Click here to download the full report

In good times and bad, workers at the front lines of many of today’s firms bear the brunt of fluctuations in demand for services and products through reductions in hours. Even before the current recession, today’s employers faced strong pressure to contain, if not minimize, labor costs, especially in industries, such as the service sector, where labor is a principal expenditure. Local communities suffer when residents’ jobs are unstable and their earnings unpredictable. In this report, Susan J. Lambert and Julia R. Henly of the University of Chicago highlight several targets for intervention—ranging from improving employer scheduling practices to enacting new legislation—which could enhance the quality of jobs for hourly workers and, in turn, the quality of life in local communities. 

Click here to download the full report

by Research Associate Jonny Finity

As the US economy slips further into recession and more workers – with collars of every color – are faced with unemployment, many political leaders and media outlets are falling deeper into the quicksand of poverty rhetoric. Some policymakers read from their well-worn scripts, helpless in the face of economic decline, while the news media sprints to keep up with breaking stories of employers scaling back hours and pay, or hard-working families losing their jobs and falling through “the safety net.” But then, this is what happens during a recession, isn’t it? Spending is down, prices are up, and there’s little that anyone can do about it. In a souring economy, employers have no choice but to cut back their workers’ hours and wages…right?

On the contrary, say Eileen Appelbaum and Tsedeye Gebreselassie in a recent article in the New Jersey Star Ledger, raising wages – specifically, the minimum wage – is a key policy tool for helping low-wage workers, as well as the overall economy, to bounce back from just such a recession. They highlighted a recommendation coming out of New Jersey, where the current minimum wage is just $7.15 per hour, or $14,782 a year:

The state’s minimum wage advisory commission, chaired by Gov. Corzine’s labor commissioner…called on the legislature to restore New Jersey’s minimum wage to $8.50 – closer to its value before it started to slide – and to guarantee annual cost-of-living increases to prevent the minimum wage from falling each year.

We have already seen good evidence that the minimum wage doesn’t have the adverse economic effects its critics claim, and can actually have positive effects on the labor market, workers, and the overall economy. In fact, since the minimum wage acts as a floor for overall wages, raising it could go a long way in improving our long-term prospects for economic recovery. Over 40 million jobs – or about 1 in 3 – pay low wages of $11 or less, and this has been the case since even before the recession started. With an economy that’s so reliant on low-wage workers who often lack benefits, it’s no wonder that our economic success was so fragile. Raising the minimum wage would be sending a signal to the rest of the world that we are committed to turning things around. As the article’s authors say,

A strong minimum wage is not only crucial for helping low-income families make ends meet, it is one of the best ways to stimulate the consumer spending that drives the state’s economy.  A minimum wage increase goes directly to those New Jerseyans who will spend it immediately – because they have to – on basic necessities like food, fuel, rent, clothing and transportation.  A recent study by Federal Reserve Bank of Chicago economists confirmed that minimum wage increases boost consumer spending substantially more than tax cuts do.  This is spending that goes directly into local businesses and the local economy.  

So while low-wage workers may seem to be the ones benefiting from any increase in the minimum wage, the effects are far-reaching. Raising the minimum wage is good for our communities and local economies.

In fact, the minimum wage’s twin functions as cushion for working families and fiscal stimulus have been recognized from the beginning.  As the nation struggled through the Great Depression in 1938, Franklin Roosevelt called for adoption of the first federal minimum wage as “an essential part of economic recovery.”  By increasing the purchasing power of those workers “who have the least of it today,” he explained, “the purchasing power of the Nation as a whole – can be still further increased, (and) other happy results will flow from such an increase.”

We, especially our politicians and media outlets, should not look at a minimum wage increase as merely a job support for low-wage workers.  It’s an effective policy lever that can help rebuild the economy from the ground up – the economy in which we all live and work. It is a policy that affects all of us.

In a new report released by The Mobility Agenda, the authors, Martha Ross, Sarah Sattelmeyer, and Margy Waller, find that national decisionmakers should promote worker moves into opportunity neighborhoods.

Click here to see the full report 

“The U.S. economy, workplace, workforce, and labor market have changed radically in the last 50 years, yet public and private policies have not kept up with the changes, contributing to a spatial mismatch between the location of jobs and the neighborhoods and communities in which workers reside. As our nation’s spatial layout continues to change, so must policies and practices in order to strengthen our economy,” say the co-authors of this report.

“State and local leaders can support and pursue federal recommendations in order to provide greater access to opportunity neighborhoods for their area’s workers,” explained Margy Waller, executive director of The Mobility Agenda. “These policies would support workers making voluntary moves and encourage others to make such moves,” she added.

The authors of Employment and Housing Mobility: Promising Practices for the Twenty-First Century Economy examine housing assistance and mobility initiatives as well as illustrate practices and policies that hold promise of success for low-wage workers moving to opportunity neighborhoods. The authors offer examples of successful mobility initiatives and provide recommendations for federal, state, and local policies.

