Tag Archives: economics

Look Out! There’s a Safety Net Below You

The state of affairs

Photo by Satish Krishnamurthy, satishk.tumblr.com

The U.S. social safety net continues to grab headlines, this week in the New York Times. We’ve noted before the play programs like food stamps are getting in the current presidential campaign. The NY Times article notes that, paradoxically, “Some of the fiercest advocates for spending cuts have drawn public benefits.” Why might this be?

An aging population and a recent, deep recession seem to be at the crux of the issue.

The problem by now is familiar to most. Politicians have expanded the safety net without a commensurate increase in revenues, a primary reason for the government’s annual deficits and mushrooming debt. In 2000, federal and state governments spent about 37 cents on the safety net from every dollar they collected in revenue, according to a New York Times analysis. A decade later, after one Medicare expansion, two recessions and three rounds of tax cuts, spending on the safety net consumed nearly 66 cents of every dollar of revenue.

The recent recession increased dependence on government, and stronger economic growth would reduce demand for programs like unemployment benefits. But the long-term trend is clear. Over the next 25 years, as the population ages and medical costs climb, the budget office projects that benefits programs will grow faster than any other part of government, driving the federal debt to dangerous heights.

As a result, many Americans have benefited from government safety net programs.

Almost half of all Americans lived in households that received government benefits in 2010, according to the Census Bureau. The share climbed from 37.7 percent in 1998 to 44.5 percent in 2006, before the recession, to 48.5 percent in 2010.

Yet many do not realize that it is no longer just programs for the “undeserving poor” that dominate the scene. Rather, it’s programs such as an expanded Earned Income Tax Credit and increasing Medicare costs that have stretched safety net resources.

Medicare’s starring role in the nation’s financial problems is not well understood. Only 22 percent of respondents to the New York Times poll correctly identified Medicare as the fastest-growing benefits program. A greater number of respondents, 27 percent, chose programs for the poor.

Why the misperception? Perhaps it’s because, as political scientist Suzanne Mettler explains in her book, The Submerged State: How Invisible Government Policies Undermine American Democracy, policies in recent decades have turned from more obvious provision of cash benefits to methods such as tax breaks, incentives, and other “hidden” forms of support. As a result, most citizens  have no idea that they rely on the safety net at all.

No doubt politicians, commentators, and scholars will all continue to debate the form and function of the safety net. But everyday Americans aren’t at all sure what’s best to do.

Americans are divided about the way forward. Seventy percent of respondents to a recent New York Times poll said the government should raise taxes. Fifty-six percent supported cuts in Medicare and Social Security. Forty-four percent favored both.

As one Minnesotan profiled in the NY Times story put it, “I’m glad I’m not a politician…We’re all going to complain no matter what they do. Nobody wants to put a noose around their own neck.”

 

Wall Street, Wages, and Whiteness

Money!

Photo by Thomas Galvez, togalearning.com

The current political and cultural upheaval focused on the American economy has Wall Street under the microscope. The New York Times DealBook section recently reported on a study by CUNY Graduate Center sociologist Richard D. Alba which dissected some of the income stratification occurring within financial industry. His findings? Not surprisingly, Wall Street remains an old boys’ club. White men are making significantly more than their female or non-white coworkers:

The median compensation for a white man in the financial industry between 2005 and 2009 was $154,500, 55 percent percent more than that for a white woman, according to the study, which used United States Census data. He made 55 percent more than a Latino man, and 72 percent more than a black man. A typical white woman, with a salary of $100,000, made 59 percent more than a Latina woman, and 65 percent more than a black woman.

Historically, white males have dominated the financial sector, and their wage superiority has remained consistent despite growing diversity within the field:

In 2000, more than 67 percent of older workers were white men, the study shows. In the period between 2005 and 2009, that dominance showed signs of eroding, as white men were less than 46 percent of the youngest workers, those just starting out on Wall Street.

While Wall Street has been quick to adapt to complicated new financial instruments and markets, according to Alba, it shows few signs of adapting to an already-changed labor market.

The Wrong Reasons

Protest against a constitutional amendment banning same sex marriage

In a recent op-ed in the New York Times, sociologist Jaye Cee Whitehead shared her thoughts on economic arguments for gay marriage.

