Constitutional scholar and activist Lawrence Lessig, whose march through New Hampshire to get money out of politics is featured on our broadcast this week, often says that his crusade is the most urgent in America because it impacts virtually every…
Tag Archives: poverty
At a pancake house in Houston, Claudia spent two hours rolling silverware into napkins on a slow weekend night. Without any tables to serve, she wasn’t tipped to supplement her $2.13 hourly wage. Like many other restaurant employers, Claudia’s boss did not make up for her shortfall in tips despite the legal obligation to do so.
Claudia’s story, reported in the book Behind the Kitchen Door by Saru Jayaraman, speaks for millions who struggle to make ends meet on a tipped minimum wage of $2.13.
Despite record profits reaching upwards of $660 billion in 2013 and projected to go higher in 2014, the restaurant industry has fiercely opposed raising the wage. Though the tipped base wage used to rise along with the minimum wage, it has been frozen in place at $2.13 since 1991.
The decoupling of the tipped wage from raises in the minimum wage did not happen by accident. A powerful and organized lobby in Washington — the National Restaurant Association — has worked diligently to ensure that servers like Claudia continue receiving $2.13.
Known as “the other NRA,” this restaurant lobby successfully pressured lawmakers in 1996 to separate President Bill Clinton’s minimum wage increase from the tipped minimum wage, keeping it at $2.13. At the time, no one predicted that $2.13 figure would become permanent.
That most Americans still never question the $2.13 wage is testament to the NRA’s influence.
The consequences of this stagnation have been dire for restaurant workers. Tipped workers are nearly three times as likely to fall into poverty and twice as likely to be on food stamps as the general population. Women are disproportionately affected since more than 70 percent of restaurant servers are female.
Stagnating wages for tipped workers is also part of a bigger story of rising inequality in America. Even when restaurant industry profits and CEO pay have skyrocketed, restaurant workers haven’t shared this growing wealth. The NRA’s influence as a corporate lobby signals how the wealthy have organized to an unprecedented degree to promote their interests. Meanwhile, workers’ influence has waned with the decline of organized labor.
But change is on the way. Since 2008, thousands of restaurant workers have joinedRestaurant Opportunities Center United (ROC), which fights to improve wages and conditions for the nation’s restaurant workforce. Since its founding, ROC has brought more than 10,000 restaurant workers on board and expanded to 26 states.
The NRA is paying attention. The industry group has joined forces with Richard Berman, a lobbyist notorious for his take-no-prisoners approach, to help the restaurant industry discredit ROC. Known for pioneering corporate smear tactics to attack public-interest causes, Berman has launched a website to vilify ROC and its work.
Once Claudia was able to do so, she quit her job at the Houston pancake house and became an organizer for a local ROC chapter. Across the country, these chapters are fighting for passage of the Miller-Harkin Fair Minimum Wage Act, which would raise the federal minimum wage to $10.10 and boost the tipped minimum wage to 70 percent of the federal minimum.
ROC is organizing a National Day of Action on February 13 to raise awareness of the $2.13 tipped minimum wage. All Americans should unite behind the nation’s restaurant workers on this day.
Even if you can’t take part in a rally near you, tell your representatives in Congress to support raising the minimum wage, including for tipped workers.
Marjorie Elizabeth Wood is an economic policy associate at the Institute for Policy Studies and the Managing Editor of Inequality.org. IPS-dc.org (otherwords)
Budget Cuts and Rent-Free Charter Schools: The Ugly Education Legacy of Ex-NYC Mayor Michael Bloomberg
On December 16, 2013, two letters were sent to Mayor-elect Bill de Blasio. One was a letter signed by 140 principals from across the city. The other, a letter signed by 19 of the 32 Community Education Councils in addition to the Citywide Council on English Language Learners, the Citywide Council on Special Education, the Citywide District 75 Council, and individuals from the Citywide Council on High Schools and Community Education Council 23.
The common thread to these letters was clear, the NYC school system needs to purge itself of the toxic "reforms" instituted by former Mayor Michael Bloomberg.
the Board of Education
and community school boards:
In 1969, then mayor John Lindsay relinquished control of NYC schools after a series of protests and demands from the public for community control of community schools. This led to the creation of 32 elected community school boards and a central Board of Education(BOE) made up of 7 members appointed by the mayor and borough presidents.
In 2002, Mayor Bloomberg took control of NYC schools and abolished the BOE and the community school boards, essentially shutting down parental democratic access to their children's education.
The BOE was replaced by the Panel for Educational Policy(PEP). The PEP consists of 13 appointed members, 8 appointed by the mayor and one each appointed by the borough presidents. Community boards were replaced with Community Education Councils(CECs).
Not only do the CECs have very little power when it comes to affecting change in community schools, they are poorly advertised and sparsely attended. These changes have left parents feeling locked out and voiceless in their children's schools.
Changes in funding:
The introduction of "Fair Student Funding"(pdf) had 3 main goals; to increase equity in funding schools while preserving stability, to improve student achievement, and to make school budgets more transparent.
The Independent Budget Office(IBO) has found that the funding formula actually underfunds 94% of schools and is not easily understood or transparent, according to a report released April 10 of this year.
