Posts from April 2012

Workers & Economic Inequality

Graph: “The Great Divergence”

Post by: Benjamin Landy , on April 25, 2012

Yesterday morning, The Century Foundation hosted New Republic senior editor Timothy Noah for the first public discussion of his new book, The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It, which examines the economic and political policies that have widened the income gap between the richest and poorest citizens in our society over the last thirty years.

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Workers & Economic Inequality

Graph: Balancing the Budget on the Backs of the Poor

Post by: Benjamin Landy , on April 11, 2012

Poverty and welfare in the US 1990-2010

In recent weeks, Rep. Paul Ryan (R-Wis.) has suggested severe cuts to safety net programs such as food stamps and housing assistance, in the spirit of the 1996 welfare reform that moved millions of struggling families off the dole and into poverty. Comparing the safety net to "a hammock that lulls able-bodied people to lives of dependency and complacency," Ryan has proposed "welfare reform round two," which would similarly replace federal funding with fixed grants to states, allowing local politicians to slash poverty assistance programs when the budget is tight and spend the funds elsewhere. “Yes, we divert [welfare funds]," State Representative John Kavanagh, a Republican, told the New York Times, in a recent article about welfare reform in Arizona. "Divert’s a bad word. It helps the state.” It's certainly easier than raising taxes.

The practice of diverting welfare funds, and the human tragedy that invariably results, is hardly unique to Arizona. The percentage of families with children living in poverty who received cash assistance declined sharply throughout the United States after the 1996 welfare reform law, which transformed the New Deal-era Aid to Families with Dependent Children (AFDC) into the Temporary Assistance for Needy Families program. TANF, unlike AFDC, was designed to be a transitional program, relying on block grants and lifetime caps on aid to push recipients quickly out of the program. For a few years, the reform seemed to work. The late-1990s economic boom and an unemployment rate below 4 percent helped to reduce welfare caseloads while allowing states to use their TANF funding to plug unrelated holes in the state budget, guilt-free. But when the economy slowed down in 2001, and crashed in 2007, states were unwilling or unable to redirect TANF benefits back to families in need.

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Foreign Policy

Highlights from #Policychat: How Safe Is the United States?

Blog Post by: Suzanne Chang, on April 6, 2012

The Century Foundation hosted a Twitter #policychat yesterday, featuring TCF Fellow Michael Cohen and Center for Preventive Action at the Council on Foreign Relations Fellow, Micah Zenko.

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Education

Graph: Student Debt and the Middle Class (Part 3)

Post by: Benjamin Landy , on April 5, 2012

Part Three of a three-part series on student debt and the middle class. Click here to read Part One and click here to read Part Two.

With the price of a college education rising three times faster than median family income and total student loan debt exceeding $1 trillion, Congress must act quickly to rein in costs if our high-skill labor market is to remain globally competitive. Already, the United States has fallen behind Canada, Japan, and South Korea in the production of college graduates; experts estimate the U.S. must increase postsecondary access and degree production by 4.2 percent annually just to catch up.

The primary obstacle is the cost: a college degree is expensive, and controlling soaring tuition rates won't be easy. State schools, which educate 75 percent of all undergraduates, including the 42 percent enrolled at community colleges, are largely dependent on government funding to subsidize what is supposed to be a public good. But when the Great Recession forced states to choose between raising taxes and slashing the budget for higher education, the majority of states chose the latter. According to the Delta Cost Project, nearly all public sector tuition increases in 2009 were the result of cost-shifting to replace declining state funding, raising troubling questions for the future sustainability of the entire public education model. At nearly every one of the 2,000 institutions surveyed in Delta's eleven-year dataset, increased revenues from student tuition were used to offset disappearing subsidies; almost none was spent on the students or the cost of their education.

Tuition costs rise as government subsidies decline

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Education

Graph: Student Debt and the Middle Class (Part 2)

Post by: Benjamin Landy , on April 2, 2012

Part One of a three-part series on student debt and the middle class. Click here to read Part Two and click here to read Part Three.

A trillion dollars of student loans may not be the next subprime crisis, but it is delaying traditional middle-class aspirations like home ownership. Around one million students will graduate college in debt this spring, with an average $23,000 to be paid off over a period of ten to twenty years; more than enough to discourage young people who might otherwise have taken on a mortgage on their first house.

According to Census data, less than half of those aged 25–34 years old are homeowners today, the lowest percentage since 1999. Despite a brief upsurge in young homeowners signing subprime leases during the heady days of the mid-2000s, on net nearly all of the 11 million unit household growth of the last ten years occurred among older households, while Millennials—children of the Baby Boomers born between 1982 and 2000—are now overwhelmingly choosing to rent or move home with their parents. That's problematic because first-time buyers are critical to the health of the housing market, which depends on new blood to finance older sellers' movement into the higher ranges of the market. It's also a major contributing factor in the continued weakness of the construction sector: single-family housing starts for February were down 12.5 percent from the same time two years ago, while renter-friendly housing was up 197.5 percent.

Change in percentage of homeowners

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Workers & Economic Inequality

Labor Organizing through a Different Lens

Blog Post by: Jason Renker , on April 2, 2012

To hear the story behind the Why Labor Organizing Should Be a Civil Right cover photo, listen to the TCF policycast:

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