Ethan Miller: The Millennials' financial-literacy crisis

Summer is a time of endings and beginnings. For most of the about  1.8 million people who just graduated from college, this season marks the end of at least 17 years of formal education and the launch of their careers.

My career started a little sooner than that. 

My first real job was as a student organizer during my senior year at American University, in Washington. Right before I graduated two years ago, when I filed my tax return, I was surprised to learn that I owed an extra $1,200 on the less than $13,000 I earned.

Why did I owe the  Internal Revenue Service so much? Because my employer misclassified me as an independent contractor, I owed self-employment taxes in addition to regular income taxes. And, because I had no idea I needed to pay these taxes every quarter, I owed a large lump sum that Tax Day.

It was a big wakeup call. As a 21-year-old soon-to-be college graduate majoring in economics, I was financially illiterate. Neither in college nor at  top-ranked Wootton High School, in Rockville, Md., did I learn how to manage my money beyond making sure I could budget for the basics.

When I talk to my friends about those tax troubles, I find that their grasp of personal finance is just as poor or worse. While we might feel ready to start our careers after graduation, we’re woefully unprepared to look out for ourselves in the economy.

And we aren’t alone. A recent Financial Industry Regulatory Authority (FINRA) study showed that less than a quarter of millennials could correctly answer at least four out of five questions on a basic financial literacy quiz.

As the lackluster recovery from the Great Recession lumbers forward, personal finance matters more than ever. Some 53 million Americans — one in three working people — are freelancers. And according to software company Intuit, 40 percent of the workforce will be freelancing or working as an independent contractor by 2020. That’s a pleasant way of saying they lack job stability.

In the so-called gig economy, juggling multiple part-time or temporary jobs to make ends meet is commonplace. Unless they qualify for health care subsidies, people working in this sector pay for medical insurance completely out of pocket. If they manage to save for retirement, they have to do it alone.

Many millennials are learning the rules of the game as we’re playing it. But we’re actually a lot like our elders. The FINRA study showed significant rates of financial illiteracy among Boomers and Gen Xers as well.

The difference is that our generation faces a job market that’s nothing like the one our parents faced. Combined with the $1.2 trillion of student-loan debt currently owed, that means we need more financial smarts if we’re going to thrive in today’s precarious economy.

More public K-12 school systems across the country need to follow the example of states like Virginia by prioritizing students’ financial literacy and requiring a course in personal finance regardless of whether they’re college-bound or not. Everyone needs to know enough of the basics to fend for themselves.

Of course, if our nation’s employers took the high road and paid fair wages, provided health care and retirement benefits, and gave regular, reliable schedules, we wouldn’t have to rely so much on our own wits to get by. But if our bosses won’t look out for us, we have to look out for ourselves.

Many Millennials are struggling to pay our bills now, much less build a solid future. Just as I’ve had to educate myself financially, my entire generation needs to get up to speed on how the economy works (or doesn’t), so we can join together to make it more sustainable for everyone.

Ethan Miller (Ethan99@gmail.com), is a labor-rights activist  and a New Economy Maryland Fellow with the Institute for Policy Studies.  This originated at OtherWords.org.

Sam Pizzigati: Uber-rich favor speculation over helping poor

Ultra-wealthy financiers have hoarded far more cash than they can responsibly invest.

Lots of folks in America today really need more money.

Our kids, for starters. We ought to be investing in their futures, not stuffing them in overcrowded classrooms or forcing them to graduate from college with tens of thousands of dollars in debt.

And plenty of working people need more money, too. Wages for average Americans, after you take inflation into account, have sunk below what workers were making four decades ago.

I could go on.

But not everyone’s feeling the pinch. Take Stewart Butterfield, the CEO of Slack — a tech start-up whose corporate messaging app just might, some experts believe, one day replace email.

The year-old Slack, in other words, may prove to be quite a big deal. Or the company might crash, as so many start-ups inevitably do. But that risk hasn’t stopped the heavyweights of American high finance from rushing to invest in Butterfield’s fledgling operation.

By this past March, those investments had jacked up Slack’s market value to a stunning $1 billion. Then, in April, investors injected an additional $160 million for a mere 5 percent stake in Butterfield’s company. That brought the start-up’s total market value to just about $3 billion.

The strangest part of all this? Butterfield’s company didn’t ask for that latest $160 million — and doesn’t need it either.

“Eventually,” he added, “we will find a use for it, at least I hope we do.”“We don’t have an immediate use for that money,” Butterfield openly acknowledged in a recent interview.

Wait, this story gets stranger still.

What’s happening with Slack turns out to be happening all across America’s economic cutting edge. The nation’s high-finance chiefs — the exceedingly deep pockets who run hedge funds and the like — are dumping cash into start-ups at a dizzying pace.

Back in the old days — say, six years ago — hot start-ups would raise a pile of cash from investors, digest that money into their ongoing operations, then come back a year or so later and ask investors for more. Another year would typically pass before a third round of financing.

This wait-and-see financing has gone by the boards. Since early 2013, The New York Times reports, more than 20 tech start-ups have swallowed three rounds of financing in less than 18 months. One of these, the anonymous messaging start-up Yik Yak, completed three rounds in just seven months.