In a letter to the New York State Legislature last month, top business executives endorsed same-sex marriage on the ground that “attracting talent is key to our state’s economic future.” The signers — among them the banker Lloyd C. Blankfein, the financier Ronald O. Perelman, the real estate developer Jerry I. Speyer and the publisher Mortimer B. Zuckerman — declared that legalizing gay unions would “help maintain our competitive advantage in attracting the best and brightest people the world has to offer.”

This letter is one of many examples of promoting marriage equality as good for business.

States and cities are, as the New York executives pointed out, competing to attract talent in a globally competitive labor market. The wedding industry benefits, of course, when more couples are allowed to marry. And marriage equality is associated with revenue gains from sales taxes and license fees. Backers of gay marriage speak openly of the gains from “marriage tourism” in states that have legalized same-sex marriage.

So why shouldn’t gays and lesbians have equality and bolster the economy at the same time?  In Whitehead’s eyes,

. . . supporting marriage on economic grounds dehumanizes same-sex couples by conflating civil rights with economic perks. Americans should be offended when the value of gays and lesbians is reduced to their buying power as consumers or their human and creative capital as workers. . .Worse yet, this narrative neglects the most economically vulnerable gay and lesbian couples and plays into the inaccurate stereotype of same-sex couples (particularly male couples) as being mostly well-educated and affluent.

Indeed, many proponents of same-sex marriage often point out that legalizing same-sex marriage may reduce spending on welfare programs.  But, Whitehead explains why these and other economic arguments are problematic.

Supporters of same-sex marriage ought to acknowledge that marriage is not just a natural expression of human intimacy or a declaration of personal commitment; it is a form of governance. The vast expansion of the government over the past century has embedded marriage into all areas where the state and the individual intersect, from tax obligations to disability benefits to health care decisions to family law. As with any other structure of governance in a democratic society, we ought to think about its participants as citizens rather than consumers.

So if you support same-sex marriage, do so not because it brings in tax revenue and tourism dollars and prevents people from becoming a burden on the state, but because you value gay men and lesbians as citizens who deserve equal access to the rights and responsibilities of marriage.

 

what’s at stake in wisconsin

Protesting Scott Walker
In an op-ed published in the Raleigh-based paper, the Newsobserver, sociology Ph.D student Amanda Gengler provides insight into what is at stake in the current political struggle in Wisconsin. To do so Gengler draws upon her experience at the University of Wisconsin-Madison where she earned her master’s degree.

As a graduate student at the University of Wisconsin-Madison 10 years ago, every month a few dollars of my stipend went to pay dues to the TAA; a unique union that represents and protects graduate employees working in the UW-System. In return, I worked under a contract that ensured full health care benefits and basic dental care (with no out-of-pocket premiums), and tuition remission (without which my education would not have been possible) as well as other fair labor protections.

Now, even after each subsequent renegotiation of the rights for Wisconsin’s graduate employees has resulted in more and more concessions, current Gov. Scott Walker is proposing to remove the TAA’s collective bargaining rights altogether. This would make it impossible to fight for any of these protections, all of which could be immediately revoked.

Graduate students are not alone in seeing this as an attack on the education system.

Under the rallying cry “Hands off our Teachers,” undergraduates have taken to the streets in recent days alongside their graduate student instructors.

Gengler cautions us to not see this as an isolated threat directed at the University system.

Wisconsin’s 3,000 graduate student workers are but one of the many constituencies that will be directly harmed by the state government’s attack on unions and workers’ rights. As Wisconsin’s unions offer up economic concessions in terms of pay and premiums, only to be completely rebuffed by state lawmakers, it is clear that this issue is not about the budget: it is about ending workers’ collective bargaining rights.

The op-ed serves as a call for all workers and unions to pay close attention to what is occurring in Wisconsin. While the situation appears bleak, Gengler leaves us with a statement of resolve:

Those of us who have been fortunate enough to have those rights know what they are worth, and the thousands who continue to flood Madison’s streets make it clear that the right to fight is one thing they will not concede.


Don’t Call It a Comeback – The Culture of Poverty

Montréal-Nord

Patricia Cohen’s recent article in the NY Times, “‘Culture of Poverty’ Makes a Comeback,” documents culture once again being used by social scientists as an explanation in discussing poverty.

Cohen begins by setting the historical context.

