Category Archives: Income

Blog: How to Respond to Implausible Claims about “Welfare”

How to Respond to Implausible Claims about “Welfare”

By Colleen Ross

February 13, 2015

We’ve all heard the claim — at the Thanksgiving dinner table, in the church social hall, at the water cooler, or even in our own email inboxes — that government programs are too generous and are disincentives to work. Last week, we were contacted by a NETWORK friend looking for guidance on how to respond to such an argument. Frustrated with the persistence of this claim and its popularity in our political discourse, I thought a succinct but thorough response may be useful to have on hand.

The first thing to understand is that the basis of this argument and the source of any numbers cited to support it are in a report published by the Cato Institute, The Work vs. Welfare Trade-Off. Originally written in 1995, the report was updated and re-released last year, prompting another wave of attention to its claims as well as robust criticism of its research methods and conclusions by numerous economists.

If you, like me, have heard about this argument, I hope the response I sent out (below) is helpful to you.

It can be tempting to believe that others are receiving undeserved assistance, but numerous sources have addressed and disproved the data compiled in the two Cato reports published in 1995 and 2013 that many cite as proof that safety-net programs disincentivize work. (1, 2, 3) Furthermore, the vast majority of safety-net entitlements and mandatory programs are not given to people who choose not to work, but instead go to the “elderly, seriously disabled, or members of working households” (4)

Two fundamental errors in the reports are an assumption that families receive all possible forms of assistance simultaneously – and that they are not working. Actually, as pointed out by the Center on Budget and Policy Priorities, a family receiving numerous kinds of assistance is relatively rare, and many eligible families don’t receive any benefits at all. In addition, a significant percentage of families receiving some kinds of assistance include people with jobs who, because of very low wages, fall below the poverty line and thus qualify for help.

We at NETWORK base our analysis on reports from reputable, bipartisan sources as well as the shared lived experiences of our Catholic sisters who work on the ground every day with those at the margins. After more than four decades, what we have found emphatically refutes the narrative that safety-net programs are so generous that they dissuade men and women from entering the workforce, or from working full-time jobs. Sister Simone Campbell’s testimony to the U.S. House of Representatives Budget Committee is a concise summary of NETWORK’s position on this topic. (5)

The United States has the largest economy in the world, yet the most recent report from the Census Bureau found that 45.3 million people were living in poverty last year in our nation. (6) The Children’s Defense Fund recently released a report on the state of child poverty in the United States, studying the situation of the 12.2 million children who fell under the poverty line in 2013, even with federal safety-net programs taken into account. (7) These excessive numbers of our brothers and sisters who are struggling with poverty should be morally impermissible to us living in the wealthiest country in the world. Catholic Social Teaching principles call on us to judge our society by how our most vulnerable fare, and when so many people in our society live below the poverty line we must take action communally to change that.

Safety-net programs are intended as a last resort, social insurance program to care for those who are struggling. Too often, these programs are left to survive on inadequate funding or cut entirely, making it very difficult to serve everyone who needs their vital assistance. This is especially problematic for housing and energy assistance programs.

Finally, the safety-net programs that our government administers are investments in our families, our nation, and our future and have proven effectiveness. The Earned Income Tax Credit and the Child Tax Credit are two such programs that have been found to increase employment rates of parents, reduce child poverty, and have a positive impact on children’s school performance. (8) Similarly, increasing SNAP benefits is one of the most effective strategies for boosting a weak economy, generating about $1.70 in economic activity for each additional dollar invested. (9) Safety-net programs are not disincentives to work; they are positive drivers of the economy and moral investments in our nation’s greatest strength: people.

Resources used:

Blog: The Many Effects of Inequality

The Many Effects of Inequality

By Carolyn Burstein

October 15, 2014

Although there have been several blogs on this website on the topic of inequality, the issue is increasingly relevant for so many reasons, not the least of which is the fact that inequality is the source of so many economic ills. Wherever one looks the specter of inequality rears its head.

In my recent blog on the Census Bureau’s poverty data, I referred to a recent article in the Washington Post about the effects of the wealth gap on the inability of young people to purchase their first home. I referred as well to a recent study by Standard and Poor’s describing how states were experiencing a decrease in normal revenue from sales taxes due to wage stagnation and a lack of demand among the majority of their populations. Earlier I had written a blog about the use of “dark money” in political campaigns, thanks to the Supreme Court decisions (Citizens United v. FEC and McCutcheon v. FEC), which give the wealthy an outsize influence in elections. And the list goes on.

Let’s consider some of the effects of inequality on economic growth, various social issues, global trade, higher education, and even the Scottish vote. Naturally, the results of inequality are even more far-reaching (and damaging), than this disparate list suggests, but we will scrutinize these for starters. But first, let’s focus on a few issues related to inequality. Did you know that regressive payroll taxes, which cost people in poverty proportionately much more than the wealthy, are projected to raise about one-third of federal revenue in 2015? Or that the U.S. ranks highest among the high-income countries (according to a study by the Organization for Economic Cooperation and Development – OECD) in its share of relatively low-paying jobs? These are just two fascinating details in an October 1, 2014 article in the Financial Times by Martin Wolf, economics editor of the paper.

So, how much wealth do these rich people have? A very similar question has recently (mid-September 2014) been put to people in various countries. They were asked in a poll how much money top executives of major companies make relative to the average workers in their firms, and in the U.S. the median respondent believed it was about 30 times more. Unfortunately, chief executives earn more than 300 times as much as ordinary workers, an amount vastly underestimated by nearly all Americans and reflecting the concentration of wealth at the top of the financial pyramid. This situation is what Thomas Piketty in his bestselling Capital calls the super salaries of “supermanagers”.

Celebrities and sports/movie stars earn far less than many of the financial barons who dominate the upper strata of the wealthy. In 2013 the top 25 hedge fund managers received, on average, almost a billion dollars each, according to Paul Krugman. Ignorance about this problem may be one reason why income inequality hasn’t yet become a dominant issue in elections!

Data from Thomas Piketty and Emmanuel Saez, the academics who have made a specialty in documenting the rise of income inequality around the world, shows that during the first three years of the recovery from the Great Recession (2009-12), the top 1% of the population, took home 95% of the income gains, while incomes actually fell for the bottom 90%. Until the recessions of the 1970s, most income gains experienced during subsequent expansions accrued to most of the people, but with each expansion since that time, the bottom 90% captured a smaller and smaller part of income. Family net worth, a measure of accumulated wealth, showed a similar skewing upward.

Some say that the Federal Reserve’s policies of zero interest rates and quantitative easing (buying bonds with newly-printed money) are inadvertently responsible for the income inequality the nation is currently experiencing. Certainly, inequality could have been worse without these policies, since they helped to prevent massive joblessness in 2008-09. But there is no doubt that extremely low interest rates hurt small savers who were not able to diversify into higher-yielding investments. And Wall Street enjoyed the Fed’s “easy credit” and the profits of the bull market. Many couldn’t help noticing that years of an ultra-loose monetary policy might risk skewing the U.S. income distribution upward. However, most of the evidence for income inequality indicates that its rise started many decades before and its causation is multiple, not least of which is the fact that tax and spending policies are much less redistributive than they were even a few decades ago.

It’s time to consider the effects of inequality on the various issues raised above. First, let’s look at inequality’s effects on economic growth. At an IMF seminar in mid-April 2014 there was a clear conviction that economic growth and inequality were mutually incompatible. The participants welcomed the growing consensus around the world on the need to address inequality and the IMF’s role in this process. The Deputy Managing Director of the IMF clarified that their advice to countries now always includes jobs, growth and employment in policy formation.

There is a strong belief that inequality today has reached levels that threaten economic stability and growth. As Joseph Stiglitz, the Nobel Prize-winning economist, has written in The Price of Inequality, “Widely unequal societies do not function efficiently, and their economies are neither stable nor sustainable in the long term. Taken to its extreme – and this is where we are now – this trend distorts a country and its economy as much as the quick and easy revenues of the extractive industry distort oil-or mineral-rich countries.”

