Saturday, May 2, 2015

Robert Reich: The Bankruptcy of Detroit and the Division of America

Robert Reich--economist, professor, and activist--published a grim blog post about what happens if Americans continue to segregate by income and place. When cities lack a mixture of incomes and become increasingly poor, city services and quality of living decline. Detroit is ground zero for that reality--when the city residents, mostly poor and elderly communities of color, must deal with inadequate services while wealthier white Americans have the luxury to ignore social problems.

Detroit is the largest city ever to seek bankruptcy protection, so its bankruptcy is seen as a potential model for other American cities now teetering on the edge.

But Detroit is really a model for how wealthier and whiter Americans escape the costs of public goods they’d otherwise share with poorer and darker Americans.


Related Content: A Foreclosure Conveyor Belt - The Continuing Depopulation of Detroit

Wednesday, April 29, 2015

ThinkProgress: Families of Color Likely to Remain in Poverty Even If They Work

According to ThinkProgress, families are color are likely to remain poor even if they work. Almost half of minority working families are poor or low-income. More than a third of African-American and Latino working families make less than $32,000 a year. In contrast, just 13 percent of white and Asian-American families find themselves in that same income bracket.

Some people argue that the poor are poor because they lack a work ethic. But hard work doesn’t mean American families can pay the bills. Nearly a third of the country’s 32.6 million working families, or 10.6 million, were low-income in 2013, or had incomes that fell below 200 percent of the poverty line, according to a new report from The Working Poor Families Project.

And race plays a huge role. Working families headed by people of color are twice as likely to wind up in poverty anyway as compared with white families. The report finds that nearly half, or 47 percent, of working families headed by racial or ethnic minorities are poor or low income, compared to just 23 percent of white families. Breaking it down further, 55 percent of working Latino and nearly half of African-American and Native American families who work are low income, but less than a quarter of white families are.

Sunday, April 26, 2015

The Decline of the American Dream in the U.S.

Everyone around the world knows the American Dream. According to The Cheat Sheet, a USA Today content partner, the American Dream is "a concept that doesn't have a strict definition, but is typically explained as the ability to improve one's standing in society through hard work and education, and ultimately share a piece of America's prosperity with a home, property, and other basic necessities." We learn the classic "rags-to-riches" Horatio Alger story in classroom where impoverished boys rise from their humble backgrounds to middle-class security through honesty, determination, and hard work. While most of us take it for granted that anyone can achieve upward social mobility, the American Dream has become less realistic today. Economic mobility has stunted for most Americans due to several factors: stagnant wage growth, increase in low-wage jobs, the rising cost of living and health care, mounting student debt, and the decline of organized labor. The American Dream that we proudly cherish has become more unattainable than ever, particularly among historically disenfranchised communities of color.

That is, the American Dream is now easier to attain for people who live outside of America than those who live in it. Or, another way to put it is that economic mobility has been stunted in the U.S. As far back as 2004 the progressive think tank The Century Foundation argued that "recent evidence shows that there is much less mobility in the United States than most people assume," and that "rags to rags and riches to riches are now the norm in this country to a greater degree than in many other developed nations."

It goes on to say: "Our current education system, anti-discrimination laws, and other public policy tools that aim to give the children of poor parents a fair shot at a high income are not getting the job done. We may all believe in the American Dream, but we have a lot of work to do if we are to make that dream a reality."

Related Content: Why is Social Welfare So Expensive? (Cheat Sheet)

Friday, March 13, 2015

Obama Announces Student Aid Bill of Rights

Earlier this week, President Obama recently announced at the Georgia Institute of Technology, will make it a little easier for borrowers to stay current on their debt payments and to file complaints against the companies that manage their loans. According to the Chronicle of Higher Education, his memorandum does the following:
  • Help borrowers keep track of their student loans.
  • Make it easier for borrowers to file complaints involving their student aid.
  • Help borrowers remain in income-based repayment plans.
It will NOT overhaul the student-loan debt collection process or provide an escape hatch for defaulters. Furthermore, no one knows how the government will specifically "raise standards" for debt collectors. The memorandum requires the U.S. Department of Education to "ensure that the debt-collection process for defaulted federal student loans is fair [and] transparent, charges reasonable fees," and "effectively assists borrowers in meeting their obligations and returning to good standing." The expected consumer protections include "higher standards for student-loan servicing," including "enhanced disclosures" and "strengthened consumer protections." The only protection listed is ensuring that servicers apply prepayments to loans with the highest interest rates first. More information will be made public as soon as the reports are released on private debt collectors.

Click here for more information about the Student Aid Bill of Rights from the White House.

Wednesday, March 11, 2015

Study: Elite Degrees Offer Little Advantage for African American Students

A research study from the University of Michigan found that a college degree from a highly selective college or university offers little advantage for African American graduates. White job applicants with a degree from an elite university had the highest response rate (nearly 18 percent), followed by black candidates with a degree from an elite university (13 percent). White candidates with a degree from a less-selective university had nearly the same response rate (more than 11 percent) as a black candidate from an elite university. Black job applicants with a degree from a less-selective university had the lowest response rate (less than 7 percent).

"These racial differences suggest that a bachelor's degree, even one from an elite institution, cannot fully counteract the importance of race in the labor market," said Gaddis, a postdoctoral scholar in the Robert Wood Johnson Foundation's Health Policy Scholars program at the School of Public Health. "Thus, both discrimination and differences in human capital contribute to racial economic inequality."

Furthermore, race results in a double penalty. When employers responded to black candidates, it was for jobs with lower starting salaries and lower prestige than those of white peers. Black applicants received responses for jobs with a listed salary about $3,000 less than white candidates.