Friday, June 30, 2006

New Look

Same blog -- new look.

I received enough complaints about the black (both for reading difficulty and solemn intimidation) that I thought I'd try something a bit brighter. I tried to keep the look very simple and clean like before.

One of the only substantive differences here is the addition of the DONATE area on the right sidebar. For now, it just sports your humble blogger's favorite charity (Second Harvest), but may soon feature additional charities or have a single charity rotated on a monthly basis. We'll see. Of course, I do not get anything from you clicking through my link, and I have no personal or financial connection with Second Harvest.

Feel free to suggest anything new or point out charities that might be appropriate for featuring on this blog. You can always post comments here or write me at

Wage Hike

The minimum wage is is the news on many levels lately. Yesterday, Massachusetts raised its minimum wage to $8.00. I found this personally interesting because it brings Massachusetts up to nearly the highest minimum in the country, and because Massachusetts was the first state to deviate from the federal minimum (way back when).

Additionally, New Jersey's minimum is set to increase from $6.75/hour to $7.15/hour on October 1, 2006. New York's minimum will experience the same hike, but effective January 1, 2007. Also on January 1, 2007, Hawaii's minimum will jump from $6.75 to $7.25, and Connecticut up to $7.65.

As a reminder, the minimum wage is frequently set at the state level. (A nice map is available from the Department of Labor here.) You see three possibilities:

1) the state has no minimum wage law so the federal minimum wage ($5.15/hr) controls;

2) the state has a minimum wage but it is the same as the federal or indexed to the federal so you'll see the same wage but it's technically a state law (this has been easy of late because the federal minimum has not changed since 1997); or

3) the state maintains a minimum wage higher than the federal minimum (this could be either a fixed amount or, as is the case in a handful of states, indexed to increase with inflation).

The only thing a state can't do is maintain a lower wage than the federal minimum. (Okay, Kansas actually does maintain a lower minimum wage at the generous level of $2.65/hour, but it is irrelevant as the federal minimum supersedes any lower state minimum.)

And at the national level, things are getting heated. The Democrats have vowed to block any Congressional pay raise until Congress agrees to increase the minimum wage. Congressional pay is set to increase by $3,300 on January 1, 2007. While the federal minimum wage has not increase beyond $5.15/hour since 1997, Congressional pay has increased over $31,000/year since 1997. I can't say I find this parallel as significant as the Democrats make it out to be, but the Democrats clearly believe the argument amounts to a nice sound bite, and I'm in favor of anything that raises wages.


As CNN points out in the article referenced above, the federal minimum leaves a family of three $6,000 below the poverty level with a full-time worker earning merely $10,700/year. Unfortunately, even the Democrats' proposed increase would leave a family of three about $1,700 below the poverty line. (And anyone familiar with my view of the poverty line knows I join those who consider it an antiquated number out of touch with reality.)

All that being said, the EITC (at the federal and some state levels) more than makes up for the difference. Thus, (excuse the sarcasm) we can celebrate that a full-time worker, with tax advantages, has finally breached the (probably inaccurate) poverty line.


If the Democrats have their way, the federal minimum will increase in 70-cent increments until it reaches $7.25/hour on January 1, 2009. As mentioned above, many states already maintain minimum wages higher than the federal minimum. Yet even with the first 70-cent increase to $5.85/hour, 26 states will be faced with a federal minimum higher than the minimum in effect the day before. Naturally, then, this increase and additional 70-cent increases through 2009 can be expected to correspond with even larger increases in many states.

Wednesday, June 28, 2006


Just how much is enough to live on in America? We've discussed the minimum wage in this blog in numerous posts over the last 6 months (such as here). One could certainly be forgiven for thinking that the minimum wage is set so that a worker making the minimum wage and working full time all year would earn enough to have the bare minimum (that is, three meals a day, adequate clothing, adequate shelter). A more complex but realistic approach would take into account all social programs available to such a person (including the Earned Income Tax Credit). Thus, if a person receives $3000 he could logically afford to earn $3000 less in wages that year.