In the U.S., the Great Recession illustrates how an excess of inequality can warp an economy. The housing boom crisis showed that a strong segment of the public was unwilling to accept their depressed spending power, and encouraged by those who, often illegally, eased credit standards, were able to sustain their purchasing power by borrowing using flimsy home mortgages. Marianne Bertrand and Adair Morse of the University of Chicago have found that legislators who represent constituencies with higher inequality are more likely to support the easing of credit. And credit splurges, they find, bring on instability in the financial sphere. The economy, propped up on shaky credit, becomes more vulnerable to shocks, so that when a recession comes, the economy virtually collapses as banks fail and consumer spending drops.

Income inequality also exerts a significant drag on demand, as people with low-incomes have been forced through credit contraction to spend less. This situation acts as a vicious circle, since business investment is curbed by weak growth in demand for products and services. Many companies have been encouraged to replace unskilled labor with machines, contributing further to downward wage pressure. It is this wage stagnation that is a major contributor to today’s weak recovery. So, income inequality comes full circle. The global trends are stark. Stefano Scarpetta, director for employment, labor and social affairs at the OECD, says’ almost all advanced economies have seen labor’s share of gross domestic product fall over the past 20 years.”

Income inequality causes a range of social problems by undermining social cohesion and increasing social divisions and placing greater importance on social hierarchy, status and class. Distinctions between rich and poor neighborhoods become paramount. Social relationships are severed and trust is lost. Indicators of women’s status are generally better in more equal societies. Rates of both property crimes and violence increase as income differences widen. Inequality drives status competition, which drives personal debt and consumerism, and the latter is a major threat to sustainability. Stronger community life in more equal societies also means that people are more willing to act for the common good – they recycle more, spend more on foreign aid, and focus more on peace. Business leaders in more equal countries rate international environmental agreements more highly. The social fabric of society allows populations to either flourish or fail.

What has been the impact of our global trade efforts on income inequality? Our trade agreements of the past 20 years have led to a massive decrease in tariffs from over 40% in the 1950s to less than 3% on most industrial goods today, and other barriers to trade have been radically reduced, with the result that prices for these goods over the past 10 or 20 years have been drastically reduced. But it is well to keep in mind that the U.S. comparative advantage is in capital and technology and our disadvantage is in labor, particularly unskilled labor. Thus, our lower-income people are competing with those whose wages are significantly depressed by American standards.

A recent study by the U.S. International Trade Commission has concluded that global trade in general has contributed to 10 to 20% of the wage gap between more skilled and less skilled workers, certainly not a majority of the difference, but a significant slice of it. In negotiating a free trade agreement with some developing countries, such as Vietnam and Malaysia, in the Trans-Pacific Partnership (TPP), the U.S. should bear in mind that a number of Asian countries have suppressed the value of their currencies (currency manipulation), which has severely hurt our economy and depressed the wages of U.S. workers. The TPP must address issues like currency manipulation so that income inequality does not become greater than it already is.

Also, the study points out that the U.S. needs a robust Trade Adjustment Assistance (TAA) program to provide funds to help workers who have been laid off to get the training and education they need to launch a new career and get unemployment benefits during their transition. The current TAA is considered worthless by many of the workers it has been intended to help because it either fails to provide the unemployment compensation for the jobs they have lost or fails to provide them with adequate training and skill levels needed to enable them to acquire jobs in new areas. The 113^th Congress has not taken any action on this issue.

Although not the only concern of many Democrats regarding global trade – issues like labor rights, environmental protection and patents are others – income inequality is central for many. For example, Robert Reich writes: “This massive deal [TPP] would further erode the jobs and wages of working and middle-class Americans while delivering its biggest gains to corporate executives and shareholders.” Harold Meyerson, writing in the Washington Post earlier this year agrees with Reich but also notes that the U.S. trade deficit with Canada and Mexico rose from $27 billion in 1993 to $181 billion in 2012. Meyerson writes, “when the case for free trade is coupled with the case for raising workers’ incomes, it enters a zone where real numbers, and real American lives, matter…Such deals [referring to the TPP] increase the incomes of Americans investing abroad even as they diminish the incomes of Americans working at home.”

A Huffington Post article earlier this year noted that the Peterson Institute for International Economies – a strong supporter of global free trade – estimated that nearly 40% of the observed growth in U.S. labor inequality was attributable to trade trends. It isn’t difficult to understand why after calculating the employment effects of trade flows using the government’s own methodology for translating the U.S./Canada-Mexico trade deficit figures for 2012. This trade agreement alone has been responsible for the American loss of one million jobs and doesn’t include the loss of jobs associated with the U.S.-South Korea Free Trade Agreement, which have been substantial.

The Huffington Post article warned that one should not necessarily focus only on the number of jobs lost, but on their composition. The millions of workers who had belonged to the middle class but did not have a college degree were competing for non-offshorable, low-skill jobs in sectors such as food service and retail, where wage stagnation had already occurred, due in part, to the excess supply of laborers. According to the U.S. Bureau of Labor Statistics, two of every three displaced manufacturing workers who were rehired experienced a wage reduction, most of them more than 20%. Is it any wonder that Democrats in Congress are reluctant to grant the president “Fast Track Authority” which would enable trade agreements similar to those negotiated in the past 20 years, to be voted up or down in Congress without changes?

So, what are the chances of higher education coming to the rescue of income inequality? If, as Alan Blinder (former Federal Reserve vice-chair, Princeton economist and NAFTA supporter) says, one out of every four American jobs could be offshored in the foreseeable future, then, it would seem, young, disadvantaged “millennials” must overcome barriers to a first-rate higher education. In a September 21, 2014 article in the New York Times, Vicki Madden, a former high school teacher, lamented the social isolation and alienation that most of the bottom 50% of Americans experience in the 200+ “top-tier” colleges across the country. Colleges now are more divided by wealth than ever, she writes. Many of these kids struggle academically and do not feel comfortable asking their professors for help or feel welcome in student study groups. These are among the prime reasons so many drop out.

In a recent paper, Anthony Carnavale and Jeff Strohl found that at 193 rather selective colleges, only 14% of students were from the bottom 50% of Americans in terms of socioeconomic status. And Martin Wolf, in his October 1, 2014 article in the Financial Times (referred to above) quotes a Standard and Poor’s report that for the poorest households college graduation rates increased by only about 4 percentage points between the generation born in the early 1960s and the early 1980s. The graduation rates for the wealthiest households increased by about 20 percentage points over the same period. Yet without a college degree, the chances of upward mobility remain dim. One can only hope that those born since the early 1980s fare better than their older brothers and sisters.

What in the world does the Scottish Vote for independence have to do with American income inequality? We Americans probably paid little heed to that all-important UK vote on September 18, 2014. This was the same week that the U.S. Census Bureau released data on U.S. poverty which divulged that so-called middle-income Americans made eight % less in 2013 than they did in 2007. What these facts have in common is that many millions of people in both Scotland and America (and many other countries, too) no longer trust their more wealthy governing bodies.

The Scots have little in common with our “Tea Party.” They are more left-wing than the majority in the British parliament and its ruling party, desire more social welfare spending rather than austerity, want greater efforts in the environmental area and oppose the British parliament’s emphasis on defense. Millions of Scots proved that their tolerance for their governing institutions had badly diminished. And London has heard the results of the vote (closer than many believed possible) and promised reform, although specifics were in short supply.

The U.S. poverty data are bleak and make clear that a middle-class American family is worse off financially today than it was 15 years ago. The fact that the system isn’t working for most American workers pervades public opinion polling as well as mid-term election results for the past few years. The causes are multiple, as the foregoing indicates. The issue in this country is whether tolerance of the current system will continue or what direction the opposition to it will take.

If the ability to tolerate our economic system wanes, we, at NETWORK, oppose the tools of violent conflict. We strongly believe in the power of the ballot box and legislation to right grievances. Because we are a government of, by and for the people, we believe that people with a comprehensive vision, compassion, and real leadership qualities will run for office, be strongly supported by those who oppose the status quo and, if elected, will serve the common good by supporting all Americans, including especially poor and vulnerable families. Often this will mean supporting policies that require uncommon courage to change the status quo in ways that are innovative but desirable for those who have borne the scourge of injustice. All government leaders have a shared duty to all segments of society, but especially to ensure that no one is left behind. And that means that today’s level of income inequality requires a sizable level of moderation.