Increase in the
number of charter schools:
Ex-NYC Mayor Michael Bloomberg has been a champion of for-profit charter schools. Under his management, 175 charter schools have opened in NYC since 2002.
These schools are often opened in place of larger community schools that have been closed by the Mayor-controlled PEP. Or, they force their way in to already existing school buildings rent-free, using space and resources that were originally meant for public schools.
While the majority of public schools are seeing their budgets cut, spending for charter schools is expected to exceed $1billion in the next school year.
"[C]urrently, the 53 richest New Yorkers
have a net worth larger
than the entire city budget
--three times over"
Over the past two decades, New York has undergone significant changes within its socioeconomic structure. Much of this centered around the policies and changes of the three term administration of Michael Bloomberg as Mayor of New York. As of 2014, it is apparent that most of Bloomberg's policies have resulted in a consistently growing gap between the rich and the poor.
Poverty in the City:
Between 2011-2012 the poverty rate increased by 5% in New York. As of now one out of every five New Yorkers live in poverty (below the federal poverty rate of $19,090 for a family of three) which adds up to 1.7 million people. By contrast the total net worth of the 53 wealthiest billionaires in New York rose to $277 billion.
The municipal budget for the city currently stands at nearly $70 billion. The multi-billion budget includes parks, police, firefighters, health, social services, and other service the city provides. That means, currently, the 53 richest New Yorkers have a net worth larger than the entire city budget--three times over.
The GINI index (Gini Coefficient), which measures development and equality is at .538 for New York (Manhattan itself is at .596) and is higher than El Salvador and Mexico. This puts the city as the most disparate in terms of distribution of wealth.
To add insult to injury, half a million children within the five boroughs live in a household that can’t afford to provide a solid supply of food. The Bronx leads the city in child poverty, at a staggering 44.5 percent which shows no sign of improvement. Between these numbers, the high cost of living in New York City and the decrease of the local middle class, the city’s challenges arising directly from increased poverty only escalated during the Bloomberg administration as the years progressed. According to the city's own numbers in April 2013, as Bloomberg increased his wealth seven times over while in office, 46 percent of New Yorkers were poor or nearly poor.
Lack of Affordable Housing:
Contrary to Mr. Bloomberg’s comments about affordable housing in his weekly radio program back in October: “Somebody said that there’s not enough housing. That’s a good sign” to which he continued “It doesn’t mean it isn’t a problem, but there are no vacancies. That will bring investment, for people to build for all income levels, different kind of housing”.
What Bloobmerg didn't address is that although the rezoning of the city did spur a type of housing boom, it’s a prohibitively expensive housing boom, one not geared towards the needs of the city’s non-tycoon population.
The steel and glass condos that dominate the waterside of Brooklyn and Manhattan are a sign of two things: a growing city, which is good, and a preference for the rich, one of the distinct traits of the Bloomberg Era.
Currently, there are 50,000 people in homeless shelters, according to city officials and homeless advocates. More than one out of every four families who currently reside in the shelter system contain at least one working adult.
Homeless New Yorkers who are employed are a sign that the gap between the cost of living and wages is widening to the point where people cannot afford basic housing. Within that group of 50,000 people who depend on the shelter system, 21,600 are children. The government cost for a family in a homeless shelter is around $3,000 a month. Besides wages being inadequate for the high cost of living in New York City, the lack of affordable housing is also clearly a factor. This shortage of affordable housing, rarely spoken about ten year ago, is now the largest issue facing New York City. People are being priced out of New York housing, one by one in some cases.
Rising Costs (and Stagnant Wages):
Wages in New York (much like the rest of the country) haven’t kept up with the soaring rise of the standard of living in the city. Food for thought: the median income for New York is $50,895, down from its high of $54,695 in 2008.
The poverty rate can be erratic and vary widely, reflecting economic push-factors that often force many working families out of the city or into one of its poorer communities, shifting the poverty rate within the city without always affecting the overall average (although, as noted earlier, it did rise 5% overall between 2011 and 2012).
Broken down further, income inequality in the city still reflects the country’s intense history of racial inequality, as poverty rates continue to remain higher among blacks and Latinos in New York City. The city’s youth have fared just as badly, with government reports showing that out of all New Yorkers younger than 17 years old, 31% are living in poverty. In total, almost half of the city's residents, 46 percent, are living in poverty or near-poverty.
With the Bloomberg administration consistently and continuously prioritizing Wall Street profits over the needs of the city’s most economically vulnerable populations, 21% of people in New York City are now currently receiving food stamps and 32% of single mother households live in poverty.
These numbers only get more alarming when you further sift through the hard data.
Within the poorest fifth of New Yorkers, the mean income is at $8,993. The top 5% of earners average $436,931.
Out of all boroughs, the inequality in Manhattan is probably at its most dramatic: the lowest income in the borough was $9,635 while the top 5% clock in at $799,969.
With the large residential towers being off limits to the majority of the populace, it makes many working and middle-class New Yorkers wonder what will happen to the city if it’s all just $95 million dollar penthouses and 1 million dollar studios? (not an exaggeration: 432 Park Avenue’s actual real estate numbers, according to a recent report in USA Today).
