness in these sectors is employers’ growing evasion and violation of both legal and normative standards, facilitated by the withdrawal of government’s hand in the labor market. Myriad factors describe this new world of work: the weakening of employment and labor laws; under-resourced enforcement of a host of regulations; production chains that mask legal accountability; the exclusion of groups of workers from legal protection; and a dysfunctional immigration policy. To reinvigorate labor market regulation opportunity, government should: establish a strong floor of labor standards; vigorously enforce that floor; and build a base of good jobs on top of that floor.

Key Arguments:

  • The days of business self-regulation are long gone, or never existed in today’s low-wage industries; therefore, government’s hand must be visible again. 
  • Labor market regulation should play a central role in the U.S. policy response to rising inequality, via three main strategies:
    • strengthening the floor of labor standards (wages, health and safety, and right to organize chief among them);
    • vigorously enforcing that floor (and holding employers accountable for the working conditions they control, whether directly or indirectly); and 
    • leveraging government contracting and grants to build a base of good jobs on top of that floor. 
  • In the current political climate, winning change at the national level will require ratcheting up from state and local policy campaigns to federal reform.

Read "The Role of Labor Market Regulation in Rebuilding Economic Opportunity in the U.S.," by Roosevelt Institute Fellow Annette Bernhardt.

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Daily Digest - March 25: Organizing Towards Shared Prosperity

Mar 25, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

The New Deal Launched Unions as Key to Building Middle Class (Next New Deal)

Click here to receive the Daily Digest via email.

The New Deal Launched Unions as Key to Building Middle Class (Next New Deal)

In the first of a series of posts summarizing his new report, which explores possibilities for labor-organizing reform, Roosevelt Institute Senior Fellow Richard Kirsch looks at the history of union organizing as a source of shared prosperity.

The Next Health-Care Debate (WaPo)

The Affordable Care Act's success will prove that government is indispensable in fighting widespread inequality, writes E.J. Dionne, who sources Roosevelt Institute Fellow Mike Konczal's work on why charity can't tackle the problem.

The U.S. Cities Where the Poor Are Most Segregated From Everyone Else (The Atlantic Cities)

Noting that "moral cynicism" is among the corrosive "neighborhood effects" of grinding poverty, Richard Florida looks at the data concerning the segregation and concentration poor people, which is greater in large, dense metro areas and where wages are higher.  

Freelancers Piece Together a Living in the Temp Economy (NYT)

Planning for the future in an age of job insecurity is nearly impossible, writes Adriene Hill. She reports on a Las Vegas woman who knows her current assortment of appearance-based gigs can't last forever.

Forces of Divergence (The New Yorker)

John Cassidy reviews Thomas Pikkety's Capital in the Twenty-first Century, which considers the swing back towards capital accumulation over wages in today's economy. Cassidy deems it a must-read for anyone interested in inequality.

The NLRB Must Restore Democracy in Chattanooga (Truthout)

John Logan calls on the National Labor Relations Board to overturn the recent United Auto Workers vote in Tennessee, because otherwise the NLRB will set a precedent that accepts outside interference.

The Law That Could Sink Birth Control Coverage (MSNBC)

In the context of today's Supreme Court hearing on the contraception mandate in the Affordable Care Act, Adam Serwer and Irin Carmon explain the history of the 1993 Religious Freedom Restoration Act.

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Daily Digest - March 24: Public Financing: Compromise Won't Fix Corruption

Mar 24, 2014Rachel Goldfarb

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A Promise Cuomo Can Keep (Albany Times Union)

Roosevelt Institute Senior Fellow Jonathan Soros and Frederick A.O. Schwartz call on New York's Governor Cuomo to avoid compromise on public campaign financing where concessions just extend a corrupt status quo.

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A Promise Cuomo Can Keep (Albany Times Union)

Roosevelt Institute Senior Fellow Jonathan Soros and Frederick A.O. Schwartz call on New York's Governor Cuomo to avoid compromise on public campaign financing where concessions just extend a corrupt status quo.

