Social Inclusion

Social insurance “consists in protecting wage-earning families which have developed standards of living from losing them, and in helping wage-earning families without standards to gain them.”

--Social Insurance: A Program of Social Reform (1910), Henry Roger Seager

I've been digging Matt's series of posts on the safety net and John's last one on whether a frame like "expand the middle class" is really all that different from one along the lines of "reduce poverty." I'm hoping to do some longer posts over the next few weeks on these matters. As a starting point, I think it's important for us to put to rest the distinction between welfare and social insurance. Conventional wisdom has it that programs like Social Security, Medicare and Unemployment Insurance are categorically different than programs like TANF, food stamps, and Medicaid. A common way of expressing this difference is that the first set of programs are “social insurance” and the second set are “means-tested public assistance” or, more pejoratively, “welfare.”

This distinction is both artificial and ill-conceived. Means-tested programs like TANF and food stamps should be thought of as a necessary part of America’s system of social insurance rather than as “welfare” programs that exist outside of, and have little in common with, that system. Like Social Security and other social insurance programs, means-tested public assistance programs protect Americans against various risks that can reduce their economic security. This essential similarity of purpose is more important that some of the design differences that exist among programs serving an income-security purpose.

In True Security: Rethinking American Social Insurance, Michael Graetz and Jerry Mashaw define social insurance as a set of programs and institutions that “cover common risks to income security across the life cycle of individuals” (45). In this conception, social insurance is defined by its core purpose—moderating the risks of income loss or inadequacy—and not by its funding mechanism or other design features. The Graetz/Mashaw project is best understood, not as a sweeping reconceptualization of social insurance, but as an attempt to develop a conception of social insurance that is more conceptually coherent and useful, and perhaps even more historically grounded, than the current conventional conception of social insurance in the United States.

In their view, the argument that social insurance programs cannot be means-tested is an “ahistorical” one that reflects a political strategy to distinguish Social Security and other programs from unpopular “welfare” programs like AFDC.

As a matter of history, protection against current low income because of defined personal or family circumstances, irrespective of past contributions or earnings, has long been a cornerstone of American social insurance arrangements. The original Social Security Act was a compromise between those who thought social insurance should be structured primarily as a protection against low income and those who saw it primarily as a protection against loss of prior economic status and wanted social insurance closely tied to workforce attachment. (62)

While the strategy of distinguishing social insurance from “welfare” may have been politically beneficial at times, Graetz and Mashaw view it as a “serious mistake.”

This artificial and ahistorical division of the social welfare world between contributory and non-contributory schemes strands crucial poverty reduction programs in political backwaters. It creates confusion in both public discourse and public perception whenever progressive benefit and contribution formulas for social insurance are proposed and discussed. This political separation poses political dangers for ‘contributory’ schemes as well. It highlights ‘individual equity’ or bank-account considerations in social insurance arrangements—represented recently by the ubiquitous calculations of each individual’s ‘money’s worth’ from Social Security—while submerging the social adequacy commitment that should be the fundamental norm in the design and defense of social insurance.

This doesn’t mean that public assistance programs are solely social insurance, or even that all public assistance programs are social insurance. While Graetz and Mashaw believe social insurance is not limited to Social Security and Medicare, their conception of social insurance as a protection against income insecurity is “considerably narrower than all the public activities that might be said to support American family income.” As an example, they note that education programs are not social insurance, since they don’t provide insurance against “a current loss of economic well-being.” Instead, such programs are more appropriately viewed as an investment in future economic opportunity. (58)

This distinction isn’t completely clear-cut. Education obtained in one’s youth, after all, does enhance income security over the life cycle. But Graetz and Mashaw argue that such a narrowing of the definition is necessary for pragmatic reasons.

If the definition is too broad, ‘insurance’ becomes a useless metaphor.... Important ideas about good program design—identifiable risks, moral hazard, adverse selection, and so forth—lose their salience. If the criminal justice system qualifies as “social insurance” (protection against loss of income or assets through theft, embezzlement, and the like), the concept fails to define a distinctive area of public policy. (57)

Social insurance also is distinct from other types of insurance, including insurance provided in markets where there is considerable government involvement or regulation. The adjective “social” is important in making this distinction. Social insurance is different from other forms of insurance because it is a “social rather than an individual (or group) contract” and is made for “the purpose of collective provision, subsidy, or regulation.”

