Among the more intriguing proposals in Sen. Marco Rubio (R-Florida)'s War on Poverty anniversary speech Wednesday was giving jobless people subsidies to move to low-unemployment areas. Sounds like a common-sense fix? Maybe—but Mike Konczal, a expert in unemployment and inequality at the Roosevelt Institute, says it would just move the problem around.
Here's why. Even though some states and localities have sunnier employment rates than others, Konczal tells Mother Jones, that doesn't mean there are more jobs available in those places. "States with low unemployment are often small states that are heavily agricultural," he says. "There is not a lot of dynamic turnover… There are already unemployed people there who want those jobs" that are open. Konczal had a deeper analysis of this type of proposal on the Washington Post's Wonkblog last August, noting that such relocation vouchers would also likely go to"people who are at the back of the job queue—long-term unemployed with low savings. These are populations that will have trouble finding work, and so it is likely that they’d just move to be at the end of the queue of another state."
Kevin Drum has more on Rubio's other proposals, including a government wage subsidy.
On Wednesday, news outlets released emails indicating that top aides to New Jersey Gov. Chris Christie blocked lanes on a major bridge last year in retaliation against a political opponent.
Last September, the Port Authority of New York and New Jersey abruptly closed two lanes on the George Washington Bridge, causing a massive traffic jam that clogged the streets of Fort Lee, N.J. News outlets and New Jersey Democrats began to look into the circumstances surrounding the bridge closure, suspecting that the Port Authority closed the bridge lanes in an act of political retaliation against Fort Lee Mayor Mark Sokolich, a Democrat who backed Gov. Chris Christie's opponent in the 2013 gubernatorial campaign. The emails released today suggest that was indeed the case:
President Lyndon B. Johnson announced a "war on poverty" in America in his State of the Union address on January 8, 1964. "This administration today, here and now, declares unconditional war on poverty in America," he said. "It will not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won. The richest nation on Earth can afford to win it. We cannot afford to lose it." The aim of the war, he said would be to "cure" and "prevent" poverty.
Johnson's administration went on to design "Great Society" initiatives, including a permanent food stamp program, Medicare and Medicaid, Head Start, which provides early education to low-income kids, and increased funding to public schools.
The war on poverty helped raise millions above the poverty line. During Johnson's years in office, the poverty rate dropped from 23 percent to 12 percent.
But where do we stand today? The government's official measure of poverty shows that poverty has actually increased slightly since the Johnson administration, rising from 14.2 percent in 1967 to 15 percent in 2012.
But those numbers aren't quite accurate, because while they factor in welfare and Social Security payments, for example, they don't include additional non-cash government aid from safety net programs such as food stamps and housing assistance, and expenses like taxes and medical costs. A few years ago, the government started using a new, more accurate way to measure poverty that includes these factors, which shows that government programs did indeed slash poverty—from 19 percent to 16 percent—between 1967 and 2012. And last month, a group of researchers at Columbia University released a report using a similar adjusted poverty measure that takes into account both non-cash government assistance and expenses, as well as today’s standards of living. With these adjustments, the poverty rate dropped from nearly 26 percent to 16 percent over that same time period.So have we won the war on poverty? If it means that the lives of millions of Americans in poverty have improved under the Great Society programs, yes. But by no means have we attained Johnson's goal of "curing" poverty. The poverty rates of certain demographic groups remain stagnant and racial disparities are as wide as ever. Check out the graphs below (based on the Columbia University measure):
The poverty rate for the elderly has fallen, as has child poverty. But as my colleague Kevin Drum noted last month, the working-age poverty rate has stayed flat for 40 years. It dropped from 20 percent in 1967 to about 15 percent in 1974, and remains there today.
The percent of Americans in deep poverty—those living on an income of less than $11,775 a year for a family of four—has hovered around 5 percent of the population for about 40 years.
Annually, $11,775 is not much. But try living on $2 a day, as Americans in more than 1.5 million households do. That number has jumped since 1996, when welfare reform kicked many families off of government assistance. (Note that when food stamps are included as income, the number of those living on $2 a day* decreases.)
Even though the portion of Americans in poverty has dropped, that doesn't mean that those above the poverty line—$23,550 for a family of four—have enough money to live on. A recent study by the Economic Policy Institute (EPI) of 615 communities in the US found that in all of those localities it was impossible for two parents who earn the federal minimum wage—$30,000 a year total—to support a family of four. For instance, the EPI analysis found that the monthly costs associated with "an adequate standard of living" in St. Louis include $830 for housing, $754 for food, $959 for child care, $607 for transportation, $1,457 for healthcare, $405 for other necessities, and $377 in taxes, for a grand total of $5,389 a month. That's far above the federal poverty line for a family of four, which is $1,962 a month. Here are the costs of living for a family of four in 13 cities across the United States, according to EPI:
The income disparity between white Americans and minorities remains stark. The current poverty rate for African Americans is 27.2 percent, and just 9.2 percent for white people. It's 25.6 for Hispanics, and 11.7 percent for Asian Americans.