But really, what is the minimum amount a person needs in America? Of course, that question has many correct answers as a man in Bentonville needs less to afford food, clothes and shelter than a man in New York City. We could use an average cost of living -- say, the "Peoria" cost of living.

Then there's family size. Adults must be able to provide for their children if the state does not provide the child with his or her basic necessities. Take a couple with two children. If both parents are expected to work, we could set their minimum wage at the amount necessary to pay for the family's food, shelter and clothing (keeping in mind all relevant state assistance). But we'd also need to add the expense of child care for two children. In the alternative, one parent could work and the other stay home. Then we could remove the cost for childcare and set the minimum wage at the amount needed to support a spouse and two children.

Of course the minimum wage does not consider such particulars. If Target pays two people the minimum wage in Illinois, the company does not care whether one person is a teenager living with his parents and the other is a single mother of two. But these are important issues to consider in concluding the appropriate level for the minimum wage. I will add that the EITC referenced above DOES attempt to take such particulars into account. A single individual with no children may receive almost nothing from the EITC, while a single mother of two might receive a couple thousand dollars a year. The precise amounts can easily be concluded but for this dicussion they are irrelevant.

The minimum wage has not increased in nearly a decade. According to research conducted by the Economic Policy Institute (EPI), the buying power of the minimum wage is now considered to be at a 51 year low. Even since the last minimum wage increase in 1997, the buying power of $5.15 has dropped about 20 percent. (As implied above, programs like the EITC have picked up some of that slack, but how much is left in that gap?) One thought is that all wages have fallen at the lower income bracket. But this is not the reality. Fifty years ago the minimum wage was about 50 percent of the average nonsupervisory worker's wage. Today it's about 31 percent. I probably need not mention that incomes for the highest paid workers continue to increase.

An essential question to any discussion of the minimum wage, EITC, etc., is: how much is enough? I'll end the present post here but I plan to consider these issues in greater detail over the next few posts.

(I assure you the posts will not be as few and far between as they have been of late. For anyone who has noticed, thanks for your patience.)

Thursday, June 15, 2006

The Rising Costs of SAT Tutoring

I could dedicate an entire post to the racial and economic bias found in standardized tests across the board. The SAT is no less an offender than any. As one commentator states:

The SAT has been shown to be both culterally and statistically biased against Affiran Americans, Hispanic Americans, and Asian Americans (Roy O. Freedle, Correcting the SAT's Ethnic and Social-Class Bias: A Method for Reestimating SAT Scores).

Besides the arguable racial bias is the SAT and other standardized tests, here is yet another reason why affirmative action is necessary at colleges across America: tutoring costs. The prevelance and cost of SAT/ACT tutoring has steadily increased over the years--and expecially with last year's introduction of the "new SAT" (see, for instance, here, here, and here). Now, however, the best tutoring appears not only to be a difficult expense for middle class and working class families, but an rather an impossibility. There are some indications, for instance, that the better SAT tutoring in Manhattan can cost nearly $25,000! More common are programs like Kaplan which can now cost nearly $1,000 for the SAT, and private tutoring at a less prestigious level, which still frequently costs over $100 per hour.

The point to all this is simple and I'll end it here, wealthy Americans appear to be paying more and more for tutoring on college entrance exams and it looks like the trend will continue. With stagnant wages in middle and lower class America, it leaves the better programs out of the average American's grasp. Maybe that's not surprising to anyone; maybe it is something to keep in mind when considering affirmative action at colleges across the country.

Monday, June 12, 2006

Say Hello Again After 2010

The estate tax, previously discussed in this blog here, made headlines again last week. As many of you are aware, estate tax opponents (most notably President Bush and many leading Republicans) sought permanent repeal of the tax (which declines until fully repealed in 2010 but returns in full in 2011). The opponents failed after the bill to repeal the tax passed in the House but failed in the Senate.

