Growth & Justice Blog

A week for reflection and commitment to justice and broader prosperity (and yes, taxes and public investments help do that)

We have this week a confluence of events that ought to lift our hopes and sharpen our resolve to reduce racial and economic inequality in our state and nation,  and to build a more inclusive prosperity.

The hope comes from the momentous coincidence today of Martin Luther King's official birthday observance and a re-inauguration, after a convincing re-election,  of the first African-American president of the United States.    Michelle Obama, a descendant of slaves, is the First Lady of a White House that once was occupied by white slave-holders, and actually built by slaves.   This is a remarkable country, capable of extraordinary self-correction, powerful and wealthy because it is governed by its own people, and stronger yet when ALL its people are empowered.  We can  expect President Obama will build on the theme in his inauguration speech that we all do better when we ALL do better.    While the Obamas have succeeded spectacularly, far too many people of color are still left behind, and economic disparities continue to grow between top incomes and families of all races in the middle-income brackets.

In Minnesota, attention swivels on Tuesday to the release of both a two-year state budget proposal and a major tax system overhual from Gov. Mark Dayton.    Minnesota's prosperity rests on an innovative business leadership, to be sure, but also on a  foundation of public investment, in the form of high-quality public education,  physical public works infrastructure, public health and natural resource protection.   We need to invest more and more effectively in those things, including early childhood education and post-secondary training,  and Gov. Dayton can be expected to emphasize that this broader prosperity and better government is the end we seek, while taxes merely are one of the  means.   Minnesotans understand these fundamentals and have long been distinguished by a commitment to public good, as well as private gain.   Let's try to keep this in our heads as we all get ready to argue over the details.

Dane Smith

 

 

How we can help the poor help themselves, and our economy, Selvaggio-style

Joe Selvaggio is a celebrated former priest who has spent nearly half a century helping poor folks become more productive and less poor,  lately through the MicroGrants program and before that, Project for Pride in Living. 

He also recently authored one of the most inspiring and articulate cases I've ever seen for investing in the human potential of our large and growing underclass.   His powerful essay appeared in the Star Tribune on Sunday Nov. 18, and was headlined "Think of the poor as part of the solution: They're a source of economic growth. That's why we can afford to help them.''

Selvaggio is the soul of charity but he's not a naive do-gooder who sees poor folks as purely victims.  And he argues that they ultimately are responsible for grabbing on and pulling up on the hands that are  offered from public and non-profit workforce training providers.  And he also concludes that governments need to invest more in broad-based self-sufficiency and productivity efforts instead of just focusing on direct aid and entitlements.    Citing the success of the Harlem Children's Zone and other non-profits such as Twin Cities Rise! and Summit Academy OIC, Selvaggio notes:  

"Entitlements seem to be anathema to the right, left and center.  But job-training programs are politically acceptable to left, right and center.   The private nonprofit sector has proven that they work, but philanthropy can't do it alone.  Now it's time for government to put muscle behind them...Change the paradigm and think of the poor as locked in a cocoon, ready to develop into a productive creator of wealth.''

Our policy-makers in Minnesota need to find what's working best in in preparing and moving chronically unemployed or under-employed folks in to the decent jobs that are being created in our new economy and right in their communities,  whether it's health-care, transportation, financial industries, or construction.   Growth & Justice is beginning a project that will illuminate those models.   And our legislators and other elected officials must be ready and willing to invest in them.   Because this really is an investment that pays off for everybody.