In part II, I'll discuss a specific case—why that quintessential "welfare" program, TANF, is best thought of in social-insurance terms.

In a thoughtful piece, CAP's Joy Moses compares the 1968 Poor People's Campaign with the Half in Ten anti-poverty campaign (kicked off on the 40th anniversary of the Poor People's Campaign demonstration in DC):

America is not reeling [like it was in 1968] from the loss of some of its greatest leaders or functioning in an environment of ongoing political unrest in the form of riots and protests. However, there are some notable similarities between the 1968 and 2008 campaigns to end poverty; both derive their goals from the following basic principles:

-There is no justification for poverty in America, and we should make every effort to eradicate it.

-Poverty isn’t a black problem, a white problem, a southern problem, or a northern problem; it is an everybody problem that requires a joint effort to eradicate it.

-Increasing worker wages is key to eliminating poverty.

The two campaigns were also born from similar political contexts. Both anti-poverty campaigns were formed in the shadow of war. The Vietnam and Iraq wars accumulated significant costs to the American people, negatively affecting domestic spending and the quality of social programs. Both campaigns also began as the nation prepared for important presidential elections that would ultimately have a great effect on a whole host of issues, including the effort to end poverty.

The similarities that tie these efforts together may be somewhat discouraging. It is apparent that the 1968 effort did not end poverty and the concerns about wages and income for low-income people still exist to such a degree that Half In Ten became necessary.

In 2008, certain factors should lead to more positive results. By some accounts, the nation has been embracing a political agenda focused on change. Half In Ten organizers have developed vast grassroots networks throughout the country and the capacity for valuable research and federal and state-level policy development. The organizations involved are building valuable partnerships with one another as well as with other leading advocacy groups, faith-based organizations, think tanks, and academics focused on the goal of ending poverty. And John Edwards, a significant poverty advocate, has joined the team.

There's an additional important difference between '68 and '08, one that could lead to more negative results for the Half in Ten Campaign. America in the mid-to-late 1960s was still in "The Great Compression"—a nearly three decade period of relatively shared prosperity when economic inequality fell and incomes rose across the board, with the bottom 50 percent of the income distribution gaining more than the very top. By contrast, today's America is much more unequal in economic terms. Income gains for the top 20 percent have far outpaced the modest gains for the bottom half. Since 2000, median household income has actually declined, despite overall economic growth.

This difference in economic context calls for a different framing for the Half in Ten campaign. Instead of a narrow and literal anti-poverty frame, what's needed is a broader and more populist economic one. Such a frame would call for a new social contract to expand and strengthen the middle class, and view the working class and middle class as allies in a movement for greater economic security and opportunity for everyone.

In his 1995 book Middle Class Dreams, pollster Stanley Greenberg notes that:

... In the end, the identification of the Great Society with the poor alone marginalized the beneficiaries, dissipated public support, and blocked any broad, enduring alignment of black and white support for dependable social insurance.

Moses argues that the development of "vast grassroots networks throughout the country and the capacity for valuable research and federal and state-level policy development" will make Half in Ten more successful than the War on Poverty and the Poor People's Campaign, but I'm not persuaded. If grassroots networks and research were what it took to make progressive policy happen, we'd have seen a lot more progressive policy—and a lot more progress on reducing poverty—over the last couple of decades.

In a new map/chart book released today, Rebecca Ray, Hye Jin Rho, and I present state data on economic insecurity and job quality from the Bridging the Gaps project. Here's more from the press release:

The federal poverty line does a poor job of measuring economic insecurity in the United States according to a new report from the Center for Economic and Policy Research (CEPR). In the typical state, 22 percent of people in working families suffer from economic hardship because their earnings and income from other sources, including public work supports and other public benefits, fall below the basic needs budget standard for where they live. By comparison, only 12.6 percent of Americans live below the federal poverty line.

The report, "Working Families and Economic Insecurity in the States: The Role of Job Quality and Work Supports," synthesizes previous CEPR research using a new approach for measuring economic insecurity that addresses the major limitations of the poverty line and analyzes the state of economically insecure families across 45 states and the District of Columbia.