In December, President Barack Obama nominated attorney Sharon Bowen to help run the Commodity Futures Trading Commission (CFTC), which regulates derivatives and futures markets. Bowen has little experience inderivatives, and she has represented big banks in court. Financial-reform advocates are skeptical that she is the right woman for the job—and are trying to generate opposition to the nominee. But the real question is this: Will middle-class crusader Sen. Elizabeth Warren (D-Mass.) oppose Bowen's confirmation? And if she did, would that derail Bowen's candidacy?
If Warren signals she will vote against Bowen, other key senators may follow suit, and that could cause a problem for the White House and Bowen. There's precedent for this. In September, Warren's no-vote threat helped scuttle the nomination of former Treasury Secretary Larry Summers, whom Obama was considering as chairman of the Federal Reserve.*
Warren has weighed in on Obama's CFTC picks before. In November, she expressed skepticism about Timothy Massad, the Treasury Department official Obama tapped to be chair of the agency, saying she needs more information about Massad's views on regulation and his qualifications for the post. (Massad has not yet been confirmed by the Senate.)
Warren has declined to comment on Bowen's nomination. But there's reason to suspect she may not approve of this pick. In late November, the Massachusetts senator and eight other Senate Dems sent a letter to Obama urging him to nominate CFTC commissioners who have "demonstrated experience in futures, options and swaps markets" and who possess "the expertise, independence and track record necessary to…provide long overdue oversight to the swap and derivative markets that pose a systemic risk to our economy." In the same letter, the senators expressed concern that if hard-nosed reformers are not nominated to vacant CFTC posts, Wall Street may have more influence at the agency. "We are deeply concerned that some industry interests may view [these nominations] as opportunities to roll back or slow down essential reforms," Warren and her colleagues wrote.
Bowen does not have the traits Warren and the others called necessary. She has no record of financial reform and little experience regarding derivatives. (Derivatives are financial instruments with values derived from underlying variables, such as interest rates.) Instead,Bowen is a partner at a Wall Street law firm, Latham & Watkins, that has represented Big Finance clients, including Goldman Sachs, Merrill Lynch, and Deutsche Bank.Michael Greenberger, a law professor at the University of Maryland who previously worked at the CFTC, argues that Bowen's background will "undoubtedly" make the CFTC more receptive to Wall Street lobbying, just as Warren and her colleagues fear.
Outgoing CFTC Chairman Gary Gensler—an aggressive financial reformer—also started his career on Wall Street and went onto deregulate derivatives at the Treasury Department. When he was nominated in 2009, progressive senators were skeptical that he was the right person to head up the agency. But Gensler allayed their fears by reaching out to financial-reform groups, CFTC commissioners, and senators, and he put forward a plan for regulating derivatives, which had been largely unregulated before the financial crisis. "It was a very impressive document," says Greenberger. "He made it clear that he understood what problem was and he knew how to fix it." So far, Bowen has not publicly provided any indications of her priorities for the CFTC, Greenberger says.
Bowen did not respond a request for comment for this story. Her firm, Latham & Watkins, directed questions to the White House, which did not respond.
If Warren and other Senate Dems oppose Bowen, they may have Republican company. According to Hill staffers, some GOPers are not happy with Bowen's work as chair of the board of directors of the Securities Investor Protection Corporation, an industry fund that covers losses from brokerage firm failures. SIPC was supposed to compensate the victims of Allen Stanford's $7 billion Ponzi scheme, but is trying to get out of it. Victims of the $60 billion Madoff ponzi scheme have also been disappointed by what they see as insufficient compensation by SIPC.
"[Bowen] has been a part of all that," says a Republican Hill aide. Her nomination "give[s] us great pause."
*This story has been corrected to reflect that the Senate agriculture committee, not the banking committee, vets CFTC nominees.
Last week, a federal court issued a ruling strengthening protections for Americans injured by chemicals on the job.
Both state and federal statues dictate how companies are required to label harmful chemicals in the workplace. Federal law usually trumps state law, but victims injured due to inadequate chemical labeling are still allowed to sue their employer for damages under state law. Earlier this year, the American Tort Reform Association (ATRA) sued the Occupational Safety and Health Administration (OSHA), which is the federal workplace safety regulatory agency, arguing that OSHA regulations only allow workers to sue under federal law, not state law. (Tort reform refers to proposed changes to the civil justice system that would cut down on personal injury lawsuits.) Last week, the powerful DC Circuit Court unanimously rejected ATRA's argument, which consumer advocates say is a win for workers.
"The court’s opinion is great news for those who want to hold chemical manufacturers liable for injuries to employees," Leah Nicholls, an attorney with the public interest law firm Public Justice, said in a blog post Tuesday.
While the ruling does not mean that other courts will agree that workers are allowed to sue under state law, the DC Circuit decision "will help persuade other courts that the existence of federal regulations does not prevent people from suing under state laws," Nicholls adds.
ATRA is a coalition of industry groups founded in 1986 whose members range from the chemical industry to the tobacco industry to the drug industry. The organization advocates for limits on corporate liability for damage caused by member industries' products and services. Since the group's inception, corporations including Dow Chemical, Exxon, Phillip Morris, and Aetna have helped fund it.
In the case before the DC Circuit, ATRA said that when OSHA issued its regulation governing how federal chemical injury law preempts state chemical injury law, it changed the definition of "preemption," which only Congress is allowed to do.