Blog: Shared Prosperity Remains Elusive According to Poverty Data Released by the Census Bureau

Carolyn Burstein

Sep 18, 2014

While the Census Bureau data shows that the official poverty rate fell from 15% in 2012 to 14.5% in 2013, that fact is little consolation to low and middle-income families whose wages and salaries have been largely stagnant, and in many cases, even declining since 2000. Median income for non-elderly households fell from $65,785 to $58,448, a decline of $7,337 or 11.2% from 2000 to 2013. The data is from the Census Bureau, but the idea of following wage trends to determine the path of income inequality is straight from the research and writing of the Economic Policy Institute (EPI). When one examines the data over a longer timeframe, the trends are deeply disappointing and the culprit is wage stagnation.

In the words of EPI, “Since 1973, the median man working full-time, full-year has seen no sustained growth, dropping from $52,421 in 1973 to $51, 055 in 2002 and falling even further over the 2002-07 recovery and the recession to $50, 033 in 2013.” Women’s wages have also stagnated, but for a shorter period of time, from $39,108 in 2002 to $39, 157 in 2013. As Jared Bernstein argues in his September 16 blog “On the Economy” these types of facts “contribute to the growing disconnect between growth and the economic well-being of most households.” The reality of a lack of shared prosperity is a fundamental challenge to Congress, many of whose members conveniently ignore the idea of the common good.

Before we congratulate ourselves on attaining a 14.5% poverty rate, let’s remember that that figure is the same amount of poverty we suffered in 1993, in 1982 and in 1966, according to Census Bureau charts. That 14.5% poverty rate is well above the 11.3% rate in 2000. Today’s median income is still 8% lower than in 2007 and is barely keeping up with inflation. There were 45.3 million people living in poverty in 2013, roughly the same as the year before and not a statistically significant change from 2012. The major reason for the decline in the official poverty rate is a perceptible increase in the number of full-time jobs, which allowed a gradual shift from what had become a trend toward part-time employment.

Using the Gini Index – the most common measure of household income inequality used by economists, with zero representing total income equality and one equivalent to total inequality – income inequality was .476 in 2013; the change from 2012 was not statistically significant. And changes in income inequality between 2012 and 2013 were not statistically significant as measured by the shares on aggregate household income by quintiles. It is worth noting, however, that income gains for the top 5% over the period from 2009 to 2013 was .5% or $1542, the only income group to experience any gains.

Robert Greenstein, President of the Center on Budget and Policy Priorities (CBPP) reminds us that federal austerity policies, such as the sequestration budget cuts as well as tax policies that took effect in 2013 reduced economic growth substantially. The Congressional Budget Office (CBO) projected at the time that these policies alone cost the economy more than one million jobs. We could have enhanced economic growth and strengthened productivity if we had invested more in infrastructure and training people for jobs.

The poverty data released by the Census Bureau on September 16, 2014 doesn’t include the impact of many governmental programs on the poverty rate, such as non-cash benefits (e.g. Earned Income Tax Credit [EITC]) and expenses incurred (e.g. out-of-pocket medical expenses, child care). This rate is known as the Supplemental Poverty Measure (SPM) and is considered to be a more accurate measure, even though it does not replace the official poverty measure. Poverty estimates using the SPM were published by the Census Bureau in November 2011, 2012 and 2013. Supplemental poverty estimates for 2013 will be published in October 2014.

Researchers at Columbia University looked back with their own SPM-like measure in 2013 and concluded that government anti-poverty programs were a significant deterrent to poverty, especially among children, the group that is absolutely the worst-off in the poverty statistics again this year. If the poverty data looks high today, it would be even higher without these vital government programs.

In 2012, the Supplemental Poverty Rate was 16%, rather than the 15.1% that the official poverty rate indicated. Without Social Security, the Supplemental Poverty Rate would have been 24.5%. The National School Lunch Program lowered the SPM by about .5%; housing subsidies lowered it by approximately another 1%. It’s important to keep in mind that the official poverty rate does count Social Security, Supplemental Security Income, unemployment insurance, child support and Temporary Assistance for Needy Families (TANF), but does not capture other cash benefits (e.g. food stamps) and non-cash benefits, like the EITC and does not include many significant expenses of poor families. By failing to capture all benefits that are often vital to poor families as well as many of their key expenses, the official poverty statistics are inadequate.

The value of the safety net in the reduction of poverty cannot be overstated. The Census Bureau has provided the data that allows us to conclude that the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) has lifted 3.7 million people above the poverty line in 2013, including 1.5 million children. And unemployment insurance also kept 1.2 million people out of poverty in 2013. Without these and other safety net programs the poverty rate would have been even higher.

In Pope Francis’s address to the UN Food and Agricultural Organization (FAO) on June 20, 2013, he made clear why groups like the FAO (and, by extension, all of us) must continue to work with low-income families: “A way has to be found to enable everyone to benefit from the fruits of the earth, and not simply to close the gap between the affluent and those who must be satisfied with the crumbs falling from the table, but above all to satisfy the demands of justice, fairness and respect for every human being.”

(There is much to say about how different age, gender, racial and ethnic groups fared in the poverty statistics. We will focus on these various groups next week.)

Blog: Paul Ryan: Let’s Work Together to Expand the EITC – AND Increase the Minimum Wage – America Needs Both

Laura Peralta-Schulte

Jul 31, 2014

It is not often that Sister Simone and Rep. Paul Ryan agree on policy issues. That is why NETWORK was thrilled to see that a core idea in Ryan’s recent Expanding Opportunity in America discussion draft was a call to dramatically expand the Earned Income Tax Credit (EITC) to include childless workers and workers between the ages of 21 and 64.

At the American Enterprise Institute unveiling of his anti-poverty proposal, Ryan credited the EITC as an idea inspired by the late economist Milton Friedman–or “Uncle Milton” as he affectionately called him–who proposed the merits of a “negative income tax” to provide assistance to low income Americans. At NETWORK, we believe that the EITC is a just, progressive tax policy where those who work and live on the edge of poverty pay less tax than those who can afford to pay more. Regardless of philosophical bent, economists across the spectrum believe that the EITC is one of the most effective anti-poverty programs in America and we strongly encourage all politicians–Republicans and Democrats–to move forward to enact this change that would lift millions out of poverty.

Much of Representative Ryan’s comments in the section related to the EITC argue that the EITC is a policy that should be enacted as an alternative to raising the minimum wage. We at NETWORK respectfully disagree with Rep. Ryan’s analysis and believe that expansion of the EITC coupled with an increase in the minimum wage is the most effective way to combat poverty.

Our advocacy is informed by the Catholic Church’s fundamental belief in just wages. Since 1891, the leaders of the Catholic faith have taught explicitly that:

“Before deciding whether wages are fair, many things have to be considered; but wealthy owners and all masters of labor should be mindful of this—that to exercise pressure upon the indigent and the destitute for the sake of gain, and to gather one’s profit out of the need of another, is condemned by all laws, human and divine” (Pope Leo XIII, Rerum Novarum 20)

Pope Francis recently restated this sacred obligation by suggesting that a society that “does not pay a just wage,” that “only looks to its balance books, and that only seeks profit “is unjust and goes against God.” He further states in his papal exhortation, the Joy of the Gospel, “As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets…and by attacking the structural causes of inequality, no solution will be found” to lift people out of poverty.

Three million workers in the United States live in poverty despite working year-round, full-time jobs; one-third of families with children living in poverty include a full-time worker; and nearly 60% of families living at 200% of the federal poverty line—which includes a family of four trying to get by on less than $50,000 a year—have at least one member of the household working. Put another way, in 1968 the minimum wage was enough to keep a family of three out of poverty; into the early 1980s, the minimum wage was enough to keep a family of two out of poverty; but the minimum wage can no longer keep even a family of two above the poverty line.

One of the structural changes that needs to occur is for employers to pay their full-time workers a living wage orat least wages above the poverty line. The latter, in current dollars, is a rate of $10.10 an hour. Paying full-time employees poverty wages is unjust.