 

Dane Smith   

 

 

Author of "So Rich, So Poor'' brings truths about poverty to Minnesota

I have the great privilege of introducing author Peter Edelman Tuesday evening to talk about his powerful new book, "So Rich, So Poor: Why It's So Hard to End Poverty in America." Edelman is a Georgetown University law professor who has served at the pinnacles of power, as an adviser to U.S. Sen. Robert Kennedy and in President Bill Clinton's administration. He may be most famous for resigning from the Clinton administration to protest the deep cuts to benefits and eligibility limits in Clinton's welfare "reform'' package in the mid 1990s. His book is a primer on the disgraceful prevalence of poverty in the world's wealthiest and most powerful nation. It's also one of the most misunderstood issues in our body politic. The compelling fact that Edelman drove home in a recent New York Times editorial is this: the failure of the private sector to adequately reward people who work hard for their living is by far the biggest driver of poverty and low-income status. Most poor people work and a whopping 104 million people -- a third of our population -- have annual incomes below twice the poverty line, or less than $38,000 for a family of three. A fourth of all jobs pay below the poverty line for a family of four, or less than $23,000 annually. As the world's only wealthy democracy without universal health care, and with some of the chintziest economic security benefits in the western world, our working poor and our disabled poor are signficantly worse off than the poor in all the so-called developed nations. Edelman will talk about his book at 7 p.m. on Tuesday Oct. 2 at Common Good Books, at the corner of Grand and Snelling in St. Paul.

--Dane Smith

Itasca Project elevates higher ed as key to growth

Every serious student of public policy In Minnesota needs to see at least the executive summary of an important new study out this week by the highly respected Itasca Project. The IP is a group of corporate and community leaders that has led the way in the past with consensus-seeking studies on transportation investment, early childhood education needs, and the education achievement gap. The Itasca Project's latest report elevates higher education improvement and attainment as the key to sustained economic growth in Minnesota. Among the findings and recommendations in Higher Education Partnerships for Prosperity:

• Future growth will require "deeper and more relevant skills from the workforce and increased innovation from researchers, entrepreneurs and businesses." By 2018, 70 percent of Minnesota jobs will require postsecondary education.
• Pressure on state budgets during the decade from 2000 to 2010 drove a 35% reduction in public funding per student in Minnesota, which drove up tuition and raised barriers to completion. (My editorial comment: these cuts were driven by an anti-government, anti-tax pledge that was unconscionable, and cutting higher education was dumber than eating seed corn).
• Minnesota strategically needs to: align academic offerings with workforce needs, foster an "ecosystem of research and innovation," form "new collaborations" to "optimize system-wide intellectual assets and efficiency," and (duh, editorial comment again) "graduate more students."

At Growth & Justice, we've been urging for several years now that policymakers set a clear goal for the state for postsecondary completion of 75 percent for all young adults by 2020. Put another way, the best route to sustained prosperity in Minnesota is to ensure that at least three out of four young adults have some sort of post high-school certificate or credential that enables them to enjoy a more productive career and realize their fuller human potential. And this imperative is particularly important for our kids of color, who currently are lagging far behind in academic achievement and attainment. Developing their potential is our best opportunity for business growth and productivity.

--Dane Smith

Moving from Inequality to Equity in our Region

Among other Met Council members at a roundtable discussion last week at the Rondo Community Outreach Library in St. Paul, Roxanne Smith representing Champlin said the “superior growth model” and the “top priority” for the Met Council is to close the unemployment gap between African Americans and whites, currently one of the worst in the nation. This was reaffirmed earlier this year when the Met Council’s Corridors of Opportunity and HIRE Minnesota pushed MNDOT to raise their workforce inclusion goal for people of color to 32 percent up from the previous goal of 11 percent.

The devastating consequences of the double-dip recession and the foreclosure crisis have disproportionately impacted the core cities and older suburbs throughout the Twin Cities region. The inclusion of these disenfranchised communities in the planning of economic, transit and housing development will ultimately be, as Russ Adams, director of the Alliance for Metropolitan Stability described, a “down-payment” on the “untapped human potential” to secure a vibrant, competitive and prosperous economy.

We couldn’t agree more. Growth & Justice has consistently advocated for smart investments in Minnesota to create sustainable public infrastructure and a prosperous economy. Our emphasis is on equity.