The Tea Party and Wall Street Might Not Be Best Friends Forever, But They Are for Now (TNR)

Tea Party Republicans in Congress insist that the financial crisis was all government's fault, says Roosevelt Institute Fellow Mike Konczal. That narrative, and the corresponding legislative agenda, couldn't make Wall Street happier.

Why Charity Can’t Replace the Safety Net (Slate)

Jordan Weissmann praises Mike Konczal's recent piece in Democracy Journal, emphasizing that charity can't replace government aid during recessions. Charitable donations drop just when need rises.

All Economics Is Local (NYT)

Raising the local minimum wage is an effective step towards reducing inequality, say Michael Reich and Ken Jacobs. Moreover, their research shows that low-income industries can absorb the increase and benefit from greater employee retention. 

Payday Lending: The Loans with 350% Interest and a Grip on America (The Guardian)

David Dayen explains the vast regulatory conundrum of these predatory loans. He lays out how state and national regulators, Congress, and the Justice Department are working side-by-side, but often a step behind lenders.

The End of Jobs? (In These Times)

Sarah Jaffe argues that under our current system, the shrinking of secure full-time work increases inequality. Instead, we could restructure our economy to push for a universal basic income and shorter working hours.

New on Next New Deal

Memo to Congress: Family Planning Needs More Funding

In her remarks at a Congressional briefing last week, Roosevelt Institute Fellow Andrea Flynn explains why publicly funded family planning needs to expand as the Affordable Care Act is implemented. 

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Memo to Congress: Family Planning Needs More Funding

Mar 21, 2014Andrea Flynn

On Thursday, March 20, Roosevelt Institute Fellow Andrea Flynn joined the National Family Planning and Reproductive Health Association for a briefing on "The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment." Her prepared remarks are below.

On Thursday, March 20, Roosevelt Institute Fellow Andrea Flynn joined the National Family Planning and Reproductive Health Association for a briefing on "The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment." Her prepared remarks are below.

The Affordable Care Act represents an historic investment in the health of American women and girls. It has already improved the lives of millions of Americans and will make health care accessible for many more as rollout continues. Fulfilling the promise of the ACA, however, depends on the continued support of existing programs, such as Title X, which must remain as pillars of the country’s public health infrastructure.

For more than 40 years, Title X has provided critical medical care to low-income women, immigrant women, and young women across the country.  Some have suggested that the ACA’s expanded coverage of women’s health care will obviate the need for Title X. In fact, the opposite is true. Title X will play a number of important functions in the coming years.

First, Title X will support a network of qualified family planning and reproductive health care providers who will deliver care and services to the growing ranks of insured. Clinics funded by Title X will become an even more critical building block of our nation's health system. Even when individuals obtain coverage, many will continue to choose publicly funded clinics as their main source of care. As one of my colleagues here will further explain, during the four years following the implementation of Massachusetts’ health care reform patients continued to rely on Title X centers even after they gained insurance coverage. 

Women who are already fully insured will also continue to rely on Title X clinics because they can access care with complete confidence. Issues such as intimate partner violence and religious beliefs of employers, family members, and partners, cause many women to circumvent their insurance plans when accessing family planning services. Sadly, these concerns will persist regardless of the coverage status of American women.

Second, Title X will guarantee family planning access to those still uninsured. The ACA was intended to provide a path to health insurance for most Americans. However, because of the Supreme Court’s decision to allow states to opt-out of Medicaid expansion, fewer uninsured Americans will gain coverage than originally planned.  As Clare mentioned,  today, 22 states are still refusing to expand Medicaid, leaving more than 3.5 million low-income women without coverage. As a result, two-thirds of poor black and single mothers, and more than half of uninsured, low-wage workers, remain without coverage. Title X clinics will continue to be a trusted place of care for these women.