Contrary to Ryan’s analysis, there are many economic benefits to raising the minimum wage. An increase in wages increases demand in an economy that is in desperate need for it; an increase to $10.10 would raise wages for 28 million workers by $35 BILLION and two-thirds of those workers are women many of whom are sole breadwinners for their families. Further, data shows that states that have raised the minimum wage in 2014 have added more jobs than the states that didn’t.

In addition, in Ryan’s “opportunity grants” described elsewhere, he forces people to set goals of getting a job that pays above the minimum wage. If Ryan recognizes that a minimum wage job does not lift someone out of poverty, wouldn’t the easier solution just be to raise the wage? Without an increase, Ryan is only changing the WHO in who lives in poverty because minimum wage jobs will still need to be done; so really he would just be feeding new people into poverty as he lifts others out. The only thing to break that cycle is increasing the federal minimum wage.

If Ryan wants to save government funds, why isn’t he asking companies to pay their workers a living wage? We know that a significant portion of people receiving government assistance for food and other necessities actually work full-time, but don’t make enough to support themselves or their families. Is it fair that the average CEO of profitable companies make 933 times more than a minimum wage worker? We at NETWORK believe the time for structural change is now.

Finally, Representative Ryan proposes to pay for an increase in the EITC through three mechanisms: cutting social programs, cutting access to the Child Tax Credit (CTC) for low income, undocumented working families who pay their taxes through an IRS-issued Individual Tax Identification Number (ITIN) rather than a Social Security number, and by cutting “corporate welfare.” As we begin a dialogue on tackling issues of poverty, we suggest a good place to start is to agree to a simple guiding principle: any proposal to help lift people out of poverty should not be paid for by people living in poverty. In particular, we reject any call to deny CTC benefits to legal residents and undocumented workers who file their taxes using ITINs and who pay billions of dollars in taxes—payroll, Social Security and Medicare—and yet are not eligible for benefits. Cutting them off from the CTC will hurt up to 5.5 million children, 4.5 million of whom are U.S. citizens. These taxpaying families—like all families—deserve support and an opportunity to succeed.

We do believe, however, that Ryan’s proposal to cut corporate welfare, rather than the safety net, is the way to pay for these increased benefits to families living in poverty. In his presentation at AEI, Ryan specifically called for a cut in oil and gas subsidies. Here too NETWORK is in full agreement to close tax loopholes to wealthy corporations and individuals, in order to pay for programs to support the common good.

Representative Ryan, we welcome this important dialogue and hope to work with you to expand the EITC and, more generally, to promote programs in support of the 100%.

Blog: Low Wages and Real Lives

Simone Campbell, SSS

Jul 18, 2014

A couple of months ago I met Robin, a young woman in her mid-twenties, who works for minimum wage in a profitable clothing store chain. We were at the White House for President Obama’s signing of the executive order to raise the minimum wage for federal contract workers. She was excited that a good friend of hers would receive a raise because of this order. Her hope was that eventually she too would be able to get a raise.

After we had spoken for a time while we waited for the president, she talked a bit about how difficult it was to live on minimum wage – about $15,000 a year before taxes. She confided in me that “you wouldn’t know it by looking at me, but I have to live in a homeless shelter because I can’t afford rent in this area.” I was stunned. I knew it was difficult to live on minimum wage, but had not known the enormous challenge just to get by. Robin is well-spoken and personable, with an electric smile, and yet she struggles every day just to get by. Raising the minimum wage would allow Robin to get her own place.

A few weeks later I met Adriana, who also works for minimum wage. She has a young child. She, too, is struggling. She has to pay $500 per month for child care and $240 for transportation. She is left with little more than $600 per month for rent, food, clothing, medical care, etc. Adriana says that it is almost impossible. The way she gets by is that she rents a room for herself and her young child in a house in the area. She is with other people she does not know who also rent rooms, but is so grateful to have a roof over her head. Raising the minimum wage would allow her to find a better environment for herself and her child.

A while ago, I met Billy and his wife, who both work for minimum wage. They decided that they would pool their salaries to get an apartment for themselves and their two boys, ages 14 and 6. In order to get food, they use food stamps (SNAP: Supplemental Nutrition Assistance Program) during the day and go to St. Benedict the Moor free dining room every evening. Billy said he wished he didn’t have to do that, but he knew that he could not pay for food, especially for his growing sons. His 14-year-old had just been through a growth spurt and needed constant food. Billy told me that as a parent he could get by with eating once or twice a day, but growing children need to eat regularly. Raising the minimum wage would allow Billy and his wife to feed their hungry children without worry.

All three of these stories are about the truth of life on minimum wage. The “Live the Wage Challenge” allows me to live a little bit of the anguish faced by each of these fine people. While we won’t live in a homeless shelter or in a room surrounded by strangers, we will know the stress of trying to feed our families, pay utilities, allocate some for rent, and get to work on approximately $300 for the week. But why should we do this?

I learned from Ann who works at Chautauqua in New York that one good reason to do this is to learn just how much hard work and ingenuity goes into living on minimum wage salaries. Ann told me that she and her husband both lost their positions in the recession, and even though they both have masters degrees they have had a hard time finding work in their fields. They have taken available jobs where her husband is working 50 hours a week and she is working 40 hours a week in a bookstore. They have four children who are now in their teens. While they make slightly above minimum wage, they are applying for SNAP benefits to feed the family.

She commented on how hard it is to have low incomes. She said that it takes much more work than when she and her husband made professional salaries. They are growing some of their food to supplement their earnings and do any odd jobs that they can. They never have the luxury of going out to eat or buying prepared foods. She is not opposed to work, but rather expressed surprise about just how much time and hard work it takes to survive living in poverty. She had no idea just how tough it was when they had professional salaries.

It is for Ann and her family that it is worth trying the Live the Wage Challenge. I need to have my eyes opened to the challenge of living with low wages. When my eyes are opened then I can share my experience with those who might not know just what a struggle it is to care for your family on impossibly low salaries. With open eyes, then maybe we can all work to change the culture of our society where it is currently acceptable to pay subsistence wages.

We the People need to stand up and say “Raise the minimum wage!” It is good for our people and our economy. It is good for our nation as a whole. Raise the wage for Robin, Adriana, Billy and his wife, and Ann and her family.

We the People are better than our current reality.

Sister Simone Campbell is the executive director of NETWORK, A National Catholic Social Justice Lobby, and author of A Nun on the Bus: How All of Us Can Create Hope, Change, and Community.

Blog: The Children’s Defense Fund’s (CDF) Cradle to Prison Pipeline Campaign

The Children’s Defense Fund’s (CDF) Cradle to Prison Pipeline Campaign

Carolyn Burstein

July 7, 2014

If you are not already familiar with the CDF’s nationwide campaign, launched back in 2007, we urge you to check out the its website for national and state-level information — as well as CDF President Marian Wright Edelman’s weekly Child Watch column in the Huffington Post. Not only do I support this ongoing campaign for social justice, but I notice how it dovetails with so many of NETWORK’s own initiatives, primarily our efforts to reduce inequality in this country.

The statistics presented at the CDF website are devastating. CDF says that “[n]ationally, 1 in 3 Black and 1 in 6 Latino boys born in 2001 are at risk of imprisonment during their lifetime.” This horrifying trajectory is endangering children at younger and younger ages, which not only leads to marginalized lives but also premature deaths. One of the many reasons for this outcome is that states spend three times as much money per prisoner as per public school student. What does that say about our country’s priorities?

CDF says that its vision is to “reduce detention and incarceration by increasing preventive supports and services children need, such as access to quality early childhood development and education services and accessible, comprehensive health and mental health coverage.” If the universal preschool proposal, one of the president’s key initiatives in his 2015 Budget is passed (not likely, say most), that should serve as a major response to CDF’s vision.

Of course, access to comprehensive healthcare is extended through the Affordable Care Act, which NETWORK strongly supported and continues to work on, especially in the 24 states that have not chosen to extend Medicaid to all its citizens. In this context, it is important to remember that access to coverage does not guarantee enrollment in coverage. Lack of effective healthcare jeopardizes both children’s education and their future.

Campaign summits have been held in numerous states since 2007 during which participants formulate action plans that focus on issues that are contributing to the crisis in their respective states. For example, several states, including Massachusetts, have addressed the problem of zero tolerance and other school discipline policies that tend to funnel children into the states’ criminal justice system. Recently (2013-14) schools have been watching new school discipline policies in Buffalo, NY and Denver, CO as “best practices.” The summits help the states to share promising approaches from other areas of the country.

