Strategies for Helping People Make a Living

August 26, 2015 NCAP Annual Conference-San Francisco

Jim Masters: CCAP, NCRT. jmasters@cencomfut.com Allen Stansbury, Senior Associate. Allen@Stansbury.net

Center for Community Futures

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Strategies for Helping People Make a LivingTo expand opportunity and enhance economic security, we must change the rules under which the economy operates. This workshop will present findings from the White paper about how to bring this about.1. Strategies proposed by think tanks and national advocacy

organizations to expand opportunity (demand side)2. Strategies for Human Development (supply side)3. Alternatives to “Making it" in the Mainstream Economy

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Strategies proposed by think tanks and national advocacy organizations to expand opportunity

• Expand Number of Jobs• Increase the Amount of Money that Workers Earn• Expand Access to Education and Expand Work Supports• Expand Household Income from Other Sources• Support Banking and Corporate Financial Reforms• Alternative Economics• What kind of economy are we trying to create?

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Piketty, Reich, Stiglitz, Bernstein and others

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Thomas Piketty’s “solution” to inequality• Describes evolution of inequality since the beginning of the industrial

revolution to present• As a general rule wealth grows faster than economic output, captured in the

expression r>g, rate of return to capital (r), growth rate of world output (g) • No natural forces pushing against the steady concentration of wealth. • Only rapid growth (from technological progress or rising population) or

government intervention can be counted on to keep economies from returning to the “patrimonial capitalism” such as a global wealth tax:– Inherited wealth– Top incomes– Capital gains

http://www.economist.com/node/21601642/print

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Stiglitz: Consequences-Instability

“We are paying a high price for our inequality — an economic system that is less stable and less efficient, with less growth,” • According to Stiglitz studies have shown conclusively that

inequality leads to political instability that may hamper countries’ effectiveness in responding to external shocks.

• In turn the result can be both economic shocks leading towards political instability

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Robert Reich – Income Distribution 1928 vs 2007

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Jared Bernstein

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Factors most commonly cited as driving poverty in America:• Education, • Family structure, Race and

more • Number-one factor by far is

the growth in inequality, which added 7% to the poverty rate since the late 1970s.

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Expand Number of Jobs• Energy Conservation – Weatherization, etc• The Sharing Economy• National and Regional Capital Investment – maintaining and

improving our infrastructure: roads, environment, utilities • Advocate for Tax Reform• Cap and Trade• Microbusinesses and self-employment• Social Enterprises• Expand Labor Unions

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“Half in Ten” Campaign Success Stories:• Child Care• Food and Nutrition • Education• Health • Housing• Income Assistance• Jobs training• Low-income tax credits• WIC• Unemployment Insurance• Minimum wage

Call to Action July 21, 2014 Re: New House Child Tax Credit Bill Leaves Behind Millions of Low-Income Working Families• While it permanently extends the Child Tax Credit

higher up the income scale so more families with six-figure incomes will benefit.

• It fails to make permanent the 2009 reduction in the CTC’s earnings threshold, set to expire at the end of 2017.

• If this provision expires, a single mother with two children who works full time throughout the year at the minimum wage and earns $14,500 would lose her full CTC of $1,725 in 2018.

• It indexes the current maximum credit of $1,000 per child to inflation. This provision would not help most working families with low or moderate incomes, because it benefits only those with incomes high enough to receive the maximum credit.

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Economic Policy Institute (www.EPI.org)

Issues Focus:• Labor Laws – Examples– Extend Unemployment Benefits -

State Cuts to Jobless Benefits – Tipped Workers and Minimum Wage (by the end of 2015

29 states will have increased their minimum wage)• Tax Credits –Examples– The Earned Income Tax Credit – Child Tax Credit

• Immigration reform - Example– Overloaded Immigration Courts

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Other EPI Recommendations

• Enact the Surface Transportation Act, if enacted will increase employment by an average of 117,000 jobs annually over the next three years, or 350,000 jobs total, with larger job gains in later years.

• Renewable energy and energy efficiency improvements (WHEEL and PACE) potential 2.1 million jobs.

• FAST - a direct job creation program to renovate 16,000 schools nationwide

12http://www.epi.org/publication/putting_america_back_to_work_policies_for_job_creation_and_stronger_economi/

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New American FoundationAsset Building Program: issues and papers • Children's Savings Accounts• Solving the Retirement Puzzle• Rebalancing the Scales• The Financial Health Check• Connecting Tax Time to Financial Security

California Civic Innovation Project technology to influence local government • “Public Pathways: A Guide to Online Engagement Tools for Local Governments

Economic Growth Program research papers such as: • The Wizard of Jobs a US labor status report on the first 6 months of 2014 and its continued jobs

slump. • America's Debt Problem discusses the impact on middle and low income classes due to excessive

private debt and its consequences. • Pay More, Get Less that takes a look at the cost of health, medical, education, basic financial

services and communications

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TAX AND BANKING REFORM MEASURES

