In his address, President Obama said:
“Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead. And too many still aren’t working at all. Our job is to reverse these trends. It won’t happen right away, and we won’t agree on everything. But what I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity into the middle class.”
Those proposals included most notably an increase in the minimum wage. “Americans understand that some people will earn more than others,” he said. “And we don’t resent those who, by virtue of their efforts, achieve incredible success. But Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty.”
The President also called for expanded pre-K and broadband access, among other proposals.
You can read a full transcript of the speech here, watch video of it here and listen to Mara Liasson’s report on NPR’s Morning Edition here:
In the official Republican response Congresswoman Cathy McMorris Rodgers of Washington addressed the issue directly.
“The President talks a lot about income inequality,” she said. “But the real gap we face today is one of opportunity inequality. And with this Administration’s policies, that gap has become far too wide.”
McMorris described families who can’t find full-time work, can’t afford college educations, and who are out-living their life savings.
“Last month, more Americans stopped looking for a job than found one. Too many people are falling further and further behind because, right now, the President’s policies are making people’s lives harder.”
She described, in general terms, Republican plans to grow jobs, improve education, and reform immigration. You can watch her response here.
In his response for the Tea Party, Sen. Mike Lee of Utah tackled inequality – and the President’s position on the issue – more directly.
“We are facing an inequality crisis – one to which the President has paid lip-service, but seems uninterested in truly confronting or correcting,” said Lee. He said the inequality crisis present itself in three forms:
“Immobility among the poor, who are being trapped in poverty by big-government programs; insecurity in the middle class, where families are struggling just to get by and can’t seem to get ahead; and cronyist privilege at the top, where political and economic insiders twist the immense power of the federal government to profit at the expense of everyone else.”
He went on to say the Obama administration “continues to leave poor and middle-class families further behind, while he and his allies insist that the real problem is ‘inequality’ itself.” Lee criticized Obama on a range of issues he said leads to inequality, and specifically targeted the Affordable Care Act (Obamacare), calling it an “inequality Godzilla that has robbed working families of their insurance, their doctors, their wages and their jobs.”
Watch Sen. Lee’s full Tea Party response to the State of the Union here.
What do you think of the fact that inequality has become the focus of national leaders on both sides of the political spectrum? Is the issue more about income or opportunity? Did anything President Obama, Rep. McMorris or Sen. Lee resonate as a potential solution to the problem? Or is inequality actually a problem in the U.S.? Let us know what you think!
Harford points out the definition of the poverty line is based on the cost of food needs over 50 years ago. While the calculation today reflects an increase in the price of food, it doesn’t include other common expenses today, like a cell phone and other bills.
“This goes back to Adam Smith writing in the late 18th century. Smith said that a man would be ashamed to appear in public without a linen shirt. And then he pointed out that the Greeks and the Romans — even the emperors — didn’t have linen shirts. His point is that poverty is partly about not having enough money to buy what society expects you to have. If you don’t have enough money to meet those social expectations, people will think of you as poor and you will think of yourself as poor. That’s not to say that poverty is totally relative, but it is saying it’s subjective — it’s a social condition. And he’s got to be right in some fundamental way about that.
“It’s about more than survival. It’s also about: Can you participate in social conversations. Are you ashamed to be seen in public or not? There is some controversy about whether that sort of thing should count for the poverty line or not.”
Harford said considering income inequality is “very contested, because there are just so many ways to think about it.”
“Are you comparing the very richest to the very poorest? Are you looking at the assets that people have? Are you just looking at their income? What we can be reasonably confident of saying is that inequality has been rising.”
So why should we care?
“Whether inequality really damages a country as a whole is less clear. I think the main argument that it’s a problem is that it starts to corrode your political system. You get fewer and fewer people with more and more money who are able to have a disproportionate influence on political priorities through their campaigning, their lobbying, their political donations. And if that happens then you’re moving further and further away from the ideals of a democracy.”
You can hear the full interview with Tim Harford here.
The report says most of the region’s food insecurity is still in the cities, but increasingly, families in suburban areas are having difficulty getting meals. Nancy von Euler of the Foundation says those families often don’t know about the resources available to them, like food banks and federal assistance. According to the report, 38% of Fairfield County families who are eligible to get federal food assistance don’t get the help. von Euler says part of the problem is that Fairfield County has among the highest costs of living in the country.
“So we have one of the highest food costs, per-meal cost of anywhere in the nation. Our housing costs are very high, our transportation costs are very high, our healthcare costs are very high,” says von Eueler. “And all of those things compound to put people at risk of not being able to have enough money to meet their food needs.”
The report says nearly 35,000 children in Fairfield County live in food insecure households, yet the state is last in the country for participation in the federal school breakfast program.
Governor Fallin said 50 years ago, 80 percent of middle class jobs in the country required just a high school degree or less. “Today that number is 35 percent of our jobs require a high school degree or less, and two thirds of those jobs will pay less than $25,000 a year,” said Fallon.