What’s going on here? In a word: inequality.

The “winners” in America’s contemporary economy are now holding phenomenally more money than they can prudently invest. So they’re not making rational investments. They’re speculating, racing to place mammoth bets on start-ups that may become the “next big thing.”

Slack CEO Butterfield seems a bit bemused, but not bothered. Yes, he candidly admits, we have in America right now “a lot of investors who have a lot of money.”

“But,” he adds, “it’s not like if they hadn’t given the money to us, they would have given to a homeless person instead.”

That’s true, of course. The super-rich now awash with cash aren’t choosing between bankrolling start-ups and making sure that kids in poor neighborhoods get three squares a day. They’re choosing between speculative options they think will make them even richer.

Well, the rest of us need to choose, too.

We can continue to accept an economy where fabulously rich people dump fabulously huge sums on people and enterprises who don’t need the money. Or we can try to forge a new and different economy — where investments actually make sense.

Sam Pizzigati, an Institute for Policy Studies associate fellow, edits the inequality monthly Too Much. His latest book is The Rich Don’t Always Win. This piece originated at  OtherWords.org. 

Karen Dolan: Criminalizing being poor

Here’s something you might not know about #ferguson, Mo. In this city of 21,000 people, 16,000 have outstanding arrest warrants. In fact, in 2013 alone, authorities issued 9,000 warrants for over 32,000 offenses.

That’s one-and-a-half offenses for every resident of Ferguson in just one year.

Most of the warrants are for minor offenses such as traffic or parking violations. And they’re part of a structural pattern of abuse, according to a recent Department of Justice investigation.

The damning report found that the city prioritized aggressive revenue collection over public safety. It documented unconstitutional policing, violations of due process, and racial bias against the majority black population.

One woman’s story illustrates what’s happening to more and more people as municipal revenues become the focus of police departments all over the country.

It began with a parking ticket back in 2007, which saddled a low-income black woman with a $151 fine and extra fees. In economic distress and frequently homeless, she was unable to pay. So she was hit with new fines and fees — and eventually an arrest warrant that landed her in jail.

By 2010, she’d paid the court $550 for the single parking violation, but more penalties had accrued. She attempted to make payments of $25 and $50, but the court rejected those partial installments.

Even after being jailed and paying hundreds of dollars above the original fine, she still owes the court $541 — all because she lacked the money to pay the initial fees.

This woman’s story is repeating itself in town after town.

A 2014 NPR investigation found people who wound up in jail after coming up short on fines for a range of minor offenses — such as catching a fish out of season in Ionia, Michigan, shoplifting a $2 can of beer in Augusta, Georgia, or hanging out in an abandoned building in Grand Rapids.

It’s even worse for the homeless. A majority of cities now prohibit sitting or lying down in public, and nearly a quarter make it a crime to ask for food or money.

I’ve co-authored a report at the Institute for Policy Studies called “The Poor Get Prison,” which examines the growing phenomenon of local communities “criminalizing poverty.” That means targeting, arresting, and downright bilking people for misdemeanor offenses, debt, and lack of resources.

We find that as state and local budgets were squeezed following the 2008 recession, local authorities all over the country levied more fines and fees on those people least able to pay — and aggressively pursued them.

Even after their debt is paid, these can people face discrimination in employment, housing, and social services because of the jail time they racked up when they were unable to pay.

Fines aren’t the only way the courts are shaking down poor people. The report details another increasingly lucrative revenue raiser for both local and federal coffers: civil asset forfeiture. This is the odious practice of seizing cash and property from people not charged with any crime and who can’t afford legal defense.

Not even kids are safe. From pre-school on, poor and black children are often considered criminals.

Police presence in schools has been increasing since the 1990s. Combined with the rise of “Zero Tolerance” policies, children in low-income schools are prosecuted as criminals for everything from brawling on the basketball court to doodling on a desk. In Austin, Texas, a 12-year-old ended up in court for putting on perfume.

When a community issues arrest warrants for more offenses than it has residents, something’s deeply wrong. A democratic society that purports “freedom and justice for all” can’t coexist with one that profiles and criminalizes poor people and communities of color.

Karen Dolan is a senior fellow at the Institute for Policy Studies and co-author of the report “The Poor Get Prison: The Alarming Spread of the Criminalization of Poverty.” IPS-dc.org.report . Distributed by #otherwords.org. 

Jim Hightower: Vt. Janitor leaves millions for hospital, library

When you get fed up with all the greed and narcissism that seems to rule our country, a good way to restore your faith in humankind is to reflect on the generosity of people like Ron Read — a philanthropist from Dummerston, Vt.

Read was no splashy, self-celebrating, David Koch-Michael Dell-Richard DeVos type. He’s not the kind of guy whose “altruism” depends on how prominently his name gets displayed on the facilities he endows.

In fact, no one in Dummerston had a clue that Ronald James Read was a man of wealth, much less a benefactor, until he died at age 92.

