December 8, 2016--Voices From Rural America

When looking at the electoral map of the results from the recent election, with Republican counties in red and Democratic ones blue, pretty much all of America looks bloody.

One has to look hard to find what are in effect blue enclaves. Enclaves mainly along both coasts that represent cities such as New York and San Francisco, but in addition places here and there in the middle of the country such as Ann Arbor or Louisville that are also college towns.

This also encourages urban liberals to feel that it's mainly smart, well-educated people who are wisely Democrats. As for the others living in Red-State America, so much the worse for them. What do they know about cappuccinos?

From reporting in yesterday's New York Times, it appears that this rural-urban split is also common in many places in Europe.

From, "Like Trump, Europe's Populists Ride a Wave of Rural Discontent to Victory"--

"The elites in the city are detached from reality," said Joszef Grochowski, a lifelong village resident and mayor [of Kulesze Koscielne, Poland]. "They no longer understand the needs of ordinary people." 

Populist, anti-establishment parties are now on the move in Europe. If they are far from homogeneous, these parties share common ground in their core constituencies--rural voters. Just as Donald J. Trump rolled up a big rural vote in his unexpected presidential victory, Europe's populists are rising by tapping into discontent in the countryside and exploiting rural resentments against urban residents viewed as elites.

This not-understanding-the-needs-of-ordinary-people reminded me of how I was more than prone to that in my early years at the Ford Foundation. And, who knows, perhaps even to toady.

Ford had a program called the Rural Community College Initiative (RCCI) that focused on the educational and community development needs of 24 of America's "most distressed" counties. From some in the Black Belt in Alabama to various counties in Appalachia, to others along the Texas-Mexican border, to schools and colleges on Indian reservations. We made large grants to address these needs and arranged for frequent convenings of college and community leaders so that they could share experiences and learn from each other's efforts.

At one such convening in Uvalde, Texas, about two years into the RCCI, after we all had dinner and more than a few drinks, I made a presentation before the gathered minions about "distressed counties" and how Ford's good efforts were all devoted to helping their communities enhance their assets. Familiar Ford and RCCI stuff.

After about 20 minutes of my rattling on, slouching in the back row was Joe McDonald, founder and president of Salish Kootenai College in Pablo, Montana. Joe and I had known each other for years and worked together on this and other initiatives that were devoted to helping the establishment and development of tribally-controlled colleges. And so I recognized that slump and from it knew I was about to get the business. As indeed I did--

"You guys from Ford keep talking about 'distressed' this, 'distressed' that. And how our counties and reservations are 'impoverished.' Some of the fellas and I have been talkin' about that. And to tell you the truth, we don't like it. We're not distressed and not impoverished."

"But," I interjected, "If you look at the Commerce Department's county-by-county map of the country, the 24 of you represented here are from among the most impoverished. I wish it were otherwise, but unfortunately it's the truth."

Those words coming out of my mouth didn't feel all that good.

"We go back a long ways," Joe said, "And we've always been straight with each other." I nodded. "It's true we may be poor by economic measures but we're rich, very rich in other ways."

"I'm listening," I said.

"In some places in natural resources but in all cases in history and culture. My people, for example, have lived and survived in this area for quite a few thousand years. With all due respect many more years than your people. Even more years than your Ford partner there whose family I know came over on the Mayflower." He winked at her.

"It's true, they really did."

"So we like to think of ourselves in ways different than you guys and the Department of Commerce do. It's not that we don't want your help, including your money which we can really use, but to be honest with you both we don't want to hear too much more about being distressed and impoverished. We know about that but we want you to know about the other side of the picture. Our history, culture, traditions, and family and community strengths."

Silence filled the room. My Ford partner and I knew they were right. From our eastern-elite vantage point, we had not shown enough respect for the lives they were living or the things they had achieved. That it's not all about educational attainment and one's financial balance sheet.

"We've got big problems." Joe concluded, "and with your help we want to fix them best we can. But at the end of the day, we feel pretty good about ourselves and what we and our people have achieved against great odds."

That evening changed my life.

April 20, 2015--Minimum Wage

Republican candidates for the presidency are being asked about the minimum wage--whether they are in favor of raising it. This in the context of concern about inequality.

Even GOPers are taking note of widening disparities in income and saying we have to do something to help the middle class close the income gap. Basically what they recommend is cutting corporate taxes and taxes on job-creating high earners and getting government off the backs of small businesses so they can grow and then hire more people. In other words, 2015-style trickle-down economics.

Hillary Clinton and other Democrats for the most part see raising the minimum wage as one part of a strategy to reduce inequality.

There is a lot of demagoguery and made-up economic theory and data being flung around--mainly by conservatives--that are going substantially unchallenged by the press covering the various campaigns.

Jeb Bush, for example, campaigning in New Hampshire late last week, was clearly uncomfortable when asked by Kasie Hunt of MSNBC if he favored raising the minimum wage. In addition to claiming it's a issue for the states, not the federal government, he added that he personally is against it since it will cost jobs. Rather than being required to pay a few more dollars an hour companies will take their businesses overseas. Just how a McDonald's in Tulsa might do that he both wasn't pressed about.

Also unchallenged by Ms. Hunt was his claim that raising the minimum wage costs jobs and leads to more unemployment. There are challenging questions to ask about that, challenging questions derived from a myriad of studies that show doing so does not lead to loss of jobs. In many instances, the opposite. More motivated workers are generally more motivated and productive than those who feel underpaid and taken advantage of.

Before glancing at some of these studies, what is at issue in regard to the current situation?

The federal minimum wage as of July will be $7.25 an hour. (A number of states such as California and Massachusetts  pay more--$9.00.) This means that if someone works a 40-hour week, 50 weeks a year, her or his pretax income in July will be $290 a week or $14,500 a year. Far from enough to live with even a modicum of security or comfort.

The poverty rate, as a point of comparison, for a family of four is an annual income of $23,283. So working full-time at the July minimum wage will mean living considerably below the poverty line. Not impressive in a country with the strongest national economy in history.

The best study published in the Review of Economics and Statistics of the effects of raising the minimum wage is by a team of researchers from the University of Massachusetts Amherst, the University of North Carolina, and UC Berkeley, "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties." It closely analyzed 16 years of employment trends among various categories of low-wage workers in the retail and food services industries, where most minimum-wage workers are concentrated.

Key to the study was to track data from geographically adjacent counties where the wages were different to see if there was a migration of employment opportunities to the higher-wage sides of the borders and as a result an increase in the unemployment rate.

The study shows conclusively that increasing the minimum wage had no negative effects on high-wage employment, significantly increased the income of workers, and had no impact on unemployment rates.

There are many other studies that reach similar conclusions. So when candidates such as Jeb Bush claim the opposite to be true they should be confronted by the findings of studies of this kind and pressed to move beyond their factless talking points.