As previously discussed, the tax was put forward by opponents as costly to many Americans and to our economy. This is a questionable position at best, and costs in reduced tax collection was estimated at $700 billion to $1 trillion every decade once the effects are fully felt (this comes from a study by the Joint Committee on Taxation).

A lot of people have always found this heated debate amusing. There's something sadly humorous about Republican presidents pointing to American farmers as the victims of the estate tax--then when the bluff is called they cannot point to a single farm that was lost to the tax. There's something oddly funny about a debate where nearly all Americans seem to have picked a side, yet 99 percent will never see its effect. We're talking now of a tax that doesn't even touch the estates of married households until they top $4 million at death. (I particularly like the way a Seattle paper puts this all in perspective. Discussing the tax in the state of Washington, the article estimates that the tax is literally felt by a mere 210 families. The amount lost in tax from those 210 families is enough to fund education for every other family in Washington state.) There's something funny about a debate bankrolled on one side by some of the wealthiest Americans (real estate moguls, retail giants, etc.) and bankrolled on the other side by even richer Americans (Bill Gates Sr. and others).

And I can't help but find it amusing that in some ways estate tax opponents have been equally met with so success and failure. Just look at an article today out of Arizona where a Scottsdale man discusses how his 92 year old father, after a lifetime of hard work as a house painter, just barely missed the estate tax cut-off. (Here, we see that Roger Dellinger, like many average Americans, is sucked into the propaganda--for I doubt that his father died anywhere near the top 1 percent of our nations wealthiest individuals.) And then the opponents have equally met failure, as it looks now like we will say hello again to the "death tax" in 2011.

Finally, the Democrats must be complimented on a rarely skilled naming effort when the countered the "death tax" with the "Paris Hilton tax." Apparently America's farmers don't have much sympathy for Paris Hilton--even after a couple seasons of The Simple Life.

Wednesday, June 07, 2006

Myths and Realities (IV)

All in all--and contrary to the conventional stereotype--the overwhelming consensus among [welfare] recipients was that working in the labor force constitutes an important and essential part of being an adult....

--Mark R. Rank, Living on the Edge: The Realities of Welfare in America.

As Mark Rank points out, a major stereotype towards welfare recipients is that they would rather not work. In other words, that recipients have no incentive to work if they recieve welfare benefits. I find this logic appealing because it makes sense. If I didn't have to work I probably wouldn't. And yet the empirical and anecdotal evidence indicates the opposite for welfare recipients. Let's look deeper.

One reason the stereotype is popular goes to a related stereotype of recipients: that they are lazy. (I discussed that in a previous post here.) With this stereotype, we're left with the image of welfare recipients as good old American couch potatoes, getting up only to pull the welfare checks out of the mailbox. That stereotype then interlinks with another: that recipients are dishonest. Here, the view goes, recipients are more likely to go out and sell food stamps for money (this is illegal) or forge AFDC documents than they are to get a job.

Yet the evidence mentioned above indicates that most welfare recipients want to work. Does that mean the stereotypes are wrong--that welfare recipients are not lazy or dishonest? Not necessarily. I hope that at least gives mild pause to those of you who think I type with my left hand.

The old stick or carrot debate understands that a person might take a step in a certain direction because he is pushed or because he is pulled. Welfare recipients may not be drawn to work so much as they are pushed from welfare. At the very least, the possibility must be considered. Indeed, I've repeatedly discussed how miserable an experience welfare appears to be. Rank talks about this in Living on the Edge, as does David Shipler in The Working Poor, Loretta Schwartz-Nobel in Growing Up Empty, and, to a lesser extent, William Julius Wison in The Truly Disadvantaged. However, to say welfare recipients only work because welfare is a pain in the butt is like saying I don't kill because jail would be pretty miserable.

Another alternative is that people work because they are greedy. Such a theory is seen in some of the interviews in books mentioned above. In other words welfare is fine for those who don't mind never eating out and buying clothes only when absolutely necessary. Authors like Juliet B. Schor in The Overspent American argue that out culture applies ever-increasing pressure to spend. Even with credit cards and bankruptcy, you eventually have to make money to spend money, and such pressures may explain the appeal of working.