Malloy said there’s no reason to believe Connecticut is not leading the country in the decline in the number of jobs available to people without a higher education degree. “And then, in some of our urban areas, we have a larger than we should find acceptable numbers of students that don’t even get the high school degree, at least in the standard 13 years,” said Malloy. “So this is a big questions for all of us.”
Malloy discussed efforts to address the state’s disparity in greater detail. Listen to his comments here:
Malloy said when cities like Bridgeport are graduating only about 65 percent of their students, “that is not a roadmap to recovery” or closing the economic gap. He said Connecticut’s educational reform package is designed to reduce the achievement gap between wealthy and the poor students. And the new Board of Regents for Higher Education, which brings together community colleges, state universities and an online college, is intended to help the state create a system that prepares more young people to be ready for the workforce.
A new study by Emmanuel Saez at U.C. Berkeley says that the economic recovery has been far more generous to the wealthiest Americans than to the rest of the country. From 2009-2012, according to the study, incomes of the top 1% of Americans grew by 31.4% while the incomes of the other 99% grew just 0.4%. This chart from study shows what percentage of the total income share was held by the top 10% (decile) from 1917-2012.
As you can see, there was a serious drop-off around the time of World War II, and the levels stayed fairly constant between 30-35% until the late 1970s. They’ve now climbed back up to an all-time high.
Stephanie Coontz of the Council on Contemporary Families said on the show that this is a long-term change.
“I think it’s a mistake to just think of it in terms of the recession,” she said. “It’s actually a 30 year process that has turned around all of the trends we had after the Great Depression and the move toward greater equality, and greater sense of community among the rich as well as the poor. I think the social implications of this are profound at all levels of society.”
Wall Street Journal columnist Dante Chinni, who directs the American Communities Project at American University discussed the causes of the growing disparity.
“You have the decline of good paying jobs, of manufacturing jobs,” he said. “And they were hard jobs, but they paid well. And they’ve disappeared. And that’s made life very hard. Also, automation. There are just fewer jobs available for people who don’t have a lot of education, and a lot of good skills training.”
The show’s other guest Columbia University journalism professor Thomas Edsall recently wrote a blog post for the New York Times on whether the government can actually do anything about inequality. On a somewhat related note, economist Steven Lanza looked at the issue of what difference government policies can make on the economy in Connecticut. His answer: not much. A WSHU story on his paper is here.
Also today, NPR Morning Edition’s Steve Inskeep spoke with Tyler Cowan, author of the book “Average Is Over: Powering America Beyond the Age of the Great Stagnation.” Cowan predicts the future means more people rising up to much greater wealth, as well as more clustering in a kind of “lower-middle class existence.”
“It will be a very strange world, I think,” he said. “We will be returning to historical levels of inequality. We’ll view post-war America as a kind of strange interlude not to be repeated. It won’t be the dreams that we all had that virtually all incomes go up in lockstep at three percent a year. It hurts to give that up. It will mean some very real increases in economic fragility for a lot of people.”
You can listen to Cowan’s conversation with Inskeep here.
What do you think? Let us know in the comments, email email@example.com or tweet us at @CTdisparity.
Test scores released earlier this week by the Connecticut Department of Education highlighted, once again, a persistent gap between the performance of the state’s wealthiest students and the poorest ones. Now, the state has released information on a measurement that shows that achievement gap in even more stark terms – the percentage of students who graduate from high school in four years.
Listen to Craig LeMoult’s story about four-year graduation rates here:
The impact of income on graduation rates is evident in this map detailing the newly data, created for WSHU by the Connecticut State Data Center at the University of Connecticut. Click on the dots to see the graduation rate of individual high schools, and on the map to see the median family income of different census tracts they’re in. To see a full-screen version of the map, click here.
As you can see, the high schools with the lowest four-year graduation rates are clustered in the towns with the lowest median family income.
In Connecticut during the 2012 academic year, the four year graduation rate for kids whose parents made too much money to qualify for help paying for lunch was 93 percent. For kids who got a reduced priced lunch, that graduation rate slipped to about 83 percent. And of the kids who were poor enough to be eligible for a free lunch, just around 66 percent of them graduated from high school in four years.
Robert Balfanz, the director of the Everyone Graduates Center at Johns Hopkins University, says if a student doesn’t graduate in four years, they’re likely to not graduate at all. He says although Connecticut is one of the wealthiest states, it under-performs its affluence.
“Its graduation rate is higher than the national average, but it’s not among the top,” says Balfanz. And I think that’s largely because the state overall is wealthy, but the wealth has significant unevenness in its distribution.”
Connecticut’s Commissioner of Education, Stefan Pryor, says the state is making an investment in the kinds of services he thinks will reduce the gap. “Just this year alone, in the new biennial budget the increase for Alliance Districts, the 30 lowest performing, highest poverty districts was increased by about 50 million dollars,” says Prior. “Another increase is budgeted for next year. On top of that, there are investments in family resource centers, school based health clinics, the Commissioner’s Network of individual low performing high poverty schools, and it goes from there.”