Moreover, even in states that participate in Medicaid expansion, many low-income individuals may still remain uninsured. Estimates suggest that between 25-35 percent of those eligible for Medicaid still do not know it, and are failing to enroll.  Many immigrants will also remain uninsured, given the federal 5-year eligibility requirement for Medicaid. And millions of others will churn among coverage plans. One study estimates that up to 29 million people under age 65 will be forced to change coverage systems from one year to the next. Individuals who fall into these categories will rely on the Title X network for quality, affordable, and confidential care.

Third, and equally important, Title X will continue to set a comprehensive standard of care for family planning and reproductive health services.

Finally, Title X clinics are a primary and trusted point of entry into the health system. Six in ten women who receive services at a publicly funded family-planning center consider it their primary source of medical care. As such, the Title X network will continue to play an important role in ACA outreach and enrollment efforts to ensure that health coverage is realized by as many Americans as possible.

Title X is particularly important given the health challenges facing many women in the United States. However, current funding for U.S. public family planning programs extends care and services to just over half of the women in need. Per capita, the United States spends two and a half times more on health care than other developed countries, yet Americans overall have less access to services and experience worse health outcomes. The United States reports among the highest rates of teen birth, unintended pregnancy, and maternal and infant mortality of any industrialized country. Almost half of all U.S. pregnancies – approximately 3.2 million annually – are unintended. Poor women, women of color, and immigrant women bear a disproportionate burden in this regard. They are also more likely to experience chronic disease, maternal mortality and have a lower life expectancy than women with higher incomes.

Unintended pregnancy and teen pregnancy remain persistent issues in the United States, ones that Title X has been tackling for decades. Unintended pregnancies have a number of larger health implications. Women who have unintended pregnancies are more likely to develop complications and face worse outcomes themselves and for their infants. They often receive inadequate prenatal care, and the care they do receive begins later in pregnancy. Research has shown that pregnancies that occur in rapid succession pose additional risks for both mother and child.

The U.S. teen pregnancy rate has declined dramatically over the last decade, thanks to services offered by programs like Title X. However, it is still considerably higher than in any other developed country, where rates are generally 5 to 10 births per 1,000, compared to the current U.S. rate of 29.4 per 1,000. Racial disparities are especially pronounced in relation to teen pregnancy, with teen birth rates for white women hovering around 21.8 per 1,000, while the rates for Hispanic, Black, and American Indian teens are at least twice that. Research has shown that increased access to comprehensive reproductive health information, care, and services, including a broad range of contraceptive methods, reduces rates of unplanned pregnancy among teens.

Title X has prevented these various health disparities from becoming even more troubling. With an increased investment the program could replicate its incredible results many times over, leading to significant health improvements for American women.

In times of economic uncertainty the demand for publicly funded family planning services increases. Since the 2008 financial crisis and the ensuing recession, the need for Title X has grown dramatically, while funding levels have declined or remained flat. Over the past few years the Title X budget has been cut by $40 million. To make matters worse, the anti-family planning and overall austerity sentiments that have since prevailed reduced and restricted family planning budgets in many states. There have been fewer state and federal funds for women’s health during the very time that women have also lost jobs and insurance coverage.

When Title X centers lose funding, they are forced to make cuts in three places: services and supplies, hours, and staff. As a result of funding challenges, six in ten Title X clinics have been unable to stock the most costly contraceptives, particularly long-acting reversible contraceptives (LARCs) such as the IUD and implants, methods considered highly effective and most desirable among women wanting to avoid pregnancy.

Family planning is first and foremost a matter of women’s health and rights. But it is also central to women’s economic security. The continued fragility of the U.S. economy and the recession’s devastating impact on low-income families requires an increased investment in family planning. American families, many of them now headed by single women, face enormous challenges. Access to affordable contraception enables women to pursue educational and professional opportunities that strengthen their families and their communities. The majority of women who participated in a recent Guttmacher Institute study report that birth control enables them to support themselves financially, complete their education, and get or keep a job. 

Given the tenuous state of the U.S. economy, the vulnerability of women’s health programs in the face of unrelenting political attacks, and the fraying social safety net more broadly, public funding for family planning is more critical than ever. Continued – indeed, increased – funding of Title X will maximize the impact and reach of the ACA and ensure continued quality care for those who remain uninsured.

