Asset Building News Week - July 15, 2016

Highlights from this week's news stories
Blog Post
July 15, 2016

Featured Story: Low-Wage Jobs Limit Economic Opportunity

Alana Semuels writes for the The Atlantic on how the United States’ cash welfare program, Temporary Assistance for Needy Families (TANF), is often a barrier to self-sufficiency because of its work requirements. Federal rules require that TANF recipients work a certain number of hours each week, but many effective, long-term job training programs don’t count towards those hourly requirements. So instead, welfare recipients are pushed into low-paying jobs with limited opportunities to advance. Semuels describes how sectoral employment programs, which give free training for well-paying, high-demand jobs, can often help low-skilled people earn a living wage. But while effective, these programs are rarely an option for people who must meet work requirements to receive their benefits. As one of the women that Semuels interviewed for this piece says, “having a bank account or creating a nest egg” is just not possible with the low-wage jobs that people on welfare are often pushed into.

But people leaving welfare aren’t the only ones who are expected to work for low wages. In fact, as Danielle Paquette writes in the Washington Post, child-care workers routinely make a median wage of $9.77, and half are on food stamps, cash welfare, or Medicaid. Some businesses are making news with pledges to raise their employees’ hourly wages. Jamie Dimon, chairman and chief executive of JPMorgan Chase, published an op-ed in the New York Times on the reasons why his company is giving its employees a raise. Starbucks, too, is raising its wages. Sarah Halzak reports in the Washington Post that employees will soon see five to 15 percent increases in the size of their paychecks.

Raising wages isn’t always enough, especially when, writes Bryce Covert in ThinkProgress, a five percent raise for a person working at Starbucks is still several dollars below a living wage. Dimon says that “government, business and the nonprofit sectors working together to build on models of success that advance economic opportunity” is essential. Instead of just raising wages, Dimon points to government interventions like expanding the Earned Income Tax Credit. Paquette cites a report that recommends states invest more in child care, since the market alone isn’t responding to the need for better pay. 

News Highlights: Child Poverty and Workers’ Rights

Want to Lower Child Poverty? Give Families Cash.

The best way to fight child poverty may be to simply give families cash says TalkPoverty’s Andrew Stettner. Stettner points to a successful cash transfer program by the Cherokee Nation in North Carolina, where parents spend their cash allowance “on key investments like education for their kids, safe housing, meeting basic needs, and preventing hardships.” As a result, children have grown up less likely to commit crimes and use drugs and alcohol, and are more likely to finish high school. Stettner also describes the positive outcomes of the Earned Income Tax Credit: “children in families that receive larger credits have higher test scores in elementary and middle school, and are more likely to graduate from high school and complete one or more years of college.” To ensure all families reap these benefits, Stettner suggests expanding the child tax credit, as universal child tax credits are already the norm in many other highly-industrialized countries. To further drive his point home, he cites a recent report by the Bernard L. Schwartz Rediscovering Government Initiative at the Century Foundation, which estimates that a universal child tax credit of $2,500 would lift 3.2 million children above the poverty line.

Appalachian Schools are Helping Isolated Students Go to College. Here’s How.

“There’s no doubt that [inner] cities, and their schools, face serious problems that deserve our attention. But a set of very different communities are virtually invisible in narratives about education and poverty in America. These are mostly stories about white children in rural, isolated communities from Alabama to Virginia—in Appalachia,” writes Elaine Weiss for TalkPoverty. In an effort to close the educational gap in the region, educators at all levels across Appalachia are taking steps to provide students and their families with the supports they need to succeed academically. “Skype mentors for at-risk students who are physically isolated, mailing books to students and online book clubs to avert summer learning loss, college preparatory services, and targeted professional development for teachers,” are all interventions that educators are currently exploring to reach these students.  

News in Brief: Work Requirements, Child Care, Sick Leave, and More

  • “A new study indicates that from the 1980s to the 2000s, it became less likely that a worker could move up the income ladder,” reports The Atlantic’s Alana Semuels.
  • Sometimes the disconnect between a policy’s goals and the realities of its implementation have dire consequences—like losing your Medicaid. NPR’s Michelle Andrews reports.
  • We know that the burden of student debt is affecting millions of Americans; NPR’s Eric Westervelt interviews The Center for Investigative Reporting’s Lance Williams on how exactly the student debt crisis unfolded, as well as who is profiting from it.
  • With all of the air time that the need for quality child care has been getting lately, not much has been written about the workers who provide that care. The New York Times’ Patricia Cohen shares some of their stories.
  • One-third of working adults don’t get sick leave from their employers, and that often means choosing “between getting healthy and getting paid,” says Alison Kodjack for NPR.
  • A new report released by FINRA “found that 32 percent of the 27,500 Americans who were polled said in the last year they had just paid the minimum [credit card payment] due,” reports the Washington Post’s Michelle Singletary.
  • Now might be a good time for homeowners to refinance their mortgages. The New York Times’ Neil Irwin explains.
  • “Work requirements tend to have limited impacts on employment and to leave some of the most vulnerable people without needed resources,” says Hannah Katch in a new report from the Center for Budget and Policy Priorities on potential Medicaid work requirements.
  • Writing for the New York Times, Alexandra Stevenson and Matthew Goldstein examine the recent resurgence in seller-financed home sales and the need for tighter regulation.
  • “[B]etween 1988 and 2012, increases in the minimum wage were linked to an increase in newborns’ fetal growth and birth weight, specifically among babies born to mothers without a college degree,” writes The Atlantic’s Alexia Fernández Campbell.
  • Writing for American Prospect, David Bensman covers a Seattle union’s attempts at securing better working conditions and pay for taxi and Uber drivers.


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