The reticence was a legacy of the ugly battles that erupted after Daniel Patrick Moynihan, then an assistant labor secretary in the Johnson administration, introduced the idea of a “culture of poverty” to the public in a startling 1965 report. Although Moynihan didn’t coin the phrase (that distinction belongs to the anthropologist Oscar Lewis), his description of the urban black family as caught in an inescapable “tangle of pathology” of unmarried mothers and welfare dependency was seen as attributing self-perpetuating moral deficiencies to black people, as if blaming them for their own misfortune.

The idea was soon central to many of the conservative critiques of government aid for the needy. Within the generally liberal fields of sociology and anthropology the argument was generally treated as being in poor taste and avoided. This time of silence seems to be drawing to a close.

“We’ve finally reached the stage where people aren’t afraid of being politically incorrect,” said Douglas S. Massey, a sociologist at Princeton who has argued that Moynihan was unfairly maligned.

The new wave of culture-oriented discussions is not a direct replica of the studies of the 1960s.

Today, social scientists are rejecting the notion of a monolithic and unchanging culture of poverty. And they attribute destructive attitudes and behavior not to inherent moral character but to sustained racism and isolation.

Cohen continues by providing examples of how culture is now being examined. To do so she turns to Harvard sociologist, Robert J. Sampson. According to Sampson culture should be understood as “shared understandings.”

The shared perception of a neighborhood — is it on the rise or stagnant? — does a better job of predicting a community’s future than the actual level of poverty, he said.

William Julius Wilson, a fellow Harvard sociologist who achieved notoriety through studies of persistent poverty defines culture as the way

“individuals in a community develop an understanding of how the world works and make decisions based on that understanding.”

For some young black men, Professor Wilson said, the world works like this: “If you don’t develop a tough demeanor, you won’t survive. If you have access to weapons, you get them, and if you get into a fight, you have to use them.”

As a result of this new direction in the study of poverty, a number of assumptions about people in poverty have been challenged. One of these is idea marriage is not valued by poor, urban single mothers.

In Philadelphia, for example, low-income mothers told the sociologists Kathryn Edin and Maria Kefalas that they thought marriage was profoundly important, even sacred, but doubted that their partners were “marriage material.” Their results have prompted some lawmakers and poverty experts to conclude that programs that promote marriage without changing economic and social conditions are unlikely to work.

The question remains, why are social scientists suddenly willing to deal with this once taboo approach?

Younger academics like Professor Small, 35, attributed the upswing in cultural explanations to a “new generation of scholars without the baggage of that debate.”

Scholars like Professor Wilson, 74, who have tilled the field much longer, mentioned the development of more sophisticated data and analytical tools. He said he felt compelled to look more closely at culture after the publication of Charles Murray and Richard Herrnstein’s controversial 1994 book, “The Bell Curve,” which attributed African-Americans’ lower I.Q. scores to genetics.

The authors claimed to have taken family background into account, Professor Wilson said, but “they had not captured the cumulative effects of living in poor, racially segregated neighborhoods.”

He added, “I realized we needed a comprehensive measure of the environment, that we must consider structural and cultural forces.”

This surge of interest is particularly timely as poverty in the United States has hit a fifteen-year high. And the debate is by no means confined to the ‘Ivory Tower’.

The topic has generated interest on Capitol Hill because so much of the research intersects with policy debates. Views of the cultural roots of poverty “play important roles in shaping how lawmakers choose to address poverty issues,” Representative Lynn Woolsey, Democrat of California, noted at the briefing.

No Longer Off Limits?

Morningside Heights/HarlemSince the 1960s, sociologists have shied away from explaining the persistence of poverty in terms of cultural factors, instead emphasizing the social structures that create and perpetuate poverty. Now, the New York Times reports, there seems to be a resurgence of analysis linking culture and persistent poverty.

The old debate has shaped the new. Last month Princeton and the Brookings Institution released a collection of papers on unmarried parents, a subject, it noted, that became off-limits after the Moynihan report. At the recent annual meeting of the American Sociological Association, attendees discussed the resurgence of scholarship on culture. And in Washington last spring, social scientists participated in a Congressional briefing on culture and poverty linked to a special issue of The Annals, the journal of the American Academy of Political and Social Science.

This, however, is not a reproduction of ‘culture of poverty’ scholarship; current work is significantly different:

With these studies come many new and varied definitions of culture, but they all differ from the ’60s-era model in these crucial respects: Today, social scientists are rejecting the notion of a monolithic and unchanging culture of poverty. And they attribute destructive attitudes and behavior not to inherent moral character but to sustained racism and isolation.