To determine how much income a working family needs to "make ends meet", the authors of the report use basic family budgets that take into account the actual costs of goods and services needed to have a decent standard of living, as well as the variations in these costs, depending on where one lives.

The researchers also examined the role of public work supports- programs such as child care assistance, the Earned Income Tax Credit, food stamps, health insurance provided through Medicaid and the State Children's Health Insurance Program, housing assistance, and income supplements provided through Temporary Assistance- in helping families achieve economic security.

"When measuring poverty, the government and most researchers do not take into account most public work supports," said report co-author Rebecca Ray. "By contrast, when we determine whether a family is able to make ends meet, we take into account the value of all of these benefits."

The report also shows that most economically insecure workers have jobs that pay low wages and provide few or no benefits or "bad Jobs". Only a minority of jobs nation-wide are "good jobs", in other words, ones that pay at least $17 an hour and provide health and retirement benefits.

"Public work supports play an important and largely unheralded role in promoting economic security and opportunity for working families," said Shawn Fremstad, a co-author of the report and Director of Bridging the Gaps, a CEPR initiative. "In the typical state, work supports close more than half of the hardship gap-the gap between a working family's income and the basic family budget for where they live".

The authors of the study point out, however, that substantial numbers of workers in low-paid jobs receive only modest or no help from work support programs.

According to the report, which uses data from the 2001-2003 Survey of Income and Program Participation (SIPP) and the basic family budgets developed by the Economic Policy Institute, the monthly income of the typical economically insecure family varies from $12,775 a year in Arkansas to $25,047 a year in New Hampshire.

Earlier this week, the Center for American Progress Action Fund, ACORN, the Coalition on Human Needs, and the Leadership Conference on Civil Rights kicked off the political arm of a campaign to expand the middle class by nearly 20 million people over the next decade. Well, they don't actually it that, but that's the basic idea.

The campaign's new website notes that the campaign "will focus on the issues facing the poor and middle class in America, building an effective constituency to advocate for specific policy changes." The part about focusing on issues facing the middle class is a notable addition and something that was lacking from CAP's earlier report on poverty.

It's a good sign that John Edwards is chairing the campaign. Edwards could bring the kind of partisan and populist voice to this work that has been lacking on the national level. As Larry Bartels' new book suggests, advancing the cause of economic justice in the next decade will require a Democrat in the White House and more partisanship rather than less.

Edwards should help ensure that the campaign doesn't become a kind of mushy attempt to find "common ground" between Republicans and Democrats on economic justice. The reality is that there really isn't any common ground on economic justice right now or in the near future at the national level given the conservative extremism of the national Republican party and their allies. (I say this as a matter of fact rather than advocacy—there are thoughtful efforts by progressive R's to change this, but it's a decades-long project, not a short-term one). The biggest challenge for the CAP campaign isn't finding common ground between Republicans and Democrats, it's making sure that conservative Democrats don't obstruct efforts to expand the middle class (which is one of the reasons, by the way, that this campaign needs to be framed as a campaign to expand the middle class).

While I'm a fan of the policy ideas put forward by the campaign, I'm less enthusiastic about much of the communcations aspect of the campaign. The name of the campaign, "Half in Ten," while easy to remember, sounds more like a technocratic goal than a statement that combines vision and values. This can be demonstrated by comparing it with ONE: The Campaign to Make [Global] Poverty History and Green for All's goal to "build an inclusive green economy strong enough to lift people out of poverty.

ONE is both a values statement (we're in this together, "united as ONE") and a true vision statement ("make poverty history"). Similarly, Green for All's goal combines vision and values—a strong and inclusive economy—in a slogan that clearly positions poverty as an economic issue. By contrast, "Half in Ten" has no obvious values content and will sound to some like "give us half a loaf in 10 years." This may be fine as a compromise governmental goal adopted by political leaders, but may be less effective as an advocacy slogan. I wish the wealthy backers of estate tax repeal had rallied under the banner of reducing the estate tax by 50 percent in 10 years, but unfortunately they went for the whole loaf and were much more successful as a result. Of course, a 50 percent reduction in poverty in ten years would be a fantastic accomplishment, but the slogan the campaign, like all good advertising, doesn't need to be so literal.