Known around town as Ron, he was a quiet, hard-working, and well-liked fellow who spent 25 years as a gas- station employee, then 17 more as a janitor at the local JCPenney store.

He drove a second-hand cars,  gathered downed limbs for firewood, held his well-worn coat together with safety pins, and hated seeing anything go to waste.

Some knew that Read enjoyed collecting stamps, and that he often checked out books from the local library. It was only after his death, however, that the town learned about another little hobby he enjoyed: picking stocks and making small investments.

Turns out, he was very, very good at it.

This February, local folks were astonished and delighted to learn that their modest neighbor had bequeathed $1.2 million to their library — the largest gift in its 129 years, doubling its endowment. He also gave $4.8 million to Brattleboro Memorial Hospital, the  region's major hospital, the largest bequest it ever received.

He didn’t even wait around for a public thank you, much less demand that he get tax writeoffs and have his name engraved on the library façade. Ron Read was an exemplary philanthropist — a genuine altruist who invested in the future of the common good.

Jim Hightower is a radio commentator, writer and public speaker. He wrote this for otherwords.org.

Melissa Tuckey: Friends don't let friends frack

All my life, I’ve been a good citizen. I vote. I volunteer. I know my neighbors.

Moreover, I take care of my property. I garden. I make jams and jellies to give away for Christmas. In short, I fulfill my obligations as a rural homeowner.

Still, there’s one additional step I’ve taken to be a good neighbor: I’ve signed a pledge to resist fracking in New York State.

I moved with my family to the small city of Ithaca in upstate New York five years ago. We were drawn to the natural beauty here and the innovative local economy, which has one of the fastest growing organic and family farming sectors in the country.

Here in Ithaca, crop mobs — large groups of volunteers — show up at local farms to plant and harvest alongside our hardest working neighbors: the farmers. A network is growing, too, to provide low-income residents with access to locally grown, healthy, organic produce.

We’re on the cutting edge of a new economy: one that uses renewable energy, leaves a small carbon footprint, and invests in local businesses. This emerging economy is more livable and prosperous than older models, which are failing everywhere.

Fracking threatens all of this.

Fracking, or “hydraulic fracturing,” is a controversial method used in drilling for oil and gas. It turns rural communities into industrial zones, complete with all the problems that come with heavy industry: blazing flares, loud noise, light pollution, heavy truck traffic, and air and water contamination.

Although you might not choose to buy property next to an industrial waste site, if your neighbor wants to frack, you’re out of luck.

Residents living near fracking sites complain of a wide range health problems related to pollution of their property — from nosebleeds to asthma, cancer, and kidney disease.

To make matters worse, gas companies and lawmakers have teamed up in states like Pennsylvania to pass gag rules that block doctors and nurses from discussing the health effects of fracking-related chemical exposures with their patients.

A recent study published in the peer-reviewed Environmental Health journal shows that not only does fracking pollute water sources — more than 687 million gallons of fracking waste laden with radioactive materials and heavy metals were injected in deep wells in Ohio alone last year — it also threatens our air quality.

The study of six communities in Arkansas, Colorado, Ohio, Pennsylvania, New York and Wyoming found high levels of air pollution at multiple fracking and oil-production and -storage sites. More than one third of study air samples contained concentrations of dangerous chemicals exceeding federal standards for health and safety.

Among the chemicals that most often exceeded limits, the study found formaldehyde, a known human carcinogen, and hydrogen sulfide, a potent nerve and organ toxin that smells like rotten eggs. In Wyoming, the air sample contained hydrogen sulfide in concentrations ranging from twice to 660 times the level classified by the EPA as immediately dangerous to human life.

These facilities are  near schools, farms, and homes. Our regulatory system is failing these families while increasing profits for the fossil-fuel and chemical industries.

This is why a dear neighbor of mine recently spent the night in jail, and why 83 people in recent weeks — including the baker who makes our bread each week, and the owner of my favorite restaurant — have peacefully blocked the entrance at a proposed gas storage site beneath Seneca Lake.

And it’s why I’ve joined thousands of New Yorkers in signing a pledge to resist fracking. Because if we poison this land, we’ll never get it back.

Melissa Tuckey is a  poet and author of the book ''Tenuous Chapel''. She’s a co-founder of the national poetry organization Split This Rock. She wrote this for OtherWords.org.

Candace Clement/Timothy Karr: Battling for Net Neutrality

Earlier this month, President Barack Obama added his voice to the nearly 4 million people who have urged the Federal Communications Commission to preserve the open Internet and protect free speech online.

The president’s statement was a clear, concise directive on how the FCC should handle the question of Net Neutrality — the principle that prevents Internet service providers from blocking or interfering with online traffic by creating “fast lanes” for a few powerful companies while relegating the rest of us to a slower tier of service.

Obama first expressed his support for Net Neutrality when he was a presidential candidate in 2007, and he’s since spoken in favor of the principle on several occasions.

But this time was different: Obama finally got specific, calling on the FCC to reclassify broadband under Title II of the Communications Act. Reclassifying would provide the solid legal foundation needed to stop companies like AT&T, Comcast, and Verizon from becoming gatekeepers online.

