Inequality: From Wall Street to Your Street

This blog post appeared as a commentary in the Huffington Post on July, 9, 2013. You can access the original article here.

Income inequality, for years the great unmentionable in political discourse, is suddenly on everyone’s lips. Thanks to the Great Recession, Occupy Wall Street, and the ensuing focus on the “one percent,” the gulf between the richest and the rest is now not only acknowledged, it is being cited by people across the political spectrum as an impediment to economic recovery.

 While income inequality is enjoying its moment in the sun, other forms of inequality are getting far less attention. Just as we rely too heavily on economic metrics like Gross Domestic Product to gauge human progress, so too are we taking an overly narrow view of inequality. Mutually reinforcing inequalities in health, environment, education, and wealth have created a large and growing opportunity divide that wages alone cannot bridge. These inequalities have a particularly pernicious impact on disadvantaged children, limiting their life chances long before they cash their first paycheck. Ignoring the ways in which these non-income inequalities take root and multiply is a costly mistake for society. Here are some examples.

 Let’s start at the most basic level: being alive. Our research shows that a baby born today in southwest Louisiana can expect to outlive a baby born in parts of New Orleans by seven-and-a-half years. At the national level, Asian Americans can expect to outlive African Americans by a dozen years. Lifespan disparities like these are less about access to doctors and medicine—the focus of our national health care debate—than about the conditions of people’s daily lives. Improving conditions in poor neighborhoods such that families have ready access to full-service grocery stores and parks where children can safely play and exercise can go a long way towards laying the foundation for long and healthy lives. Vigorous public health campaigns to raise awareness of the “fatal four” health risks of smoking, poor diet, physical inactivity, and excessive drinking have great potential for reducing both premature death and health care costs. And policies that increase job security can mitigate the health-eroding chronic stress that Americans living paycheck-to-paycheck experience. Communities where preventive efforts are strong boast some of the world’s longest life expectancies. By contrast, other groups of Americans have life spans on par with those that prevailed five decades ago.

 The environments in which different groups of Americans live, right down to the air they breathe, is another sphere of stark inequality. New York City offers an illustrative example. Manhattan, with less than a fifth of New York City’s population, produces over half of its garbage. But when it comes to waste disposal, Manhattan is spared consumption’s downsides. The Bronx has nineteen facilities where garbage and recycling are trucked, sorted, and shipped out; Manhattan has none. With these large-scale garbage facilities come diesel truck pollution, vermin, and cockroaches, all known asthma triggers, making it no surprise that the South Bronx has one of the region’s highest rates of asthma hospitalization. Asthma is a common childhood condition, but it plays out differently depending upon where you live. In some communities, a frantic trip to the emergency room with a life-threatening asthma attack is a mercifully rare occurrence; in others, like the Bronx neighborhoods of Tremont and Melrose, such a trip is all too common. No community welcomes garbage facilities. But the pattern, found across the country, of making poor communities society’s dumping ground is unjust and demands a solution.

 Our country has historically placed faith in education as the great leveler, the answer to inequality. Today, that faith is largely misplaced; on the whole, our educational system is doing more to widen than to narrow inequality. In our work in California, we found that the Los Angeles Unified School District (LAUSD) has high schools with top-notch facilities, well-stocked libraries, and advanced coursework options for most students. But LAUSD also has schools with severe overcrowding, outdated facilities, and few advanced courses. These latter schools also typically serve students facing the greatest out-of-school challenges—low English-language proficiency, poverty, gang recruitment, and more. These variations yield strikingly different results. Graduation rates range from above 97 percent in some LAUSD schools to only 56 percent in others. Within the Los Angeles system, and in districts across the nation, schools whose students have the greatest needs tend to get the fewest resources. In an age when the pie is not growing, greater equity in how it is sliced matters more than ever; our current approach of giving the biggest pieces to those who already have a lot makes little sense. Also critical is getting it right from the start. Robust evidence shows that high-quality preschool for disadvantaged children has benefits that last well into adulthood, with less grade repetition, less need for special education, and a lower dropout rate during the school years as well as less incarceration, higher earnings, and higher rates of homeownership later on.

While income inequalities are large and growing, inequalities in wealth—or net worth—are even larger, and arguably more consequential. For example, while African American young people are 43% more likely to get an MBA than their white counterparts, they are  one-third as likely to become business owners. Why? A key reason is that the typical white household has twenty times the median wealth of the typical black household. This means that African Americans have fewer savings to invest directly in business and, without collateral, are far less successful securing business loans. While other factors, including discrimination, also shape the fortunes of these young people, greater racial equity in wealth would be a game changer. Unfortunately, while incentives for wealthy families to save and invest abound (think mortgage interest deductions and lower tax rates on capital gains), programs for low-income families are few and far between. Developing such mechanisms (including automatic savings accounts for every child at birth, the option to deposit state tax refunds directly into college savings plans, greater support for homeownership, and others) would go a long way toward reducing the huge wealth inequalities that dampen mobility, stifle entrepreneurship, and limit the horizons of too many young Americans.