To hear more about economic disparities and recommendations for equitable solutions, please join us on Tuesday night with author Chuck Collins and Headwaters Foundation for Justice, On the Commons and Wealth for the Common Good as we address many of the central questions of our time: Who are the 99 percent? How extensive and systemic is inequality in different areas of society? How is inequality changing in our world? Do we dare be hopeful about changing it?

Tuesday, June 26 at 7 p.m.
This event is free and open to the public.  

Open Book Center - Target Performance Hall
1011 Washington Avenue South, Minneapolis
Registration is appreciated; click here to RSVP

--Colin O'Keefe

All of our kids will be in the minority, and very soon

Plain facts: By 2015, in just three years, white youth in the United States will no longer comprise a majority, and then all of our kids will be members of a minority group. The Star Tribune and other Minnesota media was abuzz last week confirming this transition. In 2011, for the first time in our nation's history, more than 50 percent of our newborns were non-white or Hispanic and in Minnesota more than 30 percent of our kids under 5 are kids of color.

This will be good, for Minnesota must become a world community to compete in an age of globalization. But the more important corresponding reality is that our white population and our education systems must adapt faster to changing demographic realities for this state and nation to thrive. That was the key message delivered by Georgetown University Law Professor Sheryll Cashin during a recent forum in Minneapolis.

Sheryll Cashin, Georgetown University Law Professor

“The Latino population grew at a rate 40 times that of the white population during the last decade, and these are people born here; not immigrants. Growth in the Asian population is high as well,” Cashin said during the 15^th Annual Julian Parker Lecture held earlier this month at the Minneapolis campus of the University of St. Thomas.

Cashin, who writes extensively about issues of race and inequality, said that social psychology holds that most people harbor biases, and people who are the most isolated tend to believe the worst stereotypes. This can be dangerous because separation perpetuates stereotypes of people perceived as “the other.''

“It is no secret that American public schools are rapidly resegregating,” Cashin said. “Blacks and Latinos have become more segregated than ever in the last 30 years.” Economic segregation is rising as well, she said, noting that in 1970, 65 percent of the people in this country were middle class while today, 44 percent are middle class.

The better news is that some areas of the nation have been able to counter this segregation and the widening gap in various measures of school success rates, to the benefit of all, Cashin said. She cited Montgomery County, Maryland, where longtime zoning laws required 10- to 15-percent affordable units in wealthier communities. Now, Montgomery County has emerged as a leader in closing the achievement gap between low-income and affluent children, she said. (See the July 2011 Growth & Justice policy brief on this topic.)

Referring to different perceptions about race and inequality, Cashin said whites frequently view racism through its more blatant and outrageous history, in the context of laws and policies of the previous century that more brutally and intentionally held certain groups back. So, whites are more likely to see progress around the issue. People of color, however, seek a future of true equality, which they see as quite distant, Cashin said.

Although whites and people of color typically disagree about the subject of race and addressing disparities, Cashin urged unity and called for establishing multicultural coalitions that “narrow rather than widen gaps” between people.

Louis Porter II

(Note from Growth & Justice President Dane Smith: Louis Porter II is a new policy fellow for Growth & Justice. He's a communications teacher at the University of Minnesota, a former journalist for the St. Paul Pioneer Press, and he holds a doctorate in education.) 

Lessons from Blackwell and Finland: Equity is the superior growth model

Angela Glover Blackwell is one of the nation's leading voices on poverty and inequality, and her national think tank, PolicyLink, provides a wealth of data and best practices for moving people out of poverty, and improving lives for middle- and lower-income households, and communities of color.

Blackwell was in Minnesota recently, promoting PolicyLink's America's Tomorrow report on equity, and she was featured on MPR talking about poverty in America. She made the points, among others, that the vast majority of Americans have no idea how hard it is to get out of poverty, and that more equitable nations are outperforming us economically.

The MPR segment included an inspiring call-in from a Lakeville woman who described how the more generous safety net benefits of the 1970s saved her family and helped her to go to college, and she decried the shredding of those benefits and their reduced purchasing power in recent years.