A related communications issue. Most of the images used on the campaign's website seem likely to reinforce popular stereotypes and misconceptions about people living below the poverty line. The banner of the site rotates a set of photographs that appear to be: a black child, a white mother hugging a child, an elderly white woman in a wheelchair, a black man, and a black woman (the classroom setting suggests that she may be an immigrant). None of the pictures portray people who are clearly at work or in work clothes.

A final point that involves framing in a deeper sense: while it's positive that the campaign "will focus on the issues facing the poor and middle class in America, building an effective constituency to advocate for specific policy changes", they need to go one step further and describe the cross-class constituency they're trying to build as "the working class and middle class." Where I grew up in the tundra of rural Minnesota, there were plenty of people living below the poverty line, but if you called one of them a "poor person" you would probably get either a punch in the face or an insulted glare. The same goes for the hundreds of clients I represented as a legal services attorney in west central Minnesota. Most people with incomes under even the miserly federal poverty line describe themselves as working class or middle class rather than "poor." The descriptions used to describe people—and how they describe themselves—change considerably over time. Negroes, paupers, and, increasingly, homosexual, are examples of terms that have been replaced in general public conversation or are in the process of being replaced. Poor people is another term in need of such evolution.

A fantastic new paper from CEPR's John Schmitt on how unions boost the wages of low wage-workers:

Economic data have long demonstrated a substantial wage premium for unionized workers --on the order of 10 to 20 percent-- relative to non-union workers with similar characteristics. This paper uses a straightforward extension of standard statistical techniques to estimate the impact of unionization separately for workers at different wage levels, from the lowest to the highest paid workers.

Using national data for 2003 through 2007, we estimate that unionization raises the wages of the typical low-wage worker (one in the 10th percentile) by 20.6 percent, compared to 13.7 percent for the typical worker (one in the 50th percentile), and 6.1 percent for the typical high-wage worker (one in the 90th percentile). The traditional statistical approach applied to the same data produces an estimate of the average union wage premium of 11.9 percent, which is substantially lower than the union effect on low-wage workers (20.6 percent) and somewhat below the effect for the median- wage worker (13.7 percent).

Also worth noting, the report includes state-by-state data on union wage premium.

In a previous post, I mentioned Larry Bartels' important new book, Unequal Democracy: The Political Economy of the New Gilded Age. Bartels is blogging about the book this week on TPMCafe. In his lead-off post, he reviews some of his key findings:

1. Ordinary citizens' policy preferences are often only loosely connected to their beliefs and values. For example, upward of 85% of Americans agree that "our society should do whatever is necessary to make sure that everyone has an equal opportunity to succeed," but support for specific policies that would promote equal opportunity is much more modest. One problem is that many people are too inattentive to grasp connections between values and policies. Among people with strongly egalitarian values, those who were highly informed about politics opposed the highly inegalitarian Bush tax cuts by a four- to-one margin, but those who were least informed were more likely to support the tax cuts than to oppose them.

2. Even when public preferences are clear and firmly held, policies contrary to those preferences can persist for a very long time if powerful political elites want them to persist. For example, the real value of the minimum wage has declined by more than 40% since the late 1960s despite remarkably strong and consistent public support for minimum wage increases. (This outcome has been facilitated by the fact that the nominal minimum wage is not adjusted for inflation, but that is itself a political decision; even when Democrats have controlled the White House and Congress, they have preferred symbolic nominal increases to permanent indexing of the sort that has long been accepted for social security.)

3. There are big differences in policies between Democratic and Republican elected officials, even when they represent exactly the same constituents. Political scientists have an elegant theory explaining why this shouldn't happen: if voters choose the candidate closest to their own policy positions, Democrats and Republicans alike must move to the center in order to get elected. The only problem is, they don't. A figure in the book compares the behavior of Democratic and Republican senators representing liberal and conservative states. The difference in behavior between a Democrat and a Republican representing the same constituents turns out to be much greater than the difference in behavior between a Democrat representing the most liberal state in the country and a Democrat representing the most conservative state in the country. Party and ideology dominate constituents' preferences in shaping legislators' roll call votes.

