U6 Watch: June 2013

Update (8/1/2013): There was a problem with the image I used for the labor force participation rate graph.  Put in a different graph.

Image: A Google image search for "unemployment" found this cartoon (source)

Both political parties have an cynical, poverty-sustaining compromise on the economy.

Both have agreed to use the U3 measure of unemployment in measuring the performance of the economy.  However, this measure makes no sense whatsoever; for June, U3 unemployment rate stayed steady at 7.6%, making it appear that things aren't getting worse.  They are.

The U3 measure divides:

(number of people actively searching for work) / (number people who are working + number of people actively searching for work)

Notice what the U3 measure conveniently leaves out:

Sequestration's Latest Victim: The Constitution

Image: Beneficiaries of the bottom tier of the American welfare system (source)

Updates--see below

I previously wrote about a Wonkblog round-up of media accounts of programs getting axed by the sequester, and how the sequester persists only because these cuts are focused on the bottom tier of the American welfare state.  Contrast the harm the sequester inflicts on the poor with the fact that any sequester cuts that inconvenience the rich were quickly rolled back: few things could more effectively express who our government works for.

Jared Bernstein has been running a "Sequester Watch" on his always excellent blog, and I'm embarrassed to say I haven't been keeping up.  In installment #14, he rounds up accounts of specific programs being cut: various Head Start programs, inner city schools, mental health services for Native Americans, low income housing, Meals on Wheels, federal public defenders, and others.  This is poverty sustainment; not giving poor children the educational opportunities they need to succeed is an endorsement of their poverty.

Here's another link describing the effect on federal public defenders:

Federal defenders already were facing a 5 percent budget reduction when $85 billion in spending cuts began coursing through federal agencies in March, lopping another 5 percent from the budget this fiscal year. Some courts have limited the hours they hear criminal matters. Defenders across the country are taking up to 15 days without pay, forcing postponements in many criminal proceedings...

The court system’s alternative is to hire private, court-appointed attorneys to represent indigent clients, since by law they must get a lawyer. They are paid from the same pool of money as public defenders. But they cost more, and according to some studies, are less experienced and less effective.

Nachnanoff told lawmakers that public defenders are expecting another hit to their budget of more than 20 percent in the fiscal year that starts Oct. 1, which would almost surely result in layoffs.

In a letter to the Judiciary Committee, a group of 40 former judges and prosecutors urged Congress to fully fund the defender program.

“These ill-conceived measures undermine not only the Federal Defender system, but the entire federal judiciary, without achieving any real cost savings,” they wrote of the sequestration cuts.

All American citizens have a Constitutional right to a trial and legal representation.  There can be little doubt this right was being trampled before sequestration; there can be zero doubt now that this is now occurring.

But a closer look reveals the cynicism of the sequester: because public defenders are being furloughed, the federal government is actually paying more money for worse representation for poor criminals.  Can there be any question that this is a feature, and not a bug?  Does the American ruling class really find this a convincing argument:

Poor people accused of federal crimes are more likely to go to prison because of the sequester, and we need to help them get adequate legal representation.

or would they rather that poor people suffer from incompetent representation?  That legislators are willing to pay money to ensure worse representation shows that worsening public representation is a pleasant surprise of sequestration, and not an unfortunate casualty.  Constitutional rights are to be protected, but only for the rich.  Remember, we imprison people at a higher rate than the world's autocratic dictatorships:

Crack babies and convenient explanations of poverty

The Philadelphia Inquirer has a story on a 25-year-long longitudinal study of 224 children (110 actually participated for the full 25 years) that set out to show the dangers of uterine crack cocaine exposure to children.  Instead, they wound up showing the dangers of poverty:

At age 4, for instance, the average IQ of the cocaine-exposed children was 79.0 and the average IQ for the nonexposed children was 81.9. Both numbers are well below the average of 90 to 109 for U.S. children in the same age group. When it came to school readiness at age 6, about 25 percent of children in each group scored in the abnormal range on tests for math and letter and word recognition.

"We went looking for the effects of cocaine," Hurt said. But after a time "we began to ask, 'Was there something else going on?' "

While the cocaine-exposed children and a group of nonexposed controls performed about the same on tests, both groups lagged on developmental and intellectual measures compared to the norm. Hurt and her team began to think the "something else" was poverty.

Basically, the study determined that poverty is really bad for children.  It's not hard to think of better headlines for this story (Poverty Bad for Children: Science).

As the children grew, the researchers did many evaluations to tease out environmental factors that could be affecting their development. On the upside, they found that children being raised in a nurturing home - measured by such factors as caregiver warmth and affection and language stimulation - were doing better than kids in a less nurturing home. On the downside, they found that 81 percent of the children had seen someone arrested; 74 percent had heard gunshots; 35 percent had seen someone get shot; and 19 percent had seen a dead body outside - and the kids were only 7 years old at the time. Those children who reported a high exposure to violence were likelier to show signs of depression and anxiety and to have lower self-esteem.

Large, universal Scandinavian-style government welfare programs do not hurt the economy or unemployment

Image: Don't worry kids.  It turns out that alarm over your ability to strangle the American economic system was just hype. (source)

Note: This post is about social democracy.  If you don't know what social democracy is, first read this page on basic social policy.

Several arguments are typically leveled against social democracies.  The most common objection is that universal social welfare programs are simply too large, and thus are a drag on the economy.  Having large programs like universal health care, universal child care, and universal old age and disability insurance thus result in slow economic growth, and thus high unemployment.  So, while these programs may be nice to have, the resulting slow economic growth and high unemployment make them more trouble than they're worth.  The second most common argument is that social democracies really aren't that much better at promoting social welfare.  Are the sacrifices to the economy really worth it for a populace that's only marginally better off?