Blackwell's equity-driven economic model is not just a pipe dream, or a sentimental wish list. It exists as a real life example in places like Finland, which has one of the world's stronger economies, high incomes and standard of living, an innovative workforce, and leading socio-economic indicators.

In the 70's, Finland wasn't so much beset by poverty as it was concerned about how to redesign its education system to move into the knowledge-based economy. Finland chose equity as its educational policy goal, not competition.

Finland's results on the PISA, an international reading, math and science survey conducted by the OECD, rank among the very best in the world. And this is from a system that promoted cooperation among schools, high teacher pay, and equality over high-stakes test scores, competition and "choice." A fascinating recent article in The Atlantic magazine explains Finland's success and concludes that "the problem facing education in America isn't the ethnic diversity of the population but the economic inequality of society, and this is precisely the problem that Finnish education reform addressed."

While comparisons between Finland and the United States as a whole may be like comparing lingonberries to fruit salad, a comparison of Finland to Minnesota is particularly useful to our policy conversations. Finland's population is 5.4 million; Minnesota's is 5.3 million. Finland is becoming more diverse than most people realize and its foreign-born population is 4.6% of the country. Minnesota's foreign-born population is 6.7% of the state.

FInland created an equitable system based on the idea that every child, in any city, from any family and any income should have the same educational experience, from birth on. Minnesota can match the rhetoric on equal opportunity. And we actually stood out as a model of equity among the states until a couple decades ago. But we can't match the results lately and disparities by race and income on educational attainment and achievement are among the worst in the nation.

The lesson from Finland and from leaders like Blackwell on the payoff from elevating equity in order to achieve growth is becoming part of a larger conversation. And PolicyLink's mantra, that equity is the superior growth model, is catching on as a defining principle for economic and education policy.

Maureen Ramirez
 

P.S. I'm the new policy and research director at Growth & Justice and I'm thrilled to be working for an organization that is focused so clearly on advancing equity (also known as economic justice) as the superior growth model. I bring to this job my experience as a current member of the University of Minnesota Board of Regents; as a former executive director of the CaptiolRiver Council in St. Paul (a downtown council that advises the city on planning issues); as a former director of the Minnesota Civic Engagement Table; and as a former coordinator of the Minnesota Participation Project at the Minnesota Council of Nonprofits.

 

Know exactly where you rank among the 99 Percent (you may be surprised)

One of the best things coming out of the 99 Percent movement is an increasing public awareness of exactly who gets how much in our increasingly unequal nation.  A number of interactive calculators have popped up on the internet and I'd recommend the Wall Street Journal's "What Percent Are You?'' site for a quick calculation of your household's approximate position on our extremely unequal income ladder.  The calculator advises that an annual salary above $506,000 puts you in the top 1%, while you need to make less than $2,500 a year to be in the bottom 1%.

Ignorance and misinformation about exactly where you are in the economic hierarchy can lead to poor decision-making in voting and policy-making.  I've seen studies that show many Americans on the bottom half of the scale mistakenly think they are more affluent than they are, and are even more wrong about their likelihood to ever make it to the top echelons.  As a result, they may actually oppose increasing tax rates on the top tier because they imagine they are in it or close to it, or destined for it.  Similarly, I've seen studies that show many households at the upper echelons, perhaps because most of the people they hang out with also have second homes in Florida, don't think they are rich.  A recent New York Times story headlined "Everyone is Middle Class, Right" summarizes a study that documents these erroneous impressions.  Note the bar graphs that show how wrong people are about their status, on both the top half and bottom half.

Maybe if more wealthy folks knew exactly how many Americans ranked below them, they wouldn't be so hostile to paying more for the social contract.  And if more voters knew how far behind the top tier they are, the less they would empathize with that advantage.  Knowledge, as they say, is power.