CDF reminds us of the cruel facts of child poverty, a leading contributor to pervasive inequality.

More than 16 million children were poor in 2012 — more than 1 in 5 — and the youngest (under age 6) were the poorest. Yet these are the same years that child psychologists and pediatricians tell us are the years of the most rapid cognitive development.
Children of color are disproportionately poor and half the states had Black child poverty rates of 40% or more.
Child poverty leads to unacceptable child homelessness and hunger. More than 1.1 million public school students were homeless in the 2011-12 school year (the latest for which data is available), a 73% increase since before the recession. (Excuse the personal note at this juncture, but I have been involved in tutoring homeless children and have found in my personal experience that many homeless students are not only embarrassed by their circumstances and therefore have low self-esteem, but also typically fall behind in their studies often due more to moving around than to a lack of native intelligence).
More than 1 in 5 children lived in households that lacked access to adequate food in 2012 and 1 in 4 relied on food stamps (SNAP) to meet the nutritional needs on an average month. This amount of homelessness and hunger is partially explained by the fact that in 2014, it took about 3 full-time minimum-wage jobs on average to afford a fair-market rent for a two bedroom apartment and still have some funds left for food, utilities and other necessities.
Government safety net programs — the Earned Income Tax Credit (EITC), the Child Tax Credit and SNAP — lifted 9 million children from poverty in 2012.
Child poverty would have been 57% higher in 2012 without these programs and extreme child poverty would have been 240% higher.

Another major problem that CDF describes is rampant substance abuse. As we can see from the preceding facts as well as those listed below, we are dealing with disconnected youth who often lack a decent education or high school degree, lack job skills and have no social support systems or mentors. These are the youth who often resort to self-destructive acts, abusing drugs, tobacco and alcohol. Even when they seek help it is often not forthcoming because treatment is in short supply. Only about 10% of youth who seek help for a disorder receive treatment.

Lack of investments deprives children of critical support during their formative years. We already noted the disparity between funds spent on prisoners vs. children in schools. CDF provides us with additional significant facts:

Early Head Start funding served only 4% of the 2.9 million eligible poor infants and toddlers in 2012 and regular Head Start funding served only 41% of the eligible poor 3-4 year-olds.
In 2011, the average annual cost of center-based child care for a 4-year-old was $7,705, the same as the cost of in-state college tuition.
The nation’s schools fail to educate all children, closing off a crucial pathway out of poverty. In 2013 66% of fourth graders in public schools were unable to read at grade level and that figure masked the fact that 81% of Latinos and 83% of Blacks also read below grade level. Also, 59% of these students were unable to compute at grade level and that percent includes 74% of Latinos and 82% of Blacks who were unable to compute at grade level.
In 2013 only 68% of Blacks graduated from high school in four years compared to 74% of Latinos and 85% of Whites.
Students who are suspended or expelled from school are more likely to drop out of school completely, thus helping to form that pipeline to prison, especially if they have encountered the criminal justice system during that process. Unfortunately, more than 17% of Blacks were suspended in the 2010-11 school year and more recent school publications indicate that the problem of suspensions has been exacerbated, not resolved in most jurisdictions.

Many vulnerable children face special risks. Among those risks are the following:

Almost 342,000 children were either abused or neglected in 2012, while almost 400,000 were in foster care.
Over 4,000 children are arrested each day and almost 2,000 are serving sentences in adult prisons.
Almost 2,700 children and teens were killed by guns in 2010 — a rate of 3.2 out of 100,000 children and teens.
U.S. children and teens are 17 times more likely to die from gun violence than their peers in 25 high-income countries. Since 1963, three times as many children and teens have died from guns on American soil than U.S. soldiers killed in action in the Vietnam, Afghanistan and Iraq wars. Every year American companies manufacture enough bullets to fire 31 rounds into every American citizen.
Gun violence disproportionately affects children of color. Black children and teens were nearly 5 times (and Latino 3 times) more likely to be killed by guns than their White peers.

We can readily see how the few facts listed above (there are many more on the CDF website as well as photos, multimedia presentations and personal stories) impinge on so many areas where we at NETWORK are working in earnest:

increasing the minimum wage
reducing gun violence
saving safety-net programs
improving school nutrition
increasing employment opportunities and extending long-term UI
reducing inequality in all its dimensions.

And many more! The foregoing information from CDF should give everyone some new data to help in the ongoing effort to influence legislation and should also provide you with some new social justice friends in CDF’s nationwide network.

Perhaps the ultimate killer fact (on a global level) was produced by the charitable NGO, Oxfam, a few weeks ago (and quoted by the IMF), whereby the organization estimates that the 85 richest people in the world own as much wealth as the bottom half (3.5 billion people) of the global population. What an unsettling contrast! How can such a heavily skewed distribution of wealth be morally justified? And based on its own calculations, the magazine Forbes concluded that only 67 billionaires owned as much as the world’s poorest half. As it happens, neither Oxfam nor CDF nor NETWORK call for a global equalization of wealth – Oxfam may be more concerned about plutocracy than CDF, but since the Supreme Court’s 2010 decision in Citizen’s United v. FEC, NETWORK is also concerned about this issue. But for CDF and NETWORK, a strengthening of social protection through an improved safety-net; an acknowledgement of and an end to racism; and critical investments, supports and services needed for the most vulnerable populations are the sine qua non of access to equal opportunity.

As CDF says in one of its policy priorities, “too many children live in poverty and suffer from preventable illnesses, neglect, abuse inadequate education and violence.” I agree with CDF and one of the famous lines of Mahatma Gandhi: “Poverty is the worst form of violence.”

Blog: Pay and Working Conditions at Wal-Mart Run Counter to the Joy of the Gospel Message

Carolyn Burstein

Jun 05, 2014

This past Sunday, June 1, my parish (Our Lady Queen of Peace in Arlington) hosted a presentation on pay and working conditions at Wal-Mart by a 14-year veteran associate at Wal-Mart and a founder of “Our Walmart” along with a union supporter. Cindy told her personal story, including years of being disrespected despite having an impeccable work record. She described how family leave policies passed by Congress (the Family Medical Leave Act, or FMLA) are routinely ignored; how new associates are not given a Policy Handbook, so they are unaware of the thinking behind certain policies as well as not understanding their employee rights; and most disconcertingly, how only part-time associates are hired today with no benefits. Cindy reported that fear is endemic among the 1.4 million U.S. workers at Wal-Mart. She described how “Our Walmart,” was launched after more than a decade of attempts to unionize in the face of intimidation by Wal-Mart officials.

“Our Walmart,” which stands for Organization United for Respect at Wal-Mart, is composed of hourly associates who work from within to try to bring about change. “Our Walmart” maintains their independence by clearly stating that their organization is not affiliated with Wal-Mart. They have had some recent nationwide successes: after a campaign they led for pregnant women’s rights, Wal-Mart changed its policies to allow pregnant women to be given less physically-demanding duties.

Besides cultivating awareness of the issues facing Wal-Mart employees, one of the key purposes of the presentation on June 1 was to encourage our parishioners to join the march from Union Station in D.C. to the rally being held at the Wal-Mart on H Street, NE on June 6. Rallies like this are being held in more than 20 U.S. cities across the country starting on May 29 and culminating on June 6, the day of the Wal-Mart annual shareholders’ meeting. Hundreds of “Wal-Mart Moms” (a large group of Wal-Mart associates) and others will converge on the University of Arkansas in Fayetteville where the shareholders’ meeting will be held to provide a visual presence to shareholders. The rallies are demanding wages of at least $25,000 per year, more full-time openings and an end to retaliation against workers who speak out against their conditions.

As a matter of fact, the National Labor Relations Board (NLRB) filed a complaint against Wal-Mart earlier this year, according to The Guardian, for illegally retaliating against 60 workers who had engaged in legally-protected strikes and protests.