Obama’s statement was a high-profile moment in a year where a once-obscure issue has drawn front-page coverage — and galvanized activists nationwide.

The street outside the FCC’s headquarters was home to a two-week protest encampment in May. And a rally in Washington, D.C. drew huge crowds on May 15, when FCC Chairman Tom Wheeler released proposed rules that would allow rampant discrimination online.

Activists shadowed Obama on a fundraising trip to California over the summer. Protests took place in Manhattan and Philadelphia on September 15, the deadline for comments on the FCC proposal.

On Sept.  10, 40,000 Web sites participated in the Internet Slowdown, an online day of action where sites greeted visitors with slow-loading pop-ups to show the world what a non-neutral Internet would look like.

Earlier this month, in response to reports that the FCC was considering new rules that would still permit the creation of fast lanes, vigils were held everywhere from Austin to Boston to Chicago to Minneapolis. And over the course of the fall, people’s hearings have taken place in Brooklyn, San Francisco, and Texas.

It’s important to note that Net Neutrality draws support from both sides of the aisle. ANovember University of Delaware poll, for example, revealed that over 80 percent of both Democrats and Republicans support keeping the Internet open.

Is any of this getting through to Wheeler?

In response to the president’s statement, Wheeler reportedly told a group of industry lobbyists that his challenge is figuring out how to “split the baby.” The comment suggests he could still be trying to write rules that pay lip service to the open Internet but ultimately allow phone and cable giants to create fast and slow lanes online.

Despite the overwhelming public and political support for Net Neutrality, the chairman — who previously served as a top lobbyist for the cable industry — so far seems incapable of breaking with his old bosses.

The coalition backing Net Neutrality is as broad and diverse as it is deep. Surely this ocean of support means more than the whispers of the many phone and cable lobbyists who come knocking at the FCC.

Wheeler himself claims to oppose the creation of fast lanes. But so far he hasn’t backed those claims up with a proposal that would actually prevent them.

What more does Wheeler need to do the right thing? He now has Obama’s backing and a strong public mandate for real Net Neutrality.

The future of the open Internet is too important to be left to business as usual in Washington. The Internet service providers’ political influence may be formidable, but public opinion favors real Net Neutrality and nothing less.

Now it’s up to Chairman Wheeler to make it happen.

Candace Clement is the Internet campaign director for Free Press, where Timothy Karr is the senior director of strategy. This originated on OtherWords.org. 

Marge Baker: Taking stock of the 'Money Mid-Terms'

The 2014 midterm elections sure looked like a blowout for the Republican Party. But leave it to The Daily Show with Jon Stewart to call the real winner: big money.

“Incredible night for money in politics!” gushed one of the show’s satirical correspondents.

Indeed, in the first national elections since the Supreme Court’s McCutcheon v. FEC decision (aka Citizens United) — which removed overall federal limits on contributions to political candidates and party committees — the tidal wave of special-interest spending was even heavier than the most dire predictions.

The “Money Midterms,” as some commentators dubbed them, were the most expensive in history. Local news stations struggled to keep up as they were flooded with ads from super PACs and other outside groups.

The Daily Show is right: The most enduring “winners” in the midterms may be the wealthy interests that bankrolled their candidates of choice and can now expect to have the ears of their chosen representatives.

A tiny fraction of the electorate drove this deluge. As of Oct.  15, just 140 donors had provided more than 60 percent of this cycle’s super political action committee (PAC) contributions. That’s no surprise in a post-Citizens United landscape where corporations and billionaires can spend as much as they want to influence elections.

But it’s not all bad news on the money in politics front. Despite this influx of money — or perhaps in some cases because of it — the 2014 elections also brought a number of hopeful signs that the tide is rapidly turning.

In Florida, Tallahassee voters passed a referendum to cap political contributions in local elections at $250 per donor, among other measures. In Maine, more than 1,000 volunteers collected signatures in support of a ballot initiative to update the state’s clean elections law. Cities across Wisconsin passed referendums against Citizens United. And in Maryland, Republican Larry Hogan will be the first governor of that state to have accepted public financing for his campaign.

And that was just on Election Day.

In September, Atlanta’s city council overwhelmingly passed a resolution in support of a constitutional amendment to overturn decisions like Citizens United, joining more than 550 other towns and cities across the country. In the same month, activists from across the nation made over 15,000 calls to Senate offices backing an amendment to let Congress and the states set reasonable limits on money in elections.

Even during the “Money Mid-Terms,” some politicians took note of this swelling movement. This cycle, we saw candidates from both major parties making campaign finance a theme of their campaigns, reacting to the fact that the push for change is coming from Americans of all political stripes.

The fight to take our elections back from the chokehold of wealthy special interests won’t go away. Americans know that as long as the system is rigged, it’s not going to work for anyone except those doing the rigging.

Anyone who was subjected to the endless barrage of political ads and emails this cycle knows that political spending is out of control. That’s why we’re fighting alongside committed activists around the country to amend the Constitution to overturn decisions like McCutcheon and Citizens United and reclaim our democracy.