Click here to see the full report.

We agree that the focus in the near term will be on the economy – rebuilding and recovery. I think there is plenty of opportunity in that effort to change the lens – shifting from ‘helping the poor’ to strengthening the labor market and our economy with more good jobs.


Like Bob, I believe there will be lots of opportunity in coming years to focus on getting the details of specific legislative proposals right. And there are plenty of DC-based advocates who are really, really good at using the data to make sure the legislation responds to their understanding of reality on the ground.

We also agree that it will be important to develop the public conversation about the concept of inclusion. In fact, we’ve proposed (to ahem…some foundations) a research project on how to talk about inclusion in the United States. It will be critical to explore with communications experts what will work here. We also need to develop consensus on how to measure the effectiveness of this national effort.

This two-part approach to adopting a new goal is a much better use of limited resources in the next couple years than the wasteful effort to establish poverty goals.

It does not look like the next President will adopt a poverty goal. But, he might well be very interested in a new and better goal based on social and economic inclusion. 

(Originally published as an op-ed in the Philadelphia Daily News)

By MARGY WALLER

LONG before the onset of the current economic slide, some Washington insiders called on government to set a goal of reducing poverty. While recognizing the good intentions, we must acknowledge what the recent election proves: Changes in our nation in the years since citizens heard a similar plea – more than 40 years ago – require a new vision for the economy.

Any effort to revive a policy and political focus targeted specifically on the poor will demand significant energy and resources and, unfortunately, can’t yield the desired policy results.

Instead, we should adopt goals that establish what Robert F. Kennedy called our desired “bond of common fate” in a new national framework for advancing economic and social policy.

We’ve already reached everyone persuadable by describing policy proposals as “anti-poverty” initiatives. Yet that level of support still hasn’t been enough to overcome the opponents.

While many people will say they want government to do something about poverty, it isn’t a high priority. In October, when the Gallup Poll asked voters to name “the most important problem facing the country,” only 1 percent named poverty, hunger or homelessness. (The percentage has actually declined from 2 percent since early 2008.)

This means policymakers don’t have the political space they need to take on opponents. Talking about poverty more loudly and more often won’t change this fact. Indeed, continuing to use the poverty banner will lead to failure. There are a few reasons for this:

* The federal definition of poverty (based strictly on income, it’s currently about $21,000 for a family of four) is out of date and flawed, allowing opponents to limit policy solutions to a narrow and very low-income group.

* Widespread impressions of poverty’s causes (irresponsible and immoral behavior) and remedies (responsible personal behavior) hinder adoption of the policy solutions we seek to address it.

* Defining the problem as “poverty” opens the door to a losing scenario in a legislative debate.

For example, critics have responded to Sen. Obama’s concession to John Edwards late in the primary season that Democrats adopt a goal to halve poverty in 10 years. In November, in an interview about Obama’s policy proposals, Bill Cunningham, ranked by Talkers Magazine as one of the 100 most important talk radio hosts in the U.S., said:

“You know, people are poor in America . . . not because they lack money; they’re poor because they lack values, morals, and ethics. And if government can’t teach and instill that, we’re wasting our time simply giving poor people money.”

See the problem?

It would be a much better use of the good will and support generally accorded a new president to focus on setting a higher standard for our nation.

A better goal would go well beyond income deprivation, or even a standard that assesses what is necessary to “make ends meet.” Our real goals are higher than this, and our policy proposals already reflect a desire to do more.

Unless we want to narrow the list of solutions at the outset, the new president should focus instead on how to establish goals that measure our progress toward an inclusive economy that works for all of us.

Other nations have taken up this effort. Every European Union member has a plan for an inclusive society, a multidimensional concept that incorporates not only notions of adequate income (using a relative measure designed to assess whether the gap is getting too big for a strong nation), but also neighborhood quality, access to the arts, education, health care, participation in civic events, housing, pensions and other factors.

 

IT WILL take hard work and high-level attention to develop a framework for this concept in the U.S. We need consensus on targets to measure progress and assess the effectiveness of new initiatives.

Establishing a new wide effort to develop and focus on such goals is worthy of presidential attention and Cabinet status.

In contrast, renewed attention to the limited target of income poverty is not. Even eliminating poverty sets the bar too low and, as a national goal, it simply will not work to achieve our shared hopes for a strong nation

Residents of nine states  – Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington  – will see a boost to their local economy from a state minimum wage increase taking effect in the new year.

Unfortunately, media coverage of the change varies across place and often undermines public support for this progressive step.

For example, an article in the Cincinnati Enquirer begins with the suggestion that the raise benefits only the workers getting the increase:

“Local minimum wage workers will have something to celebrate with the coming of a new year.”