Let’s look at some of the conditions within Wal-Mart. The Teamsters’ Union points out that Wal-Mart wages and benefits are so low that it forces workers to go on Medicaid and receive housing assistance, child care subsidies, food stamps and more — to the tune of $6,000 per employee. In other words, like other companies that pay minimum wage or slightly more per hour, taxpayers are subsidizing the managers and shareholders of these companies!

The Guardian reports that Wal-Mart made a $16 billion profit in 2013 and the Walton family, which owns more than half of Wal-Mart stock, is worth $145 billion. Yet, the company pays 825,000 associates, around 2/3 of its workforce, less than $25,000 per year.

In a Reuter’s “Breakingviews” video in late May, the editor Rob Cox says, “Wal-Mart has been vilified for its low wages. This (referring to his suggestion that Wal-Mart throw its weight behind raising the minimum wage) could be Wal-Mart’s Henry Ford moment.” (Henry Ford revolutionized industries world-wide when he doubled his employee’s wages to $5 a day in 1914. The pay increase allowed his employees to purchase the cars they assembled each day and in the process helped give rise to the American middle-class and also doubled Ford’s profits).

Because so many of Wal-Mart’s customers work in minimum wage jobs, Wal-Mart’s support in raising the minimum wage would mean, according to “Breakingviews,” that the company would net an additional $13 billion, far more than it would cost.

“Wal-Mart Moms” are especially upset over the failure of the company to provide fixed schedules. Wal-Mart (and many retail employers) use “just-in time” software to set employees’ schedules, which give workers fewer work hours and less notice. Unpredictable work schedules make it nearly impossible for women to make time for other important responsibilities, such as getting the education and training they need to help them get a better job, attending a meeting at school, arranging for child care and taking care of their families. It’s one thing to demand “just-in-time” delivery from suppliers, which has been used in the best-managed companies since the 1980s, and quite another to schedule employees’ work in the same way. At least in the first instance, the company’s employees expected to make suppliers’ deliveries are already at work.

Sarah Jaffe summarizes the evolution of female workers at Wal-Mart in a May 29th article for In These Times. In the early days of the company, she says, many women worked part-time at Wal-Mart to supplement the income of their husbands, many of whom also worked at Wal-Mart. Now, however, the company is the largest employer of women who largely depend on these low-wage jobs to support their families. Many of these women are single moms or have husbands or partners who also earn low wages. Many of them work part-time through no fault of their own. They have requested full-time work but have been spurned by the company.

Retail is one of the top industries employing women and one projected to add substantial numbers of jobs over the coming decades. The choice that major retailers make regarding wages will play a crucial role in determining not only the welfare of its workers, but also the nation’s economic future.

A June 2 study, released by the research organization Demos, found that if the nation’s largest retailers (including Wal-Mart) raised wages to the equivalent of $25,000 a year for full-time workers, it would cost consumers only about $17.73 annually. The author of the study, Amy Traub, cites numerous convincing studies to show that companies could easily afford to pay workers more because such an action would a) improve employee productivity, and b) give workers more money to spend in those very stores. This improvement alone would advantageously impact nearly 6 million employees and their families and be a source of greater stability to families and to the national economy.

Traub warns that if present trends continue, by 2022 more than 100,000 additional women will be added to the ranks of the working poor or near-poor, meaning that the 2.5 million family members they help to support will be living in or near poverty in 2022. And if present trends continue, public costs for safety-net programs will continue to grow.

Wal-Mart’s actions reflect a loss of purpose of business, which is not at all the maximization of short-term profit or shareholder value. While including profit and shareholder value, its purpose also includes two other significant stakeholders – employees and customers. The delivery of goods and services to customers is largely accomplished through employees who interact with them, thereby assuring a mutually beneficial transaction. This transaction will never be beneficial if employees are browbeat and disgruntled.

Are there any actual models out there that retailers could follow? Bloomberg Businessweek points out that the retail giant Costco has never had significant labor troubles and has witnessed its stock price doubling since 2009. Costco pays its hourly workers an average of $20.89 an hour, not including overtime, and 88% of its employees have company-sponsored health insurance. Only about 4% of its workers are part-time and employed by contractors, including those who give away samples and sell mobile phones. Maybe part of the answer lies in the fact that in 2012, Costco’s CEO made $650,000, plus a $200,000 bonus and stock options worth about $4 million, compared to Wal-Mart’s CEO, who had a base salary that year of $1.3 million, plus a $4.4 million bonus and $13.6 million in stock options.

Over the last few years, Nordstrom, the Container Store, Sephora, REI and Whole Foods, all of which are known for treating employees well, have outpaced rivals. “This is the lesson Costco teaches,” says Doug Stephens, author of The Retail Revival. “You don’t have to be Nordstrom selling $1200 suits in order to pay people a living wage. That is what Wal-Mart has lost sight of. A lot of people working at Wal-Mart go home and live below the poverty line. You expect that person to come in and develop a rapport with customers who may be spending more than that person is making in a week? You expect them to be civil and happy about that?”

Ellen Bravo, executive director of “Family Values @ Work” has accused Wal-Mart of creating a crisis for many families in America because of its pay practices and policies regarding family leave, among others.

We, at NETWORK agree, but would add that Wal-Mart’s pay and policies regarding employees are not at all in sync with Catholic Social Teaching. If we look only at Pope Francis’ Evangelii Gaudium, we see that the joy of the gospel is for all people: no one can be excluded (and that includes all minimum-wage workers living below the poverty line). Wal-Mart would do well to heed the admonitions in chapters three and four. In the latter, Pope Francis proclaims that “solidarity” presumes a new mindset which thinks in terms of community and the priority of all over the appropriation of goods by a few. He goes on to say that above all everyone must have access to employment, “for it is through free, creative, participatory and mutually supportive labor that human beings express and enhance the dignity of their lives. A just wage enables them to have adequate access to all other goods which are destined for our common use.”(Italics added).

“As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems. Inequality is the root of social ills.” Evangelii Gaudium, chapter four.

Blog: Senate Republicans Block the Minimum Wage Bill

Senate Republicans Block the Minimum Wage Bill

By Carolyn Burstein

May 02, 2014

On April 30, Senate Democrats were unable to advance the Minimum Wage Fairness Act (sometimes referred to as the Harkin/Miller bill), which would raise the federal minimum wage from the current $7.25 an hour in three increments to $10.10 an hour by 2016. The vote in the Senate failed by 54-42 to clear the filibuster threshold. In addition to tying the wage floor to an inflation index, the bill would also raise the so-called “tipped” minimum wage for restaurant servers and other tipped workers to 70% of the standard minimum wage. The “tipped” minimum wage is now $2.13 per hour before tips and hasn’t been raised since 1991. Even if the measure garners the necessary 60 votes, it still faces nearly impossible odds in the GOP-controlled House, where Republicans have shown no interest in bringing it to the floor and the Speaker, John Boehner (R-OH) has been adamant in his refusal to even consider a minimum wage bill.

Senator Susan Collins (R-ME) has been promoting a bipartisan proposal that would increase the minimum wage to just $9.00 over the same time frame, hoping to rally a coalition around this deal. But Senate Majority Leader Harry Reid (D-NV) wants all Democrats to strongly support the Harkin bill, which he plans to offer again (if not several times) in subsequent sessions before the fall midterm elections.

In fact, a minimum wage of about $9 an hour would only amount to a wage of $18,720 annually, below the current poverty-line threshold of $19,790 for a family of three. The May 1 issue of The Hill quoted Reid as saying, “We are not going to compromise on locking people into poverty.”

Discussion on the measure, both inside and outside Congress, has fallen along rather familiar ideological lines. Democrats point out how the wages of minimum-wage workers have eroded over the past 40 years, and argue that if fully phased in by 2016, the new minimum wage would push a family of two or three above the federal poverty line – something that has not happened since 1979. Republicans’ resistance was predictable. They argued that a wage hike would lead to a loss of employment for millions of workers, relying extensively on a February 2014 report by the Congressional Budget Office (CBO) that estimated that a $10.10 minimum wage would lead to the loss of somewhere between zero and one million jobs. (The Republicans chose to use the figure 500,000.)

Various analyses of the CBO report (the subject of an earlier blog) clarified that job losses due to raising the minimum wage would be negligible. More than 600 economists, including several Nobel Prize winners, at that time endorsed a $10.10 minimum wage, agreeing that raising the wage to that level would have no effect on employment. More importantly, the CBO report also envisioned higher income for 16.5 million low-earning workers.