The more Americans speak out and challenge their elected officials to take action to address our money in politics problem, the more campaign finance reform will become a pivotal issue that every candidate will have to address in future elections.

So while the 2014 elections exemplified everything wrong with our campaign finance system, they also demonstrated how we’re going to make it right: through the power of ordinary Americans.

Marge Baker is the executive vice  president for policy and program at People For the American Way. She published an earlier version of this op-ed at The Huffington Post., from which it moved to otherwords.org.

Diana Anahi Torres: Elite schools a better financial deal

As high-school seniors start to churn out their college applications, elite campuses are trying to catch the attention of high-achieving and gifted low-income students around the country.

It may be hard to believe, but schools like Harvard University and Amherst College are opening their doors to more highly qualified high school students who grew up facing economic hardship yet can thrive in their campuses. Given the record sizes of the endowments supporting the most selective schools, these full rides won’t bust their budgets.

At $1.8 billion, for example, Amherst’s endowment amounts to about $1 million per student.

This means Harvard can turn out to be more affordable than your own state school. But the path from a poor neighborhood to an elite college, as Richard Pérez-Peña recently wrote in The New York Times, is almost impossible to travel without the support of teachers or mentors who know how to guide students through the process.

I’ve been there and I couldn’t agree more.

Consider many of my friends in Albuquerque, New Mexico, N.M.  Around two out of three of the students I grew up with dropped out of high school and at most 10 percent got a college degree. The rates are even lower when you account for race, class, immigration status and gender.

It took Alan Marks, a seasoned educator and Stanford University graduate who has dedicated his career to helping students in my community attend college and mentoring them, to introduce me to my potential.

Marks encouraged me to take demanding college classes while I was still in high school and to participate in extra-curricular activities I felt passionate about. He recommended summer courses, invited me on trips to visit campuses, helped me study for standardized tests, and told me that I should consider applying to the top schools in the nation.

By senior year I had a 4.4 GPA, five college-level courses under my belt, and an idea of the schools I wanted to apply to. But even with his guidance, I found the application process daunting.

The first time I looked at the tuition pages for the top-ranked schools, I balked. It cost upward of $55,000 a year to attend them, a price tag my mom, a domestic worker, and dad, an auto body worker, could never afford to pay.

“Their financial aid packages are generous,” my mentor assured me. You won’t have to worry.”

His encouragement and unyielding support led me to four years at Amherst College, for which I paid less than $10,000. The total was less than what I would have paid to attend one of New Mexico’s public universities for one year.

And the $10,000 paid for much more than four years of college classes.

Amherst’s comprehensive financial-aid package paid for my tuition, fees, room and board, two round-trip flights a year, health insurance, personal expenses, and research opportunities. All I had to worry about was a minimal student contribution. I paid for that with a mix of outside scholarships, summer jobs, and negligible student loans.

Amherst, however, is one of very few schools willing to do what it takes to boost its economic diversity. Thanks, in part, to the commitment of its former president Anthony W. Marx to attract students from all walks of life, at least 20 percent of its students come from working class and poor households.

But it’s not enough for these top colleges to offer generous financial aid packages to low-income students with great grades.

More educators and mentors who work with economically challenged yet high-achieving students need to encourage and help those kids consider applying to and attending those schools. And qualified, low-income students need to know that earning a degree from a top-notch school could turn out to be within their reach.

So, as I ask high school seniors who can relate to my story, what are you waiting for? Apply to your dream Ivy League universities. (The official Ivy League consists of Yale, Harvard, Brown, Dartmouth, Columbia, Cornell, the University of Pennsylvania and Princeton.)

There’s nothing to lose except a great opportunity.

Diana Anahi Torres is the New Mexico Fellow at the Institute for Policy Studies, in Washington.

This piece comes via OtherWords.org.

Sarah Anderson: Leaf blowers' assault on our health

When new neighbors moved in next door, I didn’t hold off long before broaching the Big Question.Even though we live in Washington, D.C., this had nothing to do with politics. For me, neighborly harmony hinges on where folks stand on this divide: leaf blower vs. rake.You see, I’m one of those otherwise calm individuals who goes totally bonkers at the sound of a leaf blower. It would be different if this infernal racket served some useful purpose. When I go to the dentist, the drill doesn’t make my blood boil. I accept that without it, my teeth would rot.When a leaf blower cranks up, I can find no logical justification for my suffering. In a recent article for AlterNet, former Consumer Reports editor Cliff Weathers presents a frightening litany of their multiple hazards.

“Leaf blowers don’t just blow away leaves and lawn clippings,” Weathers wrote. “Their 180- to 200-mph air output blasts away topsoil, microbial life forms, animal waste, allergic fungi, spores, herbicides, pesticides, and even heavy metals such as arsenic, mercury, and lead.”

That’s gross and scary, but the worst part is what these gizmos do to your health. “This toxic cocktail of engine emissions and dust particulates can exacerbate allergies and asthma in children and adults, and aggravate acute pulmonary disorders,” Weathers explained.

The American Lung Association says we should all steer clear of gasoline-powered blowers, the most popular type. So why are they still in use?

