Clarifying Durham Poverty

It doesn’t take away from the importance of such an issue that news stories comparing the poverty rates in various cities and counties in North Carolina nearly always fail to index the percentages.

A question was raised in the Raleigh paper on New Year’s Day about why Durham’s poverty rate is higher than Raleigh and Cary’s.

If when reported, the percentages had been indexed to ethnic make-up, the more obvious question would have probably been, “Why are poverty rates in Raleigh and Cary so high.

Give or take, Durham’s rate of 19.4% is about three points higher than Raleigh’s and Cary’s but Durham is also a significantly much more diverse community.

This is noteworthy because poverty rates in North Carolina for African American and Latino residents are two and a half times that for Caucasians.  Durham is, respectively, as much as three times more diverse than Cary or Raleigh.

Just as puzzling is why so many people are disturbed by the poverty rate when they move to Durham from Greensboro.  They are seemingly unaware that the poverty rate there is as high or even higher.

Perhaps the misperceptions are fueled by the tendency of Durham residents to talk more openly and passionately about issues it wants to improve.

This is also why in the mid-1990s, to avoid being caught up with just headlines, Durham officials followed the lead of its agency for visitor-centric economic and cultural development and began to benchmark community comparisons against a comp set of communities across the state and nation.

This is a best practice means of not just explaining away issues, but putting them in a context where true anomalies can be readily detected which would otherwise be clouded by passions or news headlines.

Unfortunately, this benchmarking approach has not been applied broadly or deeply enough.  Not only has it been neglected in reference to problems such as poverty, but also areas such as cultural facilities, urban forestry and overall community curb appeal.

Even where they have been effectively applied in areas such as crime and school scores, often the results have not been used strategically to buffer problem-solvers from news reports which according to analysts, are only slightly biased toward negative news but heavily biased toward extremes.

An example in Durham is the media’s obsession with crimes and rates of crime, particularly violent crimes such as homicides. Durham is not exceptional or out of the norm in its overall crime or its violent crime, so it diverts officials from addressing types of crimes where it is above the norm, such as burglary and robbery.

While the communities weren’t indexed for variables, the report by a long-time Durham resident and columnist in the Raleigh paper was loaded with useful context to inform yesterday’s 50th anniversary of the declaration of the War on Poverty.

In 1960, four years before that declaration, 4-in-10 North Carolinians lived in poverty, including nearly 1-in-3 Durham County residents.

We can debate whether the programs responsible for wiping out so much poverty need to be perpetually overhauled or have become too brittle, or whether they were shortchanged, but the fact that they made a huge difference seems indisputable.

Another view of the statistics shows that poverty levels in America dropped precipitously from 1959 to 1970 before efforts to eradicate it became politicized and gridlocked.

Not coincidentally, in my opinion as a political Independent, this is also the time span where we invested heavily to broaden the middle class.  Maybe it would be worthwhile revising that span for solutions to help get back on track.

The answers still aren’t clear to me although I’ve read and thought about the issue a lot.  But as conservative critic Joe Queenan, who was raised in poverty, has written so eloquently, “Poverty is a pathologically enduring, immutable condition. Not a lifestyle choice.”

So I wasn’t at all surprised that the mandatory drug testing conservatives sought to impose (to varying degrees) in 30 states found that only 2.6 percent of poor people receiving public assistance tested positive for drugs compared to 8.7 of the general population.

The rate testing positive was as low as 1.2 percent or less in some states, leading one policy analyst to refer to this testing as “a bad cure in search of a problem.”

Similar analysis has found that poor people are less likely to turn to crime than those with much higher incomes.  We also know now that the stereotypes used to demonize the poor in the late 1970s and 1980s were misleading.

Far too much brain power is being wasted on playing ideological offence and defense at the expense of the poor.   We can do better, and we must do better, because “there, but for the grace of God” go any of us.

The $7 Billion Cheeseburger

Nearly two-thirds (63%) of spending on public benefits goes to working families, according to a study released last week by researchers at the University of California and the University of Illinois.  These families make up 73% of enrollments in these safety net programs.