And on the other hand welfare certainly pushes some away. Mark Rank discusses at length the stigma and lack of privacy associated with welfare programs. Guilt, peer pressure, and a decreased sense of worth pressure many to leave welfare as quickly as possible. And some programs require so many disclosures so frequently, that people feel they have no privacy from the state. And those who don't care about the privacy may nonetheless find the constant disclosures and documentation requirements demeaning.

So why are so many people on welfare? Easy question to write; tough question to answer. Sometimes there are not enough jobs. Sometimes people in need of work are not qualified for the jobs available. If a factory closes, 100 nearby available jobs may still leave a person unemployed if he cannot successfully be retrained.

Sometimes employment is not the issue--but rather compensation. Low wages can leave a person in need of supplemental income. The popular book Nickel and Dimed indicates just how hard it is to survive on minimum wage jobs--or anything low wage at all. Barabra Ehrenreich's findings are only supported by David Shipler in The Working Poor, and many other authors. The same is true for jobs with inconsistent compensation. (Illegal immigrant) strawberry pickers in Eric Schlosser's Reefer Madness are not the only manual laborers to find themselves in seasonal work. Welfare benefits are needed to fill the gaps when you don't make enough all the time or don't make enough some of the time.

And then there are all the other potential explanations. I will not go into them here but suggest possibilities like injury and disability. If I fall and find myself on crutches tomorrow, I can still work. I have a desk job and I can have pretty much any injury not associated with my brain and still keep my job (and my paycheck). But Ehrenreich's jobs in Nickel and Dimed, for instance, are far different (and yet ever so common). She couldn't work as a waitress with a broken leg, or clean rooms at the hotel if she was stuck to a bed for two weeks. The differences between white and blue collar jobs are many, but often the many small differences matter a great deal when it comes down to how much you take home each week.

For these, and many other reasons to be discussed later, welfare is necessary for many on a temporary or permanent basis.

Thursday, June 01, 2006

A Rare Plug

I've never plugged a charity or organization on this blog and have no plans to do so in the future, but here goes a rare plug for Second Harvest. I've believed strongly in Second Harvest since I was a teenager and I believe in it even stronger now. I recently made another periodic donation and I hope to donate one week's pre-tax salary to the organization each year in the future.

Second Harvest has an intersting history and I can forward on some suggested reading to anyone intrigued, but today it stands strong as the #1 organization working against hunger. (And we're not talking policy here--their work fits on the tines of a fork).

Beyond being massive, the organization is extremely efficient. This has always been an area of pride to Second Harvest and no less so today. Charity Navigator rates Second Harvest's efficiency as nearly perfect (39.81 on a scale of 40). The CEO does earn over $335,000 a year, and that disturbs me slightly, but it is not out of line from other super-efficient charities.

And while Second Harvest seeks to help every American in need of food assistance, a special emphasis is made to help children through schools and elsewhere. In researching for this blog over the past few months, I have read about many gaps in assistance programs. One example points to school lunches (and breakfast programs) that work great on school days. But problems occur on weekends and over breaks. Second Harvest addresses that problem with its Backpack Program. Such attention to detail is what we need regardless of the scope a policy or organization seeks to address--because every tiny gap matters to millions of people.

Yet another important aspect of Second Harvest is its focus not only on quantity (though quantity matters) but also quality. As cheap as I find produce at my local grocery store, Americans in every book and article I've read on hunger complain about the cost of fresh fruits and vegetables. Second Harvest's Fresh Food Initiative address that problem by trying to get produce into the hands of the hungry. As the website indicates, they were able to put 311 millions pounds of produce into those hands in 2005 alone.

Check it and please keep it in mind. Second Harvest helps where help is needed day in and day out. They are able to leverage every dollar donated to help put food in a hungry American's stomach.

There's the plug. Thanks for listening.
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