For decades now, manufacturers and many landscaping companies have worked to block anti-leaf-blower efforts. A favorite tactic: Make it seem like opponents are all extremely rich, and possibly even racist. With low-income Latinos making up a large share of landscaping workers, these are sensitive charges.

It’s true that  rich white enclaves were among the first to ban blowers. In California, Carmel and Beverly Hills made the move back in the 1970s. But in most of the country, the higher-income set continues to drive demand for these dangerous beasts.

Industry lobbyists downplay the risks while claiming that regulations will lead to higher costs and fewer jobs. But good old non-motorized tools are cheaper than leaf blowers and, according to several tests, nearly as fast.

In his AlterNet article, Weathers cites a competition the Los Angeles Department of Power and Water organized that pitted a grandmother with a rake and broom against a professional landscaper with a leaf blower. Granny gave him a run for his money.

Detailed analysis of the employment impacts of blower bans is hard to find and enforcement is tough. But it’s clear that in California, where about 20 cities, including Los Angeles, have banned blowers, the landscaping industry has hardly collapsed.

About 103,000 Californians are employed in this industry, and landscapers make up a larger share of the workforce there than in other big states like Texas, New York, and Illinois. California’s median wage in this business is $13.75 per hour, more than 20 percent higher than the median in Florida and Texas.

Nationwide, the areas with the highest concentration of landscaping and groundskeeping jobs include some of the hoity-toitiest holiday and retirement spots. No. 1: Nantucket Island and Martha’s Vineyard, where the Obama family vacationed this year.

If a critical mass of these communities banned leaf blowers, it would transform the landscaping industry away from reliance on machines that are senselessly endangering health and welfare — especially for the workers who operate them.

In response to my Big Question, our new neighbors laughed and assured me I didn’t need to worry about which side they were on. This was a relief. But in a city that restricts leaf-blower hours but hasn’t banned them, I’m still dreading the fall season.

As in past years, I’ll probably hear three or four machines blasting within a few blocks of my yard, while I — quietly raking — try to maintain my sanity.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies.    This originated at OtherWords.org.

Robert L. Borosage: Help unions help middle class

 

Labor Day is supposed to be a celebration of workers, but it’s been a long time since workers have been celebrated — or for that matter, have had a reason to celebrate. That’s because the union movement that gave us this holiday is, at least numerically, a shadow of its former self.

If we really want to give workers something to cheer about, we need to revitalize unions. It’s no coincidence that prosperity was widely shared when unions were at the height of their power in the decades after World War II, and that inequality has soared as unions have been weakened.

That’s what I conclude in Inequality: Rebuilding the Middle Class Requires Reviving Strong Unions, a new Campaign for America’s Future report. My analysis tracks the simultaneous decline in the power of the labor movement and the fortunes of middle-class workers. It makes the case in simple terms.

One chart reinforces the point. It compares union membership with the share of income going to the top 10 percent since the 1920s. When only one in 10 workers belonged to unions in the early 1930s, the richest 10 percent pocketed nearly half of the nation’s income.

Then President Franklin D. Roosevelt began a set of bold New Deal initiatives that dramatically increased the power of workers to join unions and bargain collectively. The share of workers who were unionized rose to about one-third by the late 1940s. At that point, the bottom 90 percent saw a significant increase in their share of national income.

Today, as union membership declines to low levels last seen in the 1920s, the share of national income going to the top 10 percent is rising — to levels not seen since then either.

Combine that with lackluster economic growth and you get the result chronicled in an August report by Sentier Research. As The New York Times reported, Sentier found that median incomes, when adjusted for inflation, had fallen 3.1 percent since 2009. They remain significantly below what they were in 2000.

A corporate-driven propaganda campaign has for decades blamed labor unions for saddling American corporations with burdens that made them uncompetitive in the global economy.

That has proven to be cover for dismantling the forces that kept corporations from rigging the economic rules in their favor. When corporate power was kept in check by union power, workers and corporations at least had a fighting chance to prosper together. Without that check, workers are losing. As wages erode, benefits disappear, work conditions become harsher and jobs themselves become more unstable.

The good news is that a combination of worker-activist movements and bold political leadership is setting the stage for a potential resurgence of the labor movement. In Los Angeles and other cities, newly elected pro-labor officials are making companies that benefit from local zoning or contracts pay a living wage and accept unions when a majority of workers indicate they want one.

Across the United States, fast-food worker strikes are fueling state and municipal minimum-wage increases while injecting new energy and ideas to worker organizing efforts.

President  Obama has used executive orders to raise the minimum wage for federal contract workers and require adherence to basic fair labor standards, including the right to organize. These orders could have effects that ripple through to private sector workers.

Labor Day would live up to its purpose if it not only gave workers a temporary respite from the rigors of their jobs, but also drove a national effort to empower workers once again to rebalance the economic scales so that we can rebuild a growing, stable middle class. It needs to be a day on, not a day off, in the effort to reclaim the American dream for working people.

Robert L. Borosage is the co-director of the Campaign for America’s Future, a center for ideas and action that works to build an enduring majority for progressive change. Distributed via OtherWords.org

Emily Schwartz Greco/William A. Collins: Good news for public is bad news for Wall St.