Minimum wage legislation is opposed by some business groups (not all), none more vociferously than the businesses represented by the National Restaurant Association. Interestingly, the association had hundreds of members lobbying Congress this week on several issues, including opposition to a higher minimum wage. According to the Bureau of Labor Statistics, about two-thirds of the 3.3 million people who earned $7.25 an hour or less last year worked in food preparation and serving.

The restaurant industry and other low-wage businesses double-fleece taxpayers by opposing the minimum wage and allowing taxpayers to spend about $7 billion a year in federal assistance payments to close the gap between what minimum wage workers are paid and what they need to meet their most basic expenses. Taxpayers also subsidize the outsize salaries of the CEOs of low-wage employees — to the tune of $232 million in 2012 and 2013 for just the top 20 restaurant chains. These CEOs earn, on average, more than 1000 times the salary of an average fast-food worker.

Let’s take a look at the views of various other groups regarding the minimum wage.

First, the general public. A New York Times/CBS poll and a Huffington Post/YouGov poll, conducted in January and February 2014, respectively, are remarkably similar in their findings. Both indicate that a minimum wage hike to $10.10 is highly popular, with 62% of Americans supporting the raise and only 26% opposed. The Huffington Post/YouGov poll sliced the responses further to indicate that 85% of Democrats and 60% of Independents think the minimum wage should be increased, while only 31% of Republicans agree. There is no doubt that a gulf exists between the two major parties on the matter of economic fairness. Starkly different views have become more and more common.

To most Democrats, many Independents and a few Republicans, “fragile” is the most apt descriptor of the finances for many working families. Even with a steady paycheck, keeping the bills paid can be overwhelming, and saving has become almost impossible for many. Not only are ordinary goods and services continuing to rise in price, but costs for many of those most critical to escaping poverty – education, healthcare and child care – have soared. The latter costs have served as a strong check on social mobility.

Those agreeing with Rep. Paul Ryan (R-WI) that safety-net programs like unemployment insurance, SNAP (food stamps) and WIC are not as effective as economic growth in halting poverty, need to note that decades of economic growth have been completely unsuccessful in raising the incomes from work of many middle, lower-middle, and low-income families.

The National Urban League, the NAACP, BET networks and the National Council of La Raza strongly support raising the minimum wage largely because such legislation would increase the total combined wages of people of color by $16.1 billion. A Center for American Progress (CAP) report concluded that six million workers would be lifted out of poverty if the minimum wage were raised to $10.10, and 60% of them would be people of color. Blacks, Latinos and Asians, who constitute a larger share of minimum wage workers than their share of the overall workforce, would benefit significantly.

The Center for American Progress reminds us of some significant statistics related to the minimum wage:

Earnings for the top 1% have risen 177% since 1980, but minimum-wage workers are actually making 16% less than in 1980.
Two-thirds of all minimum-wage workers are women.
21 million children live in households where at least one parent is a minimum-wage worker.
3.5 million people of color make up a disproportionate number of minimum-wage workers.
21 states and many localities have already raised their minimum wage to levels above the federal minimum of $7.25, most of them tired of waiting for Congress to act.

After the Minimum Wage Fairness Act was blocked in the Senate, the Service Employees International Union (SEIU) also reminded us that the minimum wage has fallen far behind inflation even though productivity has risen, and workers are not sharing in the benefits of their labor because corporations are hoarding profits. Company managers, directors and high-level employees seem to be the only beneficiaries of rising profits.

The National Employment Law Project (NELP) expressed its disappointment with the outcome of the 54-42 vote by lamenting that the minimum wage has lost more than 30% of its spending power over the last 40 years. And the Economic Policy Institute (EPI) stated that raising the federal minimum wage would boost GDP by nearly $33 billion and generate 140,000 new jobs over three years as workers spend their raises in their local businesses and communities.

More than 350 clergy members of various faiths signed a letter to members of the Senate stating that “the dignity of work and the security of the family are non-negotiable moral values” and that “for the minimum wage to be moral and just, it must be a living family wage.” They referred to repeated admonitions in Scripture against exploiting and oppressing workers and urged their members to flood their senators with phone calls, emails and letters to increase the minimum wage at the first opportunity.

Many of the signatories of the letter were members of the Catholic clergy. The April 30 edition of the National Catholic Reporter (NCR) calls our attention to the fact that, while Catholic teachings would urge us to press for an increase in the minimum wage, current proposals do not really constitute a just, living wage and thereby becomes a kind of “moral understatement, a mere baby step where giant leaps are in order.” A just, living wage would provide enough money to support the family, to put some aside for retirement, and to take care of health needs so that the family in question can live and get ahead. A living wage is at least 20% higher than the proposed minimum wage. Thus, looking at the federal minimum wage, even if increased, through the lens of Catholic social teaching, we know that it is failing to meet the minimum standard of our faith. All the more reason to continue working to raise it.

Catholics in Alliance for the Common Good (CACG) agrees that a minimum wage falls short of a just wage, because it fails to provide the resources for individuals to take care of themselves and form and sustain their families. Both NCR and CACG refer to the forceful example of Pope Francis speaking out on the issue of economic justice and call on their readers to emulate his example.

NCR is forced to remind us of the cognitive dissonance in the church on this issue of social justice. Many U.S. bishops have honored politicians hostile to increases in the minimum wage. For example, Paul Ryan, whose budget proposals have been condemned by the bishops’ conference was, nevertheless, praised by Cardinal Timothy Dolan of New York as an “exemplary public servant.” Ryan has also called raising the minimum wage “bad economics.”

There are numerous other examples that could be cited, one of the worst being the $1 million contribution from the Koch brothers accepted by Catholic University for their newly opened business school. Unfortunately, the polarization that is so strong in our politics and society has also seeped into ecclesial life to the detriment of the church’s social teaching.

Those of us who are supporters of NETWORK and believe strongly in Catholic social teaching have a lot on our platters to occupy our time, talent and treasure.

https://www.youtube.com/watch?feature=player_embedded&v=fUZsxlOh_Gw

Blog: Women of Faith Call for a Raise in the Minimum Wage

Women of Faith Call for a Raise in the Minimum Wage

By Tom Cordaro

March 10, 2014

On March 6, prior to International Women’s Day, seven women religious leaders from Chicago and the Western Suburbs gathering in Naperville, Illinois to call for an increase in the minimum wage. The event was held in conjunction with press events around the country organized by Interfaith Worker Justice – a leader in the fight for economic and worker justice in the U.S. since 1996.

Moderating the event was Sr. Karen Nykiel, OSB, a member of Pax Christi Illinois, a chapter of Pax Christi USA, the national Catholic peace movement. Sr, Karen set the context of the event stating, “We are focusing on women at this event because more than 64%– almost two-thirds — of minimum wage workers are women.”

She went on to explain why this event was being held in a wealthy suburban city like Naperville, “Raising the minimum wage is not only an issue of importance in poor urban or rural communities in our nation. It is an important issue in communities like Naperville. Census figures show that poverty is growing at a faster rate in the suburbs then it is in urban areas. “

The first speaker, Rev. Elizabeth Bowes from the Glen Ellyn First United Methodist Church, began with a short history of the struggle to create the minimum wage in 1938 and how religious leaders from all faiths were united in that struggle. What these faith leaders had in common was that “they valued human dignity and thus desired to create a labor system that valued workers and treated them with fairness and respect.”

To illustrate how much value the minimum wage has lost over the years Rev. Bowes stated, “In 1968 when the minimum wages was $1.60/ hour you and your family of four could purchase an entire fast-food meal for one hour of work. Today at $7.25/hour – one hour of work can only buy one person a burrito at Chipotle or three cups of coffee from Starbuck’s.”

The next speaker was Sr. Kathleen Desautels, SP, from the 8^th Day Center for Justice located in Chicago. The foundress of Kathleen’s community, St. Mother Theodore Guerin, had a strong commitment to raising the status of women in America. As Mother Guerin once stated, “Women in this country are only ¼ of the family. I hope, through the influence of religion and education that she will eventually become ½ – the better half.” Kathleen pointed out that “nearly 175 years latter women still only earn 77% of what men earn for same work.”