The reporters continue with this narrow frame by implying that certain employers and the state’s 300,000 minimum wage workers will be the only ones to feel the impact of the change.

The online comments regarding the article illustrate the destructive debate that inevitably flows from this framing. When the reporter suggests the impact is only felt by a small group of employees and certain employers, the debate devolves to the worthiness of workers and an us-vs-them depiction of who benefits and who suffers.

For example, one commenter shares an out-of-date (but widely held) perspective on the ability of workers to climb the wage ladder.

“You’re not supposed to survive on minimum wage as an adult, because it’s supposed to be the starting point not what you make an hour when you have chosen to add more mouths to feed. Secondly, if you start at minimum wage, within a very short period of time you will get raises. now the conditions are: you have to show up on time, do a good job, and make yourself a valuable employee. Wow, big surprise, then you continue up the ladder.”

Another commenter illustrates how the “charity” framing leads to the us-vs-them debate that undermines public support for improving jobs.

“all this does is hurt the middle class. Push up the wages off teenagers and young college students, which force up prices in stores for the average middle class america….stupid stupid stupid.”

We could debate the assertions of these commenters. But that’s not an argument we really want to have – or that we can win with “facts”. Public understanding of this issue won’t change just because we have good data.

Instead, it’s our job to work for better media coverage.

Our own talking points should start with the fact that these increases strengthen the local economy by ensuring that there are better jobs in the community – a benefit that accrues to everyone.

December 2008

Residents of nine states – Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington – will see a boost to the economy from a state minimum wage increase taking effect in the new year.

Yet, media coverage of the change varies across place and can contribute to an unfortunate framing of the increase as a charitable effort to support the poor.

For example, an article in the Cincinnati Enquirer begins with the suggestion that the increase benefits only the workers getting the increase:

    “Local minimum wage workers will have something to celebrate with the coming of a new year.”

The reporters continue with this narrow frame by noting that certain employers and the state’s 300,000 minimum wage workers will be the only ones to feel the impact of the change.

The online comments regarding the article illustrate the debate that inevitably flows from this framing. When the benefit is to a small group of employees and the impact on certain employers, the debate is over the worthiness of the workers for an increase and the us-vs.-them over who benefits and who suffers.

For example, one commenter shares an out-of-date (but widely held) perspective on the ability of workers to climb the wage ladder.

“You’re not supposed to survive on minimum wage as an adult, because it’s supposed to be the starting point not what you make an hour when you have chosen to add more mouths to feed. Secondly, if you start at minimum wage, within a very short period of time you will get raises. now the conditions are: you have to show up on time, do a good job, and make yourself a valuable employee. Wow, big surprise, then you continue up the ladder.”

Another commenter illustrates how the charitable framing leads to the us-vs.-them debate that undermines public support for improving jobs

“all this does is hurt the middle class. Push up the wages off teenagers and young college students, which force up prices in storesfor the average middle class america….stupid stupid stupid.”

A better framing would portray the increase as one that strengthens the local ecnomy by ensuring that there are better jobs in the community – a benefit that accrues to everyone.

Education and health, however, will take you only so far. Suppose Opportunity NYC succeeds. The likelihood is that these families will still be poor. One in three jobs in America pays less than $11.11 an hour, with no benefits. Full time, that’s less than $23,000 a year. 

(Data courtesy of The Mobility Agenda.)

This may sound like a bleak future, but it’s the unfortunate (and preventable) reality of an economy dependent on low-wage jobs without benefits.  Good jobs don’t just benefit the workers who fill them – they can help make us all better off.

In a new report released by The Mobility Agenda, the authors, Virginia Parks, Dorian Warren, and Margy Waller, find that over the past decade, community benefits agreements—legally binding agreements negotiated between developers and broad-based coalitions of community and labor organizations—have strengthened local labor markets by transforming thousands of low-wage jobs into good, living wage, and/or union jobs.

“The need to improve low-wage jobs is…important for a healthy overall economy and society—and not just for the workers directly affected… A stronger labor market with better local jobs benefits the entire community,” say the co-authors of this report.

The authors of Community Benefits Agreements: Policy for the Twenty-First Century Economy examine the core components of these agreements that address low-wage work, strengthen local labor markets, and advance the goals of social and economic inclusion. The authors offer brief examples of successful community benefits agreements campaigns, highlighting how and why this strategy works when community resources are at stake.  Finally, the authors recommend policy initiatives to strengthen and increase the opportunities for using these agreements.

“Federal policies…should include incentives that advance community benefits principles. This is an especially important policy recommendation because CBAs emerged out of a context in which there has been a lack of federal action to improve low-wage work, strengthen local labor markets, or advance the inclusion of local communities in economic development decisions,” explain the co-authors.

Full report available here 

We need more than just a new definition of poverty – we need a new way of communicating about policy. For more information and ideas, visit our Reframing the Poverty Debate page.