4. Insofar as elected officials are responsive to the policy views of their constituents, only the views of affluent and middle-class people really matter. The preferences of millions of low-income citizens (in the bottom third of the income distribution) have no discernible effect on senators' roll call votes, whether we consider the whole range of issues that come before Congress or specific salient roll call votes focusing on the federal budget, the minimum wage, civil rights, and abortion. Aristotle wrote that "where the possession of political power is due to the possession of economic power or wealth ... that is oligarchy, and when the unpropertied class have power, that is democracy." By that standard, America is, at best, a very unequal democracy.

A nice op-ed (in the WaPo no less!) by Noah Zatz on the Administration's decision earlier this year to limit the definition of "community service" in the Temporary Assistance program:

....

Traditional forms of community service—including many of those that are most beneficial to people in need—don't count anymore, unless they are "designed to improve the employability" of those performing the services. But enhancing our own job skills is not the primary purpose of ladling soup for the hungry, beautifying our public lands, consoling the sick, bringing joy to the elderly and mentoring the young. Serving others is.

The administration's interpretation not only mocks the spirit of public service but also mangles the law. The statute has other provisions for training and work experience. The regulations render the separate inclusion of "community service" superfluous.

....

I agree with Zatz—community service, while it almost always involves the use of skills, is certainly about much more than "improv[ing] ... employability." To the purposes of community service Zatz lists, I'd add community participation and inclusion, and the development of what the National Service and Community Service Act calls "citizenship values." According to that Act, community service programs should "engender a sense of social responsibility and commitment to the community."

That said, community service is a somewhat uneasy fit with the current Temporary Assistance program, the purposes of which include the "promot[ion of] job preparation, work, and marriage" (Sec. 401a), but not the promotion of service or civic participation.

It's worth thinking about how Temporary Assistance could be reformed to include a greater emphasis on meaningful service and civic participation. An obvious first step would be to include the promotion of community service as a basic purpose of the program. And States could provide educational and other benefits to parents who provide community service—although to really make this happen, the federal law would need to be changed to encourage, if not require, it.

More generally, Temporary Assistance needs to be understood not as a stand-alone "social contract with the poor" as conservatives (including conservative Dems) have often described it—Zatz alludes to this conservative framing when he notes that "the work requirements of the program were sold to the public as a 'social contract'"—but as an element of the American social contract. The idea of a specific and separate social contract with "the poor"—if conceived of as a static and non-contributing group having little in common with other Americans—makes no more sense than the idea of specific and separate social contracts with blacks or women.

In his column today, E.J. Dionne (a favorite of The Mobility Agenda) reports that the message of “inclusion” on the campaign trail has overcome old-style, slice-and-dice-progressive-constituencies “micropolitics”.

It’s great to have the press call attention to this concept. And no surprise that E.J. Dionne is one of the first to do so.

Robert Frank in Sunday's NYT:

Does money buy happiness? This week, Senator Byron Dorgan, Democrat of North Dakota, will join a long line of people who have taken serious stabs at trying to answer that thorny question. He will hold a hearing exploring whether traditional economic measures like per-capita income accurately capture people’s sense of well-being.

This has long been a contested issue. Although everyone concedes that income is an imperfect welfare measure, conservative economists have tended to emphasize its virtues while liberals have been more likely to stress its shortcomings.

The debate is not just of philosophical interest; it also has important policy implications. Recent research findings offer support for specific arguments on both sides. Mounting evidence suggests, however, that per-capita income is a less reliable measure of well-being when income inequality has been rising rapidly, as it has in recent decades.

....

[a] problem ... that challenges the very foundation of the presumed link between per-capita G.D.P. and economic welfare ... [is] the assumption, traditional in economic models, that absolute income levels are the primary determinant of individual well-being.

This assumption is contradicted by consistent survey findings that when everyone’s income grows at about the same rate, average levels of happiness remain the same. Yet at any given moment, the pattern is that wealthy people are happier, on average, than poor people. Together, these findings suggest that relative income is a much better predictor of well-being than absolute income.

....