Navarro and Shi (2001) looked directly at these two (related) criticisms by comparing health and economic indicators of all advanced countries with the four basic types of welfare systems (liberal, Christian democrat, social democrat, and fascist), over four decades (1950's through 1990's).

Supreme Court rules section 5 of voting rights act unconstitutional based on liberty vs. justice lie

Image: Justice Roberts, the author of the majority opinion in Shelby County v. Holder (source)


I realize I'm pretty late to the game in commenting on the Supreme Court's Voting Rights Act, but because discussion about it has relied so heavily on a key justification used in social policy--the freedom (or liberty) vs justice lie--I think that "better late than never" is true here.

Whenever a policy is justified based on appeals to someone's liberty or freedom, an extreme degree of skepticism is warranted.  Except in cases of national security, which truly does whittle away at the freedoms of all (while hacking away at the freedom of Muslims who have done nothing wrong), or giving the right to marry to homosexuals (which does nothing to limit anyone else's freedom), or a few other examples, one group's gain of liberty is usually only possible with another group's loss of liberty.  The claim is always made that we must sacrifice social justice in the name of liberty, but that claim is rarely true; rather, liberty is redistributed, not created.

The Supreme court ruling in Shelby County v. Holder, in which section 4 of the Voting Rights Act (VRA) was ruled unconstitutional, perfectly illustrates this point.

McDonald's sample budget and convenient explanations of poverty

(Updated below)

I can't comment any more thoroughly on the sheer inanity of McDonald's sample monthly budget for minimum wage employees than Annie-Rose Strasser did over at Think Progress.  It's worth reading in full.  But it's also worth noting that I have never seen a better example of the typical underlying assumption of American poverty.

What is most amazing about this budget is that it was put out without any sense of irony.  The people who published this clearly think it is reasonable--why else would they have published it?  And yet, this is the most effective indictment of McDonald's wage policies there could possibly be.  Twenty dollars for health insurance?  Zero dollars for heating?  No money allotted for food?  The only way to make a McDonald's job look like a livable wage is to make absolutely absurd assumptions.  There can be no more effective indictment of McDonald's wage practices than this--try for yourself to make a life out of this; of course you can't.  If McDonald's policies were intentionally malicious, they would never have published this.

No, Stand Your Ground is working exactly as planned

(Image source)

The basic premise behind this entire blog is that our government usually gets the policy outcomes it desires--but that the stated policy goals rarely line up with the actual policy goals.

Such is the case with Stand Your Ground laws.  Katie Halper at Salon has piece examining the racial biases in the enforcement of these laws in Florida and generally:

The Tampa Bay Times found that defendants claiming “stand your ground” are more successful if the victim is black. Seventy-three percent of those who killed a black person faced no penalty. Only 59 percent of those who killed a white person got off. The Urban Institute determined that in “stand your ground” states, when white shooters kill black victims, 34 percent of the resulting homicides are deemed justifiable. When black shooters kill white victims only 3 percent of the deaths are ruled justifiable.

Links worth reading

How's that whole Obamacare thing going?

"I want to cover everybody.  Now, the truth is unless you have what's calle d asingle-payer system in which everyon'es automatically covered, you're probably not going to reach every singel individual."
-Barack Obama, July 22, 2009

We seem to get new information every week confirming the worst fears of opponents of Obamacare from the left--it's a massive sellout to the health insurance industry at the expense of the uninsured.

Breathtaking piece about rural food insecurity

This piece should be read in full; children whose mother cannot feed them, who cannot concentrate in school because of hunger, whose brains turn to mush over the summer from utter lack of stimulation while rich school children elsewhere benefit from summer enrichment opportunities.  Their mother works a full time job.

The United States is not a country where anyone can be successful.  It is a country where its most vulnerable citizens are allowed to starve, and are then demonized by politicians for their suffering.

What is social democracy?

Image: Beneficiaries of Finland's social democratic welfare state (source)

I'm working on a few pieces that I realize won't be accessible to those without a basic working knowledge of social policy.  So, this post is a primer on social policy basics.  If you know all of these terms (Christian democrat, social democrat, residual, means testing, universal), you should probably skip this post.  If not, read on!

Checklist for profitable business: quality product, solid management & marketing teams, and high unemployment

Image: Construction workers "lucky" enough to have the privilege to work for low wages (source)

It's no secret that unemployment is still very high.  There are still 3.1 job seekers for every one job opening.  And things are even "worse" for the construction industry, where there are 12 job seekers for every 1 job opening:

Indeed, construction workers have been especially hard hit by the Great Recession and "recovery."  Setting aside the problems with the measure, the overall unemployment rate is 7.6%; for construction workers, the unemployment rate is 13.2%, and topped out at over 27%.  Most of the drop in unemployment is not due to these workers finding construction jobs, but with huge numbers of workers giving up.  Whether these workers successfully found work in other employment sectors matters little to the point of this post (most didn't)--but the obvious fact remains that huge numbers of workers skilled in construction are ready and willing to work.  Again, with 12 construction job seekers for every one construction job opening--double that number if you count the workers who have given up looking for construction jobs--there is no question that we have more skilled construction workers available than we can possibly use.

So why did the construction lobby fight to bring in foreign construction workers?  Current law caps work visas for immigrant guest workers at 15,000; the construction lobby fought (and failed) to get that cap eliminated.  Why, when there are so many idle, unemployed construction workers ready and willing to work, would the construction lobby possibly want to bring in more?

The reason the construction industry wants more foreign guest workers is because high unemployment keeps wages low.  When unemployment is high and workers are desperate for work, businesses can pay workers less than they're worth.  "You want $30,000 per year, plus health insurance?  Why should I hire you when Bob is willing to work for $20,000 without benefits?"  High unemployment = low wages.  This is basic economics.