Fortunately, the leading causes of premature death are largely preventable, environmental equity can become a priority, educational opportunities can be more fairly distributed, and proven programs to increase asset-building and reduce wealth disparities can be brought to scale. Greater recognition of how inequalities in these four areas interact and reinforce one another is the first step, and concrete action in the form of strong policy measures must follow. Income inequality matters, but it’s just one piece of the puzzle; addressing non-income inequalities as well is key to creating an infrastructure of opportunity that serves the next generation of Americans.

The State of America’s Well-Being

This blog post appeared as a commentary in the Stanford Social Innovation Review  on February 28, 2012. You can access the original article here.

As the national debt debate intensifies and public resources become increasingly scarce, determining how best to allocate federal dollars is today’s burning question. So who is making these critical decisions, and how—and how will we know if we’re on the right track? Shaping the path is the 113th Congress, celebrated as the most diverse in history, with more women, people of color, and openly gay or lesbian members than ever before.

Yet our research, which compares Congress to the US population as a whole, shows that members are still disproportionately white and male, and twice as likely to be over age 65 as other Americans. Using as a gauge the American Human Development Index (AHDI)—a composite measure of government health, education, and income data—we find that the divide between representatives and their constituents is vast. Congress as a whole enjoys higher levels of well-being than the highest-ranked state by AHDI: Connecticut.

When it comes to education, more than 95 percent of members of Congress have completed a bachelor’s degree or higher. That number for the US population as a whole is 28 percent. Another fun fact: Members of Congress are 68 times as likely as all American adults to have practiced law.

How does Congress compare to the general population in income? Median annual earnings of American workers ages 16 and older are $29,000. Members of Congress earn $174,000. Put another way, members of Congress earn six times what the typical worker earns annually—and this includes only salaries, not outside income, assets, allowances, or benefits.

The only area in which Congress lags behind the country as a whole is health. The average American can expect to outlive the average member of the 113th Congress by more than one and a half years. The disproportionate number of men (the world over, women live longer) and dearth of Asian Americans and Latinos (the US racial and ethnic groups that live the longest) pull down the average Congressional life span.

OK, so what if Congress is dramatically better off than the rest of us? Don’t we want well-educated people making our laws and allocating our resources? Of course. But we want the same for the rest of America. The real question for our representatives is how to raise AHDI scores across the board so that America’s well-being looks more like Congress’s.

AHDI is a valuable tool for understanding which groups are thriving and which are barely surviving, and where to channel our scarce resources. Rooted in the human development approach, AHDI asks how people—the real measure of American strength and prosperity—are doing. GDP, on the other hand, asks how the economy is doing—and the answer can be misleading. GDP has tripled since 1975, but the big productivity gains that fueled GDP growth have not paid off for the vast majority of Americans; median personal earnings have barely budged in four decades. GDP is increasingly irrelevant as a marker of human progress—the focus of the AHDI.

Congress’s disproportionately high level of well-being means that the majority of its members are detached from the reality of average Americans—people concerned with making the rent, paying for health care, hanging on to their jobs, and living in safe neighborhoods with decent schools for their children. A Congress that reflects the full diversity of American society is more likely to be responsive to its needs. New people bring new ideas, new perspectives, and new information, which spur new solutions. Plus, research shows that diverse groups make better decisions than homogenous groups. So just as we want an America that looks more like Congress in terms of well-being indicators, we also want a Congress that looks more like America in terms of demographics.

So, as they consider budget cuts, what should our representatives do to increase people’s well-being? It’s critical that Congress is not penny smart and pound foolish. It must take a long-term view and understand that there are proven investments we can make now to increase our well-being and global economic competitiveness, save taxpayers money, and reduce our debt.

Congress should invest in fostering the conditions that allowed its members to succeed in their own lives, starting with education. Our representatives, nearly all of who possess at least bachelor’s degrees, have demonstrated the importance of education. Quality preschool has been shown to be the single most cost-effective educational intervention. Congress should start there.

Furthermore, we all know that education leads to better jobs and bigger paychecks. But research increasingly shows that more education also correlates to better, happier, and longer lives for individuals. It also pays big dividends for all of us in the form of increased civic engagement, greater neighborhood safety, more tolerance, and a more globally competitive workforce.