Thank you. 

Andrea Flynn is a Fellow at the Roosevelt Institute. She researches and writes about access to reproductive health care in the United States. You can follow her on Twitter @dreaflynn.

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Daily Digest - March 20: The Safety Net - Government = ?

Mar 20, 2014Rachel Goldfarb

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The Voluntarism Fantasy (The Majority Report)

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The Voluntarism Fantasy (The Majority Report)

Sam Seder speaks with Roosevelt Institute Fellow Mike Konczal about Mike's new piece in Democracy Journal. Mike says the social safety net has always depended on the government.

The Tyranny of the On-Call Schedule: Hourly Injustice in Retail Labor (The Nation)

Michelle Chen explains the ways that retail scheduling has harmed workers' ability to plan their lives. On-call schedules mean not knowing how much you'll make or when you'll work, ever.

Journalists’ and Activists’ Strange Approach to Low-Wage Workers (WaPo)

Sarah Jaffe calls out the habit of representing low-wage workers as poor, unfortunate Others in need of our help. Any one of us could share the concerns and needs of low-wage workers.

Why Not Peg EITC Benefits to the Local Cost of Living? (PolicyShop)

David Callahan suggests President Obama could do better than simply increasing the earned income tax credit. For low-income workers living in high-cost areas, it would make a big difference.

Janet Yellen's Rookie Mistake: Speaking Too Clearly (Bloomberg Businessweek)

Janet Yellen, the new Federal Reserve Chair, needs to speak with less specificity, writes Peter Coy. Attaching a six-month timeframe to a vague written statement set off a market selloff.

The Key Question for Yellen: Is This Economy As Good As It Gets? (FiveThirtyEight)

Andrew Flowers considers the ways to measure economic potential, and what the Federal Reserve ought to do if we agree that the U.S. is still falling short.

Do We Need to Force People to Live in the Homes They Own? (Pacific Standard)

Real estate that isn't actually lived in may be a good investment, but it isn't good for a city, writes Kyle Chayka. He suggests that residency requirements could control rising rents.

New on Next New Deal

There's More to Fixing the Minimum Wage Than Just Raising It

Azi Hussain, Roosevelt Institute | Campus Network Senior Fellow for Economic Development, says that instead of tying the minimum wage to annual inflation, we should peg it to inflation over the business cycle to ensure flexibility.

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Daily Digest - March 18: Society Doesn't Work on a Volunteer Basis

Mar 18, 2014Rachel Goldfarb

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The Voluntarism Fantasy (Democracy Journal)

Roosevelt Institute Fellow Mike Konczal looks to the history of public and private social insurance in the U.S. to explain why the conservative belief that private charity could take the place of government is deeply misguided.

Click here to receive the Daily Digest via email.

The Voluntarism Fantasy (Democracy Journal)

Roosevelt Institute Fellow Mike Konczal looks to the history of public and private social insurance in the U.S. to explain why the conservative belief that private charity could take the place of government is deeply misguided.

In City's Job Growth, Faces of the Working Poor (WNYC)

New York City now has 237,000 more jobs than it did before the recession, reports Mirela Iverac, but too many of those jobs aren't paying enough to live on.

Hunger Crisis: Charities are Strained as Nearly 1 in 5 New Yorkers Depend on Aid for Food (NY Daily News)

Over five years, the number of people relying on food aid has increased by 200,000, and Barry Paddock and Ginger Adams Otis report that charities have seen even more need since November's food stamp cuts.

Low-Wage Workers Are Finding Poverty Harder to Escape (NYT)

Steven Greenhouse reports on the lives of the working poor in Chattanooga, Tennessee, where workers with many years of experience can still make only $9 per hour.

Inside Low-Wage Workers’ Plan to Sue McDonald’s — and Win (MSNBC)

Timothy Noah explains that these workers are targeting the franchise system, arguing that McDonald's as a corporation created the conditions that led to wage theft, not just the franchise owners.