Working families are defined as those where at least one member is working.  While probably unintended, low wage industries are shoving costs off on to government, which is one of the rationales behind passage of the Affordable Care Act.

A high proportion of these low wage workers - a whopping 87% - do not receive health benefits.

In the case of fast food giants, more than half of their front-line workers, including the 28% fortunate enough to get 40 hours of work a week, are enrolled in one or more public assistance programs.

This is twice as much compared to 1-in-4 Americans nationwide.

This amounts to a $7 billion taxpayer subsidy each year for fast food businesses alone.  The proportion of Americans in low wage jobs has ballooned to 4-in-10 nationwide, according to another study.

Yet another recent study of U.S. food policy shows that “…huge subsidies are lavished on crops that become the ingredients for highly processed foods — including “junk” foods,” and other high margin staples in the fast food business model.

The result is a significant part of the $11 trillion diet-related heath issues and lost productivity is pushed off on taxpayers and higher premiums for those lucky enough to have health insurance.

Another report finds that the agriculture subsidy per taxpayer supports just over half an apple compared to 20 Twinkies, a junk food favorite where 17 of the 37 ingredients are taxpayer subsidized elements directly related to obesity, which burdens the economy with $150 billion in hidden costs annually.

Fast food giants and suppliers also make up 1-in-4 of the top 100 businesses keeping outdoor billboards on life support ever since use by tobacco companies were outlawed.

There is now an established link between prevalence of outdoor billboards and obesity.  And billboards themselves require the sacrifice of trees and vegetation, robbing taxpayers of not only these publicly owned assets but their public health benefits, such as screening noise and particulates as well as purifying air and storm run off of pollutants.

All of this amounts to a public subsidy of an unsustainable business model that relies on subsidized ingredients paying workers as little as possible while letting taxpayers pick up the costs.

Recently, it was estimated that for fast food companies to pay a livable wage it would require adding only 68 cents to a popular hamburger, but economists countered that to please investors, the companies would most likely just trim labor costs.

The not so veiled threat is that if required to do the right thing, they would hire fewer people, cut hours and push even more costs off onto the general public and taxpayers.  It is not unlike the hubristic mentality that just ripped $24 billion out of the economy in 16 days.

This is the same threat some of these businesses make about the Affordable Care Act and the requirement for health insurance to lower the burden on taxpayers.

I’ve personally sat on legislative committees for two state restaurant associations.  I’ve learned that there are many good people who want to do the right thing in these types of businesses but they are shouted down by small cadres of condescending extremists all too aware that they can’t go it alone or less honorable competitors would cut them to pieces.

So this is where the free market breaks down because it rarely requires full-cost accounting.  The minimum wage today is much lower than in 1955 when adjusted for inflation.  We’re paying for the cost of subsidized burgers and fries whether we like it or not, whether we realize it or not.

The low wage, taxpayer subsidy is not unique to fast food businesses, that’s just where I have the most familiarity having worked for forty years in visitor centric cultural and economic development.

Similarly, a report updated last spring found that in another segment of the tourism sector, a typical 300-employee Wal-Mart Superstore shifts more than $5,815 per employee onto taxpayers each year or a total of between $1 million and $1.7 million in corporate subsidy per store.

The tourism sector cannot make excuses by pointing just to how many employed there are students.  Nearly 7-in-10 frontline fast food workers are not in school and are single or married adults with and without children.  Two-thirds rely on that income as an essential component of family income.

In my opinion this status quo isn’t working.  We need to experiment with things like requiring health insurance and a livable wage rather than pushing costs off on taxpayers where anti-government types want to “drown it in a bathtub” as a way of controlling costs.

The “drowning” metaphor is horrible when people’s lives are at stake. It is also bad for business.  I’d rather start paying the “real” costs of things even if it takes a while to get things right.

If you missed it, the reports cited are linked where noted in the text.

Don’t take my word, click through and read for yourself, maybe while eating at a fast food business.  Look in the faces of the people serving you and ask yourself if you would pay a little extra at the counter so they can make a livable wage.

Reflect on the fact that more than 7-in-10 are women, more than 2-in-5 are minorities.  Only 13% receive health benefits through their employer compared to 59% of workforce as a whole.