That per-capita G.D.P. is an imperfect index of economic welfare is not news. The lesson of recent work is that its weaknesses are more serious than we previously realized.

And it is an especially uninformative metric when income inequality has been rising sharply, as it has been in recent decades. A society that aspires to improve needs a better measure of what counts as progress.

The hearing Frank mentions is Wednesday at 1:30. For testimony, check out the committee's site later this week.

How Mark Thoma would update the New Deal:

Suppose you had the power to alter the New Deal however you want. Some of you would abolish it all together, and shame on you, but for those who would choose to keep it around, how would you change it? What issues should an updated New Deal address? Perhaps:

• We need to provide health and dental insurance that doesn't end when a worker changes or is between jobs.
• We should recognize that it is normal for both parents to work outside the home. Child care that is affordable, reliable, and that helps children to get off to the best possible start needs to be available to all parents. For many parents, this is a big problem.
• We are much more geographically mobile than we were in the 1930s. If we expect a flexible workforce, we need to do more to support geographic movement of workers and their families.
• I would redefine poverty as a relative rather than an absolute standard and ensure that everyone has what they need to fully participate in society. And if my powers do not extend that far, I would at least raise - substantially - the absolute poverty threshold and then make sure nobody falls below it. Right now, it's too low. Along these lines, an expansion of the EITC is needed as well.
• The existence of large speculative bubbles - first in the stock market then in the housing market - threatens to undermine the stability of the economy and put an end to "The Great Moderation." We need to reexamine the regulatory structure of the financial sector to be sure we are doing all we can to prevent destabilizing bubbles from emerging. If the consequences were confined to participants in these markets this wouldn't be necessary, but they are not. Problems in financial markets spread through the economy more generally and impose costs on people who had nothing to do with the creation of the problem.

Even thought it's a list, this is a nice one. As Thoma suggests, the stock market and housing bubbles should be thought of not as anomalies that hurt only a slice of home/stock owners, but as examples of a much deeper structural problem that hurts the economy as a whole.

Unlike Margy, I think there are sound strategic reasons for Hillary to put forward a poverty reduction plan, at least if she wants to have a shot at winning the Democratic nomination. Going back to the distinction between transactional and transformative politics, any sound strategy to win the Democratic nomination this year will require both kinds of politics. Having a poverty-reduction plan is part of transactional politics this year for Democratic candidates.

One may wish this wasn't the case—that some other more effective and transformational frame for issues of economic deprivation had the same relevance and resonance as the poverty frame does for the part of the Democratic Party base that prioritizes these issues. But for right now poverty is the dominant frame among this group of Democrats. As a result, not having a plan that is framed as a poverty reduction plan has almost certainly hurt Hillary because it allows her to be easily characterized as someone who cares less about poverty than Barack Obama. As an example, take a look at this Huffington Post blog by former Edwards and Move-On staffer Ben Brandzel.

Among the findings in this impressive new report from the Pew Foundation, more than one out of every 100 American adults are incarcerated:

For the first time in history more than one in every 100 adults in America are in jail or prison—a fact that significantly impacts state budgets without delivering a clear return on public safety. ....

As prison populations expand, costs to states are on the rise. Last year alone, states spent more than $49 billion on corrections, up from $11 billion 20 years before. However, the national recidivism rate remains virtually unchanged, with about half of released inmates returning to jail or prison within three years. And while violent criminals and other serious offenders account for some of the growth, many inmates are low-level offenders or people who have violated the terms of their probation or parole.

“For all the money spent on corrections today, there hasn’t been a clear and convincing return for public safety,” said Adam Gelb, director of the Public Safety Performance Project. “More and more states are beginning to rethink their reliance on prisons for lower-level offenders and finding strategies that are tough on crime without being so tough on taxpayers.”

....

“States are paying a high cost for corrections—one that may not be buying them as much in public safety as it should. And spending on prisons may be crowding out investments in other valuable programs that could enhance a state’s economic competitiveness,” said Susan K. Urahn, managing director of the Pew Center on the States. “There are other choices. Some state policy makers are experimenting with a range of community punishments that are as effective as incarceration in protecting public safety and allow states to put the brakes on prison growth.”