Some of these these very same overpriced investment units, however, won’t even be occupied full time; with much of the high-priced housing serving as weeks’ long vacation spots for the rich, a homebase in the billionaire playground. Rick Hampson of USA Today said it perfectly in the article cited in the previous paragraph:
“These towers are shaped by their clientele: a transnational nouveau riche looking for a second (or third or fourth) home.
Having made fortunes in nations less regulated economically and less stable politically than the USA, these buyers want a safe investment as much as, or more than, shelter. And they don’t want to pay New York resident income taxes.”
As manufacturing and union-secured jobs have either left the city or been gutted by its profit-addicted 1%. the average wages of working and middle-class New Yorkers have not only stagnated over the past few decades, but they have done so in a time of intense price-increases throughout the city.
Furthermore, the lack of “good jobs” (meaning jobs that pay at or above a living wage), has meant more New Yorkers than ever are making do with minimum wage jobs. Minimum wage itself, however, has been the lowest it’s been in generations. When, in 2009, Congress raised the minimum wage to $7.25/hour that new rate provided about 20% less purchasing power than the minimum wage did in 1968.
The bottom line:
What makes New York City attractive to such a wide variety of newcomers is its symbolic status within what’s often portrayed as the American Dream, the intense faith that with hard work anything can be achieved.
New York City is the unofficial entry port, or at least it was, for millions who arrive pursuing the that dream. But today, an accessible, affordable New York is slowly disappearing.
Without this working-class base that endeavors for itself and propels the entire city forward, someday soon even local culture and art will become just as corporate as those glass and steel condos built up during the Bloomberg administration, devoid of any real meaning or any thriving, living connection to the community.
New York City as Billionaire Playground (elitist, detached, overpriced and violent in defense of its own privileges) is one possible future laid out by the destructive legacy of Michael Bloomberg, but it’s not an option that offers much of a future to 99 percent of New York City.
--Randal J. Rivera--
The fast food industry is notorious for handing out lean paychecks to their burger flippers and fat ones to their CEOs. What’s less well-known is that taxpayers are actually subsidizing fast food incomes at both the bottom — and top — of the industry.
Take, for example, Yum Brands, which operates the Taco Bell, KFC, and Pizza Hut chains. Wages for the corporation’s nearly 380,000 U.S. workers are so low that many of them have to turn to taxpayer-funded anti-poverty programs just to get by. The National Employment Law Project estimates that Yum Brands’ workers draw nearly $650 million in Medicaid and other public assistance annually.
Meanwhile, at the top end of the company’s pay ladder, CEO David Novak pocketed $94 million over the years 2011 and 2012 in stock options gains, bonuses and other so-called “performance pay.” That was a nice windfall for him, but a big burden for the rest of us taxpayers.
Under the current tax code, corporations can deduct unlimited amounts of such “performance pay” from their federal income taxes. In other words, the more corporations pay their CEO, the lower their tax burden. Novak’s $94 million payout, for example, lowered Yum’s IRS bill by $33 million. Guess who makes up the difference?
My new Institute for Policy Studies reportcalculates the cost to taxpayers of this “performance pay” loophole at all of the top six publicly held fast food chains — McDonald’s, Yum, Wendy’s, Burger King, Domino’s, and Dunkin’ Brands.
Combined, these firms’ CEOs pocketed more than $183 million in fully deductible “performance pay” in 2011 and 2012 , lowering their companies’ IRS bills by an estimated $64 million. To put that figure in perspective, it would be enough to cover the average cost of food stamps for 40,000 American families for a year.
After Yum, McDonald’s received the second-largest government handout for their executive pay. James Skinner, as CEO in 2011 and the first half of 2012, pocketed $31 million in exercised stock options and other fully deductible “performance pay.” Incoming CEO Donald Thompson took in $10 million in performance pay in his first six months on the job. Skinner and Thompson’s combined performance pay translates into a $14 million taxpayer subsidy for McDonald’s.
What makes all this even more galling is that these fast food giants are pocketing massive taxpayer subsidies for their CEO pay while fighting to keep their workers’ wages at rock bottom . All of the big fast food corporations are members of the National Restaurant Association, which is aggressively working to block a raise in the federal minimum wage to a level that would let millions of fast food workers make ends meet without public support.
There’s an easy solution to the perverse “performance pay” loophole. A bill introduced by Senators Jack Reed (D-RI) and Richard Blumenthal (D-CT) would simply set a firm $1 million cap for executive pay deductions — with no exceptions. Corporations could still pay their CEOs whatever they choose, but at least taxpayers wouldn’t be subsidizing anything above $1 million. The Joint Committee on Taxation estimates this legislation would generate more than $50 billion over 10 years.
It makes no sense for employees of highly profitable giant corporations to have to rely on government assistance for basic needs. It makes even less sense for ordinary taxpayers to subsidize the CEOs who are benefiting most from the fast food industry’s low-road business model.
With Congress again mulling deficit-reduction strategies, it’s high time that Washington stopped letting fast food giants gorge on both of these absurd subsidies.