Posts tagged with: Socioeconomics

social-mobility-01_500x260Earlier this year I wrote a series of posts explaining 12 principles that generally drive the thinking of conservative evangelicals when it comes to economics. Number 9 on my list was:

9. Social mobility — specifically getting people out of poverty — is infinitely more important than income inequality.

Social mobility is the ability of an individual or family to improve (or lower) their economic status. The two main types of social mobility are intergenerational (i.e., a person is better off than their parents or grandparents) or intragenerational (i.e., income changes within a person or group’s lifetime). Researchers at Harvard University recently released a study of intergenerational social mobility within the United States which controlled for five factors: racial segregation, income inequality, school quality, social capital, and family structure.

Can you guess which factor makes the most difference for social mobility?
(more…)

long-term-unemploymentThe longer that Americans are unemployed, the more likely they are to report signs of poor psychological well-being. A recent Gallup survey found that about one in five Americans who have been unemployed for a year or more say they currently have or are being treated for depression.

Gallup finds that unemployed Americans are more than twice as likely to say they currently have or are being treated for depression than both those with full-time jobs and those who have been unemployed for five weeks or less. According to the U.S. Department of Labor, there are currently 3.4 million people who have been unemployed for 27 weeks or more. These individuals accounted for 34.6 percent of all the unemployed.

A 2011 study of the long-term unemployed published by the Heldrich Center for Workforce Development at Rutgers University also found that half of participants experienced shame and embarrassment that led them to isolate themselves from friends and associates. Among the long-term unemployed, 31.1 percent reported spending two hours or less with family or friends the previous day, versus 21.5 percent among short-term unemployed adults.

Long-term unemployment is not just a mental health crisis; it’s also a spiritual crisis. And the church is the only institution in American that can adequately respond. “Fortunately, the church is in a unique place to explain Christ’s restoration of work,” says Michael Jahr, “the meaning of suffering, and the hope and peace that result from putting our trust in him.”
(more…)

unemployedNote: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

 The Term: Unemployment

What it Means: If you consult a dictionary, you’ll find a number of commonsensical definitions for unemployment: the state of being without a job; being without a paid job but available to work, etc. But like many other economic terms, the dictionary definition can vary significantly from how the term is often used. For example, since your teenage daughter, your neighbor’s stay-at-home spouse, or your retired grandfather are without a job, are they considered “unemployed”? In each case the answer is the same: It depends.

According to the federal government, to be unemployed a person must (a) be jobless, (b) looking for a job, and (c) available for work.

People are considered employed if they have a job (whether temporary, part-time, etc.). People who are neither employed nor unemployed are considered to be not in the labor force.

In America, the labor force consists of all persons 16 years old and over who are not serving on active duty in the military and are not confined to institutions such as nursing homes and prisons and either have a job or are looking for work. The labor force is made up of both the employed and the unemployed.

So unemployment refers to anyone who doesn’t have a job, wants one and is available to work, and is actively looking for work. That last part is particularly important because “discouraged workers” are not counted as unemployed. (See below for more on discouraged workers.)
(more…)

poverty-declinedWould you say that over the past three decades (since about the mid-1980s) the percentage of people in the world who live in extreme poverty — defined as living on less than $1.25 per day — has:

A) Increased
B) Decreased
C) remained the same

The right answer is B: extreme poverty has decreased by more than half. Yet according to a recent Barna Group survey more than eight in 10 Americans (84 percent) are unaware global poverty has reduced so drastically, and more than two-thirds (67 percent) say they thought global poverty has risen during that period.

Additionally, more than two-thirds of US adults (68 percent) say they do not believe it’s possible to end extreme global poverty within the next 25 years. One exception to this pessimism is practicing Christians. Defined by Barna as people who have attended a church service in the past month and say their religious faith is very important in their life, practicing Christians under 40 are the most optimistic at nearly half (48 percent), with practicing Christians over 40 slightly higher than the general population (37 percent compared to 32 percent of all adults).

The reason for the pessimism about eradicating extreme poverty generally fall into one of five categories:

(more…)

Seattle-mystWhen I was growing up I had a buddy—let’s call him “Bob”—who was constantly asking, “What happens if we do . . . ?” Bob’s curiosity, however, only led him to wonder about foolish actions. He never pondered, for example, what would happen if we all volunteered at the senior citizens center. Instead, his thinking ran more along the lines of what would happen if we jumped off the senior citizens center.

The reaction of me and the rest of my friends was always, “Let’s find out!” But we were more prudent than Bob (or maybe just more cowardly) so we’d encourage him to try whatever reckless idea he had in mind so we could learn from his experience. We learned, for instance, that if jump off the 3-story senior citizens center, a stack of cardboard boxes will not be enough to sufficiently break your fall.

Bob’s shenanigans would daily provide for us what social scientists would call a “natural experiment.” A natural experiment is a study of the effect of an independent variable, which has not been planned or manipulated by the researchers, on a dependent variable. (The word ‘natural’ in the term natural experiment therefore refers to an event that is not planned by the researchers.)

The city of Seattle is about to pull a Bob, by foolishly raising the minimum wage to $15 per hour. The effect on the citizens of Seattle will be almost entirely harmful. But it will provide a natural experiment on the effect of raising the minimum wage laws that the rest of American can learn from. Anyone who isn’t already convinced that increasing the minimum wage has a detrimental impact on employment and harm minority workers will, in a few years, have solid proof. We will all be able to look to Seattle to see the difference between good, albeit naive, intentions and sound economic policy.