You’re paying hidden costs in taxes anyway.  Isn’t it time for the free market to incorporate a triple-line approach to cost-benefit analysis?

Choices and Entitlement

The sentiment has been expressed before in many variations but none better than how it was phrased by CBS Television Studios’ writer Sarah Byrd (credited in part to supervising producer Adam Targum) for an episode of CSI: New York two weeks ago in lines delivered by Det. Mac Taylor played by actor Gary Sinise:

“The events of our lives shape us. But it’s our choices that define us.”

That, and in my personal experience, an awful lot of luck.

As Wall Street Journal conservative columnist and humorist Joe Queenan once wrote for another publication referring to his own upbringing in poverty - “It is a pathologically enduring, immutable condition.  Not a lifestyle choice.”

When some of the first government social safety nets emerged during the Great Depression in the mid-1930s, they were accompanied by volunteer and work requirements to ensure dignity, self-reliance and self-respect.

With common roots in Chicago’s Hull House, the vaunted welfare program of The Church of Jesus Christ of Latter-Day Saints (Mormons) was launched in 1936 and is structured even today around a recipient volunteer program.

But for the entire 400 years since colonization of this continent began, we as a society have worried, as phrased by business professor and ethics researcher Dr. Jonathan Haidt in his book The Righteous Mind, that people might “rely upon the safety net for more than an occasional lifesaving bounce.”

Who knows how much better safety net programs would be today if partisan hostility had not stripped funding out of the government programs that enabled associated oversight of conditional volunteer and “pay it forward” programs.  The Mormon welfare program is as successful as it is because of the more than 870,000 of associated volunteer-days on welfare farms and in storehouses and distribution centers.

Mormon officials report that individual recipients typically receive aid for three to six months while they volunteer, but my experience growing up in that culture tells me there is a small percentage of recipients, some multi-generational, who, just as is seen in government programs, never seem to be able to fully escape the vicious cycle of poverty described by Queenan.

Entitlement is no more common among the poor than it is with people who are educated or middle class or rich or in parasitic, rent-seeking corporations such as billboard companies.  A classic example appeared in a news story last week from Raleigh, which is near Durham, where I live.  A person quoted in the story questioned, while noting she had a PhD, why she should have to refrain from interrupting her boss and I suspect other forms of social and business etiquette?

It seems that both liberals and conservatives are too caught up in playing offense and defense over the condition of entitlement and other issues and have been for more than 20 years.

While more willing to join moderates in compromise, liberals have been far too dismissive of concerns raised by economists and sociologists, both White and African-American, about the troubling by-products of safety net programs, many of which these experts helped devise.

These included The Rediscovery of Character: Private Virtue and Public Policy by the late Dr. James Q. Wilson, The Moral Quandary of the Black Community by Dr. Glenn C. Lowry, now at Brown University or The Content of Our Character by Dr. Shelby Steele, now a senior fellow at Stanford University’s Hoover Institution, all penned between 1985 and 1990.

As noted by researchers at the non-partisan Center for Evidence-Based Policy and the Brookings Institution in a Washington Post op-ed last April written by Daniel Stid a partner in The Bridgespan Group, since 1990 rigorous government evaluations of 10 overarching social programs using randomized trials found “9 out of 10 yielded weak or no positive effects.”

Gridlock, primarily forced by conservatives, has made a more nimble and entrepreneurial approach impossible; although to his credit, President Obama has found ways to fuel program innovations anyway, often by end-running the bureaucratic process.

Economic conservatives, having abandoned half of their “intellectual ammunition,” to paraphrase New York Times columnist David Brooks, have forgotten a founding principle of that movement that it is “best to reform steadily but cautiously” and turned instead to fiscal strangulation and a social mobility Dance of Death.

As Thomson Reuters Digital editor Chrystia Freeland wrote in yesterday’s New York Times in an article entitled The Self Destruction of the 1 Percent, adapted from her book published last week entitled Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else, today’s conservatives seem to be following the playbook of Venetians at the turn of 13th century.

And that didn’t turn out too well.