The economic costs of mass incarceration are staggering. In addition to the discussion of costs in the Pew report, check our the expert testimony from Bruce Western and others at the hearing held by the Joint Economic Committee last October.

The current issue of Challenge, the bimonthly economics journal edited by Jeff Madrick, is definitely worth checking out. In addition to John Schmitt's lead article on the decline of good jobs, there's good stuff on job quality by David Howell and Mamadou Diallo and on economic security since 2001 by Christian Weller.

I've written about John's good jobs research before on this site (and the new CEPR paper Movin' on Up summarizes some of his findings), so in this post I'll focus on Howell/Diallo and Weller's articles. Starting from the sensible assumption that "the performance of a labor market would be judged superior if it produced equivalent unemployment and employment rates with lower wage inequality, a lower incidence of low-wage jobs, and a lower involuntary part-time rate", Howell/Diallo develop a set of new "quality-adjusted" labor market indicators that are similar in construction to the official unemployment and underemployment rates. The new measures are:

• an Underemployment Rate (UER): the share of the labor force unemployed, working involuntarily part-time, or paid very low wages;
• an Adequate Employment Rate (AER): the share of the working-age population employed at wages above the low-wage threshold and not working involuntarily part-time;

and

• a Low-Wage Share of Employment: the share of employed wage and salary workers earning below the low-wage threshold.

Using these indicators, Howell/Diallo find that about 30 percent of U.S. workers are paid low wages, at least one-third of the U.S. labor force is underemployed, and just over two-fifths of the working=age population is employed in "adequate" wage and salary jobs. Howell/Diallo also document that "young workers (20-34) with at least a high school degree but not more than two years of college show a dramatically increased incidence of low-wage employment between 1979 and 2006, with particularly large increases for men since 2000."

Weller documents various ways in which middle-class economic security has deteriorated since 2000, including downward trends in the share of two-earner families in the middle three income quintiles who have three-months worth of income in liquid financial wealth, sufficient savings to cover a spell of unemployment, and sufficient savings to cover a medical emergency.

As these articles show, Challenge is a great progressive economics journal with content that is relevant to current policy debates. It's unfortunate that, unlike say the new journal Democracy, they don't make their stuff available for free on the web.

I'm not taking sides, but this is a thoughtful op-ed making the case that it's time to "retire the term African-American and go back to black."

Distinguishing between American black people based on their ancestors’ arrival date ignores the continuum of experience that transcends borders and individual genealogies and unites black people all over the world.

....

... The black American community’s social and political power derives from its inclusiveness. Everyone who identifies as black has traditionally been welcomed, no matter their skin color or date of arrival. In Britain, in contrast, dark-skinned people who trace their relatives to particular former colonies can be cliquish. Beyond the fact that blacks make up a smaller share of the population here, this regional identity may be a reason that the British black community isn’t as powerful a social and political force.

....

One political objection to revising our outdated and essentially arbitrary poverty line is that it would result in an increase, substantial under some proposed revisions, of the number of Americans who are classified as living in poverty. I don't doubt that many members of Congress would object to revisions on this ground, but it's worth noting that more than 2/3rds of the public already sets the poverty line more than 40 percent higher than the current measure.

This chart, from a talk I did earlier today at the National Low Income Housing Coalition's annual conference, graphs some recent public opinion data on this score. In October 2007, NPR, Kaiser, and Harvard conducted a survey that asked if a four-person family living at various income level was poor. Another question asked if families at various incomes were middle class. The blue bars are the percentages of those surveyed who agreed that a particular income level made a family poor; the green bars are the percentages who agreed that an income level made a family middle class.

Some 68 percent of those polled said that an income of $30,000—a figure 42 percent higher than the current poverty line of $21,200—made a family of four poor. One conclusion to be drawn from this chart is that an inequality-based poverty measure—one that sets the poverty line at around 50 percent of median income—is more in sync with what the public thinks poverty is than either the current measure or even the revised measure proposed by a National Academy of Sciences panel in the 1990s.

As for the middle class, it looks from this data that a bare majority would place the minimum income threshold for entering it at somewhere between $40,000 and $50,000. There's also a grey area around $40,000, which most Americans don't fit into either poverty or the middle class.