Harvard sociologist Robert J. Sampson says that how people collectively view their community matters.

The shared perception of a neighborhood — is it on the rise or stagnant? — does a better job of predicting a community’s future than the actual level of poverty, he said.

Sociologists try to unpack what this means:

Seeking to recapture the topic from economists, sociologists have ventured into poor neighborhoods to delve deeper into the attitudes of residents. Their results have challenged some common assumptions, like the belief that poor mothers remain single because they don’t value marriage.

In Philadelphia, for example, low-income mothers told the sociologists Kathryn Edin and Maria Kefalas that they thought marriage was profoundly important, even sacred, but doubted that their partners were “marriage material.” Their results have prompted some lawmakers and poverty experts to conclude that programs that promote marriage without changing economic and social conditions are unlikely to work.

The article speculates about several reasons why a cultural approach to studying poverty is reemerging, including a new generation of scholars, advancements in data collection and analysis, and shifts in broader discourse and attitudes outside the university, as well.

Take a look at the full article.

The Great Baby Bust

Baby feet!The birth rate in the United States hasn’t been this low in 100 years, leading social scientists to speculate on the role the Great Recession might be playing in family planning. The Associated Press reports:

The birth rate dropped for the second year in a row since the recession began in 2007. Births fell 2.6 percent last year even as the population grew, numbers released Friday by the National Center for Health Statistics show.

“It’s a good-sized decline for one year. Every month is showing a decline from the year before,” said Stephanie Ventura, the demographer who oversaw the report.

The birth rate, which takes into account changes in the population, fell to 13.5 births for every 1,000 people last year. That’s down from 14.3 in 2007 and way down from 30 in 1909, when it was common for people to have big families.

A sociologist explains how the falling Dow might relate to declining birth rates:

“When the economy is bad and people are uncomfortable about their financial future, they tend to postpone having children. We saw that in the Great Depression the 1930s and we’re seeing that in the Great Recession today,” said Andrew Cherlin, a sociology professor at Johns Hopkins University.

“It could take a few years to turn this around,” he added.

The birth rate dipped below 20 per 1,000 people in 1932 and did not rise above that level until the early 1940s. Recent recessions, in 1981-82, 1990-91 and 2001, all were followed by small dips in the birth rate, according to CDC figures.

Despite this trend, there is no need to panic.

Cherlin said the U.S. birth rate “is still higher than the birth rate in many wealthy countries and we also have many immigrants entering the country. So we do not need to be worried yet about a birth dearth” that would crimp the nation’s ability to take care of its growing elderly population.

bankruptcy in 21 seconds or less

Lest you think that sociologists are not discovering things relevant to your day-to-day life, rest assured. Sociologist Dan Myers of Notre Dame, along with his son, claims to have discovered the shortest possible Monopoly game.  As reported on NPR:

The shortest possible game of Monopoly requires only four turns, nine rolls of the dice, and twenty-one seconds, Daniel J. Myers, a professor of sociology at Notre Dame University, told NPR’s Robert Siegel…

In short, here’s what has to happen:

“One player moves around the board very quickly, to buy Boardwalk and Park Place, and places houses on them,” Myers explained. “And the other one ends up drawing a Chance card that sends them to Boardwalk, and they don’t have enough money to pay the rent with three houses, and the game is over.”

So, what is the statistical probability of that particular game happening?

The odds are very, very, very slim.

Statistically speaking, it would happen “once every 253,899,891,671,040 games,” Josh Whitford, an assistant professor of sociology at Columbia University, says.

Not only is this discovery fun, it’s also not without its sociological parallels. From Myers’ interview with NPR’s Robert Siegel:

SIEGEL: Monopoly, famously, was popular in the Great Depression, when people were going broke. And now, you’ve come back during the Great Recession of the 21st century, with this theory.

Mr. MYERS: Yeah, well, there have been some comments out on the blogosphere about how it’s representative of what’s going on in our economy, that people could go bankrupt so quickly. We didn’t intend to parallel but certainly, it’s been drawn by a number of people out there.

Myers’ next project will be the shortest possible game of Risk.

SIEGEL: Well, what will fill the void, now, that’s occupied you for the past few weeks?

Mr. MYERS: Well, we’ve been getting suggestions from those out in the blog world. So the next one is to try to play the shortest possible game of Risk.