As important it is to raise the minimum wage, Sr. Kathleen reminded everyone, “The minimum wage is only a start, what we need is living wage. That is why the 8th Day Center for Justice has been involved in the campaign to raise the minimum wage in Chicago to $15/hour. Do we need an increase in the minimum wage? Absolutely! But let’s not stop there. Let’s continue the struggle for a living wage for every worker. ”

Rev. Emmy Lou Belcher, pastor of the Du Page Unitarian Universalist Church spoke about her own experience with helping those who work minimum wage jobs. “The church tries to help, but the needs far outweigh the resources available. We should not treat human beings this way. This is not in line with America’s concept of fairness.”

Drawing from her own personal story Rev. Belcher stated, “After World War II my family survived on benefits from the GI Bill my father received. These benefits allowed my family to enter the middle class and gave us the opportunity to get a college education. Everyone deserves the same kind of opportunity to succeed.”

Sr. Mary Kay Flanagan, OSF, also of 8th Day Center, made the connection between raising the minimum wage and the works of mercy, “To feed the hungry, clothe the naked, to care for the sick and to bury the dead; all of these needs are the consequence of the lack of economic security in the lives of our brothers and sisters. Providing people with a living wage is a way to fulfill the works of mercy.”

The Rev. Lisa Telomen, from Grace United Methodist Church in Naperville also made the link between the struggle for raising the minimum wage and her Christian faith, “Looking at the life and teachings of Jesus it is clear that insuring that every person has enough to eat, that they have adequate shelter and clothing and that they have access to affordable health care is part of what it means to be a disciple.”

Sr. Dorothy Pagosa, SSJ-TOSF from 8th Day Center spoke about volunteering at a homeless shelter for women, “I was shocked to learn that part of my responsibilities was to wake some women up earlier so they could get ready for work. Their minimum wage jobs did not enable them to afford rent at any level. For most apartments you need first and last month’s rent as well as the regular rent payment. Let’s not forget utilities, food and clothes.”

Sister Dorothy also spoke about the grotesque salaries paid to many CEOs, “There seems to be no outcry from Congress when CEOs get increases in their salaries. There seems to be no concern that the cost of these huge salaries will get passed on to consumers in the form of higher prices or that these huge payouts will make it harder for companies to create more jobs.”

Dorothy took aim at Rep. Paul Ryan’s approach to welfare, “He says his ideas are in line with Catholic Social Teaching; but he is reading a very different version than I read. As Pope Francis stated, ‘While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation.’”

The last speaker was Sr. Gwen Farry, BVM, from 8^th Day Center. Sister Gwen shared about the different ways members of her community were working to increase the minimum wage in Springfield and in Washington DC. Speaking to the value of raising the minimum wage Gwen stated, “If the Gap can pay $10/hour to its employees why can’t others do the same? Even the Gap understands that raising the minimum wage is good for business. The fabulously wealthy do not create jobs; customers create jobs. The minimum wage puts more money in the pockets of consumers and that spending creates jobs.”

Speaking for everyone on the panel Sister Gwen ended by stating the moral imperative of this struggle, “No one working 40 hours a week should have to live in poverty.”

Blog: Reduce Poverty among Women by Raising the Minimum Wage

Reduce Poverty among Women by Raising the Minimum Wage

By Carolyn Burstein

March 03, 2014

Millions of workers – mostly women – struggle to make ends meet on minimum wage earnings. Women comprise nearly two-thirds of minimum-wage workers although they are only 49.2% of the employed population. They also comprise 61% of full-time minimum-wage workers (working 35 or more hours each week) and nearly two-thirds of workers in tipped occupations.

The share of women varies somewhat by state from a low of 47.7% in California to a high of 63.3% in Mississippi (www.epi.org/raising-federal-minimum-wage). They provide care for children and frail elders, clean homes and offices, and wait tables. Bringing home $10.10 an hour would mean more money for food, gas, diapers and shoes.

The Economic Policy Institute (EPI) provides important facts that defy our stereotypes about minimum-wage workers: more than three-quarters of women are 20 or older (not teenagers!) and most do not have a spouse’s income to rely on.

Full-time work at $7.25 an hour pays only $15,080 a year. That’s nearly $4,500 below the poverty level for a mom and two kids. It’s even slightly below the poverty level for a family of two. Increasing the minimum wage to $10.10 per hour, as proposed by the president and legislation pending in Congress, would boost annual earnings to about $20,200, enough to help pull a mom and her two kids out of poverty.

If the minimum wage had been indexed to inflation, as we do for Social Security, it would be $10.72 today. If it had grown at the same rate as productivity (which it did until the 1980s), it would be $18.30 today, according to an EPI study.

The declining real value of the minimum wage has significantly contributed to the enormous growth in U.S. income inequality. The gap between the minimum and average wages of typical American workers used to be much smaller than it is today. From the mid-sixties to the early 1980s, minimum-wage workers earned a wage that was equal to about half that of the typical American worker. Today’s minimum wage is equal to only about 36% of that worker (of course, much could be said about the inadequate “typical” wage today). But raising the minimum-wage to $10.10 by 2016 would return the minimum-wage to roughly 50% of the average production worker wage.

Increasing the minimum wage would boost wages for millions of working women and help close the wage gap. The EPI estimates that if the minimum wage were gradually increased to $10.10 per hour, almost 28 million workers would get a raise, including over 1 million workers earning slightly more than the minimum wage due to what economists call the “spillover effects.” The Center for American Progress concludes that about 55% of those directly affected and nearly 50% of those indirectly affected by the increase would be women. Similarly, women of color would be affected by the increase: 16% of affected female workers are African American, while 19% are Latina (www.americanprogressaction.org/women-are-the-biggest-losers…)

Since women are the majority of minimum-wage workers, raising the minimum-wage would help close the wage gap. The typical woman earns 77 cents for every dollar the typical man does; African-American women working full-time year round made only 64 cents; and Hispanic women only 54 cents for every dollar paid to their white, non-Hispanic male counterparts. The fact that all women are more likely to be minimum-wage earners than men contributes to that disparity.

Raising the minimum-wage would also strengthen the American economy. Increasing the wages paid to low-wage workers results in lower turnover, boosts worker efforts, and encourages employers to invest in their workers. Most minimum-wage workers need this income to make ends meet and tend to spend it quickly, boosting the economy. Research indicates that for every $1 added to the minimum-wage, low-wage worker households spent an additional $2800 the following year, thus increasing spending nationwide by about $48 billion, even benefiting the GDP (Federal Reserve Bank of Chicago study entitled “The Spending and Debt Responses to Minimum-wage Increases”).

The federal minimum cash wage for employees in tipped occupations is $2.13 per hour, unchanged in over 20 years and less than one-third of the minimum-wage. Restaurant servers, the largest group of tipped employees, experience poverty at nearly three times the rate of the workforce as a whole — and about 70% of servers are women, according to the National Women’s Law Center. Because of the numbers of women involved, it’s worth examining the restaurant industry as a prime example of gender inequity. A recent study by the Restaurant Opportunities Centers United revealed:

66% of tipped workers are women who receive a pittance for a wage and often receive less than their share of tips
Restaurant occupations are among the lowest paid in the U.S. and employ a majority of women who are paid below the poverty level
Servers — of whom 71% are women — are almost three times more likely to be paid below the poverty level than the general workforce and nearly twice as likely to need food stamps as the general population
Women are more often kept among the lower paid positions than in most industries; for example, women are hired for only 19% of chef positions, one of the highest paid in the restaurant business
Women also are confined to the lower-paying segments of the industry, such as quick serve and family-style rather than the highest paying fine dining segment
Women restaurant servers who are full-time are paid just 68% of what male servers are paid, even though they are considered in the same category of servers

The restaurant business is only one example of an industry where minimum wages and low-paid women predominate, where women receive unequal treatment and where poverty wages are the norm. One could just as easily have chosen the hotel industry, the healthcare industry or many others.

Raising the minimum-wage would allow almost 2.8 million women see their incomes rise above the poverty line. This one move alone wouldn’t solve all of the inequities women face in the labor market, but it would be a step in the right direction.