Pryor says he’s optimistic, because even though the new data show poverty continues to be correlated with lower graduation rates, there are also signs of improvement. For kids getting free lunches, the graduation rate is nearly six percent higher than last year. And for those getting reduced price lunch, it’s seven percent higher.
A report out this week by researchers at Harvard and U.C. Berkeley found the chance that someone born into the bottom fifth of the economic ladder in Connecticut could rise to the top fifth is about 8%. For some young low-income people, even the bottom rung of that economic ladder feels out of reach. One program in New Haven is working to help them start that climb.
Listen to Craig LeMoult’s story here:
The New Haven Family Alliance runs a program called Project Success to help young people who don’t see a path for themselves to jobs in the regular economy. Economists say even with a regular job, climbing out of poverty is a challenge.
A report out this week by researchers at Harvard and U.C. Berkeley examines the ability of people to move up the economic ladder in metro areas around the country. They found striking differences in upward mobility based on where in the country people live. This map from the study illustrates the regional differences. The red spots are where it’s hardest to move up, and the lighter areas are where that kind of mobility is easier.
There’s a New York Times interactive map and article on the study here.
Interestingly, although Connecticut has one of the greatest economic disparities in the country, as you can see on that map, it’s not one of the hardest places to move up the economic ladder. The study found that in the Bridgeport area (the one area of Connecticut included in the study) the chance that someone in the bottom fifth of the economic ladder could rise to the top fifth is about eight percent. Compare that to Atlanta, which is just four percent. The study says Bridgeport kids who grow up in the first percentile in income, just $2,000 a year, will end up, on average, in the 35th percentile.
Coming up shortly on WSHU’s State of Disparity, we’ll take a look at efforts to help young people who are having trouble even reaching the bottom rung of the economic ladder.
In a commentary on the New York Times’ fascinating online series on inequality, “The Great Divide,” Stanford professor Sean Reardon argues that much of the educational achievement gap in the U.S. comes not simply from a difference between the quality of rich and poor schools. He says the biggest difference is how much rich families are spending on the academic development of their kids.
Reardon says test scores for the poorest students aren’t dropping. Test scores for the richest students have risen dramatically. “Before 1980,” he writes, “affluent students had little advantage over middle-class students in academic performance; most of the socioeconomic disparity in academics was between the middle class and the poor. But the rich now outperform the middle class by as much as the middle class outperform the poor.”
He says it boils down to this: “The academic gap is widening because rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students. This difference in preparation persists through elementary and high school.”
And he says it’s not just that the rich have more money than they used to. It’s how they use it:
“High-income families are increasingly focusing their resources — their money, time and knowledge of what it takes to be successful in school — on their children’s cognitive development and educational success. They are doing this because educational success is much more important than it used to be, even for the rich.”
In several earlier stories, we’ve focused on arguments educators are making on what schools can do to close the achievement gap, like this story on early childhood literacy, this one on Brookside Elementary School in Norwalk and this one on half-day kindergarten. Reardon argues here that “improving the quality of our parenting and of four children’s earliest environments may be even more important.” And he points to programs and policies like maternity and paternity leave that he says could lead to that goal.
Read Reardon’s full story here.
Connecticut’s legislative appropriations subcommittee approved two bills Tuesday related to economic disparity issues – one that would raise the minimum wage, and another that takes steps toward creating a state retirement plan for low income workers.
Hear about both bills here:
The first bill would raise the minimum wage from $8.25 to $9 an hour over the next year and possibly to $9.75 the following year. Democratic State Representative Beth Bye of West Hartford says in the past she voted against raising the minimum wage. But now she says workers need it more than ever:
“What we’re seeing is this widening income disparity, in our state and in our country,” said Bye. “For people who are working full time I think we need to offer this as a way to help them to buy food and afford housing”
State Representative Mitch Bolinsky, a Newtown Republican, says the bill would prevent companies from hiring new employees, particularly teenagers. “The unemployment rate for that class of individual is three times higher than the state rate I see this as a job killing bill and a reason to have more kids on the street with nothing to do this summer,” said Bolinsky.
The bill is different from what Governor Dannel Malloy has proposed, which is to raise the minimum wage by 75 cents over the next two years. The committee bill still needs to be taken up by the House and Senate.
Also, the Appropriations Committee approved a bill that would require an initial feasibility study of a state administered retirement plan for low income workers. It made it through the committee on a mainly party line vote on Tuesday. Representative Jason Perillo of Shelton was one of a number of Republican members of the committee who voted against the bill. Perillo says there are plenty of private firms available to administer retirement plans for low income workers. The bill requires the Connecticut Retirement Security Trust Fund Board to set-up a low income workers fund, if the market feasibility study finds that such a fund would be self-sustaining. The bill heads to the Senate for further action.