One last point.  The Wall Street Journal's What Percent Are You? calculator is part of its regular feature, The Wealth Report, a blog by senior writer Robert Frank.  Frank's blogs are even-handed, often counter-intuitive and progressively edgy and funny, without being strident.

--Dane Smith

Channel that "99 percenter" energy by linking to the [email protected] movement

Protesting the increasingly unfair advantage of the top 1 percent underlies much of the new energy around politics and policy these days.  And that can be healthy, because the economic decline of the middle class and the working class is a major challenge of our times.

But it's important to stay active and informed on a more constructive front as mainstream Minnesotans try to channel that anger and enthusiasm in 2012.

And one of the best new positive things going in Minnesota, coinciding with the Governor's Job Summit this fall, is a campaign called [email protected], a joint project led by the United Way of the Greater Twin Cities, and the Governor's Workforce Development Council.

Key facts from the [email protected] website that many have already heard, but must be kept top-of-mind:

• In 2018, 70 percent of Minnesota jobs will require education beyond high school, yet only 40 percent of working-age adults in Minnesota hold a postsecondary degree.  (We at Growth & Justice have been urging state leaders to start by setting a goal of 75 percent post-secondary attainment by 2020.  See our op-ed urging an attainment crusade earlier this month.)
• Nearly two million working-age Minnesotans lack a credential beyond a high school diploma. 
• Educational attainment levels are expected to decline in coming years – an unprecedented trend.

The alarming facts surrounding an educational equity gap for kids of color, which is grossly unfair to our fastest growing demographic groups, is a major factor for that last bullet.  One of the better comprehensive formulas for improving that picture is contained in the document "All Hands on Deck," which was produced by the Governor's Workforce Development Council under the previous administration and has strong input from the corporate and business world.  The GWDC is one of the most farsighted state agencies you've maybe never heard of.  Plug in to it.

--Dane Smith

 

Report card is in on the Tax Cut Decade: Not good for most of us

The U.S. Census Bureau's report on "Income, Poverty and Health Insurance Coverage in the United States: 2010," is out and it's worth digging in to the spreadsheets showing year-by-year change over the last 25 years for each state.

More than 500,000 Minnesotans currently are without health care, even more (560,000) are living below the official poverty level (a ridiculously paltry $22,113 for a family of four) and median income in Minnesota ($52,554 in current dollars) has dropped to its lowest level since 1999.  As usual, our rankings relative to the rest of the nation are a little better, but this should be small comfort.

It's important to remember that 1999 gave us some of the largest state income tax cuts in Minnesota's history, sold then as the surefire medicine for long-term economic growth.  Many states followed suit with their own tax cuts, and two years later we were treated to some of the largest federal income tax and capital gains tax cuts in history, also billed as a tonic for long-term job and income growth.   Instead, the next decade was marked by a dot-com bust and a bad recession, a rather weak recovery for all but high-income families, another recession capped by a banking and housing collapse, the worst economic and private-sector failure since 1929, and severe budget shortfalls and ballooning debt at the state and federal level.

Of course, the last decade, increasingly known as the "Lost Decade'' for most Americans and Minnesotans, also was the decade of 9/11, an expensive and dubious "Global War on Terror," rapid technological progress and disruption, accelerating economic globalization, and manufacturing job loss to cheap-labor competitors.  All of these factors surely are related to economic dislocation and travail, and poor and middle-income folks usually can't cope as well with rapid change as the people who are on top, highly educated, and in position to take advantage of economic changes.

But let's not forget that it was anti-government conservatives who made the cause-and-effect case, and still do, that tax cuts are not only a good thing for the economy and general prosperity, but the best and main thing to do, period.  As Ricky Ricardo would say, they have some "splainin' to do.''

Some of the best analysis and interpretation of the Census numbers can be found at the Center for Budget and Policy Priorities, which offers an interesting take on the growth of "deep poverty,'' and the Minnesota Budget Project, which notes that only Michigan had a bigger drop in median income than Minnesota since 1999.

--Dane Smith