  NORWALK, Conn.

For the first time since 1997, the U.S. economy just added at least 200,000 jobs per month for six months running. GDP grew at a 4 percent annual clip between April and June. The percentage of Americans who describe the economy as “good” has climbed to the highest level of President  Obama’s presidency.

Who wouldn’t rejoice over these happy milestones on the bumpy road to a real recovery?

Wall Street. On July 31, within hours of the release of a bunch of sunny indicators, stocks sank more than they had on any day since early February. The decline wiped out all gains the S&P 500 stock index had racked up over the month.

Global instability contributed to the sharp drop, but so did investors’ fretting over indications that workers are finally getting higher wages and more benefits.

And why exactly does Wall Street tank on news portending economic gains for most Americans? Don’t people with extra money in their pockets boost the economy when they spend more freely? Isn’t it something worth celebrating?

Not in an economy that caters to the rich.

You see, there are practical implications of the chasm between rich and poor for the conduct of commerce. For several years, retailers have increasingly doted on the affluent, the most alluring segment of the $10 trillion consumer spending market.

Consider how U.S. households differ. The richest 20 percent of Americans now pocket more than half of the nation’s income. The typical income for this kind of family tops $150,000, triple the norm for all of us. Together, these “high-value customers” (to borrow a phrase from LuxuryDaily.com) account for about 40 percent of all U.S. spending.

And the cost of real luxury has gotten a divorce from reality. A quilted Chanel handbag can set you back $4,900. An ultra-thin Piaget Altiplano watch could siphon 95 grand from your wallet.

There’s still some money made from selling cheap stuff to the poor and working class. That’s why the four biggest U.S. retailers are big-box behemoths Wal-Mart, Costco, and Target, along with the Kroger supermarket chain. Even the very bottom of the food chain, the people whose households eke by on $30,000 or less a year, account for a stagnant yet sizable $1 trillion bare-bones consumption market.

For them, dollar stores can be a bigger draw than the big boxes. They’re in a bind and so are the companies relying on their purchases.

“Customers are under pressure,” Dollar Tree Chief Executive Bob Sasser told The Wall Street Journal. “Unfortunately, that’s one reason why the space continues to grow.”

In a telling sign of today’s increasingly unequal times, Dollar Tree is merging with Family Dollar Stores. The No. 2 and No. 3 companies in this cut-throat market want to team up to compete with their No. 1 competitor, Dollar General. Together, they’ll fend off bids by Wal-Mart and its ilk to gobble up some of their territory with new smaller-box establishments.

Clearly, times are tough for retailers opting to sell stuff to the rest of us. But they’ve got it figured out for the most part and Wall Street worships predictability.

Think of all the economic models and assumptions that would be shattered if the drive toward wealth concentration were to take a detour toward shared prosperity.

Of course, financial experts won’t say these things out loud. Instead, they’ll mutter about inflation and freak out over signs that labor markets are growing tighter. Are those really big concerns in light of this protracted war on consumers?

If you would like to know more about how and why the rich are getting so much richer while the poor become steadily poorer (and you enjoy very long reads), check out Thomas Piketty’s 700-page masterpiece. In his wildly successful book Capital in the Twenty-first Century, the French economist has finally organized and footnoted every lost battle in this tale of class warfare.

Winning the debate, of course, isn’t enough. Until more U.S. political and business leaders decide they’ve had enough, this nation will become less of a democracy governed by the people and more of a plutocracy ruled by the rich.

Emily Schwartz Greco is the managing editor of OtherWords, a non-profit national editorial service run by the Institute for Policy Studies. OtherWords columnist William A. Collins is a former  Connecticut state representative and a former mayor of Norwalk, Conn. This piece originated at OtherWords.org.

Sam Pizzigati: R.I. joins war on huge pay of CEO's

Have you heard about Domino’s Pizza CEO J. Patrick Doyle? He pocketed $43 million over the last three years running an operation that stiffs low-wage workers and rakes in taxpayer subsidies.

That news prompted the New York Post to open its coverage with a rather brilliant quip: “Hey, J. Patrick Doyle, save some dough for the pizzas.”

Almost every day, the headlines remind us how outrageous CEO pay in America has become. Will these outrages ever end?

On Capitol Hill, lawmakers in Congress give us no particular cause for optimism. But at the state level we actually may be in for a pleasant political surprise. Two new imaginative state proposals are now seeking to leverage the power of the public purse against executive excess. In California, lawmakers are zeroing in on how government taxes. New legislation pending in Rhode Island targets how government spends.

California’s pending Senate bill 1372, introduced by state Senators Mark DeSaulnier and Loni Hancock, would tie state corporate-income tax rates to corporate pay disparities.

Corporations in California currently face an 8.84 percent tax on their profits. The DeSaulnier-Hancock legislation would raise that rate to 13 percent for companies that pay their top execs over 400 times what their typical workers are making.

The same legislation lowers the state corporate tax rate to 7 percent on companies with a CEO-worker pay divide less than 25-to-1. Under the bill, all firms with a ratio under 100-to-1 would end up with a tax cut, all above that ratio with a tax hike.