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Tax Reform - Background• Last overhauled of the federal tax code: 1986• Tax Cuts, i.e. lowering of capital gains to 15% have

benefited the wealthy, however,• Middle and Low Income have been hit by increased

“payroll” taxes• Tax reform is the best way to tackle “income inequality”

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Tax Reform and SimplificationRecommendations for reform and simplification: • One tax reform strategy: raising taxes on high-income earners and corporations to

pay for expanded benefits to low-income Americans• “Broaden the base, lower the rates”Three Strategies to consider: • National Commission on Fiscal Responsibility and Reform Simpson-Bowles 6 Part

Budget Plan• Urban and Brookings Institute Tax Policy Center • US Senate Committee on Finance Tax Reform List• Reform of The

Distribution of Major Tax Expenditures in the Individual Income Tax System

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Support Banking and Corporate Financial Reforms

• Since 2007, 1,400 smaller banks have completely disappeared from the banking industry.

• Our economic system is now more dependent on the 6 “too big to fail” banks than ever - JPMorgan Chase, Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells Fargo

• 5 of these account for approximately 42% of all loans, all 6 account for approximately 67 percent of all assets in our financial system.

• Together have accumulated $278 Trillion Of exposure to derivatives

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Strategies for Bank Reform• Enforce Dodd-Frank - continue writing bank

and corporate financial regulations • Support the

Consumer Finance Protection Bureau – Laying the groundwork for rules to end debt-trap

loans of Pay Day lending– Ended deceptive and predatory mortgages – Ended credit card deceptive and fraudulent add

on products

• Re-enact Glass-Steagall Banking Act of 1933 - prohibits banks using deposits that put the bank or the economy at undue risk (Joint Warren-McCain amendment pending)

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INCREASE THE AMOUNT OF MONEY THAT WORKERS EARN

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Ways to Increase the Amount of Money that Workers Earn

• Increase minimum wage levels at national, state and local level• Enact Fair Pay Legislation – equal pay for male and female workers (NEW)• End “Perma-Temp” positions – temporary positions that are permenant • End misclassification of workers to avoid paying benefits (workman comp,

social security, health insurance) such as:– Hire through 3rd party personnel agencies that are employed as contractors– Classify workers as supervisors to avoid paying overtime ($23,000 limit)– Use only part time and temp. employees 30 hr max to avoid ACA

• Enact paid sick leave, required vacation time legislation • Support the development of Employee Stock Ownership Plans (ESOP)

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Wage Theft and Misclassification in America• Unpaid overtime, • “Off-the clock” work

violations, (clock out, but don’t clock in),

• Outright wage forfeiting (illegals), or

• Through bankruptcy avoid required benefits and wage payment

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Example: Perma - Temp• Temporary workers — and not employees — pick crops, sew

garments, clean hotel rooms, flip burgers and toil in a range of low-wage industries either direct hire or 3rd party contractor

• No sick days, vacation days, health insurance benefits, no pregnancy leave

• Legislation is required to make both the labor contractor and its client company, jointly liable for payment of wages, accurate reporting of hours worked, wages, benefits, tax deductions and insurance coverage for victims of on-the-job injuries (Illinois)

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EXPAND WORK SUPPORTSEXPAND ACCESS TO HIGHER EDUCATION

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Expand Work Supports to Include:

Increase or expand work supports for: • Child care, off-site and on-site• Family leave and pregnancy leave, • On the job training, • Dislocation services and skills training • Employers providing or paying for educational upgrading

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Expanding Work Support Strategies: Streamlining Access, Strengthening Families

• WSS - A five-year 6 state initiative to help low-income families get and keep work supports (Colorado, Idaho, Illinois, N. Carolina, Rhode Island, and S.Carolina)

• Supports states in their efforts to reform and align the systems delivering work support programs intended to increase families’ well-being and stability—particularly SNAP, Medicaid and CHIP, and child care assistance.

• States work to streamline and integrate service delivery, using e-technology to improve administrative efficiency to reduce burden on states and working families.

• Directed by the Center for Law and Social Policy (CLASP) in partnership with the Urban Institute (and the Center on Budget and Policy Priorities (CBPP) (technical assistance lead).

• Funded by the Ford Foundation, the Open Society Foundations, The Annie E. Casey Foundation, The Kresge Foundation, and J.P. Morgan Chase & Co.

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Expand Household Income from Other SourcesThe Center on Budget and Policy Priorities (CBPP)

A few examples:• EITC

and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development - (April 3, 2015 Report)

• WIC Works: Addressing the Nutrition and Health Needs of Low-Income Families for 40 Years (MAY 6, 2015)

• Social Security Keeps 22 Million Americans Out Of Poverty 26

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College Student Loan Debt • Currently $1.3 Trillion outstanding in student loans, • Average debt of a graduate with a BA is now $27,000,

average BA graduate salary $53,000• 6.6 million jobs created since 2010, 2.9 million were

good jobs, 100,000 of those jobs were filled by people with less than a Bachelor’s degree.