Here are some of the effects I predict the policy will have in the next three years:
(more…)

Children-in-PovertyFrom the fiscal to the familial, conservatives have the right answers, says Kevin D. Williamson:

The conservative hesitancy to put the issue of poverty at the center of our domestic economic agenda, rather than tax rates or middle-class jobs, is misguided — politically as well as substantively. Any analysis of the so-called War on Poverty, officially at the half-century mark this year, will find that the numbers are very strongly on the side of the conservative critique of the welfare state: We spend a great deal of money, achieve very little in the way of measurable positive good, and inflict a great deal of destruction on families and communities in the process. Addressing poverty in a meaningful and robust way calls for a response from every part of the conservative coalition, because we have a generation’s worth of social-science research documenting that poverty is only partially an economic phenomenon. Poverty is complexly intertwined with marriage and family, with childbearing habits, and with the prevailing norms in local communities. The cause-and-effect relationships here can be complicated, and they operate at the community level as well as the individual level: For example, poor children with married parents experience better long-term economic outcomes than do those with single parents, but the more significant variable, according to a fascinating Harvard study on the subject, is the prevalence of marriage in their communities. It matters whether a poor child has married parents, that is, but it matters even more how many of his friends and classmates have married parents. The free market is part of the solution here, but it is only a part of the solution. But whether the question is the organization of our families, the organization of our tax code, or the organization of our schools, conservatives are well-positioned to step in and do something about the mess the Left has made of things, if only conservative leaders — and, especially, Republican elected officials — were more inclined to do so.

Read more . . .

Blog author: jballor
posted by on Thursday, April 24, 2014

cittfcSpeaking of Thomas Piketty, here’s a very helpful and revealing interview with Matthew Yglesias, “Thomas Piketty doesn’t hate capitalism: He just wants to fix it.” (HT: PEG)

A few highlights with some comment:

On the need for a historical perspective in economics:

Thomas Piketty: … It’s not only economists’ fault. Historians and sociologists are too often are leaving the study of economic issues to economists. Sometimes nobody does it.
(more…)

Blog author: johnteevan
posted by on Thursday, April 17, 2014

There are several ways to understand that poverty is expensive.

First poor people pay more for the things they buy or they find that cheap stuff is not good. The poor find it hard to pay for housing which leads to having a harder time saving money even by cooking. The poor have a hard time using a bank or even cashing a check without high fees.

Then there are the lower wage part-time jobs that some bosses make worse by urging people to work a few minutes or more or even over lunch for free.

A second way to look at the expense of poverty was highlighted by the 50th anniversary of the War on Poverty. The amount spent on poverty reduction, $1t annually, is terrifically expensive. Most of that comes from 80 means-tested federal programs according to Heritage’s Steven Moore.

A trillion dollars is equal to each of 45m people having $22,222. Of course, money is not given to people, there is a vast government and private web of helpers who work hard to improve conditions for those in poverty.  And they are paid well.

The third way, a way I think is better than the first two, is to count the cost of poverty in terms of wasted lives, wasted opportunity, and loss to our society.

If even 15m people went to work and earned $22,222 our GDP would thrive, tax revenues would rise and programs to help the poor would require dramatically less money.

There is dignity to work, satisfaction in working with others to meet a goal, and the pleasure of doing your job well and being paid for it. Millions are missing that opportunity and are living lives that tend toward mere passivity.

The high cost of poverty is essentially a human cost that is not limited to economic deprivation. The upside is that many who have little tend to be more spiritually rich than others though this idea is treated as a phony sop to keep people down.

l_20121213-school-reform-145-600-300If you really care about income inequality, notes John Goodman, you need only focus on one thing — the inequality of educational opportunity:

The topic du jour on the left these days is inequality. But why does the left care about inequality? Do they really want to lift those at the bottom of the income ladder? Or are they just looking for one more reason to increase the power of government?

If you care about those at the bottom then you are wasting your time and everyone else’s time unless you focus on one and only one phenomenon: the inequality of educational opportunity. Poor kids are almost always enrolled in bad schools. Rich kids are almost always in good schools.

So what does the left have to say about the public school system? Almost nothing. Nothing? That’s right. Nothing. I can’t remember ever seeing an editorial by Paul Krugman on how to reform the public schools. So I Googled to see if I have missed something. The only thing I found was a negative post about vouchers. And Krugman is not alone.

You almost never see anything written by left-of-center folks on reforming the public schools. And I have noticed on TV talk shows that it’s almost impossible to get liberals to agree to the most modest of all reform ideas: getting rid of bad teachers and making sure we keep the good ones.

(Via: AEI Ideas)

Blog author: jcarter
posted by on Wednesday, March 26, 2014

dv1693021Modern rhetoric of income inequality is driven by covetous envy, says Russell Nieli. Caritas, humility, gratitude, and goodwill toward others are a healthy society’s answer to the ancient curses of envy and pride:

The problem of the chronically poor is that they are chronically poor, not that some people make a lot more money than other people and bring about “inequality.” The fact that some fail to earn enough to live at a decent level is a genuine social problem. The fact that those who are not poor are widely dispersed in terms of how much they earn is not.

Under the rhetoric of “inequality,” covetous envy—including that of the upper-middle-class for the truly affluent—has reared its ugly head. Mayor de Blasio’s proposal to fund universal pre-kindergarten education by an income tax increase solely on the income of the highest income earners making more than $500,000 a year, who already pay city income taxes at the highest graduated rate, is an iconic example of this newer tendency to combine genuine anti-poverty concerns with envy-driven, soak-the-rich taxation policies. It is perhaps no accident that New York’s upper middle class (those making between $100,000 and $200,000 annually) voted for de Blasio in greater proportion than many New Yorkers in lower income brackets.

Read more . . .