To stay true to our national value of equal opportunity for all, we need forward-looking policies and investments that improve human development outcomes across the board. We need a Congress that represents the people and a tool that can measure real progress in what matters to average Americans: health, education, and economic security. We need to show leadership as a nation in advancing human development, starting by investing in our own citizens’ well-being.

– See more at: http://www.ssireview.org/blog/entry/the_state_of_americas_well_being#sthash.DFuQ0O9W.dpuf

Purse Strings & Heartstrings

This blog post appeared as an Exclusive Commentary in Spotlight on Poverty and Opportunity on November 28,2012. You can access the original article here. 

 

 

 

Since 1970, the size of the U.S. prison population has grown more than 600 percent. If all the Americans currently in jail or prison today lived together in one city, it would edge out Houston as the country’s fourth largest, after only New York City, Los Angeles, and Chicago. 

Policymakers have finally begun to question this incarceration boom. What’s motivating this re-examination is not mounting evidence showing that incarceration isn’t the most effective way to increase public safety. It’s not the disturbing fact that the U.S. locks up more of its citizens than any other nation on earth. It’s not even growing awareness of the prison boom’s disproportionate impact on African American men and their families.

What finally got through was the cost. With today’s strained budgets, mass incarceration is getting a second look because the price tag is just too high. The economic argument succeeded where effectiveness, moral, and social justice arguments all came up short. What lessons can those of us working on issues of poverty and opportunity learn from this?  

First, we need to do a better job of making the connection between government spending in the abstract and the ways in which those investments are essential to the concrete services and infrastructure all of us rely on every day. This includes obvious investments such as roads and schools as well as less evident public services and systems. For example, the legal system allows the market to function through contract enforcement and protection of private property, and regulatory frameworks keep food, toys, and babies’ cribs safe. These collective investments may not be as apparent on a day-to-day basis, but they’re just as vital as roads and schools.

Fortunately, the payoff of these investments is fairly easy to demonstrate. Years of robust research tell us that prevention—in health, education, criminal justice, environmental protection, or infrastructure—can save hundreds of billions of public as well as private dollars annually. Among some clear examples:
 
• For every $1 invested in repairing our aging physical infrastructure and maintaining public health and emergency response systems, we would save $7 in natural disaster response in the form of property protected, response quality and time improved, and potential deaths averted.

• If America invested more in nutrition and exercise programs and created more walking and bike paths, we would reduce the staggering $116 billion spent every year in diabetes treatment.

• According to the 2012 U.S. Peace Index, for an expenditure of about $1,000 on prisoner education, taxpayers receive roughly $2,500 in benefits thanks to decreased recidivism and its associated costs to government and crime victims.

Second, we need to better account for both the cost of what we are already paying for our failure to invest in people as well as the benefits that accrue to people and communities when we direct our resources to human well being.

With just a little data, this is possible to do. For example, according to the nonpartisan California Legislative Analyst’s Office, the state spends $47,000 a year to keep a single prisoner behind bars. Head Start, in comparison, costs an average of $7,600 per child annually. Studies have shown that at-risk children who participate in high-quality early education programs are significantly less likely to spend time behind bars as adults than those who do not. In the long run, investment in early childhood education decreases incarceration rates and creates a cascade of measurable savings in education, social welfare programs, law enforcement, and more.

The legacy of public investments is all around us—so much so that we tend to take it for granted. Just as we need to make the economic case for investing in people, we also need to do a better job of showing how collective investments benefit all of us. Indeed life as we know it would be impossible without a functioning government funded by tax dollars. In the aftermath of large-scale disasters like Hurricane Sandy, the essential role of government is abundantly clear—but memories fade surprisingly fast. We need to make the case clearly and consistently ourselves, rather than waiting for hurricanes, floods, and earthquakes to make it for us.

Few of us started our work on issues of poverty and opportunity with the goal of making the case for efficient government expenditure. We did it for moral, ethical, spiritual, humanitarian, and social justice reasons. But when we make the case for investing in people only on those terms, we are preaching to the converted and failing to convince a significant share of our fellow Americans.

To print a PDF version of this document, click here.

Kristen Lewis and Sarah Burd-Sharps are co-directors of Measure of America of the Social Science Research Council. 

MOA Data Featured in CaliforniaCampaign

Last year, Measure of America published A Portrait of California, which examines the well-being of California residents using the American Human Development Index (AHDI). This research was supported by a consortium of organizations hoping to stimulate dialogue and action to address challenges facing California today.

The study, which has already been well-received within the academic and philanthropic communities and is a frequently quoted source for the media, has now become the basis for a California-wide public health campaign.