SIEGEL: Which you think might be more complicated or…

Mr. MYERS: I think it will because making someone go bankrupt isn’t quite as complicated as world domination.

americans moving…barely

u-haulRecent data released by the Census Bureau have sociologists and demographers abuzz about mobility in the U.S. The Christian Science Monitor reports:

Americans are moving again, following a recession-induced plunge in mobility. But the mobility rate is still at historic lows as housing costs and few job opportunities keep many Americans hunkered down.

Some 37.1 million Americans, or 12.5 percent of the population, moved in 2009, according to the Census Bureau. That’s up – barely – from 11.9 percent the previous year, the lowest the US mobility rate has been since the Bureau began tracking it in 1948.

A normal rate during good economic times, such as in the 1990s, is between 15 and 17 percent.

A sociologist comments:

“What the [recession] has done is frozen people in place,” says Kenneth Johnson, a senior demographer at the Carsey Institute and a professor of sociology at the University of New Hampshire in Durham. “I’ve never seen changes of this magnitude in so short a period: It’s stunning for demographers.”

Another expert weighs in on the economic effects of lower mobility:

But the fact that the mobility rate is still very low is bad news for the economy, says Richard Florida, professor of US urban theory at the University of Toronto.

“Mobility is the cornerstone of the American economic backbone,” says Professor Florida, author of the new book “The Great Reset.” “Our economy has been premised on flexibility and mobility. Our workforce has always better able to move to where jobs and opportunities are.”

One demographer explains why local vs. long-distance moves might be problematic:

“It’s not good news,” says William Frey, chief demographer at the Brookings Institution in Washington. “It only ticked up for local moves, not long-distance moves. I think the latter is a more significant story than the former – more college-educated people, more young people trying to move up in their careers. They are the lifeblood of migration and growth.”

Another concerning although consistent trend: People with incomes below the poverty line were more likely to move locally – and less likely to make long-distance moves – than others.

But experts see at least some positives of lower mobility:

Moving tends to take a toll on people. Staying put, by contrast, reaps social benefits like stronger family and community connections. Communities with lower levels of mobility tend to enjoy higher levels of trust and well-being, Mr. Frey says.

“People have their kids around them longer. There’s a stronger sense of community, but you’d like to think that would happen more for voluntary reasons,” he says.

to farm or not to farm?


Iowa Round BalesAgriculture Online reports results from the Farm and Rural Life Poll, an annual survey of Iowa farmers conducted by Extension Sociology at Iowa State University.

The latest [survey] indicates concerns are growing surrounding the passage of farms to the next generation. In the 2008 poll, 42% of farmers responding said they were planning on retiring in the next 5 years, and among those, 56% said they had identified a successor, according to J. Gordon Arbuckle, Jr., leader of a team of ISU Extension sociologists administering the poll.

The survey explores what the farmers think motivates their children to take on the family farm:

“The 735 farmers who were over 55 — approaching retirement age — had 350 children who farmed, a proportion (48%) that represents less than half of the number that will be needed to replace the current generation of farmers as they retire,” he adds.

Of those saying the younger generation planned to take the reins of the farm, reasons like quality of life and love of farming topped the list of motivations.

“Following in importance were quality of life considerations and having grown up wanting to farm. Seventy-two percent of farmers rated these factors as having been important or very important criteria in their children’s decisions to farm,” Arbuckle says. “Ability to be their own boss (68%), desire to stay close to home (56%), desire to carry on family tradition (55%), and family ability to help get them started (55%) were also rated as important or very important by a majority of Farm Poll participants.”

Why are members of the next generation planning on other careers instead of returning to the farm? Arbuckle says income opportunities elsewhere comprised the top motivator, while industry entrance hurdles like input costs, high land rents and excessive overall financial risk topped the list of drivers toward other careers.

“In contrast to the factors influencing the decision to farm, most of the reasons that were rated as most important in the choice of a non-farm career were economic,” Arbuckle says.

“On the whole, results suggest that for those individuals who chose farming as their career, cultural and lifestyle factors were the predominant reasons underlying that choice. Whether regarding their own decisions to farm, or their children”s decisions, love of farming and quality of life issues were fundamental,” he continues. “On the other hand, for those children who did not choose to farm, parents’ assessments clearly point to economic factors as the most important decision criteria, whether in the form of economic barriers to farm entry or better income opportunities elsewhere.”

Check out the site for “The Farm Poll” for great summary reports of surveys dating back to 1982.