Back in the 1970s, few firms in California or anywhere else in the United States paid their top execs over 25 times what their workers were making. And today? The AFL-CIO has just reported that major U.S. corporate CEOs last year averaged 331 times the pay that went to America’s workers.

The California legislation, writes Washington Post columnist Harold Meyerson, would give top corporate execs a simple choice. They could either continue to “overpay themselves and underpay their employees,” a course of action that would up their corporate tax bill, or they could narrow their internal corporate pay divide and watch their corporate tax bill shrink.

Top execs would have a third option as well. They could try to game the system by contracting out their lowest-paying jobs to reduce the gap between their company’s highest and lowest paychecks.

But the California legislation covers this possibility. The bill raises by 50 percent the tax rate on any corporations that increase their outsourcing.

The DeSaulnier-Hancock legislation has made it through a key California Senate committee. But final passage will take a heavy lift. The bill needs a two-thirds legislative majority.

In Rhode Island, Senate Bill 2796 would give preferential treatment in state contracting to companies that pay their highest-paid executive no more than 32 times what their lowest-paid employees take home.

This preferential treatment, says bill chief sponsor Catherine Cool Rumsey, would give firms with reasonable CEO-worker pay gaps an edge in competing for state contracts.

“We need to give companies the incentive to do the right thing,” the freshman senator told me earlier this month.

The Rhode Island legislation has already won the support of key state legislative leaders. Those senators not yet on board, notes Rumsey, fear “ruffling business feathers.”

Her message for the hesitant: Corporations that lavish pay on top execs and underpay workers are forcing low-wage families to draw on government social service programs. These corporations are costing state taxpayers millions.

All levels of government in America today, advocates for the Rhode Island bill point out, already deny contracts to companies that discriminate by race or gender. Our tax dollars, Americans believe, shouldn’t be subsidizing racial or gender inequality.

The Rhode Island bill extends this consensus. Our tax dollars shouldn’t be subsidizing economic inequality either.

Sam Pizzigati, an Institute for Policy Studies associate fellow and a columnist for otherwords.org, where this piece originated. He edits the inequality weekly Too Much. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.

William A. Collins: State banks are a good idea

By WILLIAM A. COLLINS NORWALK,  Conn.

Vermonters aren’t like the rest of us: They live in a small state with a flinty history and a legendary suspicion of outsiders.

That independent streak gained luster when 15 Vermont towns voted earlier this year to reinforce this independent tradition by approving a proposal to create a state bank.

The Vermont Economic Development Authority would get a license to do what private banks normally do — only with a mandate to serve the public interest no matter what.

This isn’t unprecedented. North Dakota has enjoyed a flourishing state banking system for nearly a century.

Costa Rica set another good precedent. Its public banking dates back to 1949. As of a decade ago, its four state banks held 75 percent or more of all individual deposits.

All this is quite vexing to the World Bank and the International Monetary Fund. As elsewhere, they have muscled Costa Rica to privatize its government-owned businesses. Costa Rica has largely done this, but it won’t let go of its state-owned banks. For some reason, Costa Ricans don’t trust the commercial ones.

No, Americans don’t trust our banks either. But only North Dakota’s state bank remains under public control.

Everywhere else, banking laws have made it very profitable for old-fashioned mutual (non-profit) savings banks, once popular, to sell out their depositors and turn commercial. The executives who accomplish this switch all do very nicely for themselves.

Luckily, credit unions carry on from bygone times as a thorn in the side of the industry, but Wall Street is working hard to extinguish them too. Credit unions depend heavily on their non-profit status to protect them against taxes, so conservative outfits like the Tax Foundation are trying mightily to squash that exemption.

Theoretically, the government is our protector from the avaricious cartel of private banks. Both state and federal laws ostensibly provide us with banking watchdogs which safeguard the honesty and fairness of our saving and borrowing.

That’s really just in theory. Unfortunately, a cynical revolving door regularly sends regulators wheeling into bank jobs and bankers hot-footing it over to regulation. At the same time, lobbyists sap the rectitude of those lawmakers and oversight agencies who you might have thought had our best interests at heart.

Hence, banks feel unrestricted to manipulate credit cards, student loans, mortgages, securitizations, hedge funds, credit default swaps, currency exchanges, and all manner of rigged financial transactions. Our regulators rein them in sometimes, but in many cases not until after the damage is done.

As a result, when mortgages default, neighborhoods collapse, families are ruined, and the economy tanks, the banks go right on — perhaps with their wrists slapped.

One other savings alternative does exist: the U.S. Postal Service. In years gone by, the Postal Service doubled as a bank that had lots of branches and no securitized mortgages.

But given the general lack of trust that  most people have in commercial banks, some lawmakers are looking to bring the Post Office back into banking. That would be a new American Revolution.

 William A. Collins is a former Connecticut state representative, a former mayor of Norwalk, Conn., and a columnist for OtherWords.org, where this column originated.

Catholic Church vs. a certain commerce

 

Cartoon from www.OtherWords.org