• 12 % are unable to save for their retirement or their children’s education and feel less secure

• 20% unable to purchase home, average home purchase before 2007 was 27, now age 35 (Zillow.com)

• Causing longer live with parents, delay home purchase and even marriage

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Strategy on Lowering Student Debt

Two Part Strategy: 1) Reform Student Loan program 2) Increase Education Subsidy• Lower current interest rate of 5-6+%• End prohibition of bankruptcy protection• Free 2 year college tuition • Increase state budget allocation to off-set college/university

overhead• Hold to 4 year BA degree by increasing facility and class-rooms

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WHAT KIND OF ECONOMY ARE WE TRYING TO CREATE?

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Otto Scharmers: 8 innovations to update the economic system

1. Nature- Consider the natural world as an eco-system that we need to cultivate.2. Entrepreneurship- Think about “jobs” as passion-led entrepreneurship.3. Money - Instead of extractive, capital should be intentional, serving rather than harming the real economy.4. Technology - Empower people to be makers and creators rather than passive recipients.5. Leadership - Build the capacity to co-sense and co-shape the future on the level of the whole system.6. Consumption - Move towards sharing and collaborative consumption 7. Governance - Move toward complementing the three older mechanisms (hierarchies, markets, and special interest groups) through a fourth mechanism: acting from shared awareness, from seeing the whole.8. Ownership - Create a new category of ownership rights: commons-based ownership that better protects the interests of future generations.

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http://www.theguardian.com/sustainable-business/2014/sep/26/8-innovations-economic-system-capitalism

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David Korten: Change the Story, Change the Future Sacred Money and Markets story is the corporate message, serves as the basis for the US economy, as it defines our future• Use as the framework for every news report and political debate, • Basis of their legal arguments • Taught in our schools and universitiesThe counter-story: Sacred Life and Living Earth story to advance justice, sustainability, peace, and democratic governance campaign organize around individual issues• Focal point of discussions in our living rooms, schools, churches, and civic centers• The frame of our social media exchanges, community initiatives, and political advocacy. • Introduce it into academic curricula• Compel the champions of money to make their case within a sacred life and living earth

frame

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Reframing

• Professor George Lakoff• Dr. Meg Bostrom. Cultural universals• Center for Community Change• Partnership discussion with The Frameworks

Institute http://www.frameworksinstitute.org/

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Strategies for Human Development• The pursuit of human development and expansion of economic

opportunity• Moving to Opportunity - moving people to new geographic areas

mostly to middle-class suburbs• Adverse Childhood Experiences (ACEs) or “good parenting” • Child Care Development block grants, (CLASP)• Gates Foundation -supports kindergarten readiness and elementary

school achievement

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Issues for CAAs to Think About –Part 1

• Support expansion of early childhood development• How Much Could We Improve Children’s Life Chances by

Intervening Early and Often?• The Future of Education. • The Human Development Capability Approach • Two Generation Strategies • Nurse-Family Partnership

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Issues for CAAs to Think About –Part 2

• Conditional Cash Transfers• Health Issue. The Unbelievable Rise of Single Motherhood• Health Issue: Use of Long Acting Removable

Contraceptives (LARCs)• Work to keep youth “at risk” from going further downhill• Social Capital• Work to prevent people from killing each other

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Issues for CAAs to Think About –Part 3• Support criminal justice reform• All kids must have high-school skills • Support the Affordable Care Act • BE INCREDIBLY CAREFUL about use of Social Impact

Bonds • Final thoughts on human development – the effects of

credentialism

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Alternatives to “Making It” in the Mainstream Economy Part 1

• Reduce or redirect the human desire for to expand consumption • Explore sustainable, alternative approaches like

“Transition Towns”• HOW TO “reform capitalism”• Reducing Consumption

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Alternatives to “Making It” in the Mainstream Economy Part 2

• The Sharing Economy and the On-Demand Economy• The Informal Economy• Turn citizens into shareholders of the countries natural

resources• Utopian Movements

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New ways of thinking about how people can “make a living”

• Community supported agriculture, • Co-housing, • Makerspaces, • Reducing consumption• Artisanal work in metals and wood, • Producing culture (400,000 hours of

YouTube videos and 350 million photos are posted to Facebook EVERY DAY, Kindle books)

• 3-d printing, • Tiny homes, • New contests in sports and video

games, • Reducing consumption, • Trading services, • Transition towns, and • Various forms of “citizen’s income.”

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Remember

• The Office of Economic Opportunity ran several Guaranteed Annual Income (GAI) experiments in the late 1960’s and early 1970’s,

• President Nixon was in favor of a GAI. • Nine other countries are exploring ways to do citizen’s

incomes, and • So should the U.S.

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Questions and Answers

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Thank You

For more detailed information Please check our website

America’s New Working Poor-Its Middle Class

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