New on Next New Deal

Florida Election Shows Danger and Promise in Obamacare Debate

Roosevelt Institute Senior Fellow Richard Kirsch says polling from the recent special election for Florida's 13th congressional district shows that standing up to "keep and fix" Obamacare is a path for Democratic success.

The Progressive Budget Reminds Us That Government Can Create Jobs

The Congressional Progressive Caucus's budget is a reminder that an aggressive approach is still needed to push job growth, writes Nell Abernathy, Program Manager for the Bernard L. Schwartz Rediscovering Government Initiative.

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The Progressive Caucus Budget Makes the Right Decisions

Mar 12, 2014Jeff Madrick

The "Better Off Budget" is the only budget proposal in Congress that really places people's needs ahead of political compromise.

The "Better Off Budget" is the only budget proposal in Congress that really places people's needs ahead of political compromise.

The Congressional Progressive Caucus has issued its annual budget and it is in different ways the antithesis of what both the Republicans and Democrats are offering. The Caucus calls it the “Better Off Budget," and it puts its money where its mouth is. Thank goodness they’ve issued it, because it puts in perspective how much is actually within our nation’s reach. It is aimed right where it should be: at creating jobs. The budget acknowledges that our jobs crisis is far from over (I’d call it the jobs emergency budget, of course). And it rightly says we can solve our problems.

The proposals errs slightly on the side of economic optimism, but that is as it should be. It stands in contrast to the modest improvements in social policy proposed by the Democrats, which won’t get unemployment down to 5 percent in the foreseeable future, and to the insensitive regression proposed by Paul Ryan and the Republicans. Those proposals are all politics, with little caring about the people’s thirst for jobs and opportunity. The progressives toss political compromise aside to do the right thing.

Their proposed budget does a lot of good in a lot of areas. It refuses to reduce entitlements; it provides a middle class tax break; it raises income tax rates on the wealthy; it provides a lot of money for infrastructure investment. I could go on.

But in this brief analysis I want to focus on the question of how much stimulus the economy can stand, which is really a question about how much slack there is in the economy. Conventional analyses say that slack—the potential to grow—has fallen. It’s mostly not because the economy is growing and catching up with its potential. The reason is that people are dropping out of the work force, maybe for good. They are losing skills. Some are retiring or getting close to retirement. Capital investment has been okay, but it has been far from stellar and therefore not likely to create exciting new products and industries that also increase productivity.

If the potential is not as high as typical economists, including the Congressional Budget Office, thought just a couple of years ago, we can’t push the economy up as fast as we might like, they argue.

The irony is that potential is down, as conventional economists measure it, because of the Great Recession and historically slow recovery, not because of a structural change in the economy. In particular, labor productivity growth is not very good. Total factor productivity, which (allegedly) measures the productivity of capital and labor combined, is somewhat stronger by historical comparison. I say allegedly because total factor productivity is a pretty flaky number.

Now, there is a pretty good relationship between how fast demand is growing and productivity growth, both labor and total factor productivity. In any case, if the potential of the economy is reduced because growth is slower, people can’t get jobs, and investment in research is far from hot—well, then potential would likely rise if we got the economy growing rapidly again. There is good theory, partly Keynesian but also something called Verdoorn’s Law, to suggest this could well be the case. 

So, in sum, that’s what this debate turns on. Will stimulus bump up against a genuine GDP ceiling and cause inflation, or is that ceiling only an artificial one based on recent data generated in a very slow economic recovery? I’d argue the CBO analysis and that of others is proposing an artificial ceiling. We can growth much faster, and we can get unemployment down to 5 percent. More demand can and often has led to faster productivity growth and more aggressive capital investment.

That’s what the Progressive Caucus Budget is all about. The nation can afford a decent social safety net and adequate investment in its future, and can get five to 10 million more people working again. If the progressives’ budget overstates the possibilities, it is not by much. 

Jeff Madrick is a Senior Fellow at the Roosevelt Institute and Director of the Bernard L. Schwartz Rediscovering Government Initiative.

 

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