Research from A Portrait of California is appearing on billboards all over the state, as part of the Health Happens Here campaign, a community-based health initiative supported by The California Endowment, one of the sponsors of A Portrait of California.

One of the first steps involved in calculating the AHDI for California was to determine the life expectancy for people living in each and every neighborhood and county group, using raw data from the California Department of Public Health. Measure of America’s life expectancy calculations are the only ones available for small geographies in California and as such, were among the novel and unique contributions of A Portrait of California

The Health Happens Here campaign uses poignant images of young Californians alongside life expectancy estimates from A Portrait of California to powerfully illustrate the wide gaps in health outcomes that exist between communities within the state. This video, produced by the California Endowment, speaks to how the campaign is using data from the report to motivate people across the state to see connections between social and environmental conditions in their communities and the kinds of health challenges they face as a result.

In the public health community, understanding of these “social determinants of health” is growing. The World Health Organization defines this term as, “the circumstances in which people are born, grow up, live, work and age, and the systems put in place to deal with illness.” It is now important to find ways of conveying this concept to the general population. The Health Happens Here campaign holds great potential to raise awareness among communities throughout California that although doctors and medicines are vital once you are sick, the conditions of our daily lives hold the key to better health and greater longevity. Furthermore, these images draw public attention to inequalities in living standards and health outcomes among California residents, thus encouraging policy makers to target and ameliorate these disparities.

Measure of America is proud to have been involved in The California Endowment’s Health Happens Here campaign through their work on A Portrait of California and is looking forward to the positive impact it will have within the state of California.


A Portrait of Marin’s Widespread Local Impact

A Portrait of Marin, a county-level human development report produced by Measure of America and commissioned by the Marin Community Foundation (MCF), uses the American Human Development Index to assess well-being and needs in Marin County, California. The report compiles and analyzes data from official U.S. government sources to provide accessible, quantitative information on racial and ethnic demographics, economic conditions, health, and education within the county.

The report facilitates interaction between citizens, the public sector, and the private sector by providing a single source and a common language with which to deliberate community issues. A Portrait of Marin is also being translated into Spanish to enable the county’s growing Latino population to better understand aspects of the report that discuss this community’s needs and to take action to address them.

At a a community forum sponsored by the First Presbyterian Church of San Rafael and the Marin Interfaith Council on May 23rd, MCF president and CEO Dr. Tom Peters stated that the Foundation commissioned the report “to promote equity and diversity through the process of engagement”— a way to turn statistical data into tools of empowerment. When we spoke with MCF this June, they discussed how the report has catalyzed both discussion and action in Marin since its publication in January 2012. More specifically, A Portrait of Marin:

    • INCITES PUBLIC DEBATE: The report engaged residents by creating a rare and nonpartisan space for them to discuss pertinent issues affecting their everyday lives. After the release of A Portrait of Marin, a lively back-and-forth between impassioned Marin residents emerged in local papers and online, and drew attention to issues of concern such as housing, child care subsidies, immigration, and education.
    • INFLUENCES HOUSING POLICY: Experts and advocacy groups within the county are using the report to effect policy change. One such group, Action Coalition for Equity, evoked the report to argue the need for further economic opportunities and housing for low-income families in Marin. The Marin Workforce Housing Trust even remarked that the report offered the most convincing argument for the increase in affordable housing yet. In fact, as reported in the New York Times, a private citizen of note, George Lucas, (while perhaps not directly inspired by the report) will turn his property, Grady Ranch, into affordable housing with MCF’s assistance.
    • INFORMS BANK INVESTMENTS: The report brings to light socio-economic gaps within the county, and banks such as Wells Fargo and Union Bank are using the report to fulfill their obligations under Community Reinvestment Act, an act approved by Congress to reduce discriminatory practices in low-income communities.  

These examples demonstrate just some of the wide-ranging impacts that a comprehensive human development report can have on local communities. Reports such as A Portrait of Marin are designed to be statistically robust yet clear and accessible, and to help communities identify areas of need and develop policy agendas.

Learn more about Measure of America’s impact and accomplishments, and visit our Publications page for a full listing of human developing reports.

Touring NYC With Marketplace Radio

You might have recently heard an interview on Marketplace with Measure of America co-director Sarah Burd-Sharps. The segment focused on the highs and lows in New York City—more specifically, on Manhattan’s East Side and the South Bronx. These two locales are at both extremes of the distribution of median personal earnings in the entire nation; quite a startling statistic considering they are only six subway stops apart.


Photo Credits: Diana Tung.

 

Measure of America led a tour of these areas for Marketplace, pointing out how government investment in differing areas is sometimes very uneven. The way the pie is divided has large implications for individuals and communities, as is evident in the quality of local infrastructure and services. We made sure to visit public facilities within the same system in both areas to explore how public resources are allocated. The tour included two branches of the New York Public library system, two parks in the NYC Department of Parks and Recreation, a waste transfer site in the Bronx, as well as a proposed site in the Upper East Side.

East Side, Manhattan

Congressional District 14Annual Median Personal Earnings: $51,507

Sites visited:
– John Jay Park – Carl Shurz Park – Webster Library – Waste Transfer Site

South Bronx

Congressional District 16Annual Median Personal Earnings: $19,043

Sites visited:
– Rainey Park – Dawson Playground – Woodstock Library – Proposed Waste Transfer Site

Six miles and five hours later, plus many more in the recording studio, here you have it: a four-minute clip on Marketplace!With sincere thanks to Marketplace, David Brancaccio (@economy4_0) and Ann Heppermann. Also, stay tuned for more on our Tale of Two’s series. We’ll be following up on this post with examples from other places across the nation.

What do you think about these disparities? Do you see them within the places you live? Leave us a comment below.

You can also visit these sites on Google Maps:

MOA Responds to A Portrait of Marin Public Debate

As co-directors of Measure of America, we are gratified by the lively exchange of ideas among citizens we have seen in Marin County, California over the last two months in connection with A Portrait of Marin, our first-ever county-level American Human Development Report. As always, we aimed to stimulate fact-based dialogue by providing easy-to-use, methodologically sound tools for understanding the distribution of well-being and opportunity.

Commissioned by the Marin Community Foundation, A Portrait of Marin looks at how Marinites are faring by place and by gender, race, and ethnicity using the American Human Development Index, a measure of life expectancy, education, and earnings. 

In other words, we combined official statistics on how long people are living, the proportion of children and young people who are in school, the highest academic degree adults have attained, and the salaries of typical workers into a single number that falls on a scale from 0 to 10.  GDP tells us how the economy is doing. The American Human Development Index tells us how people are doing.

The Index is based on a methodology developed at the United Nations that has been in use for over 20 years in 150 countries. This work became the international gold standard for measuring well-being because it provided a much-needed diagnostic tool for policymakers and the general public to understand where they were succeeding in creating opportunity and where more effort was needed. And rather than focus only on economic metrics, the human development approach offers a way to address health, education, and living standards in the interconnected way that people actually experience them and opens a space for developing comprehensive and lasting solutions to challenges in these areas.

Our experience from Mississippi and Louisiana to California has been, somewhat counter-intuitively, that people who find themselves in the top spots on the Index often argue that they don’t actually belong there. We are not asserting that people in high-scoring locales—from Ross in Marin to the Upper East Side of Manhattan—have no problems or poverty. A high score on the American Human Development Index does not inoculate a place or group of people from the challenges inherent in the human condition; hearts break, cancers take hold, and life disappoints in affluent and struggling communities alike. But there are very concrete differences that matter for people’s lives and life chances—such as a 13-year life span gap between high and low-scoring communities in Marin, or the fact that Asian Americans in New Jersey live, on average, an astonishing 26 years longer, are 11 times more likely to have a graduate degree, and earn $35,610 more per year than South Dakota Native Americans. Life is not perfect for Asian Americans in New Jersey, but the typical Asian American in New Jersey nonetheless has a far more robust set of capabilities for living to their full potential and investing in themselves and their families than the typical Native American in South Dakota. Likewise people living in Ross as opposed to people living in the Canal area of Marin.

We invite people who have not yet had a chance to read A Portrait of Marin to do so, and to explore the interactive mapping program that allows users to map several dozen indicators by census tract in Marin and across the country.

10 Key Points on Inequality

As the presidential campaign heats up, here are ten things the candidates should understand about why extreme inequality is toxic for America.

Read more

The Supplemental Poverty Measure: A (Small) Step in the Right Direction

The Census Bureau recently released the supplemental poverty measure (SPM). By this gauge, 49.1 million Americans, or 16 percent of the population, live in poverty — more than the official poverty number of 46.2 million, or 15.1 percent of the population, reported in September.

Read more

Could London-style Riots Happen in New York City?

New York City Mayor Michael Bloomberg recently expressed concern that unrest in capitals around the world, from Egypt to England, could spread to the US. As we write, hundreds of protestors occupy Liberty Park near Wall Street. The riots in London were not just about material poverty, or even cuts in social services. Fundamentally, they were about extreme inequality and a sense of helplessness to change it. As Naomi Klein pointed out in “Daylight Robbery, Meet Nighttime Robbery,” they were about what those cuts represent: being cut off.

Read more

News | Events